IRAT ONE (LAW)

The reason for social regulation of medications is due to four market failures. If we assume that individuals will act in their best interests to maximize happiness/personal gain then these personal values that people hold dear will degrade and diminish the effectiveness of medications being available to consumers. This is why that the government is needed to regulate this industry as they are supposed to be looking out for everybody's interests as a whole. The market failures talked about are:

Public Goods: Must be provided by the government as private entities have no reason to provide this good as it is not profitable. Since there is no need to provide this public good an unregulated market will not provide these services. Examples of Public goods include orphan drugs and vaccines.

Externalities: Exists when the production or consumption of a good affects someone else. The example used in the book is the overuse of antibiotics. If an unregulated market existed then people would be taking antibiotics whenever they felt sick and would lead to the rise of antibiotic resistant strains of bacteria. This is an externality since the individual taking the drug is not considering the effects it has on others. A non medical example would be people who purchase a good from a factory that produces pollution. The consumers are not worrying about the individuals who are living near the factory and are affected by the pollution.

Natural Monopolies: Occur when the fixed costs of providing a good are high relative to the variable costs so the average cost of the good declines over time that the good is marketed. This limits the amount of people who can enter the market as the high upfront costs will not be profitable over a long duration. Examples of natural monopolies include: water, electricity, and natural gas. This is why government regulation is needed since most businesses have no incentive to open these types of businesses. Regulation incentivizes businesses to do research and produce this type of product. An example of this is drug companies marketing new drugs. The process of researching and marketing new drugs costs millions of dollars. To incentivize this the government gives the innovating business the rights to sell the drug as a brand to make up the money they have lost due to research.

Information Asymmetry: Occurs as a result of an uninformed consumer. Most objects like a chair, or table have their value relatively apparent, but it is more difficult to ascertain the value of a medication if not trained in that field. The government must step in to minimize this failure by allowing educated professionals to make decisions about the drugs used by the consumer.

Sources of Law include
the U.S. Constitution,
Legislatures make law by enacting laws and statutes,
Administrative agencies make law by enacting regulations and enforcement decisions through hearings,
federal agencies publish their regulations, and
Courts make law through judicial opinions.

Types could be
Common law (made by the courts through judicial opinion);
Stare Decisis (where the court replies on a previous courts judicial opinion); and Statutory Law (the law interpreted from how it was written)
Constitutional Law (law given by the federal constitution)

▸ The Legislative Process
Enacting or amending federal or state laws is the role of the federal or state legislative branch. The federal legislative branch and the state legislative branch have similar legislative processes.
FEDERAL LEVEL:
Is composed with the Senate and the House of Representatives. The congress function is to enact statutes through vote.
An idea for bill is presented by a citizen, government officials or the president; the bill is presented to the congress then the congressional committee with jurisdiction over the subject, they hold public hearings and conducts investigation; Then together with the sponsor work to accommodate specific interests about the bill. For the bill to be proceeded it needs the vote of the majority of the committee members.
After the bill is approved and the committee states the details and reasons for this decision, together with the changes that it might create on the existing law, then the majority leadership places it on a calendar. After the bill has been discussed it is debated and amended, then it passes to another chamber's appropriate committee for further consideration, (Senate or the House).
After the bill has been review by both chambers then is sign by the president of the Senate and the Speaker of the House and sent to the President of the United States.

STATE LEVEL
Is modeled roughly after the U.S Congress., but it differs from the federal level in a few characteristics:
- The congress meets in full session for only a few months, usually every other year.
- They are less prone to hold full hearings and do not usually issue fully informative committee reports on bills.
- Communication is sometimes poor making it difficult to know the true nature of proposed bills.
- there is usually not a well- documented written history of a bill as
in Congress .

Function: Interpreting laws through judicial review.
Structure: Courts examine evidence brought to them to decide if laws should be changed, interpreted differently, or if a new law should be made entirely. Courts can make laws through judicial opinions otherwise known as common law. Courts can choose to hear a case de novo if there is not enough evidence brought forth, meaning they will drop the case and start a new trial. If substantial evidence is brought forth, the court will review the appropriateness of a decision in light of the evidence. Agency's decisions are subject to judicial review after there is an exhaustion of remedies, meaning all administrative options have been used.

Administrative agencies are created by legislature to implement desired changes in policies or to administer a body of substantive law. Legislatures are not able to be everywhere all at once to perform these responsibilities and thus the importance of administrative agencies. The administrative agencies is the the decision makers, they provide a definitive, final answer that are reflective to society expectations. The administration agencies have the authority to perform legislative, judicial, and executive functions. They perform their legislative function through the promulgation of regulations, after 3 legal tests (1. Regulation must be within the scope of agencies authority. 2. Regulation must be based on a statute that gives the agency the authority. 3. Regulation must bear a reasonable relationship to the public health safety, and welfare.). They perform their judicial functions through enforcement activities, and their decisions are usually subject to "judicial review". They can also create law through their authority to enact regulations and render decisions at hearings

Criminal: Involves violating a statute. In the case of a pharmacist, you can be held criminally liable if you break a statute. For this case it would be dispensing a prescription controlled drug without a prescription. The statute forbids the pharmacist form doing this and if you do the government can initiate a criminal action. Sanctions can include a fine or prison time. The purpose of the criminal liability is to deter undesirable activity while also punishing and reforming that individual.

Civil: Involves one party suing the other party for injury or other grievance. In the case of the pharmacist, if the pharmacist knew about a patient's allergy but forgot and still dispensed a medication that was harmful to the patient then the pharmacist could be held in civil liability. Civil actions may be based on common law, statutory law or both. The purpose of civil liability is to compensate the individual affected by the other party.

Administrative: Involves breaking a statute or regulation, or has committed an act that warrants an investigation by an agency. These administrative actions are known as hearings where the outcome, depending on severity of the infraction, could lead to warnings, fines, license revocation, license suspension, or probation.

Federal: Laws made at the federal level are government enforced and made by the United States Government in the legislative and judicial branch. They are meant to be laws enforced around the whole nation.

State: Laws made at the state level are only enforceable in the state they are made in. These laws are made by local governments and courts. They are enforced through local law enforcement. State laws differ from state to state.

Many laws are necessarily vague and variable because they deal with human relationships. It is impossible for lawmakers to foresee all the countless, ever-changing human relationships that may occur. Courts often can
reach decisions in law only after considerable reasoning based on several factors that may include:

Fundamental notions of fairness
The custom or history involved
The command of a political entity
The best balance between conflicting societal interests

Federal statutes (most prevalent)
State statutes
State Legislation
Ordinances

FDA: Food and Drug Administration-administers the federal Food, Drug, and Cosmetic Act (FDCA)

DEA: Drug Enforcement Administration-under the jurisdiction of the U.S. Justice Department, administers the federal Controlled Substances Act.

CMS: Centers for Medicare & Medicaid Services-responsible for reimbursement policies and procedures for pharmacies and other healthcare providers participating in the Medicare and Medicaid programs

FTC:Federal Trade Commission- administers the Federal Trade Commission Act, enforcing unfair business practices and antitrust violations

Must be within the scope of the agency's authority.

Must be based on a statute that gives the agency the authority to promulgate the regulation

Must bear a reasonable relationship to the public health, safety, and welfare.

Agency decisions are usually subject to "judicial review," but only after the individual has availed him- or herself of every available administrative option, legally called "exhaustion of remedies."

On judicial review, a court usually examines the record of the administrative hearing. If the record shows that the agency's decision was based on "substantial evidence," the court often simply reviews the appropriateness of the decision in light of the evidence

The Federal Register is a daily publication that lists various federal actions, including proposed regulations, final regulations, and various government notices.

The CFR is an annually revised compilation of final regulations divided and indexed by subject matter.

Administrative agency exercises its judicial function through its enforcement activities; its decision to institute proceedings is discretionary with the agency. These can resemble civil or criminal court proceedings, however the results are in favor of the agency or the regulated party, perhaps even creating a new law by interpreting the existing law.

Stare Decisis means "to abide by decided cases." This is the court's establishment of a certain rule of law based on a particular set of facts that becomes the precedent that all the lower courts in that jurisdiction must follow.

The purpose of Stare Decisis is to 1) establish a continuity of decisions, 2) expediting judicial decision making

Voir Dire: a type of jury selection; where the attorneys question each potential juror to determine if they want the person on the jury

Subpoena:an order to appear in court at a specified time and place, failure to appear can result in a contempt of court, as the trial may be postponed

Summary Judgment: asks the judge to decide the case without trying the facts. ( one party attempts to convince the judge that the other party's claim or defense has no merit, even if all the facts are correct. This is a pre-trial motion.

Directed Verdict: one side of the trial may ask for a directed verdict, meaning the other party has no legally sufficient evidentiary basis for a reasonable jury to reach a different conclusion. This is an in-trial motion.

A ruling granted by the court in favor of the plaintiff in the event the defendant in a legal case fails to appear or respond to a court summons. (this decision can be responsible for reimbursement policies and procedures for pharmacies and other healthcare providers participating in the Medicare and Medicaid programs.cate if the defendant can establish valid reasons for not appearing or ignoring a summons)

In a civil trial, the plaintiff must establish proof by a "preponderance of the evidence."

In a criminal trial, the government must prove its case "beyond a reasonable doubt."

Thus, evidence that would result in a victory for a plaintiff in a civil trial might not be enough evidence to convict a defendant in a criminal trial.