ANUP MALANI, University of Chicago - Law School, National Bureau of Economic Research (NBER), Resources for the Future
Email: amalani@uchicago.edu
OLIVER BEMBOM, University of California, Berkeley
MARK VAN DER LAAN, University of California, Berkeley

The FDA employs an average-patient standard when reviewing drugs: it approves a drug only if the average patient (in clinical trials) does better on the drug than on control. It is common, however, for different patients to respond differently to a drug. Therefore, the average-patient standard can result in approval of a drug with significant negative effects for certain patient subgroups (false positives) and disapproval of drugs with significant positive effects for other patient subgroups (false negatives). Drug companies have a financial incentive to avoid false negatives. After their clinical trials reveal that their drug does not benefit the average patient, they conduct what is called post hoc subgroup analysis to highlight patients that benefit from the drug. The FDA rejects such analysis due to the risk of spurious results. With enough data dredging, a drug company can always find some patients that benefit from their drug.

This paper asks whether there workable compromise between the FDA and drug companies. Specifically, we seek a drug approval process that can use post hoc subgroup analysis to eliminate false negatives but does not risk opportunistic behavior and spurious correlation. We recommend that the FDA or some other independent agent conduct subgroup analysis to identify patient subgroups that may benefit from a drug. Moreover, we suggest a number of statistical algorithms that operate as veil of ignorance rules to ensure that the independent agent is not indirectly captured by drug companies. We illustrate our proposal by applying it to the results of a recent clinical trial of a cancer drug (motexafin gadolinium) that was recently rejected by the FDA.

MARC BOURREAU, Telecom ParisTech, CREST
Email: marc.bourreau@telecom-paristech.fr
PINAR DOGAN, Harvard University - John F. Kennedy School of Government
Email: pinar_dogan@ksg.harvard.edu
MATTHIEU MANANT, Universite Paris SUD XI
Email: matthieu.manant@u-psud.fr

The "ladder of investment" is a regulatory approach proposed by Martin Cave (2006), which has been widely embraced by national regulatory authorities in the European telecommunications sector. The approach entails providing entrants, successively, with different levels of access - the "rungs" of the investment ladder, while inducing them to climb the ladder by setting an access charge that increases over time or by withdrawing access obligations after some pre-determined date (i.e., by setting sunset clauses). Proponents of the ladder of investment approach claim that such regulatory measures would make service-based entry and facility-based entry complements - albeit they have been traditionally viewed as substitutes - in promoting competition. The regulators, thus, have shown a strong interest in this approach. In this paper, we provide a critical review of the ladder of investment approach by setting out its two underlying assumptions and discussing their validity with references to the related industrial organization literature.

GEORGE S. FORD, Phoenix Center for Advanced Legal & Economic Public Policy Studies
Email: george.ford@phoenix-center.org

Phoenix Center Perspective 09-04 reviews a recent analysis of net neutrality advocates Free Press on the relationship between regulation and investment. This Perspective points to a number of severe defects with Free Press's methods.

SHANE CHADDHA, University of Manchester
Email: shane.chaddha@postgrad.manchester.ac.uk

Comments that the US commercial space sector is well-developed, successful and economically sustainable. The US government has laid down a space infrastructure which has allowed the country to enjoy the benefits of such a highly competitive industry. Argues that there are six galvanising factors which have accelerated the growth of the US space commerce since its conception in 1962 to the present day. These factors are: (1) the International Geophysical Year, (2) the creation of a space agency - NASA, (3) Presidential leadership, (4) private competitions and bold space pioneers, (5) political and legislative support, and (6) the creation of a single regulatory authority.

ANASTASIOS KABURAKIS, Southern Illinois University at Edwardsville
Email: tassos.kaburakis@gmail.com

Scholars have examined the National Collegiate Athletic Association’s (NCAA) definition, development, and application of amateurism (Allison, 2001; Byers, 1995; Crowley, 2006; Falla, 1981; Glader, 1978; Sack & Staurowsky, 1998; Smith, 1993; Thelin, 1996; Watterson, 2000; Wheeler, 2004), but the matter of amateurism as it pertains to international athletes has received limited coverage in academic scholarship even though influence of talent migration has led to a steady increase in the number of international athletes participating in NCAA competition (Bale, 1991; Kaburakis, 2007; NCAA, 2007; Weston, 2006).

One development that has not been sufficiently addressed in the academic literature is how the influence of international athletes, the decision by Division I to not deregulate amateurism, and changes within the student-athlete reinstatement (SAR) governance process all intersected to create a new application of amateurism in the NCAA. It is important to examine this intersection not only because this particular evolution of amateurism policy remains uninvestigated, but also because it is important to understand the scope of forces that influence contemporary policy-making. In this article, the forces of globalization, emerging technology, legal decisions, the demands of member institutions, the pressure on coaches to win, and student-athlete welfare all converge to alter the way amateurism is applied by the NCAA in the twenty-first century.

This article examines the actions of the NCAA from 1999 to 2006 in order to demonstrate how the NCAA developed a creative institutional strategy to alter its application of amateurism in response to pressures in the external environment that sought eased amateurism restrictions during the recruitment of prospective international athletes. This article argues that the NCAA utilized the SAR process to change its application of amateurism in order to grant prospective international athletes eligibility without risking the negative public relations and legal consequences that would have resulted from directly changing the definition of amateurism through deregulation. Beginning with a review of the factors that have historically influenced the NCAA’s application of amateurism, the article will then address the influence of international athletes on the NCAA’s contemporary application of amateurism. The factors that influenced the amateurism deregulation effort of the early 2000s are subsequently examined, and then an explanation is given for why Division I rejected any substantive changes to the stated definition of amateurism. The article concludes with a discussion of why the NCAA utilized the SAR process to change its application of amateurism.