Pareto Policy Solutions, LLC

advancing innovation through smart regulation

Pareto Policy Solutions, LLC is a policy analysis and advocacy firm committed to advancing sustainability through “smart” regulation: regulation that rewards, and does not penalize, superior performance.  Often, such actions leverage advances in science and technology and make the regulatory program itself more effective as well as more efficient.

Last Week in Regulation: FAA Faces Pressure To Allow Drones

Drones:  Still Grounded.  Last year, the Federal Aviation Administration (FAA) determined that the use of unmanned aircraft systems (i.e., drones) for commercial purposes is unlawful and would remain so until the Agency issues regulations to ensure their safe use.  In February, the Agency proposed a regulation applicable for small (under 55 pounds) drones; the public comment period closed April 24th.  Many businesses, from realtors to farmers, expressed opposition to the constraints in the FAA proposal, which would require an operator to maintain visual contact with a drone during use.  Amazon has requested FAA permission to test new robotic sensing technology that may keep drones from interfering with other objects during deliveries to customers.  Retail and e-commerce are expected to offer the largest markets, at least initially, for commercial drone technology.  FAA must now consider the public comments before issuing a final rule.

California Raisins Have Their Day in Court. On April 22nd, the Supreme Court heard arguments in Horne v US Department of Agriculture.  At issue is a 1937 law that allows the federal government to take a portion of a farmer’s crop and hold it in reserve in order to inflate prices in the short term.  Although the aim of this Depression-era program is to help farmers, it has drawn the opposition from the Hornes, raisin farmers from California, who claim it represents an illegal “taking” of their personal property under the Fifth Amendment.  Press accounts report that a few of the justices were openly critical of the USDA program; Justice Elena Kagan suggested it was “ridiculous”.  A decision is expected in June.

First Biosimilar Drug To Enter the Market.  In March, the Food and Drug Administration (FDA) approved the first “biosimilar” pharmaceutical and, earlier this month, a court cleared the path for marketing of the new drug, pending appeal.  A “biosimilar” is a drug similar (but not identical) to an approved biological drug—large, complex molecules derived from living cells (vaccines, antibodies, etc.).  In the Affordable Care Act, Congress included provisions allowing for a more streamlined (and less expensive) approval process for biosimilars, modeling the new law on the highly successful generics program that has been place since 1984.  Although biosimilars are expected to save to the US health care system tens of billions of dollars over a decade, this figure is less than that provided by generics because the regulatory burden of proof is higher for the more complex biological molecules.  

EPA Expands List of Acceptable Refrigerants. On April 10th, the U.S. Environmental Protection Agency (EPA) issued a final rule adding five flammable refrigerants (subject to certain use conditions) to its list of acceptable substitutes under the Significant New Alternatives Policy (SNAP) program.  The Clean Air Act established the SNAP program to identify acceptable substitutes for ozone-depleting substances, such as CFCs, which are responsible for creating the so-called “ozone hole” in the stratosphere.  Over time, production of CFCs, used as refrigerants and many other end uses, has been eliminated, replaced largely by another class of substances known as HFCs.  Although HFCs have no ozone-depletion potential, many are potent greenhouse gases.  President Obama’s Climate Action Plan called for elimination of HFCs, and EPA is in the process of phasing down their use.  This latest EPA action is designed to give HFC consumers more options.

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