Institute for the Study of Free Enterprise

A new study by Charles Courtemanche and Joseph Garuccio reviews the literature on the impacts of Certificate-of-Need laws.
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What are the Impacts of Certificate-of-Need Laws? A Review of the Evidence | Institute for the Study of Free Enterprise         Certificate-of-Need (CON) laws require the approval of states’ health planning agencies for health care providers to engage in regulated actions such as opening or expanding facilities or purchasing equipment. Such laws initially aimed to restrain health care costs and wasteful redunda...

A new working paper by Charles Courtemanche, Tessie Krishna, Yang Liang, Joseph J. Sabia, and Anthony Chuo examines the effect of e-cigarette taxation on obesity.
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Do Va**ng Taxes Tip the Scale? The Effect of E-Cigarette Taxation on Obesity | Institute for the Study of Free Enterprise Abstract: A large literature documents that quitting cigarette smoking may lead to weight gain because ni****ne is an appetite suppressant and metabolic stimulant. However, researchers in this literature emphasize that the health benefits of smoking cessation exceed the harms from the weight typica...

340B Report featured the 340B Drug Pricing Program working paper by ISFE's Charles Courtemanche and Joseph Garuccio.

This paper was released as ISFE Working Paper No. 60
Read it on our website:
https://isfe.uky.edu/research/2025/340b-drug-pricing-program-existing-evidence-and-policy-implications-kentucky

Hospital Group-Funded Working Paper Calls for Increased 340B Visibility Among Economists - 340B Report There’s a gap in economics research on the 340B program, and economists could enrich 340B stakeholders’ understanding of the program by complementing existing studies found predominately in public health and medical journals, a recent working paper suggested.

Congratulations to Chad Cotti, Charles Courtemanche, Yang Liang, Johanna Catherine Maclean, Erik Nesson, and Joseph J. Sabia on their paper being accepted for publication in the Journal of Health Economics!
This paper was previously released as ISFE Working Paper No. 55

The Effect of E-Cigarette Flavor Bans on To***co Use | Institute for the Study of Free Enterprise Abstract: Advocates for sales restrictions on flavored e-cigarettes argue that flavors appeal to young people and lead them down a path to ni****ne addiction. This study is among the first to examine the effect of state and local restrictions on the sale of flavored electronic ni****ne delivery sys...

The new ISFE working paper by Michael E. Darden, Reginald Hebert, Michael F. Pesko, and Samuel Sturm uncovers important unintended consequences of cigarette taxes, particularly for low-income individuals.
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Cigarette Taxes and the Household Budget | Institute for the Study of Free Enterprise Abstract: We study the effects of cigarette excise taxes on smokers’ household budgets. In a randomized survey experiment, smokers respond to tax increases by adjusting cigarette shopping behaviors, substituting towards other to***co products, and reducing both discretionary and human capital-rel...

Senate Bill 14 in the Kentucky legislative session involves the federal 340B program, which bolsters the health care safety net without taxpayer money. This is a fascinating program that economists should pay more attention to! It allows facilities like hospitals who serve disproportionate numbers of low-income patients to purchase drugs at discounts. These drugs have to be prescribed at the covered facility and can be filled at either a pharmacy within the facility or outside “contract pharmacies”. The funds can help struggling hospitals provide charity care and unprofitable lines of service. But these discounts are costly to pharmaceutical companies, who allege that the funds are not always used as intended and that the program has grown beyond its intended size. The rapid expansion of contract pharmacies has drawn particular scrutiny. Drug companies responded by enacting restrictions that in turn led to a flurry of lawsuits and legislative activity. Eight states have already enacted laws intended to preserve contract pharmacy networks. In a study just released by the Institute for the Study of Free Enterprise at the Gatton College of Business and Economics at the University of Kentucky, Joseph Garuccio and Charles Courtemanche examine the history of the 340B program, scholarly evidence on its impacts, and the implications of this evidence for public policy moving forward. While the volume of studies is substantial, challenges with distinguishing correlation from causality and generalizing results beyond specific settings have largely prevented a consensus from being reached as to whether covered entities respond in desirable or undesirable ways. With that said, there is suggestive evidence that the program increases charity care and provision of critical services that are underprovided in rural areas, particularly oncology. It also appears to reduce Part B drug spending. But contract pharmacies and associated outpatient clinics tend to be located in more affluent communities than the covered entity itself, and there is also some evidence that the 340B program creates incentives that slow the adoption of low-cost biosimilar drugs. However, given the limited and inconclusive nature of much of this evidence, the only indisputable effect of the program is to redistribute money from drug manufacturers to covered entities. This means that, in states such as Kentucky that do not have a major drug manufacturing presence, the clearest effect of a law preserving 340B discounts for contract pharmacies would be to increase the flow of out-of-state money into the state. From the perspective of federal policy, is the program “too big”? One way to shed some light on this question is to discuss the “capture rate”, or percentage of eligible drugs that end up being filled at 340B pharmacies, in terms of take-up rates. Prior to the expansion of contract pharmacies, the capture rate was perhaps as low as 2%. A take-up rate this low would be unheard of in public programs SNAP and Medicaid, and would be cause for immediate program overhauls. We also discuss 340B’s legislative history. Drug companies agreed to expand the program in return for other policies that benefitted them: more business through Part D and the ACA as well as prohibitions on importing low-cost drugs and the government negotiating drug prices.

The views expressed here are those of the authors only, and do not represent the views of the Institute for the Study of Free Enterprise, Gatton College, or University of Kentucky.

The 340B Drug Pricing Program: Existing Evidence and Policy Implications for Kentucky | Institute for the Study of Free Enterprise         The 340B drug pricing program was instituted to bolster the health care safety net without relying on taxpayer money. It allows participating health care facilities, called covered entities, to purchase drugs filled at in-house or contracted external pharmacies at discounts from manufact...

A new working paper by Anthony Chuo, Chad Cotti, Charles Courtemanche, Johanna Catherine Maclean, Erik Nesson, and Joseph J. Sabia explores how recent efforts to curb ni****ne va**ng through ENDS taxes impact sexual minorities.

E-Cigarette Taxation and Q***r Youth | Institute for the Study of Free Enterprise Abstract: Electronic ni****ne delivery systems (ENDS) use among le***an, gay, bisexual, and questioning (LGBQ) teenagers is over 30 percent higher than among their heterosexual counterparts. Yet little is known about how recent efforts to curb ni****ne va**ng through ENDS taxes impact sexual minori...

Congratulations to our director, Charles Courtemanche, and co-authors David Frisvold, David Jimenez-Gomez, Mariétou H. Ouayogodé, and Michael Price on their paper "Chain Restaurant Calorie Posting Laws, Obesity, and Consumer Welfare" being accepted for publication in the Journal of the European Economic Association!
This paper was previously released as ISFE Working Paper No. 28

Chain Restaurant Calorie Posting Laws, Obesity, and Consumer Welfare | Institute for the Study of Free Enterprise Abstract: The 2010 Patient Protection and Affordable Care Act (ACA) introduced a mandate requiring chain restaurants to post calorie counts on menus and menu boards. This paper investigates whether and why calorie posting laws work. To do so, we develop a model of calories consumed that highlights t...

ICYMI: The recording of the Global Action to End Smoking Exploring the Intended and Unintended Consequences of ENDS Policies webinar is available on YouTube

Exploring the Intended & Unintended Consequences of ENDS Policies | WEBINAR Exploring the Intended & Unintended Consequences of ENDS Policies: Licensure Laws, Flavor Bans, & Taxation.

Thanks to Global Action to End Smoking for giving ISFE Director Dr. Charles Courtemanche the opportunity to present his research at their webinar last Friday. Dr. Courtemanche presented ISFE Working Paper No. 55, titled "The Effect of E-Cigarette Flavor Bans on To***co Use," co-authored by Chad Cotti, Yang Liang, Johanna Catherine Maclean, Erik Nesson, and Joseph J. Sabia.

Join us on August 23 for a free webinar: "Exploring the Intended and Unintended Consequences of ENDS Policies: Licensure Laws, Flavor Bans, and Taxation." 🕙 10am-11am EST. Learn from experts about the latest research on ENDS economics. Register now! https://actiontoendsmoking.zoom.us/webinar/register/WN_umnwSxGQRMO6JogoNzHI9g

Congratulations to Charles Courtemanche, Yang Liang, Johanna Catherine Maclean, Caterina Muratori, and Joseph J. Sabia on their paper being published online by the Journal of Health Economics! This paper was previously released as ISFE Working Paper No. 54

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