New Research on FDA Reforms, California Housing Policies, Housing Affordability and Regulatory Reform, and Michigan CON Laws

New Mercatus research from the week of Jan 6-13

FDA Drug Review Reforms

Anna Chorniy, Emma Blair, and James Bailey | Policy Brief

In their new policy brief, Anna Chorniy, Emma Blair, and James Bailey explore how various FDA drug review reforms could benefit the public. While the FDA’s role in assessing the safety and efficacy of new drugs is an important one, the authors explain how its lengthy review process costs patient lives.

The authors propose two reforms to the current inefficient process: post-launch monitoring and improved transparency, which could reduce time costs and still maintain a high standard for drug efficacy and safety.

Post-launch monitoring would allow the FDA to continue to monitor safety after approving new drugs. Reducing the review time before sending drugs to make would allow people to receive potentially lifesaving treatment faster than before.

Improving transparency would include encouraging the FDA to provide information on drugs that were not approved instead of releasing information on only approved drugs. This would put the FDA under more public scrutiny for indirect harm or even death that occurs as a result of the lengthy review process, and could therefore cause an increase in efficiency because of the added incentive to preserve its reputation.

California Can Improve Housing and Transit by Preempting Local Ordinances

Salim Furth and Emily Hamilton | Policy Brief

In this policy brief, Mercatus scholars Salim Furth and Emily Hamilton discuss a new bill in California, SB-50, that aims to preempt certain local zoning regulations in parts of the state that are well served by public transit. They consider the California housing market, the principled case for preempting municipal ordinances in California’s institutional environment, the specifics of SB-50, and the likely effects and limits of passing SB-50 into law. They conclude that Because California residents suffer the pains of high and rising housing prices induced by regulatory constraints on supply, state preemption has the potential to create opportunities for increased access to housing in several markets.

Housing Affordability Is Attainable through Regulatory Reform

Salim Furth and Emily Hamilton | Public Comment 

Scarcity and high prices in US housing markets are caused by state and local policies that constrain new housing construction. Because the federal government has an appropriately small role in local land use policy, substantial reform to local land use regulation will be driven by state and local decisions.

In a public statement to the Department of Housing and Urban Development (HUD), Mercatus scholars Salim Furth and Emily Hamilton offer insight on immediate federal action to alleviate artificial unaffordability.

Some tools to encourage reform are available to the White House Council on Eliminating Regulatory Barriers to Affordable Housing. Within HUD’s grant programs, the most natural opportunity to encourage local land use reform is to apply extra scrutiny to Community Development Block Grants in those localities that stand in the way of new housing, particularly relatively low-cost multifamily housing and accessory dwelling units. HUD has an opportunity to institute this rule by implementing standards for land use regulation for all of its grantees and standards for housing construction for high-cost grantees.

Michigan's Certificate-of-Need Program: Lessons from Research

Matthew D. Mitchell | State Testimony

In a recent state testimony, Matthew D. Mitchell explains the likely effects if Michigan repealed or reformed their extensive certificate-of-need laws in healthcare that regulate the development of new medical services.

Michigan’s CON program is more comprehensive than most, with regulations placed on air ambulances, hospital beds, transplants, medical imaging technologies, neonatal intensive care units, and psychiatric care beds. The state also requires CONs for several services that are unlikely to be overprescribed, such as neonatal intensive care and transplants, as well as care that serves vulnerable populations, such as those with mental health problems.

Unfortunately, by limiting supply and undermining competition, CON laws may undercut the very goals policymakers set out to achieve with CON regulation. In fact, research shows that CON laws fail to achieve the goals most often given when enacting such laws.

Mitchell explains these failures and their subsequent effects in detail, and offers some ideas for reform that would greatly benefit Michigan in achieving the goal of a more effective healthcare facilities.