Leveraging Pharma to Lower Premiums: Medical Loss Ratio Regulation in the Pharmaceutical Industry

Many recognize escalating drug prices as a significant dilemma related to America’s rising healthcare costs. Yet few can agree on what to do about them. Unaffordable drug prices are a result of many complex forces. One theory to address this problem is to reduce all government intervention and let normal market forces act as they usually do to bring the goods’ prices down to consumer-friendly ranges. However, the prescription drug market is not, and perhaps never can be, a normal market. Reasons for this include (1) a lack of price transparency, (2) information and control asymmetries between patients and physicians, (3) third-party payors, (4) demand that remains constant irrespective of any exorbitant price increases (i.e., market inelasticity), and (5) patent-ensured monopolies. These factors disrupt the normal market forces that usually maintain prices at levels amenable to the general public (i.e., price equilibrium). Left unchecked, Big Pharma increase their prices partly to pay for elevated marketing and other expenses and partly to recoup greater earnings. Consequently, they rake in substantial profits—at an average greater than any other industry. Thus, rising drug prices burden not only those who need them but also those who are expected to help pay for them. To right this abnormal market, this Note suggests an alternative theory: that Congress should apply a medical loss ratio framework to the pharmaceutical drug industry, similar to the ratio framework applied to reform the health insurance industry. This framework seeks to balance corporate profits with consumer benefits by separating profits and “other” less value-adding expenses from those that add greater value to the consumer (i.e., “medical loss”). In the health insurance industry’s 80:20 ratio framework, if the less value-adding expenses (e.g., profits, sales and marketing) cross the ratio threshold (20%), then the companies must reimburse the excess back to the consumer. This measure has eased some insurance premium increases. Similar reform is needed in the pharmaceutical industry, as currently the industry averages 21% profit— significantly above that of other industries—while also spending around 23% on sales and marketing and around 30% on manufacturing.Therefore, the average medical loss ratio is roughly 30:70 (30% on medical loss and 70% on less value-adding areas). Imposing a stricter ratio threshold, such as 40:60, would provide some much-needed incentives for drug companies to reduce their lesser-value-adding expenses and, as a result, reduce drug prices. If Big Pharma failed to meet the 40% threshold, then the excess would be returned to the consumer. Imposing a medical loss ratio regulation in the pharmaceutical industry is a promising solution to one of our nation’s greatest healthcare cost concerns

Community Regulation: The Relative Importance of Recruitment and Predation Intensity of an Intertidal Community Dominant in a Seascape Context

Predicting the strength and context-dependency of species interactions across multiple scales is a core area in ecology. This is especially challenging in the marine environment, where populations of most predators and prey are generally open, because of their pelagic larval phase, and recruitment of both is highly variable. In this study we use a comparative-experimental approach on small and large spatial scales to test the relationship between predation intensity and prey recruitment and their relative importance in shaping populations of a dominant rocky intertidal space occupier, mussels, in the context of seascape (availability of nearby subtidal reef habitat). Predation intensity on transplanted mussels was tested inside and outside cages and recruitment was measured with standard larval settlement collectors. We found that on intertidal rocky benches with contiguous subtidal reefs in New Zealand, mussel larval recruitment is usually low but predation on recruits by subtidal consumers (fish, crabs) is intense during high tide. On nearby intertidal rocky benches with adjacent sandy subtidal habitats, larval recruitment is usually greater but subtidal predators are typically rare and predation is weaker. Multiple regression analysis showed that predation intensity accounts for most of the variability in the abundance of adult mussels compared to recruitment. This seascape-dependent, predation-recruitment relationship could scale up to explain regional community variability. We argue that community ecology models should include seascape context-dependency and its effects on recruitment and species interactions for better predictions of coastal community dynamics and structure

Syntaxin 16 is a master recruitment factor for cytokinesis

Recently it was shown that both recycling endosome and endosomal sorting complex required for transport (ESCRT) components are required for cytokinesis, in which they are believed to act in a sequential manner to bring about secondary ingression and abscission, respectively. However, it is not clear how either of these complexes is targeted to the midbody and whether their delivery is coordinated. The trafficking of membrane vesicles between different intracellular organelles involves the formation of soluble N-ethylmalei­mide–sensitive factor attachment protein receptor (SNARE) complexes. Although membrane traffic is known to play an important role in cytokinesis, the contribution and identity of intracellular SNAREs to cytokinesis remain unclear. Here we demonstrate that syntaxin 16 is a key regulator of cytokinesis, as it is required for recruitment of both recycling endosome–associated Exocyst and ESCRT machinery during late telophase, and therefore that these two distinct facets of cytokinesis are inextricably linked