My 2013 NYT column on pandemics

The government should resist the strong temptation to skimp on rewards. Many health care breakthroughs come through university research programs and government grants, but bringing an innovation to fruition and managing wide and rapid distribution usually requires the profit-seeking private sector. In any single instance, the government could save money by confiscating rights, but in the longer run this would discourage the search for additional remedies.

If anything, the American government — or, better yet, a consortium of governments — should pay more for pandemic remedies than what market-based auctions would yield. That’s because, if a major pandemic does arise, other countries may not respect intellectual property rights as they scramble to copy a drug or vaccine for domestic distribution. To encourage innovations, policy makers need to bolster the expectation of rewards.

I agree with the circulating critiques of current Trump administration policy, but the Democrats are no angels in this matter either.  For instance:

Unfortunately, the United States lacks strong political coalitions for many beneficial public health measures. The Democratic Party has focused on insurance coverage and Medicaid expansion as political issues, while often wishing to lower prices of drugs or to weaken patent protection. The Obama administration’s new budget lowers spending on pharmaceuticals by an estimated $164 billion over 10 years, mostly through bargaining down Medicare drug prices. That makes it hard for the Democrats to embrace lucrative rewards for pharmaceutical companies or vaccine producers.

Here is the full column.

Comments

Not a word about planned pandemic tax cuts? Tax cuts heal everything, and are even better than government prizes or grants, returning money to people instead of taxing and wasting it.

Yes, the first thing the average American does when they get a tax cut is spend it on My First Vaccine home immunology kits. (The My Little Pony themed ones are my favorite.) That's what lead to the eradication of the common cold two weeks after the Trump tax cut.

It is a shame that that post was in jest.
If it were possible for people to make their own vaccines for diseases that other brought to them virtually all socially communicable diseases would go the way of smallpox.
Maybe with the exponential growth of technology this will happen one day.

creative writing, more like creative pricing.

You can joke about it, but lower middle class tax cuts, and upper middle class tax rises to continue to government funding, probably would help quite a bit with the affordability "crisis" for health insurance.

Unfortunately seems like your Dems won't do it because they are in hock to visions of becoming "Sweden" and seem to have a Pavlovian negative response to tax cuts, even for working poor, and the Republicans won't do it because they know who their voters are and turkeys don't vote for Christmas.

I am not sure how that idea started circulating, but is astoundingly bad.

To think tax cuts are necessary is to think that the horse has left the barn, the pandemic will happen, and that the economy will suffer.

And to say that out loud at this point ..

TDS alert! Quarantine measures required! Lock them up! Lock them up! TDS alert!

Am I wrong? The prudent message is normalcy and calm. The worst possible mixed message is that it is a hoax, but we need massive tax cuts to fix it.

You fell for it. We are in a media environment akin to watching a wild animal thrash about in their death throes, doing damage to everything nearby. There is no normalcy and calm unless you turn them off. This hoax nonsense will consume these idiots for a few days, and any sentient human will turn them off and look for boring reliable data from the CDC or other sources.

More seriously, Trump knows as well as anyone with any sense that a media 24 hour week long catastrophe fest would cause problems, serious problems. Thankfully almost no one listens to these idiots anymore, and this latest nonsense will move more to turn them off.

Have you noticed that people are preparing, not for the virus, but for the media induced panics? A wise person would at least try to not be part of the madness.

I am particulary glad that these lovely children are here today to hear that speech. Not only was it authentic frontier gibberish, it expressed the courage little seen in this day and age.

Wouldn't that quote have fit better in the beans post?

If rewards for pandemic fixes increase so will incentives to create them

Tax cuts are always necessary.

Never let a catastrophe go to waste as political philosophy.

Tax cuts are the best idea when everything is going good. The best government is a small government. Squeeze it, starve it out, MAGA

In Australia we give medical researcher enough money to keep them in beer and avocados and fresh chicken eggs and set them loose in a lab. Then we destroy a large part of their work by doing things like privatizing the Commonwealth Serum Laboratories which resulted in it being bought by people who love money more than they love running towards an ebola outbreak. Funny that.

Clearly, Australia has yet to appreciate the joy of VC style wealth generation, which continues to make America such a fantastic place.

Trump has destroyed the VC wealth creation from developing instant testing for viruses, like coronavirus which are very common, and if Obama or Clinton were president, an instant test for COVID-19 would be available for sale to the Federal government to screen everyone entering the US?

After all, markets predict the future so COVID-19 was xo well predicted by all that the lure of profit caused the test kits to be created before the Great Leader did what no one every did before, test everyone coming into the US. Right?

Note, Trump announced he had ordered the US military to order masks from Dupont, delivering over 100 thousand a week, something no president has ever done in history.

Several things seem to be constant.

Trump is a Great Leader.

Everything Trump orders done has never been done before.

And high economic big pharma profits from maintenance drugs fund development and production of sporadic drugs bought by governments from small pharma under the guidance of government labs and research grants.

How Australia defied global health authority on coronavirus
Peter Hartcher
Peter Hartcher
Political and international editor for The Sydney Morning Herald
February 28, 2020 — 7.23pm

Was Australia about to put the cash flow of its universities ahead of the peoples' health in the middle of a pandemic? Was the Morrison government about to bungle the coronavirus response as badly as it did the bushfires?

As MPs and senators returned to Canberra this week for a parliamentary sitting, it was a topic of lively concern. Government members knew that the universities had been agitating behind the scenes for the China travel ban to be relaxed as soon as possible. Some 100,000 of their Chinese students are caught by the ban and the unis want them back in Australia. Paying fees.

The Chinese government had been complaining about the ban for weeks, too. Australia had been "discriminatory", according to the Chinese embassy in Canberra. In multiple meetings across the government, every week with the politicians who have let them in, China's officials have been pressing their case hard.

Was the government about to cave in to the pressure? Quite a few government MPs and senators were anxious. They knew there was rising fear among their communities. They'd just seen their government announce a partial relaxation already, with about 760 high school students allowed to return from China to Australia.
They'd heard the federal Minister for Education, Dan Tehan, tell the media last week that "it is incredibly important that we get some normality back into the international student market".

"At this stage," Tehan had said, "we are looking at year 11 and 12 students but the medical advice has said in a week we could look at what would happen with tertiary education students."

So the moment that the Prime Minister and Deputy Prime Minister had finished their routine opening remarks to the Coalition party room on Tuesday morning, the smooth-faced Liberal senator from Victoria, James Paterson, took the floor to speak.

"With the ongoing China travel ban, I'm very sympathetic about the impact on tourism and farmers, but I'm much less so with the universities," he began. "Because they have been warned for years that they are over-reliant on the Chinese market, and for years they've reassured us that it was all fine, and that if anything happened they'd be able to withstand it. They rode the cycle up, now they can ride the cycle down."

ANALYSIS
The universities receive $17 billion a year in federal cash already. Paterson said they should be given this opportunity to show they could indeed withstand the lost income. Addressing Scott Morrison, Paterson concluded: "We shouldn't relax the travel ban, and there should be no financial bail-out for the universities."

Another Victorian Liberal, Tim Wilson, reinforced the point. Australia's former Human Rights Commissioner urged Morrison to exercise "an abundance of caution" in any decision on the travel ban, an expression he repeated for emphasis. And he suggested the government prepare the public for a discussion of the consequences of the epidemic.

Another Liberal, Queensland's Andrew Wallace, wanted to know why the school students who were to be allowed to return to Australia from China were treated differently to university students?
The Prime Minister's reply was to observe that the essential difference was that there were 700 school students and 100,000 uni ones.

In response to Paterson, Morrison assured that there would be no taxpayer bailout of the universities, according to multiple people who were in the room. And that the government would adhere strictly to the medical advice on any further relaxation of the travel ban. The MPs were satisfied to hear such a clear-cut undertaking.

But it lasted less than 24 hours. On Wednesday morning, a copy of a speech by Tehan circulated among alarmed government members. The Education Minister was speaking to the Universities Australia national conference on the other side of Lake Burley Griffin that morning. The passage that riveted attention: "One day, and I hope that day comes very soon, our higher education sector will resume normal operations; the travel ban on China will be lifted and the remaining China-based students will arrive to begin studies for the year."

MPs and senators, almost a dozen of them all told, contacted the the Prime Minister's office and other ministers to make sure that "very soon" was not any time soon. Some ministers argued back; the decision seemed to be in the balance.

It was the next day, on Thursday morning, that the chief medical officers of all the states, with their Commonwealth counterpart, Brendan Murphy, advised the government unanimously that a global pandemic was already under way. They had observed the accelerating spread of notified cases around the world, the growing number of countries affected, and that the outbreaks were now self-sustaining within some communities far from China.

They hadn't been alarmist. Forty-two countries reported they had confirmed infections on Thursday. By the time the Australian government's daily 6.30am incident report was delivered on Friday, that number had grown to 49.

Countries have shut down some of the institutions they hold dearest. Japan has closed all schools. Saudi Arabia has halted pilgrimages to Mecca. And the Chinese government has postponed indefinitely its two big annual political assemblies.

Australia's group of state and federal medical officers, convening daily, usually by phone hook-up, is the peak point of the pure medical advice, the Australian Health Protection Principal Committee (AHPPC). No politicians sit in on their meetings.

From there, the medical advice goes to the policymakers in the National Security Committee of the federal cabinet, and this is where the politicians get involved. The NSC is chaired by the Prime Minister. This is where decisions are made and action taken. Or not.

The medical officers' "pandemic" call was a big moment. For a start, they were way ahead of the UN body that is supposedly the lead global agency on international health emergencies, the Geneva-based World Health Organisation.

Why were the Australians ahead of the world? For a very simple reason. They don't trust the WHO. The information from multiple international sources is that the WHO is under intense pressure from the Chinese government, and succumbing to it.

The Australian Commonwealth Chief Medical Officer, Brendan Murphy, told the NSC that it was medically inexplicable that the WHO hadn't already declared a global pandemic. It's politics, in other words.

That's why Australia had earlier forged ahead of the WHO in declaring the China travel ban, on February 1. It was, again, on the unanimous advice of the AHPPC.

The travel ban was decided immediately after the US made the same call. Beijing instantly lashed both the US and Australia on that occasion – the Chinese Communist Party's official mouthpiece, People's Daily, calling it "racist".

But, of course, that decision now looks very wise, more so with each passing day. The WHO followed suit 10 days later. When Morrison announced the China travel ban four weeks ago, there were about 7000 infections disclosed by Beijing.

By Thursday this week that number had ballooned to 78,000. The number of countries announcing travel bans has grown proportionately, and mostly they have acted too late.

In any case, the political manipulation of the WHO is nothing novel. It was slow to declare HIV-AIDS to be a pandemic in the 1980s because of intense political pressure. Then it was pressure from the US. Now it's from China. Either way, the politics trumps the medical advice.

So this week the AHPPC didn't hesitate to act ahead of the Geneva-based outfit. And when the medical officers' advice went to federal health minister, Greg Hunt, and to Morrison, they didn't hesitate, either. Morrison convened a three-hour meeting of the National Security Committee of cabinet on Thursday morning. They discussed the unfolding evidence, reviewed the state of medical preparations, and made three key decisions.

One, Morrison would call a press conference and announce the conclusion that “the world will soon enter a pandemic phase of the coronavirus”. Two, Australia's emergency response plan would be activated. Three, the ban on people travelling from or through China would be extended for another week.

The ban is reviewed week to week. The meeting also discussed options for financial aid to suffering sectors of the economy. Morrison made all these announcements after question time. There has been no mention of any more special measures for universities.

The political capture of the WHO means, in effect, that it's every country for itself. It also underlines the central importance of keeping politics and other extraneous pressures out of the decision-making processes on a medical matter. Likewise, China's early political cover-ups and bungling wasted precious weeks in containing the virus.

The Australian system for dealing with communicable diseases is less prone to politics. Morrison hid from the bushfires; he had no such option on the coronavirus. The Chief Medical Officer, Murphy, does not need the government's permission to invoke the Biosecurity Act. He informed Health Minister Greg Hunt on January 20 that he was triggering the act, automatically setting in train a pre-ordained process of monitoring and advice.

Hunt encouraged Murphy and the AHPPC to give the government the full, frank and unvarnished medical advice without any view to politics. And so far, Morrison and his NSC have respected the medical advice. The Prime Minister is anxious to make sure he doesn't abrogate leadership and hide from responsibility in a national crisis once again.

If he handles it well and faithfully, putting the people's health first, he might get credit. Or maybe not. But he can be sure that, if he fails again, the people's wrath will be savage. As Henry IV said, "uneasy lies the head that wears a crown". Or, in the Spanish, a corona.

OPINION
Peter Hartcher

The current Australian government's election campaign was based promises of budget surpluses. A weakening economy slashed the projected budget surplus for this financial year from over $11 billion Australia to $6 billion and this was before Australia's worst fire season in history or the appearance of the coronavirus. So the temptation is there for the government to roll the dice and allow as many fee paying students and hotel staying tourists into the country as they think they can get away with. If they don't they are pretty much sure to be out of government after the next election in a couple of years time and what could be worse than that? Apart from a pandemic, of course.

On the bright side, the corona virus has resulted in a lot of cruise ships coming to Adelaide, since Asia is no longer such a popular destination. So we still have tourists spending money, buying wine, and occasionally coughing on things.

Trump imposed a quick travel ban on China too. Criticized as racist, of course.

Amazon has just told its employees to defer all non-essential travel.

Obviously, Amazon is racist too. Any reason you forgot to mention that?

Under Obummer, the Democrats were wasting money in typical irresponsible fashion. This is a clear example of the sort of political coalitions the Democrats favored. "Under pressure to step up the U.S. response to Ebola, President Barack Obama in 2014 appointed Ronald Klain, a veteran Democratic operative, to serve as an “Ebola czar.” The Obama administration also set up a special National Security Council team to oversee epidemic preparedness on a permanent basis.

The global health security team continued to operate during Trump’s first year in office, before John Bolton dismantled the unit when he took over as national security adviser in 2018. That led to the abrupt departure of its leader, Rear Adm. Timothy Ziemer, who had led the White House’s anti-malaria efforts under Obama and President George W. Bush. Ziemer is the senior deputy assistant administrator for the Bureau for Democracy, Conflict, and Humanitarian Assistance at USAID."

A clean broom is better at cleaning the swamp than well connected bureaucrats playing status games based on education, experience and ability. Trump is diligently working to remove such old fashioned considerations from American policy making, though he is opposed by the deep state and hordes of hysterical victims of TDS.

"Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, was scheduled to go on all 5 Sunday talk shows and then Pence was put in charge of the coronavirus response and he was ordered to cancel"

https://t.co/Vj7AjDFf0G

In a strange parallel,

"China shut down the lab that published the world’s first genome sequence of the #coronavirus last month, barring its scientists from finding ways to contain the outbreak

Their only crime? Publishing the sequence before authorities"

Some of you were "authoritarianism, lol" but seriously.

In a free society the government provides its own messaging, but it doesn't shut down anyone else's.

Mr has the best parody comments.

Obama did not declare H1N1 a public health emergency until six months after WHO declared it a pandemic. By then millions of Americans were infected and 1000 had died.

You say Dems are no angels merely because they want to pay best market prices for Medicare for existing drugs and not have the taxpayer gouged. You then go on to assume from that an unrelated idea - that Democrats would be unwilling to fund new drug research. Are you really this much of a dipshit? Your utterly irrational bias against the democrats is showing again.

The genius of chess master Tyler Cowen never ceases to amaze me. His foresight is incredible, on and off the board, seeing things well before others. You don't get to be NJ State chess champion being a stupid!

it's funny. We use logic like that until somebody like Gary Kasparov tells us something we don't want to know, then whoops IQ and chess skill are no big.

Can't believe Ray missed a chance to go off on patents.

Coronavirus is a Democratic hoax! Fake News! Sad!

President Trump jeered Democrats Friday night for criticizing his response to the COVID-19 coronavirus outbreak, saying that it was a “new hoax” after a failed attempt to remove him from office over Ukraine.

“They tried to beat you on Russia, Russia, Russia — that didn’t work out too well,” Trump told a cheering crowd in South Carolina. “They tried the impeachment hoax. That was a perfect conversation.”

“And this is the new hoax,” Trump declared.
***
“Let’s get this right: A virus starts in China, makes its way into various countries all around the world, doesn’t spread widely at all in the United States because of the early actions that myself and my administration took against a lot of other wishes. And the Democrats’ single talking point and you see it is that it’s Donald Trump’s fault,” he said.

We already overpaid the pharma companies, the hedge funds that own them, the hospitals, the insurance companies, the universities, the staff, everybody up and down the whole damn chain got paid filthy amounts of money. We have the medical bankruptcies, surprise bills, shrinking paychecks, and union strikes to prove it. How much more incentive is needed? Seems sickness is not just in the body but in the mind and spirit.

Recent studies have shown little or no correlation between high pharmaceutical prices and profits and innovations in the development of new drugs. Indeed, logic would suggest the opposite: why spend all that money on the development of a new drug that might not succeed when the existing drug is being sold at high prices and is generating huge profits. Pharmaceutical companies spend more on extending the patents on existing drugs than in developing new drugs. Incentives matter.

"Recent studies"? Cite please? The "old studies" I saw from ten or more years ago say the opposite: the reason drug prices are so high in the USA are, among Baumol cost disease effect, that, as TC says in the post, patents in the US don't carry weight outside the USA and thus US consumers end up having to pay for drug usage worldwide. It costs $1 to develop an ascaris de-worming pill in PH and about $800 in the USA, since in the former the drugs are unlicensed. Blame also the "Gray Goods" cases decided by the US Supreme Court which allows importation of unlicensed products, that you, as a lawyer, should be familiar with.

Tyler's last paragraph is misinformed. There is absolutely no tension between wishing to negotiate Medicare drug prices to get them closer to something like 1.5 times what other rich countries pay (rather than double) for the same products and offering rewards for truly innovative developments in targeted areas. Those are two totally separate incentive streams.

You don't just over pay for anything--which is how you end spending billions per year on the 5th statin on the market with no clinical improvement over existing therapies.

Tyler is not misinformed, he is simply ignoring everything written on this subjects for years by an economist who has been advocating funding pharma research using public funds, and allowing the results to be shared with the public without drug companies being able tio charge what they wish after getting a patent.

Correct, Tyler evidently had a simplistic model of technological innovation in mind when he wrote that passage: lower prices ==> less innovation. Even in Econ 101, students learn that innovation is more complex and nuanced than that.

If higher prices are the solution, let's just raise prices everywhere, permit monopolies and cartels everywhere, raise tariffs on imports, etc. etc. Think of all the innovation that will result!

I have seen people talking up rewards for tests and treatments on Twitter, and I think it is a very good idea. Headline. Full stop.

We could get mired in less useful conversations if we try to group that with "drug prices." The vast majority of drugs are old, and as physicians have noted here, have generics or substitutes. There may be production efficiencies and inefficiencies, but I see them in a completely different category from emergency response.

Rewards for innovation? Where’s ray to talk about patents when you need him?

That's the thing, an American commercial vaccine producer is already on record saying that there is no guarantee that a Coronavirus vaccine will be inexpensive.

Under the patent system it's a "feature" that an expensive product pays for research.

As I say below this is exactly the opposite of what we want in a pandemic. We want the uninsured to have free access.

Serious question: Does the US even have a system in place that can provide testing, and if necessary quarantine and care, for the uninsured?

As others have noted, what happens if people have to hide, because they can't afford the quarantine bill?

Perhaps the more free market you are, the more you worry about emergency response having a market solution.

Whereas if you are open to government action, especially in emergency, price is no big deal. Emergencies, and emergency spending, are what government is for. Efficiency, in that moment, is not a big deal.

Speaking of which, Tyler what is your plan for the uninsured in a pandemic?

I am sure you understand that if people avoid treatment, this is a negative externality, and a social ill.

No one in this country is denied medical care due to lack of insurance or means to pay.

That’s not how this works.

That’s not how any of this works.

The comment didn't say people would be denied medical care, it said people would "avoid treatment." We already have one lovely case of a Wuhan evacuee who received a $4,000 bill for a hospital stay that he was mandated to undergo after being placed in quarantine. The hospital apparently waived the doctors fees amounting to about $1,000 but the private ambulance company that took him to the hospital still wants to be paid.

At the margin, it is not difficult at all to predict that people with symptoms of coronavirus who are underinsured will opt to self-treat and possibly put themselves and others at risk.

Don't be silly. Yes if someone is near death they will be taken to the ER and put on a ventilator even if they don't have insurance.

If t hey don't have insurance and the vaccine costs $500, they won't get it.

If they don't have insurance and they feel sick but aren't sure, the doctors visit will cost a hundred plus or hospital visit (which the doc. will probably suggest) will cost thousands.

Tyler misses a key point. Identification of risks and allocation of resources is perhaps the critical point. The best example is how research monies both public and to a lesser extent private have been spent on an HIV vaccine, a disease whose transmission is well known and avoidable while spending on the corona virus family which includes MERS and SARS has paled in comparison.

Much more work needs to be done on vaccine production approaches so that scale up can be done quickly without resorting to older methods such as egg culture that is used for the seasonal influenza vaccine (it takes six months or so to produce enough vaccine at present). Antiviral pharmaceutical research needs to be expanded so that development time for drugs is shortened and we have many more candidate drugs against different viral classes.

This really is not rocket science.

Why waste taxpayer money funding something like that when the Chinese will be able to produce vaccines at a much cheaper price, saving American consumers lots of money. Besides, President Trump has assured the American people that warm weather will solve this problem anyways.

Apparently some Israelis are saying that they are a few weeks away from a vaccine. That'll pose an interesting conundrum for the Iranians and the BDS crowd.

Do you honestly think Israel has the manufacturing capacity to produces 10s to 100s of millions of doses of vaccine?

To the larger point in that column on priorities: might "focusing government on the production of public goods" be a useful summary of state capacity libertarianism?

H1N1 killed over 3400 Americans during the Obama administration.

Number of shits given by Tyler and CNN and NYT and Wapo: Zero.

Just 3400? Well, another area where Obummer's incompetence is easily contrasted with the sterling performance from just a couple of years ago. Quoting from the 2017-2018 flu season wiki article.

"The United States Centers for Disease Control and Prevention (CDC) began counting the 2017–2018 "flu season" as October 2017, and by early February 2018, the epidemic was still widespread and increasing overall. By February 2018, the CDC said that the circulating virus strains included both B strains (Yamagata and Victoria), H1N1 and H3N2. On February 10, 2018, Fortune reported that influenza in the United States was killing up to 4,000 Americans a week, likely to far outstrip the rate of deaths in the 2009–2010 season."

Number of shits given by International Pants Apparatus: Zero.

Moron, H1N1 had over 60M cases in the US. and resulted in 12,469 deaths. That's a fatality rate of 0.02%. If this virus infects 60M Americans and 2% is its rate then we're looking at 1.2M deaths.

And a lot was done with H1N1, in fact every flu season there's a lot of efforts to vaccinate, wash hands, practice social distancing etc.
https://www.cdc.gov/h1n1flu/estimates_2009_h1n1.htm

" The Obama administration’s new budget lowers spending on pharmaceuticals by an estimated $164 billion over 10 years, mostly through bargaining down Medicare drug prices. That makes it hard for the Democrats to embrace lucrative rewards for pharmaceutical companies or vaccine producers."

Any company that can bring a vaccine or treatment to market fast will reap ample rewards. At this point any company that can get masks and hand gel on shelves fast stands to make nice profits.

Meanwhile a man with flu like symptoms went to the hospital, got tested and gets a bill for $3K.
https://www.axios.com/coronavirus-surprise-medical-bills-miami-1b808778-2450-4746-864c-d5fc9459eefb.html

More people with coverage who don't have to worry about having to fork over a car downpayment for a check would do better for us.

Comments for this post are closed