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September 19th, 2017
One in ten Americans is prescribed a medication that is not financially accessible to the patient.
No wonder. Per-capita spending on prescription drugs in the United States ($856) is more than double the average of the next 19 industrialized nations ($400). Big Pharma claims that research and development is the source of this rocket burn.
But if this were the case, why have four of the most popular drugs more than doubled in cost over the past five years? Wouldn’t research costs already be baked into the price?
The price of insulin, used to treat diabetes, has more than tripled between 2002 and 2013. Humira, a drug used to treat rheumatoid arthritis, had a retail cost of $1,550 for two doses in 2009. Today, it has a retail cost of $4,537 for two doses in the United States. By comparison, the drug costs $2,726 for two doses in Canada. A two-pack of EpiPens, used for allergic reactions, is now over $600, up from a little more than $100 in 2007. The annual cost of Lipitor, an anti-cholesterol medication, rose from $1,290 in 2006 to $2,140 in 2012.
On average, the U.S. prices for the world’s top 20 selling medications are three times higher than in Great Britain.
The price hikes on many generics have also been steep. For example, erythromycin in 500-mg tablets had three increases of more than 100%, ranging from 24 cents per tablet in 2010 to $8.96 per tablet in 2015. Methazolamide, a glaucoma drug, increased 454% from 33 cents per tablet in 2010 to $1.85 in 2011. By 2015, the drug’s price was $5.47. This is an increase of 1,538% over five years. The antibiotic doxycycline hyclate jumped from $20 for 500 capsules in October of 2013 to a staggering $1,849 in April of 2014. The antibiotic tetracycline soared from 6 cents for a pill in 2013 to $4.60 per pill in 2015, a 1,000% increase in two years.
For many years, people with health insurance were one step removed from these price increases. Health insurers, through pharmaceutical benefit managers (PBMs), negotiated a price with the drug manufacturers and, depending on the terms, designated the medication as a “preferred” product on a formulary. At the same time, pharmacies negotiated with drug manufacturers and insurance companies to be part of the covered network of the insurer, in many cases agreeing to charge a lower price for medications on the formulary.
The discounts and rebates negotiated by insurers through this process can be significant—up to 80% off from the list price. 
Today, however, as many as 40 percent of people with health insurance are covered under high-deductible plans. Even though they have insurance, they must pay for their drugs out-of-pocket until they hit their high deductible. Every drug company contacted by Bloomberg News last fall said that when patients in high-deductible plans pay for drugs out of pocket, drug companies pay the rebates to the insurer or pharmacy benefit manager, not the patient. In other words, high-deductible plans don’t give the benefit of rebates negotiated by insurers to their patients.
Similarly, the uninsured are charged a “sticker” (list) price for medications, a price not paid by insurers or the government. They too don’t get the benefits of the discounts. Because of this price disparity, the uninsured, who do not have access to health insurance (in many cases due to its cost), go without necessary medications, incurring more medical costs.
Real reform of this mess should be initiated by Congress. For instance, a law should be enacted that gives the federal government the authority to negotiate the price of medications for Medicare patients. At least one research paper determined allowing Medicare to negotiate prices could save over $16 billion per year.
While meaningful reform requires Congress to act, there are steps the state of Minnesota can take to address the prescription drug disgrace.
For instance, the states of Oregon and Washington created a program where all residents—including those covered by high-deductible plans and the uninsured—benefit from discounts and rebates negotiated by government purchasers. The two states use their purchasing clout to negotiate with the pharmaceutical industry for better prices for drugs in prisons, schools, state nursing homes, and other public facilities. The two states then permit their individual residents to join these state purchasing pools so that the public also gets to share in the states’ negotiating clout.
Oregon’s drug discount program provides an average discount of 50% off list prices for brand name drugs and up to 80% discounts for generics. In Washington, enrollees save on average about 60% off a drug’s sticker price, or $43 per prescription. In Oregon over 296,000 people participate. In Washington over 230,000 participate.
Minnesota should implement a similar program.
Since 1985, the state of Minnesota has administered a purchasing pool called the Minnesota Multistate Contracting Alliance for Pharmacy (MMCAP). This pool combines the purchasing power of 5,000 separate facilities from 49 state governments (such as higher education facilities, hospitals, prisons, first responders, and the like) to buy more than $1 billion per year in medical supplies, including medications, influenza vaccines, dental supplies, and drug testing equipment. Counties, cities and school districts are also members.
The state should combine the efficiency of MMCAP with the drug discount programs available to the people of Washington and Oregon so that Minnesota residents can receive discounts off their prescription drugs like the HMOs and insurance companies do.
The proposal is simple.
The proposal doesn’t require a new infrastructure.
The proposal doesn’t require a big financial budget.
While this action will not address the full scope of the pharmaceutical problem, we shouldn’t just do nothing while we wait for the federal government to step up to the plate.
Let’s do it.
August 9th, 2017
I write about the attacks on civil rights.
The Civil Rights Division of the U.S. Department of Justice was created 60 years ago. Since 1957, it has been the tip of the spear in taking action against discriminatory practices, from schools to hate crimes, from housing to lending, from employment to elections. It has attacked human trafficking and ensured access to clinics and voting booths. It has stood up for people with disabilities.
In short, its mission has been to give equal protection under the law and be a shield against exploitation, discrimination, and violence. While the U.S. Commission on Civil Rights sets civil rights policy, it is the U.S. Department of Justice that is the watchdog on patrol.
We are now in the midst of an unprecedented culture war, where different groups of Americans are singled out for attack. Over the past six months, we have seen Muslims singled out for a travel ban, millions of voters accused of fraud, transgender soldiers told they are not worthy of service, roll backs in policies to stop campus sexual assaults, and police encouraged to mistreat suspects. The list goes on and on.
Last week it was announced that the U.S. Department of Justice will focus its energy on attacking college affirmative action policies as being discriminatory against white people. This policy turns the DOJ’s mission upside down.
The Minnesota Attorney General’s Office does not have jurisdiction to prosecute civil rights litigation. This jurisdiction is delegated to the Minnesota Department of Human Rights, which does a fine job of mediating complaints and setting policy on civil rights matters. But changes at the federal level demand that the states take more initiative.
Even though my office does not have jurisdiction to initiate civil rights litigation, we have tried to exert our influence where consistent with state policy; for example, some of our actions include:
I have also joined several other attorneys general in letters and briefs that:
There was one case where I did have jurisdiction to file a lawsuit involving individual rights, and that was the travel ban. I was one of only two attorneys general to file the initial successful lawsuit. I had jurisdiction on the basis that the state government owned universities that had students with visas and employed people who held visas.
I believe that the state legislature should establish and fund a state Office of Civil Rights. This authority may have been redundant over the 70 years of US DOJ involvement in this arena. Given the recent attacks on groups of people based on who they are, and given the apparent changes in the mission of the US DOJ, I would like to see such an office created and funded.
If you think this idea has merit, please bring the issue up with your legislators. No matter what office I hold, I will support the establishment of this office.
June 28th, 2017
Over 30,000 people will die from opioid-related overdoses this year in the United States.
The United States has less than 5% of the world’s population but uses 80% of the world’s prescription opioid painkillers.
People who abuse prescription painkillers often turn to street heroin, at a rate of about 600 per day, because of its lower cost.
One tragic consequence of the opioid epidemic is babies who are born addicted to opioids like OxyContin or Vicodin. This alone costs over $300 million in hospital care, not to mention the human toll.
I have joined with a number of other Attorneys General in an investigation into the potential legal culpability of pharmaceutical manufacturers in the marketing and sale of opioid prescription painkillers. I hope that any money recovered from this effort could help fund treatment, which is desperately needed to curb this epidemic.
Investigations and lawsuits alone, however, will not stop the addiction crisis. Nor can Minnesota arrest or prosecute its way out of this problem.
Before the legislative session, I issued a white paper on the opioid epidemic. The paper made a number of legislative proposals which, if enacted, would hopefully help save lives. The white paper was recently recognized as a 2017 Notable Document by the National Conference of State Legislatures (the only white paper to address the opioid crisis). Unfortunately, most of the proposals in the paper failed to be enacted into law this year. Lobbyists whose clients wanted to duck responsibility on the issue turned out against the legislation.
The proposals include the following:
Another proposal—which I support—would have charged a one-penny fee on each painkiller dispensed (measured in morphine milligram equivalents). The fee would have generated an estimated $20 million per year for drug treatment. This proposal was not enacted.
This epidemic affects people from all parts of Minnesota and all walks of life. The victims include people who are addicted to drugs, their families and friends, their employers, and those who fall prey to crimes like theft, assault, and intoxicated driving caused by drug abuse.
I hope that you will review the white paper and contact your legislators with your thoughts on this crisis. Despite the lobbying, legislators will respond to these proposals if they hear from enough constituents who make it clear that the epidemic affects their communities.
August 23rd, 2017
In 1987, the movie “Wall Street” was released. A tense scene depicted the character Gordon Gekko, the king of corporate raiders, explaining why he was dismantling an airline corporation and laying off its employees. He simply said, “Greed is good.”
I think of the actor Michael Douglas giving this speech when I see some of the pernicious scams perpetrated by the financial industry.
My office recently sued a finance company that charged veterans 200 percent interest for small loans that required the veterans to sign away significant portions of their monthly pension for years to come.  We sued a bank that put unauthorized charges for identity theft protection packages on customers’ accounts.  We enjoined companies that signed people up for credit cards using the credit of other customers.  We stopped student loan companies that promised students phony debt relief.  And last month, we secured a court order that that should help to get an estimated $20 million in usurious loans wiped out. 
With all this greed, it is troubling that the financial industry wants to abolish the federal Consumer Financial Protection Bureau (“CFPB”). The Bureau was established to be a consumer watchdog over the financial industry at the federal level. The industry says the CFPB needlessly intrudes into the free market with unnecessary consumer protections. Really? Let’s take a look:
Mandatory Arbitration. Banks and credit card companies bury mandatory arbitration clauses in the fine print of their customer agreements. These arbitration clauses deprive people of their right to have their day in court if the company treats them unfairly, such as charging them too much interest, failing to credit payments, or debiting unauthorized charges.
The CFPB recently proposed a rule to restrict the placement of mandatory arbitration provisions in fine print contracts. The financial industry doesn’t like the rule. The industry wants to force people into arbitration before arbitrators picked by the industry.
In 2009, I sued the largest consumer arbitration company in the world, the National Arbitration Forum (“NAF”). NAF handled hundreds of thousands of cases throughout the nation each year. In almost every case, the consumer lost, and the bank won. Our investigation found that NAF hand-picked arbitrators who were favorable to the banks. We also discovered that NAF had an ownership affiliation with a New York hedge fund group that owned the operations of the largest debt collection enterprise in the country. In the end, we barred NAF from handling consumer arbitrations. 
Congress then held hearings on the matter.  I advocated for the CFPB to promulgate rules to abolish this slanted practice. The CFPB has now promulgated such a rule, but Congress wants to get rid of it.
Fake Accounts. Last September, Wells Fargo agreed to pay $185 million to the CFPB to settle charges that the bank pressured employees to open more than 2 million fake accounts that weren’t authorized by customers.  The customers were charged fees on accounts they didn’t know they had, and some customers were chased by collection agents for fees on accounts that they didn’t know existed. To make matters worse, Wells Fargo forced consumers who complained they had fakes accounts created in their names into, you guessed it, mandatory arbitration.
Forced Automobile Insurance. An internal report by Wells Fargo was published two weeks ago. The report said that Wells Fargo illegally forced auto insurance on 800,000 borrowers who didn’t need it.  The bank immediately offered to refund $80 million to borrowers. The cost of the unnecessary insurance reportedly pushed almost 275,000 customers into delinquency, and nearly 25,000 vehicles were reportedly wrongfully repossessed.
These actions by the CFPB are only the tip of the iceberg. Adam Smith, the so-called “Father of Economics,” said that fierce competition between purchasers and sellers is good. But he never said that greed, avarice, and fraud were proper motivators in our economic system.
The CFPB can play an important role in protecting regular folks from the excesses of Wall Street. This is why I went to court to defend the constitutionality of the independence of the CFPB. 
If you agree with my observations in this report, I ask you to let your Congressional Representatives know that the CFPB is an integral part of a balanced economy.
 PHH Corporation v. Consumer Financial Protection Bureau, Amicus Brief, United States District Court for the District of Columbia Circuit, No. 15-1177, filed March, 2017.
September 7th, 2017
Liverpool is a port that is the birthright of some great slang. One of the slogans is, “I’m on board, Jack. Pull up the ladder.” This essentially means: “I’ve made it. Who cares about you.”
Unfortunately, it could be used to describe some occupational regulations in this country.
In the 1950s, less than 5% of workers in the United States needed a license from the government to do their jobs. By 2008, over 30% of nation’s workforce was required to have an occupational license.
We should require occupational licenses in jobs where a license is needed to protect the public. For example, nobody would want to be operated on by an unlicensed doctor, fly with an unlicensed commercial jet pilot, or get a root canal from an unlicensed dentist. We don’t want our children taught by unlicensed teachers, nor do we want unlicensed electricians working on power lines.
A report from the Obama Administration notes that while some occupational licensing is necessary and important to ensure high-quality services, occupational licensing in other cases has morphed into a scheme where the main goal is to drive out competitors by setting rigid or unnecessary licensing standards.
The Council of State Governments estimates that about 1,100 occupations are licensed by the 50 states. One report estimated that unnecessary licensing restrictions cost over 2.8 million jobs and added over $200 billion to the cost of services paid by Americans for personal services.
It isn’t just the money. Researchers have examined inconsistent requirements for licensure in various occupations. Professor Morris Kleiner, who holds the AFL-CIO Labor Policy Chair at the University of Minnesota, notes that: “In Minnesota, more classroom time is required to become a cosmetologist than to become a lawyer. Becoming a manicurist takes double the number of hours of instruction as a paramedic.”
Licensing requirements for similar jobs within a state can vary a lot. Michigan requires 1,460 days of education to become an athletic trainer, but only 26 days to be an emergency medical technician.
There can also be big differences in the licensing requirements for the same job in different states. Michigan requires three years of training to be a security guard. Most states require 11 days or less. Iowa requires 16 months of education for a cosmetologist. New York requires less than 8 months.
Around the country, there are a maze of different license requirements for hair braiders, cosmetologists, barbers, nail technicians, make-up artists, and estheticians. Example: a make-up artist must be licensed as an esthetician. Yet, go into a department store and you will see customers getting makeup applied by people with no licenses. Is the purpose of the license sanitation? If so, what about the department store? Is the requirement of licensure necessary to set a minimum level of expertise? If so, can the government judge the skill of a makeup artist better than a customer?
The fact of the matter is that some licensing requirements inhibit economic mobility and make it harder to get a job or start a business, particularly for entry-level workers. People like military spouses who frequently move from state-to-state can get caught up in a labyrinth of inconsistent requirements.
Borrowing from Professor Kleiner’s proposals, Minnesota should take a hard look at any standards whose aim is just to stifle competition and fence out new people from an occupation.
I don’t claim to have all the answers, but the purpose of these reports is to provide some thoughts about Minnesota as I look to the economic vitality of this state. Please let me know what you think.
 https://pages.wustl.edu/files/pages/imce/soks/professions.pdf at footnote 2.
July 25th, 2017
Elections shouldn’t go to the highest bidder.
That was the point I made in a friend of the court brief that I filed in the United States Supreme Court in 2010 in the case called Citizens United. Unfortunately, the Court disagreed and overturned 100 years of law, saying that corporations can spend billions of dollars to influence our elections.
Despite widespread criticism of the ruling—and despite more friend-of-the court briefs filed by me and my colleagues in subsequent cases—the Supreme Court has continued to leave in place the Citizens United ruling.
In the wake of Citizens United, here’s what we see:
History is repeating itself. 100 years ago—facing public backlash over corporate corruption and influence peddling—many states, including Minnesota, banned corporate contributions. 100 years later, following Citizens United, corporate and big money spending once again threaten to stifle our democracy and drown out the voices of real voters.
We should have a Constitutional Amendment to overturn Citizens United. Without such an amendment (or a new Supreme Court that reverses the ruling), the courts will not permit the government to ban corporate electioneering. But I believe the courts would permit the State or Congress to regulate some aspects of corporate electioneering if it can show it has a compelling interest and the regulation is narrowly tailored to achieve that interest.
While we work toward a Constitutional Amendment to overturn Citizens United, we should consider taking common-sense steps like these:
I hope you will let your state legislators and members of Congress know that despite the Supreme Court ruling, there appear to be some steps the state and federal governments can take to limit corporate influence on our political process. I also hope you will share with them your own ideas for how to get the money out of politics.