Sunday, December 31, 2017

What to do about Big Pharma?

CBS MoneyWatch reports that
Prices for a cancer drug called lomustine have skyrocketed nearly 1,400 percent since 2013, putting a potentially life-saving treatment out of reach for patients suffering from brain tumors and Hodgkin’s lymphoma. Though the 40-year-old medication is no longer protected by patents, no generic version is available.
Bristol-Myers Squib (BMS), who had sold the drug for $50 per capsule sold the rights to a Miami startup called NextSource, which hiked the price on nine occasions, to $768 per pill. That is cumulative hike of 1,536%.

The stated reason for the price-gouging was typical coporate gabbledigook:
NextSource CEO Robert DiCrisci, told the [Wall Street ] Journal that the company sets its prices based on the costs it incurred in developing the medication and the benefits it provides patients. Ibid.
Of course, the company did not develop the medicine; it bought the rights from BMS, instead. Basing the price on “the benefits it provides patients” can only be described as extortion. According to its website, the company apparently markets only one product: Gleostine, the same drug that BMS sold under the brand name CeeNU. The actual manufacturing is performed by CordenPharma. The patent has long-since expired.

I daresay that NextSource was formed for the sole purpose of acquiring the rights to lomustine and squeezing cancer patients relying on the drug to the extent the traffic would bear. That some patients cannot afford the drug is immaterial. Let them die and reduce the surplus population.

Big Pharma is clearly out of control. NextSource is a perfect example of corporate greed in action. Any truthful economist would classify this as market failure. It is a particularly loathsome failure when it causes people to die for inability to pay a grossly inflated price for medicine1
Because Big Pharma controls the prices of drugs upon which people rely in order to live, it has the power to decide who will live and who will die. No business should have this power without constraints, as is the case today in the U.S. The moral justification for all businesses is that they—in some way—promote the common good. NextSource has that power, at least until competitors receive authorization from the FDA to manufacture and market the drug. You can be certain that NextSource will use all its legal and political power to delay that authorization.

Something should be done to change this system. There is nothing just or fair about it, as its main purpose is the upward distribution of wealth from the public (either directly, or through insurance companies or the government) to the officers and shareholders of Big Pharma.

There are other ways to develop new medicines besides patents. Because so much medical research is performed by the National Institutes of Health, much of which the drug companies would have to do themselves without the NIH, all patents could be granted only on the condition that the government receives a non-exclusive transferrable license to manufacture and distribute the drug.

Another remedy would be to simply abolish medical patents, place responsibility for developing new medicines on the NIH (which could contract with non-governmental entities to do some of the research), and require the pharmaceutical companies to license the drugs from the government. Once a pharmaceutical company licenses a drug, it would be allowed to set its own price without limit, but with the knowledge that the government could also manufacture and market the same drug at a far lower price or license it to competitors.
We desperately need to get it into our heads that the way something is done now is not the only way it can be done or should be done. That applies particularly well to the economy and commerce, where the powerful players frequently oppose change because it is disruptive and may affect their profits2.
Monopolies of human necessities, like water, food, electric power and medicines, are parasites, extracting from society far more than they contribute. To align their incentives with the public good, societies must clip their wings. The pharmaceutical corporations, with their patent monopolies that enable them to extract far more from society than they contribute, are economically and morally indefensible. Their wings can only be clipped by the people, acting through their government. It is time to move on this front.

  1. For an excellent discussion of this topic, see Dean Baker’s article Drugs are Cheap: Why Do We Let Governments Make Them Expensive? .  ↩
  2. I have no doubt that the makers of buggies opposed allowing automobiles upon public streets and highways. They knew that once people started driving cars their days of manufacturing buggies was over. Many of the buggy makers switched over to automobiles, but most of them quietly went out of business, confirming the economist Schumpeter’s theory of creative destruction.  ↩

Monday, December 25, 2017

An Adoration

from The Holy Merriment

By Arnold Kenseth

In this snowfall season the birth
O God’s furious and tender Son
Gives us our holy days by fire. Earth
Cradles once more the hope that Eve
And her winter children will receive
The sunlit garden; because fear
Has no room in our Saviour’s castle.

All love shepherds us. The pagent kings
Weep for us. In argent rings
Heaven’s wild gabriels wrestle
For our very souls. What stables here
Is time for us to give our sin
The shape of kneeling, to perch seven
Times seventy singing robins

Of forgiveness on our tongues,
Blessing our enemies, that the bones
Which we have broken may rejoice.
No one is lost, not one, who yields
Himself to Christmas. The red ribbons
Of his grief adorn us. The voice
Of his mercy is heard in our fields.

Wednesday, December 13, 2017

Attacking the Baby Boomer Problem

The Baby-Boomer Conundrum

The baby-boomers are slowly moving into retirement. Instead of contributing to their retirement funds, they are beginning to make withdrawals to support themselves. As their minds and bodies age, they will utilize Medicare and their private insurance carriers to maintain their health and if they are not wealthy, they will depend upon Medicaid to pay for nursing home services as they become enfeebled and increasingly unable to care for themselves. Because of modern medicine, they will live longer than past generations and will therefore receive benefits for a longer period of time.

With the adaption of the modern living style, expenditures on medical treatment have skyrocketed, as disorders such as obesity, heart disease, diabetes, depression, and inflammatory diseases have spread among the populations of developed nations. These degenerative diseases are the direct result of a fast food diet, a sedentary life and social isolation.

The world, as seen through the windows of retirement and nursing homes will be no picnic, either. There presently exists an overwhelming scientific consensus that anthropogenic greenhouse gasses are trapping heat from the sun and raising the average temperature of the Earth at an alarming rate. It this rise is not stopped, life on Earth will experience a dieoff that will dwarf previous extinctions. The scarcity in food and water that will result from this warming is likely to lead to thermonuclear war, as nations compete against each other for the diminishing supply of necessities. It is hardly necessary to mention the costal flooding that will result from the melting of Antarctic glaciers, as people can see the waters rising in front of their eyes. Millions, perhaps billions, of costal dwellers will become migrants seeking higher ground.

I’m a baby boomer, but I do not wish to be a victim of the coming catastrophe. My generation may have been criminally irresponsible, back in the ’80s and ’90s, when it failed to take seriously the warnings of knowledgeable scientists or to take ameliorative measures to retard the release of greenhouse gases. At the time, such action would have caused much roaring and screaming, but it would have been doable. Now, the task has become formidable indeed, for the temperature of the Earth is approaching the tipping point when the negative feedback processes that have sustained life on Earth will have become positive. The phenomenon is unique in human history, so we do not know exactly when that tipping point will occur. We will know when it happens. The phytoplankton in the oceans will quit changing CO2 into oxygen and the concentration of CO2 in the atmosphere will start to climb, and as it climbs it will trap even more heat, making the temperature of the Earth rise faster. Surface ice will melt and seas will continue to rise. By some estimates, the seas could rise as much as ninety feet before land ice is all melted.

What will it look like then? Nobody knows for sure. With all the heat the Earth, and especially the oceans, have absorbed, there is a good possibility of continuous Katrina-sized storms sweeping over the earth with 300 mph winds. Farmlands will disappear and reappear elsewhere, depending upon air and ocean currents. Flora and fauna will evolve to survive in radically different environments.

It goes without saying that the capacity of the Earth to sustain human life, let alone civilization, will almost certainly shrink, with all the attendant suffering and death we can expect from such a cataclysm.

In spite of the probability of disaster, there are some things that we can do that are grounds for hope. Some may sound far-fetched, but they would help.

The simplest action we could take is to abstain from any foods made from animals and dairy products. Eat no animal protein or fat, in other words. I have been hearing recently that the raising and processing of beef is responsible for over half the greenhouse gasses released into the atmosphere, but the better estimate is 18%.

An all-plant diet has several advantages over an animal diet:
  • It’s safer as long as it’s organic (no pesticides);
  • It’s safer because it’s not loaded with hormones and antibiotics that make the animals grow faster and less likely to get infections from crowded conditions;
  • Food made from plants is almost always less costly. With animal-based foods, plants must be fed to animals, which must be cared for until maturity. The process is inherently inefficient.
  • Eating plant-based food is much kinder to the land. “[W]ere we to eat soya, rather than meat, the clearance of natural vegetation required to supply us with the same amount of protein would decline by 94%. Producing protein from chickens requires three times as much land as protein from soybeans. Pork needs nine times, beef 32 times[1].”
  • Since so much less land must be cleared to yield the same level of nutrition, far less CO2-converting flora is destroyed;
  • People who eat a plant-based diet lead healthier lives and are far less likely to develop chronic diseases we associate with aging. For extensive documentation, see;
  • By avoiding meat, you lessen the chance that you will contract an antibiotic-resistant superbug. Livestock, poultery, even farmed fish are administered powerful antibiotics to accellerate growth and prevent infection from unsanitary conditions under which the animals are raised. By doing so, the producers are assisting the bacteria to develop resistance to the antibiotics, some of which are what doctors call drugs of last resort.
If people are healthier and avoid chronic diseases, they will reduce their medical bills as well as their grocery bills. Most importantly, as they age they will reduce the burden upon the entire medical care system, including nursing homes.[2]

Staying healthy as one ages is a huge blessing. But eventually, no matter how hard we work to stave off the grim reaper, we will weaken, our thoughts will dim, and body parts will refuse to function as well as before. Sooner or later, we will be too weak to get out of bed or even straighten our sheets. Our spouse will be unable to help very much, as he or she is just as weak.

I hope I stay in good health long enough for humanoid robots to take over the heavy lifting: to lift me from my bed and gently place me in a bathtub, scrub, and then dry me, help me put on my pajamas and then place me in an easy chair. My wife, who by then will be in no condition to act as a traditional caregiver, sits in her chair and we chat pleasantly until the robot brings breakfast and stands next to me, ever vigilant. If I drop something, the robot catches it in midair and silently hands it to me.

With semi-intelligent machines, there is no need to hire a weight-lifting champion to lift me, wash me and walk me down the hall. If our weight-lifting champion wants to help, he can sit and visit, which is the one thing that a robot could never do convincingly, since it would have no feelings. I’m not sure feelings could ever be programmed into a robot, as the robot doesn’t have the same wild, utterly complex nervous system that makes humans the way they are.

I can’t decide whether I would prefer the robots to look just like humans or to look like machines. Imagine a humanoid robot that looks exactly like your mother when you were an infant. Would she be creepy or comforting? (What if she looked like one’s mother-in-law?)

Talking, empathizing, joking, laughing, crying — that’s what humans are for. Let the machines do the mechanical part of caregiving, and let the humans visit.

  1. Pregnant Silence by George Monbiot in The Guardian, November 19, 2015.  ↩
  2. Currently, over 75% of the $2.8 trillion in health care costs are due to chronic diseases, such as coronary heart disease and type 2 diabetes, that can be largely prevented by making comprehensive lifestyle changes. We don’t need to wait for a new drug or laser or high-tech breakthrough; we simply need to put into practice what we already know.
    Dean Ornish on CNN: Change your lifestyle, reverse your diseases  ↩

Wednesday, December 6, 2017

Tillerson, the Secretary of State from Exxon

According to Friday’s New York Times, Rex Tillerson, former CEO of oil giant Exxon and Trump’s chosen Secretary of State, is drastically cutting employees and positions in the State Department, including some of the highest ranking officials with years of experience in diplomacy. Tillerson believes that many managers in the middle and lower levels do not do anything worth doing and their positions should be eliminated. He is acting on that belief.[1]

In this writer’s opinion, Tillerson’s appointment will come to be regarded as the most damaging of all Trump’s appointments. Here’s why:

The Secretary of State, now Tillerson, is the President’s chief foreign affairs adviser. He carries out the President’s foreign policies through the State Department and the Foreign Service. More importantly, the Secretary advises the President on all matters involving foreign political entities.

The US Department of State, headed by the Secretary of State, functions as the diplomatic wing of the federal government, handling matters of foreign affairs with other nations and international bodies. The State Department’s primary job is to promote American foreign policy throughout the world.

The State Department’s single most valuable asset is its vast institutional knowledge, much of which is not to be found in file cabinets or hard disks, but in the minds and memories of State Department personnel who acquired it on their travels around the world in the course of their diplomatic careers. It is difficult to adequately describe the full spectrum of such knowledge, but it includes familiarity with foreign officials and diplomats, the grasp of current local conditions, historical backgrounds of nations and regions to which they were assigned, and, in general, information that our government requires to make informed decisions regarding the complex situations that inevitably arise in international relations.

Tillerson, for all his intelligence and business experience, obviously hasn’t a clue to how the State Department actually works, which is unexpected from the CEO of a major corporation. Exxon undoubtedly has diplomatic professionals in-house or on retainer to manage its relations with foreign nations. On the other hand, my observation is that institutional knowledge is not highly regarded in the oil business where persons are, for all practical purposes, fungible and disposable, that is, easy to replace, irrespective of skill, knowledge and experience.

It is not uncommon to walk into an office of an oil company after six months’ absence and discover that the bosses are all new, half the staff has been replaced, and one’s old friends have either taken early retirement or simply been let go.

The job of a diplomat is far more difficult than a job in the oil industry, because his knowledge is almost impossible to replace. Statecraft is specialized, deep, and acquired over many years of experience working with foreign leaders and governments. This familiarity with people and places gives him a unique viewpoint among politicians and bureaucrats, who woefully lack on-the-ground experience. He, unlike his elected superiors, can predict with some confidence how foreign nations in his area of expertise will react to what the U.S. says and does.

In short, the Foreign Service constitutes the experienced eyes and ears of our policymakers. Without it, we are blind and deaf to what is happening in the rest of the world. Why is Tillerson, presumably with permission or on orders from Trump, deliberately destroying an agency of vital importance to the U.S.?

There are not a lot of different reasons that a former CEO would tear out the eyes and ears of the U.S. government:

  • Perhaps he sincerely believes that the State Department is staffed with useless employees that advance neither the purpose of the department of the welfare of the nation, “cruft,” in other words. The State Department has been sneered at for many decades. Dean Acheson once proposed to President Eisenhower that he be commissioned to clean out the department of worthless personnel. Luckily for our nation, Eisenhower politely declined.

  • Tillerson is reputed to be a close friend of Vladimir Putin and he does not want that relationship to be carefully examined. U.S. diplomats are old hands at sniffing out hidden activities that may adversely affect the U.S. If Tillerson packs the department with inexperienced novices supervised by ignoramuses loyal to only himself, it will be unable to perform its mission. Even if a successor tries to repair the damage, he will find it nearly impossible to woo former employees back or find inexperienced but talented persons that could get up to speed quickly. Who in his right mind would want to work for a person like him?

  • Perhaps Tillerson believes he is a management genius. Perhaps he believes his genius is manifested in higher profits resulting from laying people off. Oil companies are notorious for hiring when the price of oil is high and mass firing when the price of oil falls below a profitable price. He likely believes that his genius will eventually be recognized for cutting the State Department budget by 30% without loss of effectiveness. Like so many of his ilk, he will be gone before people notice that he has nailed several more nails into the coffin of America’s prestige and power.

  • He could be a psychopath, void of empathy or decency, whose only desire in life is to reach the top of the executive heap and then fire anyone who refuses to bow. Psychopaths are adept at looking good and then bailing out before the house falls down around everyone else’s ears. Donald Trump is almost certainly a severe narcissist and likely a psychopath with delusions of grandeur, so they will eventually clash and Tillerson will depart. Tillerson is already said to have called the president a moron, not a phrase designed to preserve one’s job. If the Russian matter becomes any more serious, it will not be “eventually.”

During the few days this column is being written, the rumor is that Tillerson will shortly be replaced by Mike Pompeo, currently head of the CIA, and ideologue of the first water. I suspect that it will not take long for Pompeo, for all his mindless right-wing rigidity, to tire of pandering to Trump, either in the Oval Office or on the golf course, but that is pure speculation on my part.

Are cabinet members allowed to beat the president in golf?

Daniel Dreazner has written a scathing column on Tillerson: The sooner Rex Tillerson resigns as secretary of state, the better.

Diplomatic decisions usually have big consequences. At the present time North Korea is testing thermonuclear weapons and rocket platforms that are, or will shortly be, powerful enough to strike the U.S. mainland. This is a problem that has remained under the public radar for at least 17 years. Now that the efforts of the North Koreans is about to come to fruition, the U.S. is faced with a serious problem: what can we do to prevent the North Koreans from using their nuclear weapons against us?

It is becoming clear that Trump doesn’t believe in diplomacy, because his only response to unpleasant happenings throughout has been threats to use military force. His public remarks—intended to send a scary, belligerent message to North Korea—have not improved our relations or stopped the North Koreans from testing nuclear explosives or delivery systems.The Koreans are a proud people; threats only stiffen their resolve. They were once bombed to smithereens by the U.S. Air Force and they are not about to repeat the experience without inflicting all the harm they can upon their adversaries. They have observed that no nation possessing nuclear weapons has ever been attacked by the U.S. Nuclear weapons are an insurance policy to deter U. S. aggression.

Even when one is carrying a huge stick, it is usually wise to negotiate rather than to attack someone wielding a little stick big enough to injure. North Korea will soon have that little stick and it behooves our leadership to negotiate with the North Koreans and treat them with respect, something we should have been doing all along. Because the U.S. and North Korea have never enjoyed diplomatic relations with each other, neither state knows much about the other, and that situation is dangerous. It is essential in a nuclear standoff that each side reacts to the actions of the other in a predictable manner. Without that familiarity, there will arise situations in which one side misinterprets the actions of the other as preparations to attack. When each side must immediately fire its missiles after it confirms an attack, the danger of a misunderstanding turning into a nuclear exchange is high. During the Cold War, there were times that the only thing that prevented a war was the knowledge by one side that the scenario didn’t fit the overall situation revealed by their intelligence. Thus a false alarm did not become Armageddon because each side was familiar with its adversary.

An historical example of how ignorance can lead to disaster: During the McCarthy era, almost all the experts on the far East working in the State Department were driven from their jobs after being denounced as communists by Wisconsin Senator Joseph McCarthy. Among these experts was John Paton Davies, who at that time was probably the world’s foremost expert on China. He was the subject of nine security investigations instigated by McCarthy and exonerated eight times. In 1954, the ninth case finally stuck. The result: he was discharged for “lack of judgment, discretion, and reliability.” John Foster Dulles, Secretary of State at that time, knuckling under pressure from a McCarthy-cowed, feckless, Republican congress, affirmed the decision. Davies was offered the opportunity to resign and avoid the stigma of having the finding remain on his record, but refused, because resigning was tantamount to an admission of guilt. Later Dulles quietly offered to write Davies a letter of recommendation if he needed one. Davies never requested one.[2] In mid–1968, Davies was cleared. He eventually took his family to Spain and washed his hands of the government that had betrayed him and then would not take him back after his name was cleared.

But even then the State Department did not have the courage to admit that it had corrected an old injustice. Instead of issuing an honest and candid statement, it leaked the news of the reinstatement to a reporter for the New York Times; the timidity still lived.[3]

Thus was the State Department (and the entire nation) deprived of the very man capable of advising the government from a position of depth and experience, a man who spoke the truth to power, no matter how unwelcome it might be to its listener. The nation was also deprived, thanks to McCarthy, of numerous others that would have also fearlessly spoken truth to power: John S. Service, John Carter Vincent, O. Edmund Clubb, Owen Lattimore, John K. Fairbank, Theodore White, Raymond P. Ludden, John F. Melby, and Edgar Snow. [4]

Without these public servants in the State Department, the executive branch was in a position to make some horrendous choices in the far east, most disastrously in its attempts to prevent a Communist takeover of South Vietnam, a pseudo-nation created by France and the U.S. and ruled by a clique of generals associated with the French efforts to retain their colony, known at the time as “Indochina,” which included all of Vietnam.

But I digress. Tillerson is blinding the government, pure and simple. Apparently, Trump is behind it all, although it is difficult to imagine that Trump would care about the State Department. But he is repeating the well-established script that politicians have followed since WWII. To Halberstam is attributed[5] the judgement on the patrician coterie that got us into the Vietnam quagmire, “They were brilliant and they were fools.” Unfortunately for them, the judgment of historians on Trump and his henchmen will be “They were ignorant and arrogant and the term ‘fools’ doesn’t even begin to describe the depths of their folly.”

  1. As an interesting aside, the armies of Islam that conquered the Middle East, the Balkans, North Africa and the Iberian Peninsula in the 7th and 8th Centuries usually left the bureaucrats of the old regime in charge and replaced the nobles at the top with themselves. This was for the simple reason that there weren’t enough Moslems to take their places and the conquered lands could not be administered without someone performing those jobs. Tillerson seems to be following a radically different course in getting rid of the people that do much of the work. He may believe that they do not, and he may be leaving before the damage is apparent, but he is doing damage.  ↩

  2. Halberstam, David, The Best and the Brightest, p.390 (1972). My account of Davies’s story is based on Halberstam’s book, pp. 379–92, esp. 389–390.  ↩

  3. Ibid. p. 392  ↩

  4. China Hands, Wikepedia article, downloded 12/5/2017  ↩

  5. I have searched for the passage but have been unable to locate it. Any help would be appreciated.  ↩

Monday, December 4, 2017

Republican Arrogance

Sometimes the hubris of our Republican senators and representatives takes the breath away. The example for today comes from Chuck Grassley, Republican senator from Iowa, in an interview yesterday with the Des Moines Register:
I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.

This is clearly the attitude of the Republican-dominated Congress toward all who work for a living. It is the excuse of the elite to justify their obscene wealth: If you're not a millionaire, you are lazy and spend all your money on “booze, women or movies.”

Grassley really said that, in spite of the fact that the present estate tax only applies to estates worth $5.45 million or more that are passed on to surviving family members. The super rich, in other words. To get up to speed, read Ten Facts You Should Know About the Federal Estate Tax from the Center on Budget and Budget Priorities. It’s a PDF file that you can print out.

Grassley's message is that people who work for a living are chumps. That’s why the Republicans were able to pass an abominable tax bill that screws everyone but the 1%. If you voted for Trump, Grassley, or any other Republican, contemplate how you have been conned by some very clever propaganda artists for whom the truth is merely an inconvenience. Contemplate what you have done to yourself and your country. It ain't pretty.