Pharma supply is elastic
The crux of the problem is that the IRA imposes price caps that shorten the effective life of a patent and applies those price controls even to later-approved uses. Thirteen years after FDA approval, biologics, which are typically infused or injected, become subject to price controls. For small-molecule drugs, typically pills or tablets, the window is only nine years. The clock starts at a drug’s first approval, leaving a follow-on or alternative use, approved years later, an insufficient period to make up the cost of research.
Two weeks ago, a study I conducted with colleagues at the University of Chicago appeared in Health Affairs. It reveals how much these provisions harm cancer research. In reviewing every Food and Drug Administration-approved cancer drug between 2000 and 2024, we found a large part of innovation in cancer treatment takes place after a therapy is first approved. About 42% of the 184 cancer therapies that were initially approved during that period had follow-on approvals—involving new uses or “indications” for an existing drug—such as treating additional cancer types or being used earlier in the disease, when treatment outcomes tend to be better.
This cumulative progress through follow-on discoveries is a big driver of new cancer treatments, the largest drug class making up about 35% of the overall FDA pipeline. Cancer drugs are generally first tested in patients with late-stage disease, after which the drug is studied for use in earlier stages of that cancer and for new uses, including treating other cancers. Our study found that 60% of follow-on drugs treated earlier stages than the initial drugs. This is important because treating earlier stages is often more successful than when a cancer has spread more.
But that cumulative progress depends on incentives for sustained research well after the first FDA approval—often years of additional trials and investments. And those incentives were killed by the IRA.
The Dells add to Trump Accounts
I wrote that Trump Accounts Are A Big Deal. These accounts give U.S. citizen’s born between January 1, 2025, and December 31, 2028, $1000 invested in a low-cost, diversified U.S. stock index fund. Well, the accounts just got bigger. Michael and Susan Dell are donating $6.25 billion to seed accounts with $250 for children born before Jan. 2025, up to ten years of age:
The Dells have committed to seed Trump accounts with $250 for children who are 10 or under who were born before Jan. 1, 2025. According to Invest America, the pledged funds will cover 25 million children age 10 and under in ZIP codes with a median income of $150,000 or less.
“We want to help the children that weren’t part of the government program,” Dell said.
Tuesday assorted links
1. Brangus on women, the incels need this, noting I do not agree with all the points. But better than the PUA stuff.
2. The monarchy returns in Tonga.
3. Hail the Swiss. 80 percent rejection. And Johann notes to me: “Only two municipalities voted yes on the recent ballot measure for a 50% inheritance tax over 50 million francs: The city of Bern with about 140’000 inhabitants and the village of Schelten with 34.”
4. Woman on a mission to photograph every species of hummingbird.
5. Parties of the Right rising in Honduras, party of the Left plummeting. But when will the ruling party resume the count or make the count public? And it seems the two leading candidates are both ethnically Palestinian?
6. Why many people have trouble with the concept of strong AI or AGI.
7. Is the Mississippi reading miracle in part statistical illusion?
The People’s Republic of Santa Monica
Here’s a video from real estate investor and youtuber Graham Stephan. He’s explaining (starting at 7:23) why he is selling a home in Santa Monica instead of renting it out–it’s the rent control laws, of course. The laws are strongly biased against landlords. Perhaps landlords should be a protected class.
Everything he says about the law, by the way, is accurate. I was initially skeptical (as was Google Gemini) that homes had to be rented unfurnished. Why would that stupidity be a law? But no, it’s accurate. Apparently, the idea is to make it more difficult to rent to temporary residents.
To preserve rental housing for permanent residents, all rental units must be rented unfurnished for an initial term of not less than one year and only to natural persons intending to use the unit as their primary residence.
Here’s Google Gemini summarizing, once I corrected it on the unfurnished home law.
The speaker’s understanding of the Santa Monica Rent Control and Just Cause laws is highly accurate in almost all respects:
Subject to Rent Control (7:50): Accurate. A non-primary residence built before 1979 is typically subject to the law.
Indefinite Tenancy (8:50): Accurate. Tenants gain “permanent right” to occupancy as eviction is limited to specific “just causes.”
Rent Increase Limit ($60/AGI) (8:13): Accurate. The annual rent increase is capped by a fixed, low dollar amount (the AGI), which closely aligns with the speaker’s figure.
No Eviction to Sell (8:57): Accurate. Selling the property is not a “just cause” for eviction.
Owner Move-In (OMI) Requirements (9:14):Accurate. Eviction for OMI requires paying substantial relocation fees, re-offering the unit if re-rented within two years, and prohibits eviction during the school year.
Furnished Home Prohibition (9:56):Accurate. Santa Monica requires rental units to be initially rented unfurnished to permanent residents.
Hat tip: Naveen Nvn who also says this video is worth watching.
The myth of the $140,000 poverty line
That is my latest piece for The Free Press, focusing on the claims of Michael W. Green. Excerpt:
Most of all, there is a major conceptual error in Green’s focus on high prices. To the extent that prices are high, it is not because our supply chains have been destroyed by earthquakes or nuclear bombs. Rather, prices are high in large part because demand is high, which can only happen because so many more Americans can afford to buy things. I am reminded of the old Yogi Berra saying: “Nobody goes there anymore. It’s too crowded.”
There are now numerous excellent criticisms of the same piece, for instance by Scott Winship and Noah Smith. As my piece was in the works, Green published this response to some of the criticisms.
Séb Krier
Huge fan of multi agent systems, agent based modelling, and social intelligence – these frames still seem really absent from mainstream AI discourse except in a few odd places. Some half-baked thoughts:
1. Expecting a model to do all the work, solve everything, come up with new innovations etc is probably not right. This was kinda the implicit assumption behind *some* interpretations of capabilities progress. The ‘single genius model’ overlooks the fact that inference costs and context windows are finite.
2. People overrate individual intelligence: most innovations are the product of social organisations (cooperation) and market dynamics (competition), not a single genius savant. Though the latter matters too of course: the smarter the agents the better.
3. There’s still a lot of juice to be squeezed from models, but I would think it has more to do with how they’re organised. AI Village is a nice vignette, and also highlights the many ways in which models fail and what needs to be fixed.
4. Once you enter multi-agent world, then institutions and culture start to matter too: what are the rules of the game? What is encouraged vs what is punished? What can agents do and say to each other? How are conflicts resolved? It’s been interesting seeing how some protocols recently emerged. We’re still very early!
5. Most of the *value* and transformative changes we will get from AI will come from products, not models. The models are the cognitive raw power, the products are what makes them useful and adapted to what some user class actually needs. A product is basically the bridge between raw potential and specific utility; in fact many IDEs today are essentially crystallized multi agent systems.
Here is the link.
*Liberal Worlds: James Bryce and the Democratic Intellect*
By H.S. Jones, an excellent book. For all the resurgence of interest in government and its problems, Bryce has received remarkably little attention. But his theory of low-quality, careerist politcians, combined with imperfectly informed voters, seems highly relevant to our current day. Public opinion is slow, and largely reactive, but potent once mobilized. Leadership can truly matter, and he stresses national character and civic education. In other words, Bryce’s The American Commonwealth is a book still worth reading.
I had not known that Bryce was born in Belfast, or that he was so opposed to women’s suffrage. Or that he was so interested in Armenia, climbed Mount Ararat, and was fascinated by the inevitability of interracial marriage and its consequences (no, not in the usual racist way). He was an expert on Roman law.
Recommended, and also very well written.
Monday assorted links
Make Africa Healthy Again
In the late 1990s, South Africa’s President Thabo Mbeki decided that mainstream science had AIDS wrong. A small circle of “truth-tellers” convinced him that AIDS came from poverty and malnutrition, not a virus. He warned that anti-retroviral therapy (ART) was toxic and that pharmaceutical companies were poisoning Africans for profit.
His government stalled the rollout of ART. Health Minister Manto Tshabalala-Msimang pushed garlic, beetroot, and lemon as medicine. “Nutrition is the basis for good health,” she said, insisting that exercise and diet, not Western drugs, were the real treatment. She warned that antiretrovirals had side effects, including cancer, that the establishment was hiding. When scientists showed data, she waved it off: “No churning of figures after figures will deter me from telling the truth to the people of the country.”
The result was a public health disaster: hundreds of thousand of preventable deaths (see also here and here).
A reminder of what happens when authority trades evidence for ideology.
Meta-analytical effect of economic inequality on well-being or mental health
Some of us have known this for some time:
Exposure to economic inequality is widely thought to erode subjective well-being and mental health, which carries important societal implications. However, existing studies face reproducibility issues, and theory suggests that inequality only affects individuals in disadvantaged contexts. Here we present a meta-analysis of 168 studies using multilevel data (11,389,871 participants from 38,335 geographical units) identified across 10 bibliographical databases (2000–2022). Contrary to popular narratives, random-effects models showed that individuals in more unequal areas do not report lower subjective well-being (standardized odds ratio (OR+0.05) = 0.979, 95% confidence interval = 0.951–1.008). Moreover, although inequality initially seemed to undermine mental health, the publication-bias-corrected association was null (OR+0.05 = 1.019; 0.990–1.049)17. Meta-analytical effects were smaller than the smallest effect of interest, and specification curve analyses confirmed these results across ≈95% of 768 alternative models. When assessing study quality and certainty of evidence using ROBINS-E and GRADE criteria, ROBINS-E rated 80% of studies at high risk of bias, and GRADE assigned greater certainty to the null effects than to the negative effects. Meta-regressions revealed that the adverse association between inequality and mental health was confined to low-income samples. Moreover, machine-learning analyses19 indicated that the association with well-being was negative in high-inflation contexts but positive in low-inflation contexts. These moderation effects were replicated using Gallup World Poll data (up to 2 million participants). These findings challenge the view that economic inequality universally harms psychological health and can inform public health policy.
That is now published in Nature, by Nicholas Sommet, et.al., via the excellent Kevin Lewis.
Popular music of 2025
Usually I wait until the year passes before dipping too deeply into these offerings, but this year I have been impressed by:
Bad Bunny, ‘DeBÍ TiRAR MáS FOToS’.
Geese, Getting Killed.
Rosalia, Lux.
Oklou, Choke Enough.
Saya Gray, Saya.
Fontaines D.C., Romance, late 2024.
Jeff Tweedy, Twilight Override.
Raye, assorted songs.
There will be more, that is my first cut at a list of interest.
Sunday assorted links
1. False claims about China and Japan, but still worth pondering.
2. False claims about birth rates and utility.
3. Can management consultants be literary heroes? (FT)
4. JFV on equilibrium in economics.
5. When does low fertility shatter the social contract?
6. Naturally occurring furin cleavage sites.
7. If somehow you do not know the works of Tom Stoppard you should, RIP, here is the NYT obituary.
What should I ask Harvey Mansfield?
I will be doing a Conversation with him. So what should I ask?
Note he has a new book coming out early next year, namely
Europe’s first elephant sanctuary
Portugal’s Alentejo region is set to become home to a groundbreaking project – Europe’s first sanctuary for elephants that have lived in captivity.
Set across 402 hectares between Vila Viçosa and Alandroal, the vast refuge will welcome its first residents – elephants from zoos and circuses across Europe – in early 2026. The initiative is led by the non-profit organisation Pangea, registered in Portugal and the UK, with support from local councils and national environmental authorities such as Directorate-General for Food and Veterinary (DGAV) and the Institute for Nature Conservation and Forests (ICNF).
The land was purchased in 2023 by the non-profit, which has been busy preparing it for the elephants…
In a statement, Pangea explained that the project consists of creating a natural space for “elephants in a vulnerable situation”, so that the animals can “move freely, feed and socialise, just as they would in their wild habitat”.
Here is the full story. About thirty elephants are slated to end up there. Henry Mance at the FT notes:
The elephants will have 850 acres to roam — more than 200 times the size of Tierpark Berlin zoo’s elephant enclosure or 28 times that of the UK’s Whipsnade Zoo.
And:
The median lifespan for African elephants in a Kenyan national park was three times that of those in European zoos.
Will this prove financially sustainable? Replicable? Finding an area with enough water was one of the major constraints.
*FDR: A New Political Life*
From historian David T. Beito, here is one excerpt:
FDR gave unquestioning support to President Wilson’s crackdown on free speech during World War I, including his enforcement of the Sedition and Espionage Acts. According to Kenneth S. Davis, Roosevelt “went along with prevailing trends in the realm of the national spirit, uninhibited by any strong ideological commitment to the Bill of Rights.” After reading about the conviction of the publisher of an antiwar socialist pamphlet, for example, he sent a congratulatory letter to the federal prosecutor…
There is much more here than just the standard market-oriented “Roosevelt had bad economic policies” line, and the more left-leaning critique of Roosevelt on segregation and the southern coalition. For instance, Roosevelt supported policies that required the telegram companies to keep copies of all telegrams sent, and he used the FCC licensing process to help keep radio in his corner politically.
There is more. It can be said that this book offers a very negative view of FDR.