If The Biden Administration Won’t Make The U.S. an Innovation Leader, Tennessee Will. That is, if it’s Allowed To…
BY RON SHULTIS
All doctors are familiar with the Hippocratic Oath, a set of ancient ethical standards for physicians. These standards are still important today as most medical schools in America require graduates to take some version of the original oath. The most well-known idea of the oath is “first do no harm,” asking medical professionals to first consider the possible harm any intervention might do to their patients.
If only governments had to abide by the same oath. Often, government regulators act in their own interest or seek to expand their authority rather than best serving the public they are supposed to protect. Especially when an agency senses a “turf war” it is often more likely to act to assert its authority, often at the expense of taxpayers. We currently see this playing out often between the Biden administration in Washington and the state.
For example, despite being an international leader in financial technology, the U.S. has been one of the few developed countries that have failed to implement a regulatory sandbox, programs to assist innovative entrepreneurs and small business owners as they test, try, and launch new technologies and products. Sandboxes temporarily remove archaic regulations that have nothing to do with health and safety and that make it difficult or impossible for those entrepreneurs to get their products off the ground.
Due to that inaction at the federal level (shocking!) several states have created their regulatory sandboxes, seeking to help innovative companies and entrepreneurs start their businesses. The problem is many sectors, especially financial technology, where sandboxes are utilized the most, are regulated at both the state and federal levels. President Biden’s proposed director of the Consumer Financial Protection Bureau (CFPB), which regulates much of the financial technology space, has already mentioned he wants the agency to be more aggressive in regulating.
Earlier this week, Tennessee Senator Marsha Blackburn sent a letter to the CFPB asking them to “work with states to provide them with the tools necessary to ensure their sandboxes are safe and effective to operate in.” By working with the states instead of squashing their efforts, Sen. Blackburn points out that not only will the CFPB and state governments encourage competition and innovation, but also better protect consumers.
Like what we saw with Right to Try, the ability for terminally-ill patients to try non-FDA-approved treatments, oftentimes the states have to lead on positive policy changes. When Colorado passed Right to Try in 2014, many states followed, with over 40 states adopting similar laws by 2018. The success of the policy led the federal government to adopt it as well, with President Trump signing it into law in 2018.
With the federal government continuing to fail to create a regulatory sandbox and joining the nearly 60 countries that have already done so, the states have stepped up. To date, 11 states have created at least one sandbox program, and hopefully soon Tennessee will join that list. That is if the federal government first does no harm. And if enough states follow those eleven, it may just force Congress to actually do something positive for a change.