Top Regulatory News of 2023

In lieu of our regular Friday feature—”the Week in Review”—The Regulatory Review is today recapping some of the top regulatory news from the past year, including major U.S. Supreme Court rulings, OIRA’s revised Circular A-4, FDA’s Mifepristone battle, and more. We are also pleased to highlight some of the regulatory scholarship that we have been reading this year and have featured in the “Week in Review.”

JANUARY 

• The U.S. Food and Drug Administration (FDA) finalized a rule change allowing retail pharmacies to offer abortion pills. FDA’s new rule allows individuals to receive Mifepristone, a medication that can terminate a pregnancy up to 70 days gestation, from certified pharmacies. The change relaxed previous restrictions that limited the availability of Mifepristone to specialized clinics and offices. FDA also no longer requires in-person pick-up of the medication but instead permits patients to mail-order Mifepristone from a pharmacy. Over 3.7 million patients have used Mifepristone, according to FDA.
• The U.S. Supreme Court allowed New York to enforce a firearm law—passed in response to the Court’s decision in Bruen—that adds requirements for obtaining gun licenses and restricts carrying guns in more public places. The Court let the law remain in effect pending an appeal of a federal district court decision blocking the law. Justices Samuel Alito and Clarence Thomas commented that the law “presents novel and serious questions under both the First and Second Amendments,” but emphasized that a federal appellate court should address those issues first.

FEBRUARY

• The U.S. Department of Health and Human Services (HHS) announced three proposals that HHS will test to lower prescription drug prices. The proposals reflect HHS’s response to President Joseph R. Biden’s executive order directing the agency to select models that would likely increase people’s access to new drug therapies at lower costs. HHS’s proposals included capping generic drugs at $2 for Medicare recipients, creating a payment process for drugs approved under accelerated approval process, and partnering with manufacturers to make gene and cell therapies more affordable.
• The Biden Administration announced multi-agency actions to build a “convenient, reliable and Made-in-America electric vehicle (EV) charging network.” The U.S. Department of Transportation and U.S. Department of Energy issued a joint final rule establishing minimum standards for the construction of public, federally funded EV charging stations. In addition, the Federal Highway Administration issued a notice under the Build America, Buy America Act that requires manufacturers to build all of their federally funded EV chargers in the United States. Transportation Secretary Pete Buttigieg stated that these actions represent a “major step toward a world where every EV user will be able to find safe, reliable charging stations anywhere in the country.”

MARCH

• A federal judge temporarily blocked Texas prosecutors from enforcing current and 60-year-old state laws against organizations that help people travel out of state to have abortions. The court reasoned that the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization did not revive the older laws—which included criminal penalties for individuals who aid or abet abortion—because they had been invalidated as unconstitutional by Roe v. Wade and therefore were implicitly repealed. The order will remain in place while abortion rights groups proceed with their lawsuit, in which they argue that Texas abortion laws violate their right to free speech and free travel. The executive director of Texas Equal Access Fund, Kamyon Conner, stated that the ruling affirms “the right of Texans to travel freely between states in order to access necessary health care.”
• President Joseph R. Biden vetoed a joint resolution that aimed to reverse a U.S. Department of Labor rule allowing pension managers to consider environmental, social, and corporate governance factors when making investment decisions. The veto is President Biden’s first since taking office. The Senate and House voted to disapprove of the rule under the Congressional Review Act, which authorizes Congress to end the legal effect of agency regulations and bars future regulations that are substantially the same as the disapproved rule. President Biden explained that he vetoed the resolution because individuals managing retirement plans “should be able to consider any factor that maximizes financial returns for retirees across the country.”

APRIL

• President Joseph R. Biden signed a bill into law to end the COVID-19 national emergency first declared in March 2020. The law ends the national emergency a month earlier than it was set to expire, while a separate COVID-19 public health emergency declaration will still remain in effect until May 11. The termination of the national emergency will end waivers impacting several federal health programs, including Medicaid, Medicaid, and the Children’s Health Insurance Program (CHIP), as well as the Department of Housing and Urban Development’s COVID-19 mortgage forbearance program. The forthcoming public health emergency expiration likely also will end certain policies, such as Title 42, which have allowed border officials greater latitude to deport migrants since the start of the pandemic. 
• The U.S. Supreme Court granted a temporary stay on decisions by lower courts that banned or limited access to mifepristone, an FDA-approved pill for medication abortion. The temporary stay returns the case to the U.S. Court of Appeals for the Fifth Circuit, which has scheduled oral arguments in the case for next month. In a statement after the decision was announced, President Joseph R. Biden declared that the government will “continue to defend FDA’s independent, expert authority to review, approve, and regulate a wide range of prescription drugs.”

MAY

• The U.S. Supreme Court granted certiorari in Loper Bright Enterprises v. Raimondo and will hear a direct challenge to the Chevron doctrine during the next term. The Chevron doctrine mandates deference by a court to reasonable agency actions, so long as the U.S. Congress has not precluded such action. In Loper Bright Enterprises, a group of fishermen seek to clarify the doctrine’s reach by challenging a National Marine Fisheries Service rule that requires fishermen to pay the salaries of at-sea monitors who collect scientific, economic, and regulatory compliance data. 
• The U.S. Supreme Court limited the U.S. Environmental Protection Agency’s (EPA) authority to control wetland pollution—the second decision in a year restricting the ability of EPA to combat climate change. Specifically, the Court held that the Clean Water Act does not allow EPA to regulate wetlands near bodies of water unless the wetlands have a “continuous surface connection” to those waters. Although the actual decision was unanimous, four justices argued that the majority’s new test is too narrow and will negatively affect water quality and flood control in the United States. President Joe Biden stated that the decision “upends the legal framework that has protected America’s waters for decades.” 

JUNE

• The U.S. Supreme Court, in a 5-4 vote, held that Alabama’s voting maps discriminate against Black voters and violate Section 2 of the Voting Rights Act of 1965. The ruling could shift control of the closely divided U.S. House of Representatives, as Alabama is likely to draw new maps that would allow Black voters, who are overwhelmingly Democrats, to elect their preferred candidates in at least two districts. Justice Clarence Thomas, in dissent, wrote that the majority will require Alabama to redraw its districts so that Black voters can control a share of seats proportional to their share of Alabama’s population and contended that Section 2 “demands no such thing.”
• The U.S. Supreme Court upheld the Indian Child Welfare Act (ICWA) in a 7-2 decision, holding that the law was well-within Congress’s powers. The law seeks to keep Native American adoptees connected to their tribal community by placing the adopted children with Native families. Congress originally passed the ICWA in response to the long history of forced separation of Native children from their families and communities. Opponents of the ICWA argued that the law makes it more difficult for states to intervene in instances of child abuse. Supporters of the law, including the American Academy of Pediatrics, cited the ICWA as a means to repair “the intergenerational pain of lost connections and the trauma of historical loss.”

JULY

• The U.S. Food and Drug Administration (FDA) approved the first oral contraceptive available in the United States without a prescription. Opill, a daily “mini-pill” containing only one hormone, will be sold online and in stores in the first quarter of 2024 according to its manufacturer, Perrigo. FDA’s approval of Opill is expected to expand access to birth control, especially to the uninsured, at a time when abortion restrictions are tightening across the country. Frederique Welgryn, Perrigo’s Global Vice President for Women’s Health, called FDA’s approval “a groundbreaking expansion for women’s health” in the United States.”
• The U.S. Supreme Court, in a 6-3 decision in Biden v. Nebraska, ruled in favor of six states that objected to a Biden-Harris Administration decision to cancel up to $400 billion in federal student loans. On the issue of standing, the Court held that Missouri has the right to sue because it created the Missouri Higher Education Loan Authority, a servicer and holder of student loans, which would incur fees due to the cancellation. On the merits, the Court held that the HEROES Act of 2003, the statutory basis for the policy, only allows the administration to make “modest adjustments” to laws and regulations governing loans, and “not transform them.” Justice Elena Kagan, writing in dissent, criticized the Court’s “cardinal error” of ignoring language in the HEROES Act explicitly authorizing the administration to waive, as well as modify, the regulations at issue.

AUGUST

• The Biden Administration announced a list of 10 prescription drugs that will be subject to price negotiations through Medicare for the first time. Medicare, which covers 66 million Americans, will now negotiate drug prices to reduce costs for seniors who currently pay high out-of-pocket costs for prescriptions. The 10 initial prescription drugs were chosen based on criteria determined by Medicare including requirements that the drug has been on the market for at least seven years, and there is no generic or biosimilar competition. The negotiated prices will take effect in 2026, and the program aims to save $25 billion in prescription drug costs by 2031.
• The Federal Trade Commission (FTC) enforced Section 8 of the Clayton Act for the first time in 40 years, filing a consent order that blocked a $5.2 billion deal between Quantum Energy Partners and EQT Corporation. The proposed deal would have given Quantum a seat on EQT’s board of directors in exchange for two of Quantum’s subsidiaries, a move that the FTC contended would violate Section 8 because the two companies are direct competitors. FTC Chair Lina Khan, who has prioritized antitrust enforcement against large corporations, emphasized that the action is part of a larger effort to “reactivate Section 8” and to “put industry actors on notice.”

SEPTEMBER

• The U.S. Environmental Protection Agency announced a final rule that revised the definition of “waters of the United States,” limiting the agency’s authority to address water pollution. The revised rule is designed to conform with the U.S. Supreme Court’s recent ruling in Sackett v. Environmental Protection Agency, which concluded that the Clean Water Act’s application is restricted to “relatively permanent, standing or continuously flowing bodies of water.” The revised rule does not, however, change the current exclusions from the “waters of the United States” definition, including ditches and artificial lakes or ponds. 
• The Biden Administration announced a list of 10 prescription drugs that will be subject to price negotiations through Medicare for the first time. Medicare, which covers 66 million Americans, will now negotiate drug prices to reduce costs for seniors who currently pay high out-of-pocket costs for prescriptions. The 10 initial prescription drugs were chosen based on criteria determined by Medicare including requirements that the drug has been on the market for at least seven years, and there is no generic or biosimilar competition. The negotiated prices will take effect in 2026, and the program aims to save $25 billion in prescription drug costs by 2031. 

OCTOBER

• The Consumer Financial Protection Bureau (CFPB) issued guidance to stop large banks from charging illegal junk fees when customers request basic information. The CFPB released the guidance to clarify a provision of the Consumer Financial Protection Act, which requires large banks and credit unions to provide information completely, adequately, and in a timely manner to customers who request it. The new guidance explains how the agency will evaluate fees banks charge for reasonable requests. CFPB Director Rohit Chopra said that “many large banks erect obstacle courses and impose junk fees to answer basic questions.” 
• The Securities and Exchange Commission (SEC) adopted new rules to provide greater transparency around short selling, an activity where investors bet that a stock’s price will fall. The first rule requires institutional investment managers with large short selling positions to file a form each month with the SEC detailing their short activity. The SEC will then collect and publish this data. The second rule requires securities lenders to report in detail the terms of each loan they make. The rules are a response to the 2021 GameStop trading episode, where individual investors engaged in shorting tactics that caused some investors to sustain great losses.

NOVEMBER

• The U.S. Court of Appeals for the Eighth Circuit ruled in a 2-1 decision that private citizens and civil rights groups do not have a right to bring litigation on behalf of voters under Section 2 of the Voting Rights Act. Section 2 prohibits voting practices that discriminate on the basis of race. By finding that no private right of action exists, the decision reserves the right to bring a Section 2 action for the government only. 
• The Office of Information and Regulatory Affairs issued revisions to Circular A-4, which offers government-wide guidance on conducting regulatory analyses. These revisions address various practices needed to calculate a regulation’s benefits and costs, including how best to measure the regulation’s future consequences and how to account for effects that are difficult to measure in a monetary amount. The revision reflects a broader effort by the Biden Administration to modernize regulatory review.

DECEMBER

• The Colorado Supreme Court disqualified former President Donald J. Trump from appearing on the Colorado Republican presidential primary ballot in 2024. Under Section Three of the Fourteenth Amendment of the Constitution, President Trump is ineligible to hold the presidential office again, the court ruled. Ultimately, the court judged that President Trump qualified as an officer of the United States during his tenure in office, and that his personal actions surrounding January 6, 2021 constituted engagement in an insurrection.   
• The European Union reached an agreement on a landmark law to regulate artificial intelligence (AI). The law, which is expected to pass early next year and is expected to take effect in 2026, is the first comprehensive AI regulation. The new law would require the largest general-purpose AI systems, such as ChatGPT, to comply with transparency and disclosure requirements, conduct “systemic risk” evaluations on their product, assess and mitigate those risks, and report serious incidents to the EU. The law—which includes penalties for violations—also bans the untargeted scraping of online images to create a facial recognition database and limits the use of facial recognition software by police and governments, except in cases of serious safety and national security threats.

HIGHLIGHTS OF WHAT WE WERE READING THIS YEAR

•  In an article in the Boston Review, Louise Melling, Deputy Legal Director at the American Civil Liberties Union, argued that recent U.S. Supreme Court decisions concerning religious liberty undermine state and local antidiscrimination laws. Melling pointed to cases such as Fulton v. City of Philadelphia, in which the Court ruled that an antidiscrimination law requiring a Catholic organization to place foster children with same-sex couples violated the Free Exercise Clause of the First Amendment. Melling predicted that the Court will soon hold in 303 Creative LLC v. Elenis that a Christian website designer has the right to refuse creating wedding websites for same-sex couples even though this right to refuse service to same-sex couples violates Colorado antidiscrimination law. Melling concluded that “in every Supreme Court case in the last decade involving religious resistance to an equality norm, equality has lost.”
•  The Government Accountability Office (GAO) released a report on the widespread use and effects of noncompete agreements, which the Federal Trade Commission recently announced it will seek to ban nationwide. GAO estimated that more than a third of workers nationally have signed noncompetes at some point in their careers. Although GAO found that a substantial majority of workers do so as a condition of employment, few negotiate any terms before signing. GAO concluded that noncompetes reduce job mobility and lower wages for most non-executive employees, even when not enforced. GAO also cited studies finding that strong enforcement of noncompetes may intensify racial and gender wage disparities among lower-wage workers.
•  In an article in the Yale Journal on Regulation, Nathan Atkinson, an assistant professor at the University of Wisconsin Law School, investigated the effectiveness of EPA enforcement by exploring violations of the Clean Air Act by stationary sources of pollution. Atkinson found that in over a third of the cases he studied, it was more profitable for the sources to violate the Clean Air Act than it was for them to comply with it. Atkinson contended that EPA can only regulate emissions properly if it punishes noncompliance effectively, but that for EPA to do so, it would need to more than quadruple the penalty rate for noncompliance. Atkinson concluded that sources emitting pollutants will continue to violate EPA standards as long as the penalties for doing so remain low.
•  In a policy analysis issued by the Cato Institute, Jeffrey A. Singer, a senior fellow at Cato and Sofia Hamilton, a health policy research associate at Cato, assessed policies targeting the treatment of opioid use disorder (OUD) with methadone, a synthetic opioid. Singer and Hamilton suggested that regulations allowing only government-approved opioid treatment programs to distribute methadone to individuals with OUD create barriers to patient recovery and stigmatize the disorder. Singer and Hamilton proposed that primary care physicians be allowed to prescribe methadone and use their expertise to develop treatment plans responsive to each patient’s situation. 
• In an Urban Institute report, David Blount, research assistant at the Institute, Christina Stacy, principal research associate at the Institute, and Rebecca Dedert, policy analyst at the Institute, show that the most significant climate change impacts disproportionately affect low-income communities and communities of color. Blount, Stacy, and Dedert found that these communities are less equipped to cope with heatwaves, poor air quality, and flooding. Blount, Stacy, and Dedert noted that infrastructure and economic policies often neglect harms that result from pollution and natural disasters harming marginalized communities and recommend flexibility in using climate-related funds, increased state grant program monitoring and use of available tax credits.
• In a study for Resources for the Future (RFF), Jordan Wingenroth a research associate at RFF, and RFF fellows Brian C. Prest and Kevin Rennert evaluated the expected economic benefits of meeting the worldwide decarbonization goals of the Paris Agreement. Wingenroth, Prest, and Rennert estimated that if the global community can reach the most ambitious of the Paris Agreement’s climate goals, staying within 1.5° Celsius of pre-industrial global temperature levels, the global economy would generate over $600 trillion in total benefits by the year 2100. According to Wingenroth, Prest, and Rennert, these predictions show that short-term reductions in greenhouse gas emissions can prevent almost half of the expected economic losses from global climate change.
• In a forthcoming article in the UC Davis Law Review, Kimberly Houser, a professor at the University of North Texas, and Lindsey Sain Jones, a professor at the University of Georgia’s Terry College of Business, argue that actions by shareholders can hold corporations accountable to climate pledges. Houser and Sain Jones noted that the U.S. Supreme Court’s decision in West Virginia v. EPA, which limited the power of agencies to act without clear authorization from Congress, may hamper regulatory actions to hold companies accountable. Houser and Sain Jones concluded that by bringing lawsuits against companies that misrepresent their business practices as being environmentally friendly, shareholders may help fill this regulatory void.
• In a Brookings Institution article, Aaron Klein, a senior fellow at Brookings, argued that the Federal Reserve should not be responsible for regulating banks. Klein explained that the Federal Reserve played a role in recent bank failures such as the collapse of Silicon Valley Bank because it did not intervene when the banks made risky investments. Klein asserted that the Federal Reserve failed to provide adequate oversight because its top priority is monetary policy, not regulation. Klein urged the U.S. Congress to move bank regulation authority from the Federal Reserve to agencies that specialize in regulation, such as the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. 
• In a working paper, Cary Coglianese, professor at the University of Pennsylvania Carey Law School and director of the Penn Program on Regulation, argued that the inherent heterogeneity in machine learning algorithms makes them more difficult, but still possible, to regulate. According to Coglianese, while machine learning algorithms, such as Chat GPT, can advance technology and improve society, the wide array of algorithms creates questions as to who should regulate and how these new technologies should be regulated. Coglianese claimed that adapting to these various algorithms will likely require existing regulatory bodies to leverage their current expertise and new regulatory bodies to be formed. Coglianese concluded that regulators should remain agile and vigilant to changes in the field to keep abreast of this rapidly changing and broad field.