RegBlog

Mortgage Servicers Agree to Largest Civil Settlement Ever

2012-02-23T05:55:00Z

Five mortgage servicers accused of lending violations agreed to the largest joint federal-state civil settlement ever. The mortgage servicers settled charges made by the federal government and 49 state attorneys for mortgage loan servicing and foreclosure abuses.

The federal government and state attorneys general accused the lenders of using “robo-signed” affidavits in foreclosure proceedings as well as deceiving consumers when offering loan modifications. The joint federal-state group also accused the lenders of failing to offer non-foreclosure alternatives to federally-insured borrowers and filing “improper documentation” in federal bankruptcy court.

As part of the settlement, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC) agreed to commit $25 billion to remedy federal and state violations. The agreement requires that the servicers provide $20 billion in financial relief to borrowers. The servicers will also provide $5 billion to federal and state governments to repay, in part, public funds lost because of servicer misconduct.

The companies also agreed to submit themselves to increased oversight of foreclosure processing as well as new pre-filing requirements for documents submitted to bankruptcy court. According to the Department of Housing and Urban Development , the new requirements are “in keeping” with President Obama’s recently announced Homeowners Bill of Rights.

The settlement must still be approved by a court, notes Professor David Skeel of the University of Pennsylvania Law School in an op-ed in the Wall Street Journal.

Congress Passes FAA Modernization Act

2012-02-23T05:40:00Z

The U.S. airline industry can look forward to $63.4 billion dollars of federal funding and four years of fiscal certainty after President Barack Obama signed the FAA Modernization and Reform Act of 2012 into law last week.

The Act sets the funding for the Federal Aviation Administration (FAA) at fiscal year 2011 levels for the next four years and does not increase the rates of aviation taxes paid by passengers and airlines. The Act also includes numerous measures intended to reform and improve existing FAA practices and infrastructure.

A major focus of the law is the FAA’s “NextGen” program, a variety of linked efforts to modernize navigation and communication technologies and switch air traffic control from current ground-based systems to satellite-based systems. The law requires the FAA to establish a new position, the Chief NextGen Officer, to manage NextGen activities and report to the Administrator of the FAA.

Other parts of the law seek to improve airline safety standards. For example, the law requires the FAA to study typical sources of distraction for airplane crew members and recommend ways to reduce them. Another provision directs the FAA to investigate the frequency with which passengers use cell phones during flights and assess the potential safety risk associated with such use.

To address privacy concerns during airport security screenings, the law requires that all "advanced imaging technology" used in airports, such as backscatter scanners, must show the same generic image for all passengers who are screened.

The law amends Title 49 of the United States Code to provide the longest guaranteed period of funding for FAA programs in several years.

The Budget Roadmap to the Regulatory State

2012-02-22T05:30:00Z

President Obama’s recently released budget for FY 2013 treats environment protection, financial reform, and health care as the administration’s regulatory priorities.

The Environmental Protection Agency’s discretionary budget request for FY 2013 is $8.3 billion. This is a decrease of $105 million, or 1.2 percent, from 2012. Despite the overall decrease, “[f]unding is increased for core priorities, such as the agency’s operating budget which includes funds for the enforcement of environmental and public health protection.” The administration’s “core priorities” include the reduction of greenhouse gas emissions to “17 percent below 2005 levels by 2020 and 83 percent by 2050.”

The administration’s budget request includes increases for several of the agencies responsible for implementing the Dodd-Frank financial reform law. The Department of the Treasury would receive a 6.9 percent budget increase (though, excluding the Internal Revenue Service, the budget request is actually 2.7 percent below the 2012 level).

Independent agencies with rulemaking authority under Dodd-Frank would also receive increased budgets. The Commodities Futures Trading Commission (CFTC) requested an overall budget increase of $102.7 million, or roughly a 50 percent increase from its 2012 level. The CFTC also proposed adding 305 new staff members, an increase of 43 percent. The CFTC explained that its “new responsibilities to oversee both swaps and futures markets” under Dodd-Frank “necessitated an agency restructuring to ensure the Commission uses its resources as efficiently as possible.”

Commissioner Scott O’Malia dissented from the administration’s budget request for CFTC. According to Commissioner O’Malia, the budget “makes an unsubstantiated case for a massive expansion in staffing that is both unrealistic and unsustainable in this deficit environment.”

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray would see an increase of $91.3 million (26 percent) and 417 new employees (44 percent). The largest portion of this increase – an additional $47.1 million and 238 employees – would go to the CFPB’s Supervision, Enforcement, and Fair Lending & Equal Opportunity goals.

To implement the Patient Protection and Affordable Care Act (PPACA), the administration announced that Department of Health and Human Services (HHS) will be focusing on “building capacity and creating infrastructure to establish [insurance] exchanges.” The Centers for Medicare & Medicaid Services (CMS), perhaps the division of HHS most involved in establishing the exchanges, would see a $993 million increase, by far the largest increase requested by any HHS division.

President Obama’s budget reflects his administration’s emphasis on building a more robust regulatory apparatus to implement his political achievements of the Dodd-Frank Act and the PPACA.

Sam Batkins is the Director of Regulatory Policy and Dan Goldbeck is a Research Assistant for the American Action Forum.

EPA Regulates Emissions from PVC Production Facilities

2012-02-21T05:30:00Z

After battling in court for nearly a decade, the Environmental Protection Agency (EPA) adopted new regulations last week affecting the manufacturing of polyvinyl chloride (PVC).

The EPA estimates that its new rule will reduce PVC factory emissions of air toxics by over 260 tons annually. This includes reductions in vinyl chloride and dioxin pollution, both of which are known human carcinogens. Children are especially susceptible to vinyl chloride-induced cancer, and dioxin is also known to cause developmental, reproductive, and immunological problems.

The new EPA rule may also help alleviate environmental justice concerns with PVC facilities, as the proportion of minorities living near PVC plants is six percentage points higher than the national average.

The rule is expected to cost PVC manufacturers a total of $18.5 million in compliance-related capital expenses and $4.2 million in annual monitoring outlays.

EPA followed a circuitous route to the new rule. In 2002, the EPA issued a rule which was subsequently vacated by the D.C. Circuit Court of Appeals in Mossville Environmental Action Now v. EPA. In 2008, environmentalists again filed suit, this time claiming EPA had violated the Clean Air Act by not yet issuing new standards. In 2009, the parties reached a settlement of the second lawsuit by establishing a schedule that led to the issuance of last week’s standards.

Environmental organizations, including Earthjustice, which spearheaded both rounds of litigation, praised EPA’s decision to regulate emissions from PVC plants. The Vinyl Institute, an industry trade association, said it would have to study the standards in greater detail but that its initial view was “cautiously optimistic” that the agency adopted a sensible rule.

The third-most common form of plastic in the United State, PVC is commonly used in water pipes but also appears in products ranging from building materials to toys. Seventeen PVC plants currently exist in the United States, with most of them located in Texas and Louisiana.

A Pill Everyone Can Swallow

2012-02-20T05:30:00Z

It is rare in the current political climate for a regulatory scheme to receive broad support – including from regulated entities. The Food and Drug Administration (FDA) has accomplished this rare feat with its recent proposal to require the generic drug industry to pay user fees to fund improvements to its process of approving generic drugs.

In a hearing before the House Energy and Commerce Committee’s Subcommittee on Health, all witnesses agreed that, if implemented properly, the FDA’s proposal was a good one. Those witnesses represented the FDA, Mylan, a leading generic drug manufacturer, the Generic Pharmaceutical Association, and St. Jude Children’s Research Hospital.

The FDA’s current review process has struggled to keep up with increasing size and globalization of the generic drug industry. Approximately 2,500 generic drug applications are awaiting FDA approval, and average application approval time is stretching beyond 30 months.

Last year, approximately 78 per cent of the more than 3 billion new and refilled prescriptions dispensed in the U.S. were filled with generics. Purchasing this high percentage of generic, rather than branded, drugs, has saved purchasers an estimated $931 billion over the last decade.

At the same time, the generic drug industry has becoming increasingly globalized. Generic drug manufacturers often spread their manufacturing supply chain across several continents, adding to the cost and complexity of FDA plant inspections and approvals for new generic drugs. Foreign facilities supporting U.S. drug supply have grown by 185 per cent, while at the same time, FDA inspection rates have decreased by nearly 57 per cent. Industry members have expressed concerns about the resulting unlevel playing field for US manufacturers, who, unlike their foreign counterparts, are subject to biannual FDA inspections of their facilities.

The FDA proposal aims to overcome the current regulatory hurdles to generic drug approvals. The generic drug user fees it proposes imposing would represent approximately one half of 1 per cent of generic drug sales, or $299 million, annually. The FDA would use the proceeds from these fees to inspect foreign and domestic plants involved in generic drug manufacturing. The FDA will also commit to meeting application approval performance goals, including, by 2017, clearing the existing backlog and completing reviews of 90 per cent of generic drug applications within 10 months of their receipt.

Abigail Slater is a member of the New York Bar and a Solicitor in England and Wales. She is currently employed as an antitrust attorney by the Federal Trade Commission (FTC) in Washington D.C. Prior to the FTC, she worked in several offices of the international law firm Freshfields Bruckhaus Deringer. All views expressed are the author’s own and do not represent the views of the FTC or any individual Commissioner.

The Regulatory Week in Review: February 17, 2012

2012-02-17T05:30:00Z

President Obama introduced a $3.8 trillion budget for Fiscal Year 2013, in which he expressed support for the so-called “Buffett rule,” placing a 30% tax floor on incomes greater than $1 million.

The Environmental Protection Agency (EPA) found that a widely used dry cleaning solvent - tetrachloroethylene - is a “likely human carcinogen,” causing the agency to reconsider standards for drinking water and other sources of exposure to the chemical.

The Federal Communications Commission (FCC) updated rules on telemarketers' robocalls, requiring companies to obtain written consent before placing an automated call to a consumer and to provide consumers with ways to opt out of a robocall upon receiving one.

Registered lobbyists continued their lawsuit against the Department of Commerce (DOC) and Office of the U.S. Trade Representative (USTR), claiming the Obama administration’s policy to ban their service on federal advisory boards is unconstitutional.

The FCC has announced it will take public comment on a proposal to reject permanently LightSquared’s proposal to construct a national high-speed wireless network, following a finding from the National Telecommunications and Information Administration that the mobile service would interfere with personal-navigation and other GPS devices.

The Food and Drug Administration (FDA) studied 400 different lipsticks and announced that it found only trace amounts of lead which it deemed not large enough to raise a safety concern.

The Speaker of the House postponed voting on a $260 billion transportation and energy bill, citing numerous amendments and disagreements over funding sources.

Washington State enacted a law legalizing same-sex marriage, while a bill to permit gay marriage in Maryland faced a key legislative vote. The New Jersey legislature passed a bill that would legalize same-sex marriage, but Governor Chris Christie has stated that he will veto it.

A report on foreclosures in California found that the vast majority of residential foreclosures between 2009 and 2011 involved legal violations or questionable documentation.

The Department of Transportation (DOT) issued voluntary guidelines encouraging auto manufacturers to lock in-vehicle electronic devices like text messaging systems so they cannot be used by drivers while they are driving.

Senators Introduce Bipartisan Bill to Streamline Medical Device Approval

2012-02-16T05:30:00Z

Senators Robert Casey (D-PA) and John McCain (R-AZ) recently introduced a bipartisan bill intended to streamline the regulatory approval process for medical devices.

In a press release, Senator McCain said that streamlining regulatory approval will “improve patients’ access to safe and effective medical devices.” Senator Casey underscored that the bill will “protect consumers and…help our nation’s manufactures innovate.”

The bill, called the Safe, Efficient and Transparent Medical Device Approval Act (SET Device Act), would require the Food and Drug Administration (FDA) to speed up its evaluation of medical devices of low to moderate risk that have no existing substantial equivalent. The category of “medical devices” encompasses a wide range of items, from tongue depressors to surgical devices to in vitro diagnostic products.

Currently, devices without an existing substantial equivalent are categorized as class III devices. This classification subjects these devices to greater scrutiny than either class I or II devices because they require an FDA investigation into whether the device is substantially new. This investigation can lengthen the approval process, even for devices that are readily identifiable as unique.

To address this problem, the SET Device Act would allow manufacturers to apply for direct approval of an innovative device by submitting a classification request in which they could declare explicitly that there is no similar device already on the market. If the FDA accepts the request, then the device would be assigned a final classification without going through the similar-device investigation process.

FTC Stalls Omnicare/PharMerica Merger

2012-02-15T05:30:00Z

Potentially stalling the merger of two giants in the long-term pharmaceutical services industry, the Federal Trade Commission (FTC) recently issued an antitrust complaint objecting to Omnicare’s impending merger with PharMerica Corporation.

According to the government complaint, if the merger were to proceed, Omnicare’s $441 million acquisition of PharMerica would create a combined firm with control over at least 57 percent of the market for long-term pharmaceutical care, giving it substantial bargaining leverage.

According to the FTC’s complaint, the result would be a dramatic reduction in market competition, monopolistic price discrimination, and an increase in prices for nursing homes.

The FTC complaint also suggests that the merger would mean less control over the price of prescription drugs and higher costs for the Centers for Medicare and Medicaid Services (CMS). As many of Omnicare’s and PharMerica’s customers are nursing home residents who are beneficiaries of Medicare, an increase in drug prices would be passed on to CMS. These costs, the complaint alleges, would ultimately be borne by taxpayers.

The FTC is also currently looking into the potential merger of Express Scripts and Medco Health Solutions, but has yet to indicate anything about whether it will approve The $22 billion Scripts-Medco deal would combine two of the country’s three largest pharmacy benefit managers, intermediaries between the providers and consumers of prescription drugs.

FHFA Publishes Proposed PACE Rule

2012-02-14T05:02:30Z

Homeowners may find it more difficult to obtain loans from their local governments for energy saving home improvements under a proposed rule issued by the federal agency responsible for managing government-sponsored lending institutions, such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

The proposed rule restricts the funding of mortgages associated with state Property Assessed Clean Energy (PACE) programs, which enable local governments to provide loans to homeowners for energy-efficient home improvements.

The proposal followed a flurry of legal activity that started in July 2010 when the Federal Housing Finance Agency (FHFA) issued an informal statement warning of the risks PACE pose for mortgage investments. The statement effectively halted state PACE programs by causing enterprises such as Freddie Mac and Fannie Mae to completely avoid mortgages associated with PACE loans.

States, environmental groups, and other PACE advocates have filed several lawsuits against the FHFA seeking injunctive relief which would have restarted the programs. In one such lawsuit, a federal district court issued an order to FHFA to initiate a notice-and-comment rulemaking to offer guidance about how lenders should deal with PACE loans. The agency posted the proposed rule in the Federal Register on January 26, announcing it will accept comments through March 26, 2012.

PACE legislation, which has been adopted in 27 states, provides a way for homeowners to obtain funding for energy-efficient home improvements that would otherwise be cost prohibitive. Under the program, homeowners receive loans from the local government and repay them through annual supplemental property-tax assessments.

An Incomplete Contraceptive Coverage Compromise

2012-02-13T05:23:00Z

In Friday's highly publicized announcement, President Obama may have helped contain the political firestorm over the new federal mandate that health plans cover contraceptives. But the embers are still hot. And legally speaking, nothing has changed. On Friday, the Department of Health and Human Services (HHS) issued a final rule that looks just like what it announced on January 20 – the very announcement that set off the recent firestorm.

Americans could be forgiven for thinking the Obama administration had changed policy on Friday. The original HHS announcement, recall, had said religious nonprofit institutions would have an additional year to comply with the mandate. Admitting the issue had become a “political football,” the President said that “it became clear that spending months hammering out a solution was not going to be an option, that we needed to move this faster.” He said he told HHS, “We weren’t going to spend a year doing this; we're going to spend a week or two doing this.”

So when the president announced that “we've reached a decision on how to move forward,” he sounded resolute. He definitively laid out the compromise that, “[u]nder the rule” he was announcing, insurance companies rather than religious nonprofits would need to pay for contraceptives. He said this approach would achieve the right balance between contraceptive access and religious freedom.

Speaking to CNN just after the president’s announcement, HHS Secretary Kathleen Sebelius stated, “We’re pleased to announce that the final rule, which will be published later this afternoon, will include this important balance.” She reiterated that “as of the end of today the rule will be finalized.”

But the rule HHS finalized on Friday actually put in place nothing like what the president announced. On the contrary, the final rule enacts the very same terms that HHS had announced on January 20th. Churches are exempt from the mandate but the only concession religious nonprofits receive is the promised one-year “enforcement safe haven.” An accompanying guidance, also released Friday, would make the safe haven contingent on a nonprofit completing a certification and providing written notice to its employees that its health plan provides no coverage for contraceptives.

In an explanatory preamble to Friday’s final rule, HHS did state that it plans to “work with stakeholders” on a separate rulemaking that would enact the compromise the President announced and even “to develop policies to achieve the same goals for self-insured group health plans.” But it is clear that the federal government has not even begun to initiate this new rulemaking; it only “will work with stakeholders to propose and finalize this policy before the end of the temporary enforcement safe harbor.”

For now, nothing has changed except that the very policy that triggered the recent controversy has now been put into law. As Secretary Sebelius said on CNN, “We announced from the beginning that we were going to work with stakeholders.”

Yes, the president has articulated a clear direction forward, and in doing so he may well have done the best he could do, politically speaking. But undoubtedly Republicans in Congress and on the presidential campaign trail will continue to try to make an issue of the contraceptive coverage mandate. The fact that nothing has really changed will only make it that much harder for President Obama to put this issue behind him for good.

Cary Coglianese is the Edward B. Shils Professor of Law, Professor of Political Science, and Director of the Penn Program on Regulation at the University of Pennsylvania Law School. He is the founder of and faculty advisor to RegBlog.

The Regulatory Week in Review: February 10, 2012

2012-02-10T05:30:00Z

The Ninth Circuit Court of Appeals ruled that California’s Proposition 8 banning gay marriage in the state violates the 14th Amendment.

U.S. and state officials reached a $26 billion settlement with the nation's biggest mortgage lenders over alleged foreclosure abuses. The money will be distributed to homeowners facing foreclosure.

Controversy stirred over a Department of Health and Human Services (HHS) rule mandating employer coverage of contraceptives, prompting members of Congress from both parties to write to the administration asking for an expansion of the rule’s exemption for religious organizations. See related RegBlog post.

Congress passed a $63 billion reauthorization act funding the Federal Aviation Administration (FAA) through 2015, providing the first such long-term appropriations for the agency since the last funding bill expired in 2007.

Pennsylvania lawmakers passed a bill allowing counties to levy fees on natural-gas wells and reducing the ability of local governments to exclude gas drilling from their towns. See related RegBlog post.

Lawyers for the state of Arizona filed an opening brief with the U.S. Supreme Court in its appeal of a 9th Circuit ruling blocking enforcement of the state’s immigration enforcement law SB 1070.

An Ohio company agreed to pay the Environmental Protection Agency (EPA) $1.4 million in penalties after failing to report the manufacture of toxic chemicals at two of its plants in violation of the Toxic Substances Control Act (TSCA).

By a vote of 417-2, the House of Representatives approved the Stop Trading on Congressional Knowledge (STOCK) Act, a bill to prevent insider trading by lawmakers and other federal employees.

U.S. Senators Bob Casey (D-PA) and John McCain (R-AZ) introduced a bill to speed up the Food and Drug Administration (FDA) approval process for medical device manufacturers.

The U.S. Nuclear Regulatory Commission (NRC) approved the construction of two nuclear reactors by Southern Co. in Georgia, the first to gain approval since 1978.

An Aerospace Industries Association (AIA) report criticized the impact of a 1999 decision to place export controls on U.S. satellites makers, alleging that this resulted in reduced competitiveness of satellite exports and increased national security risk.

European governments requested that Google delay forthcoming changes to its privacy policies as the French Data Protection Authority (CNIL) continued its investigation on behalf of the EU, while the advocacy group Electronic Privacy Information Center filed suit in federal court to block the changes. See related RegBlog posts here and here.

The Centers for Medicare & Medicaid Services (CMS) proposed a rule to implement provisions of the Affordable Care Act (ACA) relating to managed care organization (MCO) contract provisions and calculations of Medicaid reimbursements to pharmacies.

The advocacy group OMB Watch reported on 25 agencies’ recent submission of plans in compliance with Executive Order 13563, which required agencies to review their existing regulations to ensure that they are still necessary and cost-justified.

The FDA issued guidance to assist drug and device manufacturers conducting clinical trials in complying with revised requirements for obtaining informed consent from their study subjects.

The Securities and Exchange Commission (SEC) released a final rule to bring its Inspector General, who previously only reported to the SEC chair, under the purview of the full Commission.

EU Reveals New Strategy to Improve Online Privacy

2012-02-09T05:30:00Z

Internet users in Europe may soon have more control over their personal data if the European Commission adopts proposed reforms designed to enhance online privacy and reduce administrative burdens for businesses.

The proposed reforms would require websites to obtain explicit consent from users before processing data. The reforms would provide users with rights over their personal data, including the right to access it, transfer it, and request its deletion.

The proposed reforms aim to reduce business costs by creating a single set of data protection laws across the European Union. In addition, instead of requiring businesses to notify regulators of all data protection activities, the proposed reforms would simply require disclosure “of serious data breaches as soon as possible.”

The proposed reforms would also authorize national data protection agencies to increase monetary penalties for violating EU data protection laws.

In support of its proposals, the EC cited a recent Eurobarometer study that found that a vast majority of Europeans are worried about the potential misuse of their online data.

The EC adopted its existing data protection rules in the early 1990s when, according to EC Vice President Viviane Reding, only 1% of telecommunications information was transmitted via the internet.

Controversy Surrounds HHS Contraception Mandate

2012-02-08T19:45:00Z

In the face of criticism over the administration’s decision to require employers to provide health coverage for contraception, advisors to President Obama signaled yesterday that the administration continues to “work with” religious organizations that object to the impending requirement.

“We certainly don’t want to abridge anyone’s religious freedoms, so we’re going to look for a way to move forward that both guarantees women that basic preventative care that they need and respects the prerogatives of religious institutions,” stated Obama campaign advisor David Axelrod yesterday on MSNBC’s “Morning Joe” show.

White House Press Secretary Jay Carney also noted yesterday that President Obama “takes seriously the religious convictions that are behind the concerns that have been raised.” In his daily press briefing, Carney stated that the administration pledges “to continue to work with religious groups to try to allay their concerns as we implement a policy that provides this coverage to women across the country.”

The administration’s response comes in the face of heated criticisms from religious leaders and Republicans over a statement announced last month by the Department of Health and Human Services (HHS) that it will require full insurance coverage of women’s preventive health services. The HHS’s final rule will closely resemble an interim final rule the agency issued last summer, in that it will retain a controversial provision requiring employers to pay for insurance coverage of all FDA-approved contraceptives.

The Affordable Care Act of 2010 required HHS to identify and create a rule mandating full coverage of a set of preventive health services targeted specifically to women. The services enumerated in the rule track recommendations from an HHS-commissioned Institute of Medicine (IOM) report. Under the HHS rule, health insurance issuers must provide coverage for interventions such as HPV testing, lactation counseling, and contraception – all without co-pays, deductibles, or other cost-sharing measures.

According to the IOM report, it is well-documented that contraception use reduces the rate of unintended pregnancies and multiple closely-spaced births, both of which are associated with poor health outcomes for mothers and their children. Contraception is currently covered by Medicaid, all federal employee health insurance plans, and 85% of large group health insurance plans in the US, but most of these plans currently require cost-sharing. The Obama Adminstration notes that more than half the states have requirements that contraception coverage be included in health plans.

The HHS rule will include a conscience exemption which would apply primarily to houses of worship, but not to religiously-affiliated institutions such as universities and hospitals. Such religious institutions that do not qualify for the exemption may defer compliance for one additional year after the rule goes into effect.

Women’s health advocates and reproductive rights groups, such as the National Latina Institute for Reproductive Health and Planned Parenthood, have praised the rule. “This decision is grounded in sound medical science and health policy and protects access to affordable birth control for millions of women,” said Planned Parenthood in a statement.

However, religious groups such as the National Association of Evangelicals criticized the rule for violating freedom of religion. Timothy M. Dolan, the president of the U.S. Conference of Catholic Bishops, indicated that the group may raise legal challenges to the rule, stating that “Catholic bishops are committed to working with our fellow Americans to reform the law and change this unjust regulation.”

Republican presidential candidates have denounced the rule. Mitt Romney’s campaign has created an online website to solicit opposition to the HHS decision. Rick Santorum has condemned the Obama Aministration for what he perceives to be its “hostile” stance toward religioun.

HHS Secretary Kathleen Sebelius responded to the recent criticism in an op-ed in Monday’s USA Today explaining that her agency’s rule aims to “strike the right balance between respecting religious beliefs and increasing women's access to critical preventive health services.”

Speaker of the House John Boehner (R-OH) today pledged congressional action to overturn the HHS rule if the administration does not reconsider.

FDA Submits User-Fee Recommendations to Congress

2012-02-08T05:30:00Z

The Department of Health and Human Services (HHS) recently submitted to Congress recommendations from the Food and Drug Administration (FDA) for a user fee program for biosimilar drugs.

Biosimilars are drugs that aim to replicate an already-approved biologic drug. The FDA plans on using the collected fees to fund timely review of biosimilar and related drug applications.

The FDA recommends legislation, a proposed Biosimilars User Fee Act of 2012, that would authorize HHS to assess an initial product development fee on biosimilar manufacturers that request meetings with the FDA or submit a new product protocol.

After paying the initial fee, manufacturers would also need to pay an annual product development fee. The FDA would not respond to manufacturers who have failed to pay their required fees.

The proposed statute would prevent HHS from charging biosimilar manufacturers more than the total costs of resources it allocates to biosimilar-related review activities.

The legislation also would require HHS to submit annual reports on the performance of this user fee program to relevant committees in the Senate and the House of Representatives. By 2015, HHS would also need to submit an independently contracted study on workload volume and biosimilar review costs.

YouTube Provides Modified Terms of Service to State Governments

2012-02-07T05:30:00Z

YouTube and the National Association of State Chief Information Officers (NASCIO), which represents state chief information officers and information technology executives, recently agreed that YouTube would provide state governments with the option of using modified terms of service.

NASCIO pursued this agreement to alleviate the concerns of state officials that YouTube’s standard Terms of Service might violate state procurement rules or state constitutions. Specifically, many states prohibit agencies from agreeing to indemnification clauses, like one that appears in the standard Terms of Service, because they could create indeterminate financial liabilities for the states. A NASCIO report described other state concerns including strict limits on jurisdiction and choice of law found in the ordinary Terms of Service.

The modified terms of service addresses those concerns by not holding states legally responsible if YouTube is sued because of content they post and not requiring that potential legal disputes between YouTube and the state governments be settled in California courts.

The agreement followed nearly 18 months of negotiations between NASCIO and YouTube. NASCIO had previously come to a similar agreement altering Facebook’s terms, and it hopes to develop parallel arrangements with other popular websites, including Twitter.

Facebook had experience modifying its terms for the government: in 2009, it formed an agreement with the US General Services Administration (GSA) to provide modified terms to federal agencies. Federal agencies concerns’ had included “liability limits, endorsements, freedom of information, and governing law.”