Research & Development

Let’s talk about drug prices.

Years ago, I was persuaded by arguments from friends who worked at Eli Lilly, Indianapolis’ own “big Pharma” company, who explained the considerable expense entailed by the development of new drugs–including losses incurred when, after the expenditure of millions of dollars, efforts to produce a new medication failed–the drug ended up being shelved. If the government imposed caps on what could be charged for the medications that did emerge, there would be little incentive to spend the zillions necessary, and we would all suffer.

That seemed reasonable, because I didn’t understand how the production of these medications actually worked, and what profits were actually incentivizing.

What initially triggered my deeper investigation was the overwhelming amount of advertising by big Pharma. (Take the purple pill!!) Companies were spending enormous amounts to “incentivize” patients to demand prescriptions from their doctors. (I don’t know about other doctors, but mine absolutely hated these ads, which required him to explain to his patients why pill X or elixir Y was inappropriate for them.)

My preliminary research (granted, a few years ago) revealed that big Pharma was spending more on advertising than on research and development.

Then there was the data showing how much those companies spent on lobbying…

Then there were the reports showing that efforts to produce new medications seldom if ever addressed so-called “orphan” maladies–that is, severe illnesses from which relatively few people suffer–since the markets weren’t attractive. They did spend generously, however, to produce slightly different versions of already-successful products.

But the most revelatory information came when I joined academia and kibitzed with colleagues on the medical faculty. Until then, I hadn’t realized how much pharmaceutical research and development is funded by government. Taxpayers pay, and drug companies profit.

A recent report from Inequality.org highlighted an example from the recent COVID pandemic.

Moderna, the world’s hottest new Big Pharma giant, now has four of its top players sitting on the annual Forbes list of America’s 400 richest. In early 2020, Moderna had none.

Moderna’s Forbes 400 billionaire quartet owes its current good fortune completely to the company’s Covid-19 vaccine. And who made that vaccine possible? U.S. taxpayers. Moderna’s Covid vaccine, as Public Citizen research director Zain Rivzi puts it, “would not exist without the massive contribution of the federal government at every step of the way.”

The Biden administration’s chief science officer for the Covid response, David Kessler, calculates that the federal tax dollars handed to Moderna for vaccine development, testing, and initial manufacture total about $10 billion. And that figure doesn’t include the brainpower of the scientists at the U.S. National Institutes of Health who spent four years actively collaborating with Moderna’s researchers.

Moderna has now filed for a patent on the key vaccine breakthrough these scientists helped produce. The company’s patent application makes no mention of the NIH scientists, a snub that could, notes a Wired analysis, have “major ramifications.”

What are those ramifications? Well, evidently, if a patent gives federal scientists the credit they deserve, the government can license the technology for Moderna’s vaccine to developing countries where vaccination rates remain low.

But if Moderna gets its way — gets approval for a crucial patent that denies credit to federal NIH scientists — the company’s billionaires would have “sole control” over the Covid vaccine technology that U.S. scientists and tax dollars did so much to create. That control would enable Moderna to continue placing profits ahead of people. Way ahead of people.

Over the course of this year’s first six months alone, Michael Hiltzik of the Los Angeles Times points out, Moderna “pocketed $4 billion in profits on $5.9 billion in revenue, almost entirely from its Covid vaccine, its only product.”

Meanwhile, according to the Mayo Clinic, the most commonly used forms of insulin cost 10 times more in the United States than in any other developed country. Other medications Americans rely upon to survive are also disproportionately expensive here.

According to the Commonwealth Fund

Drug spending in the United States is at an all-time high and still rising. Studies have repeatedly shown that the U.S. pays far more for the same prescription drugs than other high- and middle-income countries. Patients in the U.S. are more likely to report that they can’t afford their medications; half of all of adults with lower incomes go without care because of cost.

Commonwealth also debunks that argument that once seemed reasonable, opining that it “is an overreaction to say that any efforts to address drug pricing will stifle innovation,” since–among other things–the pharmaceutical industry has the largest profit margins of any sector among publicly traded companies.

And since U.S. taxpayers will continue to bear a substantial portion of R & D costs.

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Can Conservatives With Integrity Save Us?

Many thanks to all the readers who posted kind thoughts yesterday. They are much appreciated!

Among the regular readers of this blog are several people I came to know through Republican politics. Even then–“back in the day”–I had philosophical differences with a couple of them. (I generally described myself as a fiscal conservative and a social liberal, but even in my politically-active days, I defined “fiscal conservatism” as prudence, as “pay as you go”–not as ignoring the needs of the poor while being generous to wealthy purported “job creators.”)

The thing is, philosophical differences are philosophical. Rational adults can discuss them, agree or disagree about what the evidence tells us, and even find middle ground. As anyone who is following today’s political environment can attest, today’s GOP is neither rational nor philosophical. Its members bear virtually no resemblance to the center-right, generally Conservative party of which I was once a part.

The liberals and Democrats who dismiss help from the so-called Never Trumpers point out that many of them actively worked for the GOP for years and continue to hold very conservative political views. True–and that is their strategic virtue. The crazies who currently control the GOP and its various propaganda arms certainly aren’t going to listen to people like me; they most definitely aren’t going to listen to AOC and think, “you know, she has a point.” When the New York Times or the Washington Post reports that something from Fox News is false, they aren’t going to believe it.

However, when people who are known to be principled conservatives refuse to engage in the propaganda, some who are not entirely lost to the cult may pay attention. So when longtime commentators resign from Fox in protest, it is a hopeful sign.Steve Hayes and Jonah Goldberg just did that very thing.

We joined Fox News as contributors in early 2009. Combined, that’s more than 20 years of experience, relationships, and friendships. For most of that time, we were proud to be associated with the network, if not necessarily with every program, opinion, or scandal that aroused controversy. We believed, sincerely, that the country needed Fox News. Whether you call it liberal media bias or simply a form of groupthink around certain narratives, having a news network that brought different assumptions and asked different questions—while still providing real reporting and insightful conservative analysis and opinion—was good for the country and journalism.

Fox News still does real reporting, and there are still responsible conservatives providing valuable opinion and analysis. But the voices of the responsible are being drowned out by the irresponsible.

A case in point: Patriot Purge, a three-part series hosted by Tucker Carlson.

As they write, the Carlson piece is not the “hard-hitting expose” Fox is promoting.

it is a collection of incoherent conspiracy-mongering, riddled with factual inaccuracies, half-truths, deceptive imagery, and damning omissions. And its message is clear: The U.S. government is targeting patriotic Americans in the same manner —and with the same tools—that it used to target al Qaeda….

This is not happening. And we think it’s dangerous to pretend it is. If a person with such a platform shares such misinformation loud enough and long enough, there are Americans who will believe—and act upon—it.

This isn’t theoretical. This is what actually happened on January 6, 2021.

The two of them defend the news programming on Fox, which they say “routinely does what it is supposed to do.” If one only turned Fox on for the news, they’d be told that COVID-19 is deadly, vaccines work, Joe Biden won Arizona, the election wasn’t stolen, and January 6 wasn’t a “false flag” operation. But the news side of Fox has been buried by commentary masquerading as reporting, and they’ve had enough.

As they conclude:

With the release of Patriot Purge, we felt we could no longer “do right as we see it” and remain at Fox News. So we resigned.

We remain grateful for the opportunities we’ve had at Fox and we continue to admire many of the hard-working journalists who work there. This is our last recourse. We do not regret our decision, even if we find it regrettably necessary.

We often hear people bemoan the GOP’s “move to the right.” That isn’t really accurate. I don’t know where insanity falls on the political spectrum, but a collection of conspiracy theories and racial and religious animosities are not a political philosophy. Genuine conservatives with integrity understand that the Republican Party is no longer home to people holding genuinely conservative beliefs.Just ask Liz Cheney.

Ultimately, whether our “backsliding democracy” survives may depend on how many principled conservatives are willing to join Cheney, Goldberg, et al. and draw a line in the sand.

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Happy Thanksgiving!

On Thanksgivings past, my kids would call me the “gratitude gestapo” because I insisted on going around our bountiful table and making everyone say what they were thankful for.

I’m not sorry.

I’m aware that I am incredibly lucky to buffered against many of the very real problems that others face–problems that are so often the subject of discussion and concern here.

So I’m going to spend today being grateful–for my health, my endlessly supportive husband and our wonderful children and children-in-laws, for our extended family, and for all of you who are kind enough to visit this blog read my daily diatribes.

Happy Thanksgiving! (I’ll be back to my grumpy self tomorrow…)

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Speaking Of Structural Racism…

Discussions of Critical Race Theory are worse than useless, since most of the people arguing about CRT have absolutely no idea what it is. It has simply become the most recent wedge issue employed by the portion of America’s population intent upon protecting White privilege.

In other words, a distraction.

Why–you might well ask–do these angry people need a distraction? Since I’m not a psychiatrist (nor do I play one on TV), I can’t provide a truly satisfactory answer to that question. But as Americans continue to confront–or refuse to recognize– elements of our social landscape that document how inequitable that landscape truly is, a recent paper issued by The Brookings Institution may prove instructive.

It’s one thing to talk– as we academic types tend to do–about abstractions like “systemic racism.” Those abstractions are frequently dismissed by the people who become defensive in any discussion of unfairness based upon race. The Brookings study is more concrete; rather than talking in abstract terms, it paints a picture of what systemic racism is and does.

In September, Freddie Mac released a groundbreaking analysis of the U.S. home appraisal industry. Consistent with concerns raised by critics, they found that homes in Black and Latino or Hispanic neighborhoods are much more likely than homes in white neighborhoods to be valued below what a buyer has offered to pay.

A homeowner here in Indianapolis recently documented that appraisal bias.

The Brookings researchers found that Black neighborhoods were associated with much lower property values, and that only a relatively small portion of that effect could be explained by physical characteristics and neighborhood amenities.

Median home values in majority Black census tracts are 55% lower than median home values in non-Latino or Hispanic white census tracts. Part of this difference is attributable to quality differences between the housing stock. Lower wealth in Black communities means that homes in majority Black neighborhoods tend to be older, smaller, and more likely to be attached than homes in neighborhoods with few or no Black people. Lower wealth and lower home values further hinder the ability of Black homeowners to pay for structural improvements to the home and access mortgage refinancing to pay for renovations.

There are also differences in neighborhood quality that show up in housing price differences. Local schools are often less desirable—at least as measured by publicly available test scores accessible to home buyers—in majority Black neighborhoods than in non-Black neighborhoods. Some other characteristics of Black neighborhoods are more desirable, such as access to public transportation and proximity to local stores, but on average, they do not make up for the less desirable features. These structural and neighborhood characteristics explain some of the value penalty to housing in Black neighborhoods, which shrinks to 23% from 55% after adjusting for these factors.

That still leaves a lot of lost value. We estimate that losses amount to $48,000 per home and $156 billion cumulatively in majority Black neighborhoods.

The question is: What explains this?

In the linked paper, the scholars consider–and carefully rebut–criticisms of their research methodology. Interestingly, they also show that White-only neighborhoods are over-valued relative to Black neighborhoods.

Later in the paper, they return to that Freddie Mac study.

A team of economists and data scientists at Freddie Mac analyzed more than 12 million appraisals for purchase transactions submitted to Freddie Mac from January 1, 2015, to December 31, 2020 through the Uniform Collateral Data Portal (UCDP). Freddie Mac is a government-sponsored enterprise chartered to buy mortgages from banks in order to lower the cost and increase the supply of residential loans. In practice, their strict standards set the industry norm for what qualifies as an acceptable loan, and they have access to uniquely detailed data on mortgages submitted by banks.

The research team’s main finding is that homes located in majority Black neighborhoods and majority Latino or Hispanic neighborhoods are significantly more likely to have appraisals submitted to Freddie Mac that are below the contract price when compared to homes in majority white (not Latino or Hispanic) neighborhoods.

The research finds “strong evidence that appraisers discriminate against majority Black and majority Latino or Hispanic neighborhoods. They note in passing that their conclusions track with other other studies, including those showing that Black people are around 36% less likely to be called back for a job than white people with identical resumes.

This is what we mean when we talk about “systemic” racism.

No one is burning a cross on a Black person’s lawn, but the effects are–if anything–more detrimental.

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Wow…Indianapolis Is Doing Something Right

A few years ago, my husband and I took a long-planned cruise around South America. Our point of embarkation was Buenos Aires, and we booked a small hotel that had been recommended to us for a few days before setting sail, to see a bit of the city. The street in front of the hotel was being repaved, and we were struck by how Argentinians approached that task –they weren’t “resurfacing” the street by putting a few inches of asphalt over the roadway, they were reconstructing it. We watched as they dug down at least two feet, and carefully prepared the substructure before repaving it (with granite, no less!)

When they were done, they expected it to last many, many years.

I don’t know how other cities in the U.S. approach street maintenance, but as long as I have lived in Indianapolis, I have seen the way our city “fixes” our potholed thoroughfares. City administrations have repeatedly  covered the crumbling substructures with thin coats of asphalt (at the same time confirming the old political adage that “long-term to a politician is until the next election.”)

I have not been all that happy with our city’s current, timid administration (for reasons not relevant to this post), but credit where credit is due: they are actually rebuilding city streets. Properly.

We moved in May to the downtown core, and realized we’d moved into a construction zone; the major thoroughfare running past the exit to our parking garage has been torn up for months. But we’re not complaining, because the City is actually repairing it the correct way–digging down and rebuilding, just like the street repair we’d seen in Argentina.

Now there is news that the city will take that same approach to other, formerly neglected streets in Indianapolis–not just those in the urban core.

As the Indianapolis Star recently reported

Ninety miles of residential streets throughout Indianapolis will get complete makeovers next year through a rare $25 million infusion of cash.

The streets will not simply be repaved, but entirely reconstructed, reflecting a shift in strategy for the Department of Public Works from surface-level fixes to more expensive, but more longterm, deeper fixes.

That “shift in strategy” is more than welcome. Indianapolis–and all of Indiana–has followed the “penny wise, pound foolish” method of infrastructure maintenance for far too long. The usual approach–visually paving over the problem and pretending it’s solved–saves dollars initially, rewarding politicians who then brag about doing more with less while ignoring the fact that those superficial “fixes” cost taxpayers much more over the longer term.

But hey–longer term, most of them intend to be occupying a different/higher position…Leave it for the next guy to deal with.

In all fairness to our short-term politicos–they think they are being responsive to the majority of constituents who insist on government services on the cheap, the citizens who want to drive on smooth roads, visit well-maintained parks, and depend on properly trained and equipped police and fire departments–but who definitely don’t want to pay an extra nickel in taxes in order to support those services.

This attitude is incredibly shortsighted. Not only do the quick fixes require more frequent resurfacing, driving on streets that are constantly pockmarked and potholed due to underlying structural failures causes flat tires and bent rims that those tax-averse citizens end up paying out-of-pocket.

The administration says that funds to do Indy’s streets properly are coming from savings that accumulated during the pandemic, when city departments instituted hiring freezes and cut discretionary spending. Those funds should be augmented by Biden’s massive infrastructure bill, allowing even more repairs.

Proper street re-construction will take more time, and will cause traffic problems, but I for one will be delighted to put up with those inconveniences.

Now, if we could only get our utilities to buy into that longer-term strategy and bury their poles and wires…think of how much money they’d save after the next storm takes their above-grade infrastructure down, causing widespread outages…

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