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Market Failure, Epinephrine Injections, and Societal Failure

2017 February 13

This is not a competitive market:

Pharmaceutical company Kaléo – already under fire for raising the price of an overdose antidote – now plans to put an alternative to the EpiPen on the market for more than seven times the cost of the leading $608 drug.

Kaléo’s epinephrine injector, used to stop severe allergic reactions, will go on sale for $4,500 for a pack of two beginning on February 14. The auto-injector’s innovative audio instructions walk caregivers through administering less than $5 worth of epinephrine.

Remarkably, because of a system of coupons and discounts, Kaléo’s epinephrine injector Auvi-Q may have the lowest out-of-pocket costs for patients, a strategy some critics say may help some customers, but leads insurance companies to redistribute the cost of the drug through insurance fees to remain profitable.

The materials in such epinephrine injectors are worth about $8.

This is market failure. In a free market without collusion, if something is this high-priced, the price drops to more closely match the cost of production as other producers move into the market. It does not radically increase. As it stands, if you need an epinephrine injector and don’t have one, you stand a good chance of dying.

The rational reaction to these sorts of market failures, increasingly common in pharma, would be: (1) to either restructure the market to prevent them, which would require breaking up big pharma companies, streamlining approval processes, and allowing reverse-engineered knock-offs, or; (2) more simply, for the government to just manufacture them itself and charge a fair price.

There are some government services which should be kept entirely in-house. (The military, for example. Mercenaries are failure mode for any government.) There are many other services for which the government should be one provider among a number. The government stays in the business, providing about a third of the service; because if you aren’t in the business yourself you can’t always know if you’re being rooked by private companies and if you are being rooked, it’s very difficult to do anything about it because you don’t have the expertise to provide the service yourself.

At the same time, you want private companies involved to keep the in-house providers honest. You have multiple contractors, and those who do the best for the least are rewarded, so they have incentives to improve. You swap out the lowest performing ones on a regular basis, especially allowing a few upstarts in at the lowest viable level, so that radical new ideas can be tried.

If those new ideas work, everyone, government and private, adopt them.

At any rate, the market failures in pharma, with price markups in the thousands to tens of thousands of percents, are now so common that it’s clear that a radical solution is needed. The simplest solutions are price control and government getting into the business. Ideally, both should be done at the same time.

Note that price control includes forcing companies to take a profit. Dumping is (theoretically) illegal for a reason. If the government was to get into epinephrine injectors, for example, the logical solution for private enterprise would be to undercut their prices until the government pulled out because, “The private sector is more efficient.” Then, once the government was out of the business, they would jack their prices back up.

So you mandate a healthy profit, and because you’re in the business, you have a decent idea what a healthy profit is, not just for manufacturing, but also for distribution, sales, and so on. “You will make inflation +X percent on this.”

None of this is particularly complicated to do, in theory or in practice, though that isn’t to say that the technical details of setting it up are easy. But pharma is full of scientists and engineers who hate their jobs, and there have been vast waves of lay-offs as well; there’s plenty of expertise lying around.

I should add that this is a solved problem. It is simple to fix. This sort of price-gouging simply wasn’t tolerated in the past, and it is now, and pharma executives know it. Stop tolerating it, and it will go away.

But private pharma is a stupid way to invent and produce drugs anyway. They spend more on advertising than on research, they sponge off publicly-funded research, and they have vast incentives towards palliatives because a pill a day for life is far more profitable than a cure.

Medicines in the public interest, such as new antibiotics, receive little research because they are not profitable, and medicines long out of patent are subject to horrific price-gouging, and so on.

If you’re sick, you’ll pay almost anything for a cure. Medicine, drugs, and medical devices are one of the last things which should be provided through the private sector. If they are, they must be very highly regulated or in an engineered market with careful oversight–one from which the profit motive is largely excised at any level where decisions of patient care are being made.

The fact that our societies can no longer manage something as simple as drug prices is yet another sign of deep social failure.

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Trump and the Resistance

2017 February 10
by Ian Welsh

So, the Resistance are doing something effective, and important: They are showing up to town halls and holding their congress members feet to the fire. This is what the Tea Party did, and it works. Combined with aggressive campaigning for down-ticket offices: state, municipal, school-board, and so on, this is where true power comes from.

Obama’s reign left the Democratic party a shambling ruins, with hardly any states under their control. The weakness at the federal level is only a shadow of the weakness at lower levels, so much so that the Republicans are within spitting distance of controlling enough States to get through constitutional amendments. (If they do, bend over and kiss your ass goodbye. If you’re smart, get the fuck out of the country.)

Liberals tend to think that Trump’s on the run. Sure, there’s been setbacks, but it’s worth remembering that the polls are, well, probably wrong, as they were running up to the election. Besides, general approval is irrelevant, even if the polling is correct. Trump is never going to win California, or New York, or Massachussets, and if those states oppose him en-masse it means little.

Traditional phone polls that use live interviewers — including some of the most trusted polls in politics and media — report limited support for Trump and the controversial executive orders he’s signed. But automated phone and Internet-based surveys tell a different story. Once the element of anonymity is added, the president’s approval ratings suddenly look a lot better.

In referring to an automated poll that put the president’s popularity in the black, Spicer actually understated Trump’s level of support. According to Rasmussen Reports’ most recent survey (released Friday), 54 percent of likely voters approved of the president’s job performance.

Some people are embarrassed to support Trump, but they do nonetheless, and his hard core support him very much. Further, his support among likely voters is his higher than his support among the general population.

The Resistance also has another problem: To win, Trump has to fail. This is bad in the sense that what Trump really needs to do to win is to deliver a decent economy to his core. Attacks on Kushner and Ivanka, for example, if those attacks succeed in reducing their influence, would actually make Americans worse off, because these are the sanest and kindest people who have significant influence over Trump. Likewise, while Bannon is a piece of work, the people who would replace him are an incoherent mess; evil without the silver lining of actually wanting a good economy for the working and middle class.

And if you get rid of Trump, you get Pence. He’ll make a lot less crazy headlines, but he’s a theocrat’s theocrat and an oligarch’s tool. He will be as bad as Trump in most ways and worse in others (for example, on gay rights).

Indiscriminate attacks on Trump’s advisers may make Trump fail (he’s vastly reliant on advice and guidance when it comes to policy), but they also risk railroading his and Pence’s presidencies into including all the bad and none of the good.

All this said, and at the end of the day, Trump’s fate is in his hands. If he can goose the economy, and replace Obamacare with something at least as good, and if he doesn’t allow Republicans to gut Social Security/Medicare, he’ll stay president and probably win re-election. If he doesn’t, he’s toast; either impeached or loses re-election.

But, for now, don’t believe all the numbers you’re being fed. Polling works badly with Trump; what matters is likely voters, and what really matters to them is if he delivers.

But the best form of resistance is the “In Your Face” kind: make the lives of Republicans and any Democrats who support him, personally miserable. If they are Democrats? Make it clear that you will primary them if they cooperate with Trump.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.


A Note on Happiness

2017 February 8
by Ian Welsh

I live in a single room, in a downscale neighbourhoood. I sleep on some pads on the floor. I am in debt, and I have a couple serious health problems.

I am also happy most of the time.

I’ll be sitting in my garret and thinking, “God, life is amazing. This is wonderful.”

And I’ll laugh and mock myself, “What’s good about this? You’re poor, sick, overweight, and broke.”

All that is true, but I’m happy (and my health is improving, no worries, I don’t expect to die soon, though who knows).

So I’m going to give some unsolicited advice on how to be happy even though your life sucks, because, well, I’m pretty good at it.

The first step is to not be unhappy.

(Insert head smacking motion from readers.)

Seriously, though, start there. Or, as I like to say: “The whole of the path is not giving a fuck.”

Run out of fucks. Do not restock. Life will seem a lot better.

Start with not giving a fuck about how other people you don’t know are doing. Just stop. You’ve been happy many times in your life, and while you were happy, nasty people in the Congo were gang raping men and women, people were dying of starvation, people were being tortured. It was fucking horrible.

There are always people who are suffering; suffering unbelievably. Agony one can hopefully only imagine; shame, terror that rises to the level of insanity. There are people in the burn wards of the hospitals where you live begging for death, praying for it earnestly. (I’ve been there, though not with burns, thank God.)

You’ve been happy, really happy, while all these horrid things were going on. You didn’t give a fuck then, don’t give a fuck now. When you start thinking about how horrible things are for people you don’t know, STOP. Think to yourself “I’m not helping them or me,” and focus on something good.

I recommend imagining a young child you love, and seeing them running into your arms. Failing that a puppy. Stand up, open your arms wide, and imagine what it feels like. If you’re imagining a puppy, imagine yourself kneeling and it licking your face.

Or find something else, but do it. Every time you feel miserable for people you don’t know, redirect.

Next, do this for your future self. There’s a future you fear: Perhaps you’re afraid of losing your job or of Trump becoming Hitler and cackling wildly as the ovens roar, perhaps you’re afraid of something else.

STOP. Whatever it is hasn’t happened yet, and it may not happen at all. As Twain quipped, he was an old man who had known many bad times, but most of them never happened.

Even if they are sure to happen, they aren’t happening now. Why are you wrecking today over something which isn’t happening now?

Redirect. Or learn not to care. A couple summers ago I was very poor and I thought there was a good chance I’d wind up on the street. Given my health, that would be a death sentence, and not a pretty one. I looked it square in the face, just sat with it, and asked myself, “Is there anything I could do to stop this which I am not doing which I am willing to do?” The answer was no.

I sat with it, I decided I didn’t care, and from that day to today I haven’t worried about it. That doesn’t mean I haven’t done anything about it, I have. But I haven’t sat there torturing myself with visions of it; nor have I tormented myself with all the things I might do which, frankly, I’m not going to do.

People spend vast amounts of time wishing they would do what they won’t do and feeling guilty that they aren’t paragons of hard work and virtue and blah, blah, blah. You are who you are, and while you can change that, it will change slowly. So stop beating yourself up over who you are, because mostly you don’t control it.

And that’s the next step: Just stop caring that you aren’t everything you think you should be, that you aren’t who you wanted to be when you were 20, and so on. A little introspection is useful here. Watch your thoughts, experiment with controlling them, experiment with controlling your actions. Or just remember the last time you tried to change yourself and failed. And the time before that. And the time before that.

Right. If you were really in charge, if you could easily change yourself, you would have already done so. You haven’t, and you aren’t. So stop beating yourself up, you (mostly) aren’t to blame for who you are, and you sure as hell can’t change what you’ve done in the past. Don’t do regret.

Now, let’s say you’re suffering now. Right now. Sit down, lie down, stand, go for a walk, and just look at whatever it is. Dive right into the pain, observe it, feel it, watch it. Just let it be. After a while (and a while may be weeks of doing this), you’ll find that you just don’t much care. The pain doesn’t go away, but most of the suffering does. And, one day, if it’s the sort of pain which is self-inflicted through thoughts, well, that may go away, because you aren’t reinforcing it.

As you do all of this, you will suffer less and less, and you will be happy more and more. Your energy will recover, and you will then be able to make changes. I will suggest that making changes mainly means changing habits, and that changing habits (which includes what you habitually think about) is mostly about doing what comes easily. Make it easier for yourself. If you want to exercise, start by doing one minute. One minute. Increase it as you feel like. Do most things this way: Start easy and ramp up.

On the positive side, do what you enjoy and look particularly for those things which feel good not just when you do them, but afterwards.

Stop making heroic efforts and using willpower. Instead, relax, and do what you like doing.

There will be a time for pushing out of your comfort zone, yes, but first, make your life basically decent. If you don’t want to do something, don’t do it unless you must, and make must a small list: Do you need the money? Is someone going to hurt you if you don’t do it?

If your life includes doing things you hate which you can’t avoid because you need to eat or someone will hurt you, or a dependent needs to eat, that is what you need to spend any energy you have on changing.

Get it out of your life, or learn not to give a shit. Is your coworker or boss an asshole, but not an asshole who is actually physically harming you or threatening you? Mentally tune out their bullshit.

The whole of the path may be not giving a fuck, but sometimes there are things you don’t have the detachment to wave away, at least right now. Those are the things which should be removed from your life.

As you stop the bad thoughts, as you stop worrying about the future and regretting the past, as you stop self-harming by doing what you hate or by locking yourself in situations you despise, you will find something very surprising: Humans are naturally happy.

You almost certainly don’t believe that, but it’s true. Get rid of the shit, relax, and you will find that you are happy most of the time, that it takes very little to make you happy. A simple meal makes me happy. I listen to music and I smile. I hear a bus’s brakes squeal and I am happy because I don’t have to walk. It’s insane, really, how little it takes.

Humans are made to be happy most of the time. They have to learn how to be unhappy. Stop being unhappy, and the upside will probably take care of itself.

Unhappiness isn’t a choice: You didn’t really make it. It’s not your fault. You fell into it due to the circumstances of  your life and your history. Nor can you choose, by an act of will, to stop being unhappy. But you can, over time, learn not to be unhappy, to not dwell on the bad, and to let your natural happy nature take the fore.

Imagine that puppy licking your face, and when bad shit happens redirect. If you can’t redirect, simply sit with the badness, not judging it, till it loses its power. And refuse to let other people’s unhappiness make you unhappy, except as required by immediate circumstances. If your friend is sick, commiserate and feel bad for a bit, but don’t take that with you, and never let the suffering of complete strangers or imagined futures wreck you.

The whole of the path is not giving a fuck. Run out of fucks and don’t restock, and the sun will rise again and light your world up in a way it may not have been lit since you were a child.

Human nature is happy. Clear the detritus out, and it will bloom.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

Fixing the World #2: Moral Calculus

2017 February 6
by Ian Welsh

The first rule of creating and maintaining a good world, or a good society, is living in something approximating the truth. If you are delusional, you cannot make good decisions.

The second rule is that your ethical system must, if applied, create a good world.

This is harder than it seems. Ostensibly, we all agree that murder is bad, theft is bad, fraud is bad, and so on. We say that every human life has value and that all humans were created equal. We say that all life has value.

But in our actual actions we prove that we believe none of these things. We excuse mass murder by our own countries. We prioritize the deaths of people not like us over people like us–generally at very high ratios. We place human life over animal life, to the point where we are genociding multiple species every day. We prioritize property over human life more often than not, refusing to spend small amounts of money that would; easily save lives. We have enough food to feed everyone but don’t. We have enough industrial capacity to give everyone a decent life, but don’t.

We have known for decades that we were killing off animal species and did far too little. We have known about climate change for decades and done essentially nothing.

Our ethics are monstrous. They have led to a great die-off of other animals. They currently cause the death and suffering of hundreds of millions of humans who need do neither.

Until we value everyone’s life, and until we value the life of other animals at least to the point where we aren’t genociding them, we will not and cannot have a good world overall.

It is often said, by the supporters of the current regime, that things have never been so good, but I don’t believe the statistics. Even if they were true, it would not matter, because the reality they describe is not sustainable. If I know I’m doing something which makes me comfortable today but will lead to mass death tomorrow, that isn’t ethical, and that’s what we are doing.

We can have that good world when a Somali’s life matters as much as an American’s and when a both a billionaire and a poor person receive quality health care. We can have a good world when the possibility of a species extinction is considered, and treated as an emergency. We can have a good life when we look at the human footprint in the world and we don’t allow it to destroy multiple other species. We can have a good world when we make sure everyone gets fed, everyone has a decent set of material goods, and everyone is free to do more or less as they choose, so long as their actions are less harmful than the good they do, and don’t lead to the forseeable and preventable suffering and death of others.

It is insane that we are worried about AI and robotics, for example: The idea that machines might be able to do the work that humans do should fill us with joy. It’s insane that we cannot imagine a world in which humans do not have to do mostly meaningless drudge work to survive. That we cannot figure out how to distribute resources to people without making them spend the better part of their waking adult lives doing shit they’d rather not do. (If you’d win the lottery and keep your job, congrats, you are the exception. Most people would not.)

The right thing to do is generally the right thing to do. It is the great tragedy of the human race that we don’t believe that being kind and not hurting other people (or preventing suffering and enabling people to do what they will so they hurt none, and not being mass murderers of other species) is in our self-interest.

It is precisely in our self interest–it is the only way we will ever create a world that is really good to live in for the vast majority of the world’s residents.

The great task, I would suggest, is not “opposing Trump” (though that’s certainly a good thing, as was opposing Obama’s shitty policies, or Bush’s, or Clinton’s) but in trying to figure out a social system that aligns with ethics.

This is where the critics will cry about how human nature is incompatible with doing the right thing.

Perhaps that is so, though I do not believe it. But if it is so, Earth will remain hell for far too many, and we are in some danger of wiping ourselves out, along with all our victims in the non-human world.

But perhaps it is not so, and just as we could not fly until recently, we simply haven’t figured out yet how to be good at scale. And perhaps we should treat this problem as the most important problem in our society, because everything else which seems important from climate change, to war, to Trump, to fascism, is simply a manifestation of the fact that we suck at being ethical; at being kind.

All lives have value. Everyone’s suffering matters. Everyone should have a good life. These are prescriptive statements: statements that to be true, we have to make true. They are truths that will never be absolute, we will never reach 100 percent. But we can get far closer than we are today, and it is on us, as a species, if we do not.

It is a choice. Good and evil are a choice. And the first step towards evil is to say, “The pain of people like me matters more than the pain of people who are not like me.”

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By Criticizing This, Liberals Look Like Fools

2017 February 5
by Ian Welsh

Because this is 100 percent true.


One of the great problems of the campaign and into the Trump administration is liberals and the media accusing Trump of lying. He lies a lot, yes, but he tells truths that no one else is willing to say, and he has, so far, kept his high profile promises.

Normal politicians tell the truth about the things Trump lies about, but those things are less important than the truths Trump tells and the promises he keeps that normal politicians break (for example, Obama saying he’d re-negotiate NAFTA).

For the fools, this doesn’t mean that Trump will keep his most important promise: the ur-promise of prosperity for the forgotten Americans. Of course, Obama didn’t keep his ur-promise either, which was of a fundamental change in how DC did business and how the country was run. Rather the contrary, Obama institutionalized George Bush’s abuses, leaving those powers in place for use by Trump.

But Trump won because he told truths other people wouldn’t tell. As for the “approval ratings,” they are largely meaningless because about 90 percent of Republicans still back Trump. The people who are unhappy with Trump (indeed, who hate him), are people he didn’t win and doesn’t need right now. Of course they hate him, the Democrats spent the the entire election telling them that Trump was Hitler reborn.

When the “decent” people like Obama, Clinton, and Bush (who liberals are now saying was actually pretty good) don’t do the right thing, and lie about what matters most, they open an opportunity for demagogues. Now they have one and they squeal, but he was earned by their actions and words.

The ban of Muslims from seven countries, currently stayed, is something I think was a bad idea and which has hurt people. However, it was not more evil, say, than what the US did to Libya under Obama, which occasioned far less outcry. Not by any reasonable standard: a lot less people are dying because of it, or getting raped because of it, or losing their homes and livelihood because of it. Almost certainly, Trump will do truly horrible things yet, but this wasn’t truly horrible. What it was was a strike at something liberals care about greatly, an emotive issue for them: The right for some people to move freely between countries. (Notice no similar outcry for the 2.4+ million deportations by Obama.)

All of this makes liberals look, to people who supported Trump, like raving hypocritical hysterics, crying about flesh wounds when they didn’t care about broken bones when Obama was in charge.

And so it goes. Trump’s a bad man, he’s done and will do bad things, but the reaction so far has been vastly out of scale to anything he’s actually done.

And yeah, the US isn’t exactly some bastion of purity and non-violence. Strange that the President who said that had to be Trump, because we all know it is true.

A little less pearl-clutching, please.

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In Which Mandos Is Unsympathetic Towards Australia’s PM

2017 February 3
by Mandos


(This is a quick hit from MANDOS. Just so you know.)

Australia’s PM just had a little pity party about Donald Trump allegedly yelling at him about the refugee deal. Well, Trump’s tweet on the matter is, taken literally, true, except the part about them being illegal immigrants.

The truth is that Australia bought a country in order to use it as a torture camp for people who have mostly been declared real refugees. These are people who are fully the responsibility of Australia, and Australia is only using extra-territoriality as a fig leaf to use them in its political drama. That Trump is very likely to be unsympathetic to the refugees doesn’t mean that the Australian PM didn’t deserve it.

For the sake of the victims of Australia’s policy, I hope the deal eventually survives, and they can get to the US, although some of them will be very damaged by their treatment and may not get the psychological support that Australia morally owes them, along with enormous compensation. They don’t deserve to be used as a prop in the invasion paranoia drama of developed polities. Let me put it like this: If “preserving your civilization” requires the erection of a torture camp, your civilization deserves to have died yesterday. And no, holding refugees prisoner on an island from which they can’t escape to a normal life in a destination country of their own choosing is neither safety nor honouring of the refugee obligation.

The War with the Fed Begins

2017 February 3

As I predicted, the Fed / Trump war has begun (Pdf). (Letter from House Rep. McHenry)

I am writing regarding the Federal Reserve’s continued participation in internal forums on financial regulation. Despite the clear Message delivered by President Donal Trump in prioritizing America’s interests in international negotiations, it appears the Federal Reserve continues negotiating international regulatory standards for financial institutions among global bureaucrats in foreign lands without transparency, accountability or the authority to do so.

This is unacceptable.

The secretive structures of these international forums must also be reevaluated. Agreements like the Basel III Accords were negotiated and agreed to by the Federal Reserve with little notice to the American public, and were the result of an opaque decision-making process.

I have exactly zero sympathy for the Federal Reserve. They have spent 40 years sandbagging US wages and pretending that high unemployment was full employment; deliberately fueling the stock market when it would have fallen otherwise, and when elected parts of the government tried to improve the wages of ordinary people beyond what the Fed thought was acceptable, the Fed would undo what they had done.

Trump and Republicans are not the ones I’d want taking on the Fed, but the Democrats refused to do it. Nor do I agree with McHenry on what the Fed has done wrong (higher capital requirements are good), but I do agree that the Fed has repeatedly overstepped itself and needs to be brought to heel. It’s a pity it will be done by these people for these reasons, but c’est la vie.

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My Dream

2017 February 2
by Ian Welsh

Is a simple one.

We produce enough food to feed everyone. We have enough industrial capacity for everyone to have a good life. We can even do this in ways that produce less carbon and pollution than we do now.

Because we could give everyone a decent life, because we have the capability, my dream is just that we do so, and that that be the primary goal of every government on Earth, working together.

It is a utopian goal, but I am tired. Even from rich nations like America, Canada, and Britain, tragic stories keep entering my email box: from sick people, from people without enough money because we distribute money through jobs and there aren’t enough good jobs, from people who are scared and without hope–and who are often right to be without hope: Their lives are bad, and the odds are they aren’t going to get better.

We have the ability to provide a good life to virtually everyone, and we don’t.

I know of no greater indictment of the human species except the mass genocide we are committing of other species, but I know also that we CAN do better.

Whether we will, and if so, when? That I do not know.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.