Investing September 29, 2005

Mutual Fund Growth Slight in August

August 30, 2005 (PLANSPONSOR.com) - The combined assets of the nation's mutual funds grew by $71 billion, or .8%, to a total of $8.5 trillion in August according to the Investment Company Institute's (ICI's) Trend in Mutual Fund Investing July 2005.
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This growth is slight compared to July’s 2.9% increase (See  Mutual Funds Grow 2.9% in July ).

Taxable Money Market funds reported the highest change in the month of 2.5%.

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Money market funds again reported the highest inflow for the month of $32.49 billion.   Funds offered primarily to institutions had an inflow of $23.67 billion while those offered primarily to individuals had an inflow of $6.12 billion, according to the ICI report.

Among stock funds, which posted an inflow of $6.31 billion in August compared to $10.08 billion in July, world equity funds posted an $ 8.22 billion inflow in August vs. an inflow of $4.63 billion in July, while domestic equity funds posted an outflow of $1.92 billion in August, compared with an inflow of $5.32 billion in July.

Bond funds had an inflow of $7.32 billion in August, compared to $7.37 billion in July.   Taxable bond funds accounted for most of the gain ($5.82 billion ), while municipal bond funds remained relatively unchanged ($1.49 billion).

Hybrid funds reported an inflow of $1.77 billion, according to ICI.

The complete ICI report is  here .

Compliance September 28, 2005

VT Loses Rx Drug Importation Fight

September 28, 2005 (PLANSPONSOR.com) - Vermont's lawsuit against the federal Food & Drug Administration (FDA) over its imported prescription drug policy has been thrown out.
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BNA reports that US District Judge William Sessions, III of the US District Court for the District of Vermont dismissed the suit, saying the FDA did not act improperly in denying Vermont’s petition to allow it to set up a drug importation plan that would import cheaper drugs from Canada since drug importation is illegal under federal law.

The judge said in his opinion, according to BNA, that, in addition to being illegal under the Federal Food, Drug, and Cosmetic Act, the Medicare Prescription Drug, Improvement and Modernization Act (MMA) does not provide authorization for Vermont’s plan since the secretary of the Department of Health and Human Services (HHS) has not certified to Congress that importation is safe and effective, which is a prerequisite to importation under the act.   The court rejected Vermont’s argument that the certification required by MMA was only intended to apply to commercial importation rather than importation by individuals.

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In addition, BNA reports, the court rejected the argument that the certification provision was unconstitutional since it improperly delegates legislative power to the executive branch.   Sessions also found that the HHS secretary had not unreasonably delayed action on the certification provision of MMA.

The suit filed in August 2004 was the first move by a state to sue the federal government regarding importation of prescription drugs (See  Vermont Sues FDA Over Drug Importation ).   The FDA had denied  Vermont’s December 4, 2003 citizen petition requesting FDA’s permission to establish a program for the importation of prescription drugs from Canada, BNA reports.   The state sought a court order requiring “prompt adoption of regulations and waiver guidance and appropriate consideration of Vermont’s proposed program.”

The opinion was issued in re: Vermont v. Leavitt, D. Vt., No. 2:04-cv-00206 (WKS), 9/19/05.

Despite the legality of the issue, many states have already passed measures to allow importation of prescription drugs from Canada and other countries (See  Illinois Becomes Fifth State to Import Prescription Drugs from Abroad ).

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