Category: consumers



  • The U.S. Supreme Court on Monday agreed to hear arguments in a case challenging the constitutionality of the Consumer Financial Protection Bureau’s funding, a move that was welcomed by some advocates as an opportunity for the nation’s highest court to protect American consumers from a lower court ruling.

    The justices will take up the case, Community Financial Services Association v. CFPB, after a panel of three U.S. 5th Circuit Court of Appeals judges appointed by former President Donald Trump last year sided with the payday lending industry in the ruling by questioning the federal agency’s funding model and thereby its authority.

    At issue is whether the CFPB’s annual funding via the Federal Reserve and not Congress violates the Appropriations Clause of the Constitution. Critics of the October ruling argued that the CFPB’s funding mechanism was designed to ensure the agency’s independence.

    The Biden administration, backed by Democratic attorneys general in 21 states, argues that the 5th Circuit Court’s ruling “threatens the validity of all past CFPB actions.”

    First proposed by then-Harvard law professor Elizabeth Warren, the CFPB was established in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act in the wake of the 2007-08 global financial crisis. Consumer advocates warn that the 5th Circuit’s ruling threatens the constitutionality of the Federal Reserve, as well as agencies including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Housing Finance Agency, the Farm Credit Administration, and the Office of Financial Research.

    Consumer advocates reacted to Monday’s news by saying the U.S. Supreme Court now has an opportunity to correct what they say is the mistaken logic of the lower court ruling.

    “There is no judicially cognizable limiting legal principle that distinguishes between the 5th Circuit’s harebrained assault on the CFPB and potential challenges to Social Security or other financial regulators which are funded outside of the annual appropriations process,” warned Jeff Hauser, executive director of the watchdog group Revolving Door Project.

    Maria Langholz, communications director at the online advocacy group Demand Progress, welcomed the high court’s acceptance of the case.

    “We are pleased to see that the Supreme Court has agreed to hear this important case and expect a correction of the 5th Circuit’s misguided attacks on the CFPB,” she said in a statement. “In the past twelve years, the CFPB has proven itself as a fierce defender of consumers against unscrupulous creditors that decimated our economy and wreaked havoc on people’s lives. The Supreme Court should reject the Fifth Circuit’s unprecedented ruling, restoring stability to the marketplace and preserving the CFPB’s ability to protect the American people.”


    Morgan Harper, director of policy and advocacy at the American Economic Liberties Project, called the 5th Circuit’s decision “a direct attack on the nation’s economy.”

    “Now that it has taken up the case, SCOTUS must move swiftly to overturn this dangerous opinion that could prevent financial regulators, including the Federal Reserve, from doing their jobs to protect American businesses and consumers.”

    Revolving Door Project researcher Vishal Shankar called the 5th Circuit’s ruling “a naked attempt by corporate fraudsters to destroy the only cop on the beat protecting consumers.

    Shankar continued:

    The case was originally brought by predatory payday lenders and is being supported by giant lobbying groups like the Chamber of Commerce, whose members and executives have a shameless history of breaking the law and ripping off consumers. Multiple Republican lawmakers who have praised the 5th Circuit’s ruling—and the far-right judge who wrote it—have taken large financial contributions from these corporate rip-off artists and lobbying giants.

    “Following the money confirms what we all know to be true: this case has nothing to do with the constitutional separation of powers and everything to do with destroying an overwhelmingly popular law enforcement agency that has already returned over $13.5 billion in relief to consumers from corporate fraudsters,” Shankar added.

    “If the Supreme Court has any respect left for the rule of law,” he said, “it should overturn the 5th Circuit’s radical act of right-wing judicial activism.”

    This post was originally published on Common Dreams.

  • The Medicare prescription drug pricing plan Democrats unveiled this week is not nearly as ambitious as many lawmakers sought, but they and drug policy experts say the provisions crack open the door to reforms that could have dramatic effects.

    Tamping down drug expenses has been a longtime rallying cry for consumers beset by rapidly rising prices. Although people in private plans had some protections, those on Medicare often did not. They had no out-of-pocket caps and frequently complained that federal law kept them from using drugmakers’ coupons or other cost-cutting strategies.

    A plan offered earlier this year by House Democrats — which included robust negotiation over drug prices in Medicare — was blocked by a handful of moderates who argued that the price curbs would stifle innovation. The legislation also was on a course to hit roadblocks among senators.

    The moderates favored more limited negotiation over drugs only in Medicare Part B — those administered in doctors’ offices and hospitals. Most people in Medicare get their drugs through Part D, which covers medicine dispensed at a pharmacy.

    When it appeared that the bill to fund President Joe Biden’s social agenda would move forward without a drug pricing proposal, the pressure built, intense negotiations were held, and a hybrid proposal was unveiled. It includes identifying 100 of the most expensive drugs and targeting 10 of them for negotiations to bring those costs down beginning in 2025. It will also place inflation caps on prescription drug prices for all insurance plans, restrict copays for insulin to no more than $35, and limit Medicare beneficiaries’ annual out-of-pocket drug costs to $2,000.

    “There was a sense that the government had its hands tied behind its back. Now a precedent is being set,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who led the talks for the senators. “There’s going to be negotiation on the most expensive drugs: cancer drugs, arthritis drugs or the anticoagulants. And that’s a precedent, and once you set a precedent that you can actually negotiate, you are really turning an important corner.”

    Drugmakers say the changes could stymie consumers’ options. “Under the guise of ‘negotiation,’ it gives the government the power to dictate how much a medicine is worth,” Stephen Ubl, CEO of the trade group PhRMA, said in a statement, “and leaves many patients facing a future with less access to medicines and fewer new treatments.”

    But how, exactly, will the changes be felt by most Americans, and who will be helped?

    The answers vary, and many details would still have to be worked out by government agencies if the legislation passes. House members warned some minor changes were still being made Thursday night, and it all has to pass both chambers.

    Controlling Insulin Costs

    One of the most obvious benefits will go to those who need insulin, the lifesaving drug for people with Type 1 diabetes and some with Type 2 diabetes. Although the drug has been around for decades, prices have risen rapidly in recent years. Lawmakers have been galvanized by nightmarish accounts of people dying because they couldn’t afford insulin or driving to Canada or Mexico to get it cheaper.

    Under the bill, starting in 2023, the maximum out-of-pocket cost for a 30-day supply of insulin would be $35. The benefit would not be limited to Medicare beneficiaries.

    That cap is the same as one that was set in a five-year model program in Medicare. In it, the Centers for Medicare & Medicaid Services estimated that the average patient would save about $466 a year.

    Detailed analyses of the proposals were not yet available, so it is unclear what the fiscal impact or savings would be for patients outside of Medicare.

    Limiting Out-of-Pocket Spending

    Another obvious benefit for Medicare beneficiaries is the $2,000 cap on out-of-pocket costs for prescription drugs. Currently, drug costs for people in the Part D prescription drug plans are calculated with a complicated formula that features the infamous “doughnut hole,” but there is no limit to how much they might spend.

    That has led to consumers with serious diseases such as cancer or multiple sclerosis paying thousands of dollars to cover their medication, a recent KFF analysis found. Under current law, when an individual beneficiary and her plan spend $4,130 this year on drugs, the beneficiary enters the doughnut hole coverage gap and pays up to 25% of the price of the drug. Once she has spent $6,500 on drugs, she is responsible for 5% of the cost through the end of the year.

    Limiting that expense is an especially big deal for people who get little low-income assistance and have expensive illnesses, said Dr. Jing Luo, an assistant professor of medicine at the University of Pittsburgh’s Center for Research on Health Care. “The patient pays 5% of all drug costs, and 5% of $160,000 is still a lot of money,” he said.

    The legislation would alleviate that fear for consumers. “Rather than having a bill at the end of the year, like over $10,000, maybe their bill at the end of that year for that very expensive multiple myeloma treatment is $2,000,” he said.

    Negotiating Drug Prices

    Medicare price negotiation is probably the highest-profile provision in the legislation — and the most controversial. According to the bill, the Department of Health and Human Services would be responsible for identifying the 100 high-cost drugs and choosing the 10 for price negotiations. That effort wouldn’t start until 2023, but the new prices would go into effect in 2025. Another 10 drugs could be added by 2028. No drugs have been identified yet.

    To meet the concerns of some lawmakers, the legislation lays out specific provisions for how HHS would select the drugs to be included. Only drugs identified as one of a kind or the only remedy for a specific health problem would be included.

    The list would also be limited to drugs that have been on the market beyond the period of exclusivity the government grants them to be free from competition and recoup costs. For most regular drugs, the exclusivity can last nine years. For the more complicated biologic drugs, the period would be 13 years. Using the exclusivity timing allowed lawmakers to skirt the issue of whether the drugs were still under patent protection.

    The measure allows for prices to be negotiated to a lower level for older drugs chosen for the program. So, for example, the negotiated price for a non-biologic drug that has been available for less than 12 years would be 75% of the average manufacturer price. That would fall to 65% for drugs that are 12 to 16 years past their initial exclusivity, and 40% for drugs more than 16 years past the initial exclusivity.

    Drugs from smaller companies with sales under $200 million are excluded because lawmakers were afraid tamping down their prices would harm innovation.

    Some experts questioned whether the negotiated prices would be directly felt by consumers.

    “It helps Medicare, without question, to reduce their expenditures,” said William Comanor, a professor of health policy and management at the UCLA Fielding School of Public Health. “But how does that affect consumers? I bet Medicare doesn’t change the copay.”

    Yet, he added, the copayment is less of an issue if a consumer’s prescription expenses are capped at $2,000.

    Linking Prices to Inflation

    Under the bill, manufacturers would have to report their prices to the HHS secretary, and if the prices increase faster than inflation, the drugmakers would have to pay a rebate to the government. Manufacturers that don’t pay the rebate would face a civil penalty of 125% of the value of the rebate.

    The provisions would apply to drugs purchased through Medicare and non-Medicare plans.

    Over the long term, the idea is to slow the overall inflation of drug prices, which has exceeded general inflation for decades.

    Drug prices would be pegged to what they were in March, and the system would go into effect in 2023, so there would be little immediate impact. (Some lawmakers had hoped to peg the program to prices from several years ago — which might produce a bigger effect — but that was changed in the negotiations over the weekend.) The long-term impact is also hard to judge, because under the current complicated system, many people who pay for drugs get assistance from the drug companies, and most generics in the U.S. are relatively inexpensive, Comanor said.

    Over the long haul, though, savings are expected to be substantial for the government, as well as for consumers who don’t qualify for other programs to help pay drug expenses and need high-end medication.

    At the very least, the legislation would move the U.S. in the direction of the rest of the world.

    “The longer the drug is on the market, the lower the price,” said Gerard Anderson, a professor of health policy at Johns Hopkins’ medical school. “In every other country, the price goes down over time, while in the United States, it is common for prices to increase.”

    Subscribe to KHN’s free Morning Briefing.

    This post was originally published on Latest – Truthout.

  • Every eco-conscious consumer has felt the frustration of trying to make the least climate-ruining decisions. Nothing you buy is really good for the planet — every new purchase carries a carbon cost. So many factors go into determining the environmental and social impact of everything on your shopping list that even the smallest choices can become agonizing. How are you to know whether cotton really is better than polyester? Whether local or organic food is preferable? Whether GMO means anything at all? A mind-boggling array of factors can inform every decision, so for reassurance, people often turn to trusted brands and recognizable — or at least understandable —labels.

    Climate Neutral Certified combines those two things in a verified seal of approval indicating that a product comes from a company taking responsibility for the carbon emissions of its entire supply chain. The idea, according to CEO Austin Whitman, is to make those headache-inducing decisions a little easier — and provide clear, simple actions for folks who want to tread more lightly on the planet.

    The nonprofit wants to do for a whole array of products what Fair Trade has done for coffee and LEED has done for buildings — hold manufacturers to higher standards, and give consumers some assurance that the item they’re choosing is as climate-friendly as possible. Almost 70 percent of shoppers in the U.S. and Canada say they look for sustainability in the brands they buy. It’s a particularly high priority for Gen Z and millennial consumers. And although there’s some debate about whether these values actually translate into purchases, “eco-friendly” products are definitely a growing market, and more and more companies are catching on.

    Climate Neutral cofounder Peter Dering had heard a lot of talk about reducing carbon footprints among his peers in the outdoors industry. But most of them, himself included, had no idea where to start — or even what their carbon footprints actually were. In 2017, he decided to try measuring it for his company Peak Design, which makes backpacks and other travel gear and accessories. He hired consultants to map every part of every item to every factory, determine the energy consumption of those factories, and figure out what portion of that was devoted to manufacturing stuff for Peak Design. As the process dragged on and the consulting fees racked up, Dering discovered an irony: The cost of measuring his company’s carbon footprint nearly outstripped the cost of offsetting it. “I could put all my dollars toward carbon mitigation,” he says. “Or I could put an equivalent number of dollars toward simply knowing with better confidence what my carbon footprint is.”

    He wanted to do the former — and he thought he could get other business leaders on board. Dering joined forces with Jonathan Cedar of BioLite, who had had a similar experience trying to assess his company’s carbon impact. Together, they founded Climate Neutral as a way to help other businesses measure, offset, and reduce their emissions.

    To earn the sunburst-y certification each year, a company must estimate its overall carbon footprint using Climate Neutral’s nifty Brand Emissions Estimator — which is less precise, but much quicker and cheaper than hiring a consulting firm. Next, the company must purchase offsets to mitigate its entire carbon output from the preceding year. Finally, it must commit to reducing its emissions and document quantitative progress in doing so.

    For the uninitiated: Carbon offsets essentially mean paying someone else to clean up your CO₂ mess by planting trees, erecting wind turbines, or taking other steps to sequester or eliminate greenhouse gases to compensate for what you’ve produced. Not everyone is convinced they’re legit. Critics consider them little more than corporate greenwashing that lets wealthy polluters continue their dirty ways. Dering and Whitman concede offsets are not the answer to the climate crisis, but they are pragmatic enough to understand that there’s only so much companies can do to clean up their supply chains while waiting for the wholesale adoption of clean energy. Offsets allow them to take some responsibility for their climate impacts while continuing to do business. “Austerity will not win this battle,” Dering says.

    Climate Neutral’s first crop of 150 brands, which includes the likes of Klean Kanteen, Allbirds, Numi Tea, and Kickstarter, measured and offset 228,314 metric tons of carbon for 2019. The number of brands will grow to 300 this summer, and Whitman aims to get another 250 on board by the end of the year.

    Climate Neutral label on a cup of tea
    Climate Neutral Certified

    Given its relatively small advertising budget, the nonprofit largely relies on certified companies to build recognition. “We focus on enabling brands to tell our story clearly, cleanly, and accurately,” says Whitman, “so that when they carry our label out into the market, consumers are able to figure out what it means and trust it.” This is crucial, since part of the value that Climate Neutral offers to companies is the ability to convey their climate-conscious ways to customers in an enticing way. Although most of the feedback is anecdotal at this point, Whitman says he’s seen encouraging comments from shoppers who’ve taken to social media to report choosing Climate Neutral Certified products over others.

    Of course, Climate Neutral is far from the only sustainability label out there. The field’s gotten so crowded that you need a database (literally) to keep track of them all. “It can get overwhelming,” says Katherine White, professor of marketing and behavioral science at the University of British Columbia. To stand out, a label must offer something unique and be easy to interpret. Even then, it’s debatable how much sustainability claims influence consumer behavior, even when people say they value it. All else being equal, White says, customers will choose the more sustainable option. But climate-friendly products have a reputation for being expensive. Understandably, it’s tough to get the average shopper to compromise on price — especially when competitors aren’t exactly advertising the grim realities behind their bargain deals. “Take cage-free eggs,” White says. “The alternatives don’t say ‘caged-in-very-uncomfortable-and-unpleasant-circumstances eggs,’ right?” If they did, probably a lot more people would shell out $4.99 for cage-free eggs.

    With any eco or social-good certification, the companies most likely to pursue them are the ones already making sustainability a part of their brand. Still, White says, a third-party seal of approval — like Climate Neutral, which requires clear, tangible actions — can help show that a company is serious. “They’re not just putting it in their mission statement,” White says. “They’re putting their money and effort where their mouth is, and being held accountable for what they’re doing.” That will certainly appeal, first and foremost, to the dedicated green consumer.

    To reach more people and displace more carbon, Climate Neutral will continue to pursue ever-larger and more prominent brands. Whitman hopes to certify several thousand companies over the next five years, creating a framework for discipline and accountability in the private sector while building trust and understanding with consumers. With that number of companies offsetting their emissions, Whitman says, “We’ll get up into the tens of millions of metric tons of carbon, which starts to feel like meaningful impact.” And a decade from now? Like many in the do-gooder economy, Whitman is ultimately trying to work himself out of a job. “I hope that we don’t have to exist in 10 years,” he says, “because the world will be so convincingly on track to net zero that we won’t have to put this Band-Aid on.”

    This story was originally published by Grist with the headline ‘Climate Neutral’ products are now a thing. What’s behind the label? on Mar 3, 2021.

    This post was originally published on Grist.