August 2004 PRI Ideas in Action
Policy Update and Monthly Impact Report

PRI continues to impact public policy in California, the nation, and abroad. The following is just a sample of PRI's recent contributions.

EDUCATION STUDIES KEY ISSUE: NO CHILD LEFT BEHIND ACT

Policy Briefing
The federal No Child Left Behind Act (NCLB) requires, among other things, that all children be proficient in math and reading by 2013-14. In order to get students up to proficiency states must establish academic content standards, enact testing and accountability systems, and improve the subject-matter competency of teachers. While states have complained about the difficulty in meeting the targets of NCLB, a report by the Education Commission of the States found that most states have made progress in establishing the systems for implementing the federal law. Further, PRI’s value-added assessment model will help states get every child up to the proficiency level.

PRI Perspective
The standards, testing, accountability and teacher competency components of NCLB are commendable since they are critical in any practical effort to raise student performance. On the other hand, there are legitimate concerns about federalism and whether Washington should be so involved in what has historically been a state and local policy area. However, given that NCLB is the law, the practical question becomes how to ensure that its goal - higher student achievement - is reached.

PRI’s value-added assessment model tells teachers, principals, parents, and officials how much, given a student’s current location on the ability scale, an individual student’s achievement needs to grow each year in order to be proficient by the time he or she leaves school, which is NCLB’s bottom line. States should, therefore, use the PRI model in their efforts to meet NCLB’s requirements. teachers, incentives can be given to these teachers to teach in classrooms with low-performing students.

PRI Impact

• On August 30, Lance spoke on the No Child Left Behind Act at a Republican National Convention event. More than 300 people at the Waldorf-Astoria Hotel in New York attended the event; the other speaker at the event was U.S. Secretary of Labor Elaine Chao. After his speech, Lance was interviewed by Asian media including: the Philippine News, Asian Fortune, Kyodo News, Sound of Hope Radio Network, and a new 24-hour Asian news and public affairs television network.
• On August 31, KQED-FM aired Lance’s commentary on PRI’s value-added assessment model and measuring the performance of charter schools. Also in August, Lance was interviewed on KJLL-AM (AZ) and KTKZ-AM (Sacramento).
• On August 30, CaliforniaRepublic.org reprinted Lance’s Capital Ideas column “More Reasons Why We Need Value-Added Assessment.”
• On August 27, Lance was a guest on Adelphia Cable’s “This Week in California.” Lance discussed PRI’s value-added assessment model, NCLB, and other education issues.
• On August 4, Lance moderated a debate sponsored by the California Chamber of Commerce on the upcoming open-primary ballot proposition.
• In August, Lance met with Paul Navarro, Governor Schwarzenegger’s legislative analyst on education issues, and with the California Business Roundtable to discuss longitudinal collection of student test data.

TECHNOLOGY STUDIES KEY ISSUE: – GOOGLE IPO - DUTCH AUCTION
A FREE-MARKET APPROACH

Policy Briefing
When historians look back at the Google IPO, it’s likely they will judge it a huge success. That’s because the search-engine company stepped out of a process that rewarded financial insiders and moved toward a more free-market approach. Normally, when a company goes public, investment bankers set the price of shares for clients who have agreed to buy on opening day. This price is often lower than what the market is expected to set.

Investment bankers do this because it allows them to give a safe and instant deal to their most favored customers -- a process some call “free money.” But Google wanted to avoid being part of this scheme, so they decided to use a different IPO model called the “Dutch Auction.” In a Dutch Auction, the market, not a small number of high profile investors, sets the price. Investors small and large offered bids, and then Google chose the price where it would be able to sell the number of shares it wanted.

PRI Perspective
Some observers have argued that the Google IPO was a failure because the company raised much less than was expected. Google initially thought it would raise $3.1 billion dollars but instead raised $1.7 billion. In a soft market, however, where most companies aren’t even doing IPOs, this was a huge success. But perhaps the biggest reason Google’s IPO was a success is that the company managed to push the IPO process towards a more “American” way of doing things. The idea is that everyone should have an equal opportunity to get in on the game - but of course not everyone will have an equal outcome.

PRI Impact

• In August, Sonia’s columns in Tech News World addressed Google’s IPO, Apple and competition policy, Star Trek and the American character, and telecom regulation in California.
• On August 27, Sonia testified before a California state hearing on the California performance review. Her comments focused on the CPR’s recommendations on open source software.
• On August 23, Sonia spoke on antitrust and new technologies at PFF’s annual technology summit.
• On August 23, Sonia’s radio commentary on biotechnology ran on Cfact.org and radio stations around the country.
• On August 19, Sonia attended a PUC meeting on UNE rates.
• On August 5, Sonia met with the Japanese External Trade Organization on telecom issues.

HEALTH CARE STUDIES KEY ISSUE – DRUG LABELING AND TORT REFORM

Policy Briefing
As the Food and Drug Administration moves to finalize its new rule on physician labeling designed to provide more prescriber-friendly information about pharmaceutical products, it’s important to place this action into the appropriate context: urgent.

Today, labeling includes excessive risk information and exaggerated warnings. And this has set into motion a dangerous dynamic: labeling that does not accurately communicate to either the health care professional or the patient the conditions in which any given product can be used safely and effectively. America is suffering from a legal system that is dangerous to its health. Why has this happened? There is, unfortunately, a simple answer-fear of liability.

PRI Perspective
Labeling can and must be a valuable tool for improving and protecting America’s health. That’s the law. Rational prescribing occurs when a health care professional orders an approved prescription drug or biological product in circumstances where the risk/benefit profile of the product is optimal.

The FD&C Act clearly gives the FDA the authority to decide whether or not a product, when used properly, is safe, effective, and properly labeled. Manufacturers have significant monetary incentives to add dense and confusing legalese because, under current law in most states, they can be found liable for failing to provide “adequate” warnings about therapeutic products. Money, not medicine, is driving this dangerous practice. When it comes to labeling written for lawyers rather than doctors, more is less.

• On August 30, senior fellow Peter J. Pitts published an op-ed entitled “Changing behavior vs. changing minds” in BioCentury.
• On August 28, Sally Pipes published a letter to the editor of the The Washington Post “Getting Better Drugs to Consumers.”
• On August 4, Peter Pitts published an op-ed entitled “Labels, Lawyers, and Logic” in the New York Sun.

If you would like to receive this monthly update by email, please contact Christina Donegan at cdonegan@pacificresearch.org or 415/955-6110.