Month: April 2014

A reader remains unsatisfied with the Sovaldi discussion:

I can appreciate the gratitude you feel towards the pharmaceutical industry whose anti-retrovirals drugs saved your life. They saved my life too. However, the fact that the status quo has done great good does not mean that things could not be better.

Sure, research and development of drugs is expensive. But I would like to read your views on studies like this one suggesting that the pharmaceutical industry spends twice as much on marketing as it does on R&D. Also, I would like to see you grapple with the conflict between pharmaceutical companies’ responsibility to maximize shareholders’ profits, and the ethical responsibility to maximize human welfare. They are clearly often – many would argue always – in direct conflict.

Again, I appreciate the gratitude you feel towards the pharmaceutical companies. But I don’t think that gratitude requires an unconditional support of the status quo in the pharmaceutical industry. I would like to see you grapple more with the ethical conflicts and human costs involved.

My support of the drug companies’ innovation is not unconditional. In fact, it’s constantly derailed by some of the worst practices of those very drug companies. Over-aggressive and sneaky attempts to extend patents, heavy marketing of not-so-vital drugs, lobbying to ensure that the balance between the free market and the moral demands of healthcare is always tilted toward profits: I could go on. But my deeper point is a capitalist one: if the only incentive for curing people was human benevolence, I’d be dead and countless others would be suffering. A free market tries to harness human selfishness for the greater good. And maintaining that balance is what we need to do. Broad-brush condemnation of the private drug sector doesn’t help us with that balance. Another reader notes:

Here is an interesting look at the issue in Forbes. Basically, if every person suffering from Hep C in the US took this drug, Gilead would generate $227 billion in revenue. In comparison, the entire frigging drug industry in the US booked $260 billion in revenue last year. That right there is a sign that market forces have absolutely nothing to do with Gilead’s pricing. This is pure extortionary pricing. I completely understand that there are different aspects to consider for this one issue, but there is really no rational, defensible, quantitative way to justify the current price of Sovaldi … a price, by the way, that by itself will restrict access to this drug for many who need it.

But another defends Sovaldi:

I’ve been following this story on your site and around the web pretty closely, as I work for a consultancy that (in part) specializes in pharmaceutical price setting. We didn’t work on US launch pricing for Sovaldi, but the press reaction has stirred quite a bit of attention around our offices.

Our analysis shows that the price of Sovaldi should have actually been higher.

The drug sets a new standard for both efficacy and safety (and has a significantly shorter duration of treatment), and is potentially even better than the competitor drugs coming to market over the next few years. The crux of the problem is that Sovaldi is so effective and so tolerable that many more patients than expected want to initiate treatment immediately. For years, insurance payers have taken for granted that doctors “warehouse” patients who do not have HCV advanced enough to warrant treatment. Patients are streaming out of such “warehouse” queues, and that doesn’t even account for the >50 percent diagnosed population in the US.

So we see that the drug is clinically far superior to standard options that are priced at comparable or even higher levels, but as a result is having a huge impact on insurance risk pools. Is it really fair to tell a manufacturer that they shouldn’t price their breakthrough drugs at parity to inferior competitor drugs that have gone without a negative press reaction for years? The story here isn’t that manufacturers are gouging consumers for a life-saving product, but actually that our drug benefit insurance schemes are simply not equipped to give sick patients drugs that they need when a honest-to-goodness breakthrough comes out.

Another:

Thanks for defending my industry.  I admit I’m biased, and certainly my industry does some stuff that makes people unhappy.  That said, $84K to be CURED of Hep C is a bargain.  When I first saw the news I thought, well, $84K a year to stay alive is maybe a bit steep … but no, this is $84K to be CURED.  My industry doesn’t do a lot of curing.  This drug is a miracle, and those don’t come cheap.

Another looks at a different medication:

My 7-year-old daughter was diagnosed with asthma a few years ago and given a rescue inhaler. Recently the prescription ran out and we called to have it refilled. The pediatrician insisted on seeing her, then prescribed her another inhaler, a daily use corticosteroid – which costs twice as much as the original rescue inhaler.

Never having heard of this particular medication before (QVAR), I googled it and came across a Consumer Reports study noting that the drug is now 92 percent more expensive than it was in 2009, in part because of the FDA’s decision to ban CFCs – a ban which the pharmaceutical industry itself lobbied for.

I’m sorry. This absolutely qualifies as fleecing, as greed.

The NYT did a deep dive into the subject of asthma drug pricing as part of its “Paying Till It Hurts” series last October. Meanwhile, a reader raises the issue of waste:

I’m speaking as someone who worked for years in a firm that was hired by many large pharma companies to help make their internal processes both effective (i.e., defect-free, without rework) and efficient (i.e., not wasting physical, human, or financial resources).  Processes ranged from clinical trials, to marketing campaigns, to production of the active pharmaceutical ingredient.

You cannot begin to imagine the sheer amount of waste involved; it is truly, truly mind-boggling. For years, these firms resisted process improvement efforts (such as Lean and Six Sigma, popularized by Toyota and GE, respectively) in part because the FDA neither rewarded such efforts nor punished the lack of them, and in part because they did not see their activities as “processes” that could be tuned up. I remember first hearing about one firm’s method for analyzing adverse events from their products. So appalling was this description that when I got home, I checked to ensure that the meds I was taking for a chronic condition weren’t made by that company.

I agree that the cost of drugs needs to cover what it takes to bring them to market, and that not all research will result in a salable product. But consumers should not be paying for gross inefficiencies that are relatively easily fixed.

I’m not going to disagree with that. Lastly, a reader wants to clear up some confusion about the NIH:

I work in pharmaceuticals (specifically, early stage startup, not big pharma) and am very familiar with the relationship between academic-/NIH-funded research and industrial drug research and development. The NIH funds very basic research that allows us in industry to then discover and develop new drugs. There is no debate around this, and anyone in a pharma company will agree.

However, NIH funding, with rare exceptions, doesn’t even discover new drugs, let alone develop them. Typically, NIH funding will allow an academic researcher to identify a novel aspect of biology and associate it with a disease state. Pharma usually picks it up at this point by verifying the research, running chemical screens to identify potential drugs, and then modifying the potential drugs to the point where they are safe and efficacious. It is then that a drug will enter clinical trials. The entire process just to get to a clinical trial can take four to eight years and cost millions of dollars. The clinical trials are where the real money and time are spent, of course, but there is a substantial investment by a drug company prior to this that is easily overlooked.

I’m not defending drug pricing; I think we have a long way to go in terms of demonstrating value for money spent. But this is intertwined in healthcare costs itself and drug companies are responding to market pressures. I do however want to dispel the belief that the NIH funds academic research that discovers drugs, and then drug companies take it away and charge an arm and a leg. Drug companies assume the vast majority of the risk and the investment to both discover and develop new drugs.

Scott Clement unpacks yesterday’s WaPo/ABC poll, which included bad numbers for Democrats. What it may mean for turnout:

While nearly seven in 10 of all registered voters say they are “absolutely certain” to vote in November, several key Democratic constituencies are much less committed to voting. Barely half of voters ages 18 to 39 are certain about voting (53 percent) and 55 percent of non-whites describe themselves as certain to cast a ballot. By contrast, more than seven in 10 whites and voters older than 40 say they will definitely cast ballots — both groups that have favored Republicans in the past two elections.

The turnout gap is smaller among self-identified partisans, with Democrats six percentage points less apt than Republicans to be certain voters (72 percent vs. 78 percent). Closing that gap, however, could be difficult, given that Democrats are more than twice as apt to rate themselves “50-50” or less likely to vote; 15 percent of Democrats say this, compared with 5 percent of Republicans.

Zeke Miller uses another poll to read likely voter tea leaves:

Facing an uphill battle to hold the Senate, the Democratic Party may be in for a wakeup call from young voters, according to a new poll conducted by Harvard’s Institute of Politics. Just 23 percent of the key Democratic-leaning demographic of 18-29 year-olds say they will definitely vote in the midterms this fall. At this point in 2010, 31 percent said they would definitely go to the polls, but only 24 percent ultimately voted. Additionally, Republican-leaning 18-29 year olds are significantly more enthusiastic about voting this fall.

Boer Deng notes that young voters, “despite casting ballots in limited numbers, can make a difference in tight races”:

Tight races abound this year, especially in the Senate, where Democrats have more seats to lose. History says that the president’s party is set for a drubbing during a midterm year. So it is worrying for Democrats that fewer of their young supporters seem to care. In fact, they are disillusioned with politics all together. The Harvard poll found that trust in political institutions has fallen to a historic low of 31 percent. Young people, no matter their political philosophy, are cynical about American democracy today: 62 percent think elected officials enter politics for a “selfish reason,” and few would run for office themselves. They can be hardly expected to canvass for votes, if that’s the case.

Sargent adds his two cents:

In short, this is more evidence the electorate is likely to tilt older, whiter, redder, and more male. Yet at the same time, Dems are more trusted than Republicans to handle the nation’s main problems (40-34), more trusted to help the middle class (52-32), more trusted on the minimum wage (49-33); and more trusted on health care (43-35). Meanwhile, women trust Dems over Republicans on their issues by 54-27. (Republicans win on guns and the deficit.)

All of this underscores what Ed Kilgore and Sasha Issenberg have been arguing: That if Dems are going to have any chance of offsetting the “midterm dropoff” among their core voters, issues alone aren’t going to do it. The sheer grunt work of contacting voters again and again and urging them out to the polls is what it will take, and it won’t be easy. The one bit of good news is that Democrats are aware of this and are planning accordingly.

Bouie warns the GOP not to get cocky:

[I]f I were a Republican strategist, I would advise my clients to ease up on the anti-Obamacare rhetoric. … As a whole, the public opposes repeal and doesn’t support the GOP’s scorched-earth approach to the law. If the GOP claims a mandate for their opposition, it risks a repeat of 2011, when it destroyed its standing with voters through a series of stunt votes and standoffs. This didn’t doom its presidential chances the following year, but it was an unnecessary obstacle.

Mike Pesca thinks it was a bad call for NBA Commissioner Adam Silver to impose a lifetime ban on Sterling and encourage the board of governors to force a sale of the Clippers:

A swift beheading by the commissioner robs players and fans of a chance to foment justice on their own. Silver did a favor to the Clippers players who didn’t want to be put in the uncomfortable position of having to actually do anything beyond the symbolic in opposition to Sterling’s racism. …

In accepting plaudits for serving as an exacting executioner, Silver also sidesteps the fact that his office—led by David Stern with Silver as his longtime No. 2—was for years an institutional enabler. The lesson of Donald Sterling seems to extend no further than Donald Sterling, and stretches no earlier than the revelations of the past week. In fact, injustice existed longitudinally and latitudinally, with the damage done by the NBA’s inaction reaching beyond that league’s offices. If the NBA had punished Sterling a long time ago, would Major League Baseball have approved Astros owner Jim Crane, despite his company having paid a multimillion-dollar settlement for allegedly having engaged in discriminatory behavior?

Along those lines, Kareem Abdul-Jabbar criticizes the media and the public for focusing their outrage on Sterling’s racist remarks after ignoring years of much worse behavior:

He was discriminating against black and Hispanic families for years, preventing them from getting housing. It was public record. We did nothing.

Suddenly he says he doesn’t want his girlfriend posing with Magic Johnson on Instagram and we bring out the torches and rope. Shouldn’t we have all called for his resignation back then? … So, if we’re all going to be outraged, let’s be outraged that we weren’t more outraged when his racism was first evident. Let’s be outraged that private conversations between people in an intimate relationship are recorded and publicly played. Let’s be outraged that whoever did the betraying will probably get a book deal, a sitcom, trade recipes with Hoda and Kathie Lee, and soon appear on Celebrity Apprentice and Dancing with the Stars.

Many readers are flagging a similar argument on YouTube from Bomani Jones, an ESPN radio host who wrote a column eight years ago called “Sterling’s racism should be news.” One reader adds:

Think about this. Al Sharpton was prepared to mount a boycott of the NBA’s major advertisers if the league didn’t suspend Sterling as a result of the phone call. BUT, before the phone call was revealed, Sharpton was willing to stand beside Sterling while the two were honored by the NAACP. This, in spite of the fact that Sharpton knew (or certainly should have known) Sterling’s record. Does this mean that Sharpton thinks this phone call was worse that housing and employment discrimination?

Bouie elaborates on that disconnect:

When it comes to open bigotry, everyone is an anti-racist. The same Republicans who question the Civil Rights Act and oppose race conscious policy are on the front lines when it’s time to denounce the outlandish racism of the day. …

At the same time, we all but ignore the other dimension of racism—the policies and procedures that sustain our system of racial inequality. The outrage that comes when a state representative says something stupid about professional basketball players is absent when we learn that black children are punished at dramatically higher rates than their white peers, even as preschoolers. Likewise, it’s absent when we learn that banks targeted minorities—regardless of income—for the worst possible mortgage loans, destroying their wealth in the process. In turn, this blinds us to the racial implications of actions that seem colorblind. In a world where racism looks like cartoonish bigotry, it’s hard to build broad outrage for unfair voter identification laws or huge disparities in health care access.

Meanwhile, according to Adam Serwer, “There’s a more disturbing element to the controversy that has largely escaped notice”:

Sterling’s remarks show how deep, interpersonal racism can persist despite longstanding, even intimate relationships with people of color. Stiviano, Sterling’s girlfriend, is black and Hispanic. Through his charitable foundation, Sterling has given money to organizations like the NAACP,  the United Negro College Fund, and the Black Business Association. He is the owner of a basketball team made up largely of black athletes.

Yet none of these things appear to have moderated Sterling’s feelings towards black people. This is nothing new of course – even during slavery, white plantation owners sired entire families with people they owned as chattel without ever questioning the legitimacy of a system that treated blacks as property. The “black friends” defense has become a running joke precisely because it’s equally popular and unpersuasive. Sterling’s remarks are a reminder that having black associations, friends, or even lovers, doesn’t mean you can’t still hold racist views.

A reader chimes in:

So they’re banning Sterling for life and fining him $2.5 million. Listen, I think the guy is racist as hell. But are we really convicting people without a hearing, taking away their property and fining them $2.5 million for not liking black people? Isn’t that his right? It’s odious to be a jerk, and I’m appalled, but I think people have a right to hate other people. There isn’t much record of him breaking the law in his specific duties as owner of the ball team, is there?

Again, I’m troubled by this stuff. This guy makes my skin crawl. And the Mozilla guy who wants to ban my own marriage, yuck, but doesn’t he have the right to be biased too, as long as they don’t break the law? I hate that bias, and think they’re losers, but I’m uncomfortable with this witch hunt – even if they happen to be real witches.

Another

I want to disagree with the reader who questioned “convicting people without a hearing” and talks about people’s right to be biased “as long as they don’t break the law.” That’s not what is at issue here. The NBA as an association has its own rules and regulations, which Sterling’s remarks fall afoul of, and the fine and ban are entirely an internal matter to the league. Sterling has been an NBA owner for decades; the rules are written and voted on by his peers, and enforced by an employee of the league (the commissioner) who is therefore an employee of his and of his peers’; and players and coaches are routinely held to these standards of public conduct (albeit for lesser offenses). This isn’t a matter of legal or governmental punishment. It’s not even the same as the Eich case, precisely because there were actual pre-existing standards Sterling violated. The issue that Sterling was known to hold these views already is a valid one (the man discriminated in housing, after all), but the idea that this is somehow a violation of his rights is ridiculous.

And another:

As the news about Sterling’s comments unfolded, I too was initially uncomfortable with the “witch hunt.” But then I realized this has nothing to do with the NBA passing judgment on Sterling’s racism – and everything to do with the NBA protecting its own brand.

As the past thirty years have shown, the NBA doesn’t care about Sterling’s racism. What it does care about is the money his racism was potentially going to cost the league. The NBA very quickly realized that if they left Sterling in place – say, if they suspended him for a year, or even “indefinitely” – this issue was going to fester, advertisers were going to continue to abandon ship, and the team’s revenues (if not the league’s) would be in jeopardy.

So the NBA kicked Donald Sterling out of the club. In effect, through their behavior over the last thirty years, the other NBA owners essentially told Sterling, “Everything would have been fine if you would have just kept your mouth shut. But now you’re messing with our money, and if there’s one thing rich, white guys don’t like, it’s other people messing with their money.”

Another adds along those lines:

If the league didn’t act quickly, decisively, and harshly, this would have derailed a highly enjoyable playoffs but also led to more advertisers re-evaluating their relationship with the league in general. It also would have caused a players’ revolt. There were rumors that Golden State and the Clippers’ players were going to boycott the game in protest if the league didn’t handle it.

Basketball is a stars league (more so than any other team sport) and the stars were going to act (see LeBron and the Heat engaging in a solidarity protest before their game over the weekend). And if the players acted, the league was going to be in trouble. It could result in fewer sponsors and lower attendance/viewers. Energizing the players to act collectively is not something the owners want. If the star players were going to boycott games, it would be incredibly damaging (and all signs were pointing that way).

And don’t feel bad about Sterling – he is going to get paid north of $1 billion dollars when the team is sold (I’ve seen basketball guys like Bill Simmons estimate north of 1.5 billion). He’s being kicked out of a private, high-profile, exclusive club because he was going to hurt the overall brand of the NBA irreparably if he wasn’t.

(Chart via Mona Chalabi)