2012 - %3, April

How To Keep Healthcare Costs High In One Easy Lesson

| Tue Apr. 17, 2012 9:51 PM EDT

Today, Aaron Carroll tells us the story of TriCor, aka fenofibrate, a cholesterol drug licensed by Abbott Labs in 1998. Unfortunately, TriCor's patent was due to run out in 2000 and a maker of generic drugs was all set to produce a generic version. So Abbott sued, which delayed the generic version by 30 months:

In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1. Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.

Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldn’t penetrate the market.

Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.

I swear I’m not making this up. Wash, rinse repeat.

The cost to American consumers of not having access to a generic version of TriCor is on the order of $700 million per year, money that (presumably) accrues to Abbott Labs instead. All of which goes to show that America's pharmaceutical companies are still the most innovative in the world, no matter what the naysayers claim. Unfortunately, their innovation seems to reside mostly in their legal and packaging departments, not their R&D departments.

POSTSCRIPT: Although Abbott Labs is the main culprit here, fairness dictates that blame be shared. Aaron abstracted this account from a journal article in Archives of Internal Medicine, and he notes that one of the authors of the article takes doctors to task too: "Why didn’t we prescribe the bioequivalent generics for our patients? What was the advantage to our patients of the more expensive proprietary drug? Did we let down our patients and society?" Fair enough. Abbott did everything it could to keep everyone confused, but generics were still available. So why didn't physicians prescribe them?

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BREAKING: Car Batteries Are Really Expensive

| Tue Apr. 17, 2012 5:22 PM EDT

This is interesting:

One of the auto industry's most closely guarded secrets—the enormous cost of batteries for electric cars—has spilled out.

Speaking at a forum on green technology on Monday, Ford Motor Co. Chief Executive Alan Mulally indicated battery packs for the company's Focus electric car costs between $12,000 and $15,000 apiece. "When you move into an all-electric vehicle, the battery size moves up to around 23 kilowatt hours, [and] it weighs around 600 to 700 pounds," Mr. Mulally said at Fortune magazine's Brainstorm Green conference in California.

"They're around $12,000 to $15,000 [a battery]" for a type of car that normally sells for about $22,000, he continued, referring to the price of a gasoline-powered Focus. "So, you can see why the economics are what they are."

What's interesting isn't the fact that the batteries cost so much. What's interesting is that this was apparently such a closely guarded secret. I had no idea. And I still have no idea why this was such a closely guarded secret. It's hardly big news that batteries are a huge part of the cost of electric cars, is it?

Study: All-White Jury Pools More Likely To Convict Black Defendants (UPDATED)

| Tue Apr. 17, 2012 2:15 PM EDT

Duke University released a study on Tuesday that examined the impact of race in jury pools in Florida, and there's good news and bad news. The bad news is that, according to the study, which looked at 700 cases between 2000 and 2010, all-white jury pools are significantly more likely to lead to convictions of black defendants than white ones. The good news is that a single black juror in the pool can alter that dynamic.

Two particularly salient points from Duke's summary of the study:

-- In cases with no blacks in the jury pool, blacks were convicted 81 percent of the time, and whites were convicted 66 percent of the time. The estimated difference in conviction rates rises to 16 percent when the authors controlled for the age and gender of the jury and the year and county in which the trial took place.

-- When the jury pool included at least one black person, the conviction rates were nearly identical: 71 percent for black defendants, 73 percent for whites.

Eliminating jurors on the basis of race is of course illegal, but based on this data, the racial makeup of a jury can have a significant impact on whether or not a black defendant is convicted. I'd bet prosecutors and defense attorneys instinctively understood that dynamic even before the Duke researchers released their study. Race and criminal justice, and the politics of both, have been intertwined throughout American history, often for the worse.  

UPDATE: This post previously misstated that the study drew its conclusions from seated juries, rather than the pools from which juries are selected. Although there haven't been a lot of studies done on the impact of all white juries on convictions for nonwhites, a 2006 study found that racial composition substantially impacted jury deliberations. Others, like this one from the Equal Justice Initiative, suggest that in some areas of the country prosecutors go out of their way to strike black jurors during the selection process. 

Mapping Disease to Climate

| Tue Apr. 17, 2012 1:37 PM EDT

 Sea-Surface Temperate (SST) (oceans) and Normalized Dirrerence Vegetation Index (NDVI) (land) observed globally for January 2007: NASA/Goddard Space Flight Center Scientific Visualization Studio.

Sea Surface Temperature (SST) Anomaly color scale.Sea Surface Temperature (SST) Anomaly color scale.

Vegetation Anomaly percent color scale.Vegetation Anomaly percent color scale.

This map from the NASA/Goddard Space Flight Center Scientific Visualization Studio shows a snapshot of the relationship between environmental extremes and a deadly disease outbreak in Africa in January 2007. (Click here for larger image.) Specifically:

  1. Unusually high sea surface in the equatorial waters of the Indian and Pacific Oceans (red)
  2. Which fueled persistent, heavy rains over East Africa
  3. Which caused an anomalous burst of plant growth in East Africa (magenta)
  4. Which created a perfect storm of conditions for the emergence of mosquitoes that spread Rift Valley fever

Rift Valley Fever is passed by mosquitoes from viral reservoirs in bats to livestock and people. The 2006-2007 Rift Valley Fever outbreak spread through Kenya and Somalia, killing 148 people and infecting many more, causing costly closures of livestock markets and costing the Kenyan government $2.5 million for vaccine deployment.

Click for larger image: NOAA/NCDCClick for larger image: NOAA/NCDC 

The cascade of factors that ended in the death of many emerged from the record-breaking climate extremes of 2007. The map above from NOAA's National Climatic Data Center shows a few of them. Click it for a larger image.

Forget "Government Spending." The Only Thing That Really Matters is Healthcare.

| Tue Apr. 17, 2012 1:16 PM EDT

Josh Barro says that government expenditures (federal + state + local) are going up, up, up. Just take a look at the top chart on the right:

This chart has a lot to teach us about what we can expect from the coming fiscal adjustment. For me, the most notable fact about this chart is that the growth of government spending has been remarkably steady. The trend over the last 83 years has been for government spending to rise by 0.24 percent of GDP per year, and the correlation is strong: a linear regression on this trend has an R-squared value of 0.72, meaning that time explains most of the movement in government spending.

But there's another way to look at this too. The chart on the bottom is my take: I've cut it off at 2007 so that the Great Recession doesn't obscure the real trend of the past few decades: government spending increased steadily until the mid-70s, but since then it's flattened out almost completely.

Now, I agree with Barro that entitlement spending is certain to go up over the next 20-30 years as the baby boomers retire. But what the bottom chart shows us is that government expenditures in general haven't been on an inexorable upward path over the past three decades, and there's no special reason to think they'll rise inexorably in the future. Generally speaking, domestic spending, defense spending, and Social Security are on extremely sustainable paths.

What's left is healthcare spending. That's it.

So this is basically just another excuse to repeat something that I and others have said over and over: We don't have a spending problem in America. We have a healthcare problem. The other three categories of government spending taken together will probably rise by a point or two over the next few decades, but that's not a big deal. We need to pay normal, prudential attention to them, but nothing more.

Bottom line: no one serious should spend an awful lot of time talking about "the deficit" or about "government spending." We should be talking about healthcare. Everything else is just a red herring.

Fear Keeps the Filibuster Alive

| Tue Apr. 17, 2012 11:51 AM EDT

Barney Frank says the only structural reform he cares about is getting rid of the filibuster in the Senate. Ed Kilgore comments:

I'm among those who really get upset when people sort of internalize the recent routine use of the filibuster by Republicans to create a de facto 60-vote requirement for doing business in the Senate, as though it came down from Mount Sinai on stone tablets. It didn't. It's a revolutionary development in the empowerment of congressional minorities, of special utility to those who wish to obstruct progress. And it has a huge ripple effect on what happens in the House (as Frank indicates), the White House, and the country. We should never get used to it until it's modified or gone.

Agreed. And yet, in a way, it seems to me that Ed is wrong: we have to internalize the recent routine use of the filibuster first in order to have any chance of getting rid of it. As long as the public continues to hear about "filibusters," they'll continue to think that this is just Mr. Smith Goes to Washington, something that happens now and again when the minority party opposes a bill especially strongly. It's only when everyone starts to realize that the Senate is a 60-vote body — not a place where filibusters take place periodically, but a 60-vote body — that we might finally get some public pushback on this.

Or maybe not. The sad truth is that no matter what we call it, filibusters will probably retain strong support pretty much forever. In general, fear of what your opponents could do in a majoritarian Congress seems to be a much stronger motivation than passion for what your own party could do. That's more true of conservatives than liberals, but it's true of a lot of liberals too. When you sit down and start to think about what, say, Paul Ryan might be able to do in a filibuster-less Senate, it makes your blood run cold. Suddenly 60 votes doesn't sound so bad, even if it does mean there's stuff of our own that will never see the light of day either.

Fear is stronger than hope. Every once in a great while that reverses, but not often and not for long. Most of the time, fear is stronger than hope.

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Our Long-Awaited Construction Boom Still Isn't Quite Here

| Tue Apr. 17, 2012 10:53 AM EDT

As you may recall, Smithian economics suggests that we're due for a big rebound in housing construction and that this rebound will drive a strong economic recovery over the next few years. However, Karl Smith himself is starting to get pessimistic. Multi-unit housing starts are increasing, but they still look pretty anemic compared to past housing booms:

The “hopeful” argument is that while the absolute increase is much smaller this time around the pace is actually a bit faster, a four-fold increase rather than a 3-fold increase.

However, given the current conditions in housing I was looking for an even stronger snap back. This alone will not be enough to push the economy into a boom. We need a series step-up in the rate of growth.

What’s worse from a long run perspective is that the failure of multifamily to bounce back potentially sets up single family for a new bubble....That kind of instability is difficult to manage. Economic stabilization going forward would be better if there was a larger stock of multifamily rental housing, yet that is looking increasingly unlikely.

This might just be a temporary problem. Price-to-rent ratios are continuing to decline after a brief upward blip in 2009, which should make apartment construction increasingly attractive to developers. In the end, though, it's all going to depend on the same virtuous circle that ends every recession: more jobs means more income, which means more homebuilding, which in turn produces more jobs, world without end. (For a few years, anyway.) But we're still not producing enough new jobs to get all those 20-somethings to move out of their parents' basements in big enough numbers, so the virtuous circle is having trouble really catching fire. More stimulus, please.

SCAG Wants to Make Southern California More Urban

| Tue Apr. 17, 2012 10:21 AM EDT

This is mostly Yglesias bait, but the rest of you might be interested too. It's from a short op-ed about the recent decision of the Southern California Assn. of Governments, or SCAG, to adopt a new Regional Transportation Plan/Sustainable Communities Strategy:

The plan includes expansion of housing near public transit by 60%....and projections of more than 4 million new jobs — with public transit within half a mile of most of them. Amanda Eaken of the Natural Resources Defense Council praised it as "the strongest transportation plan" in the history of "car-loving Southern California."

.... SCAG's new plan is born of the realization that as a region, we have to grow up, not out. That doesn't mean Hong Kong skyscrapers in Whittier and Redlands. It does mean more apartments near light-rail stations and more vibrant mixed-use areas like the ones in downtown Pasadena, Ventura and Brea. It doesn't mean wresting the car keys from suburban commuters. It does mean making jobs and housing accessible via foot, bike, bus and rail.

In theory, a plan like this should have almost unanimous support. Developers like it because they can put up denser buildings. Environmentalists like it because it's more sustainable. Urbanists like it because it creates more walkable communities. City governments like it because it creates a stronger tax base.

There's really only one constituency that doesn't like it much: every single person who already lives in these communities and hates the idea of dense, high-rise construction near their homes. So there's going to be fireworks. It'll be interesting to see how the NIMBY bloc gets bought off.

Chart of the Day: Our Robot Overlords Will Take Over Soon

| Tue Apr. 17, 2012 9:44 AM EDT

The chart on the right is based on data that may or may not be accurate and an extrapolation that's unreliable. So the precise shape of the curve is mostly guesswork. But generally speaking, it's probably about right, and it shows that the global population of robots is set to skyrocket over the next few decades. Sometime in the 2030s there will be more robots than people. Stuart Staniford draws some bleak conclusions:

  • This trend will continue because it's in the short-term interests of societal elites. The median influencer's life can be made better with more robotically produced consumer goods and with service robots to perform tedious chores (or human labor made cheap by competition from robots).
  • The creative classes can have fun with new toys and with thinking up new uses for the technology.
  • Ever larger numbers of people will continue to be made technologically unemployed by this trend.

Six more bullet points follow, ending with:

  • However, by that point, there may very well be no easy way back, and all hell will break loose.

Read the whole thing. I pretty much agree that Stuart's gloomy view is the most likely one in the medium term, and it's unfortunate that, for a variety of reasons, we're unlikely in the extreme to ever try to seriously plan for it. Those reasons include the fact that it will happen slowly; lots of people just don't believe Stuart's scenario in the first place; lots more don't want to believe it for self-interested reasons; and addressing it in a serious way would require our cognitive and financial elites to give up a lot of power and wealth, which they won't do willingly. So this will all probably unfold pretty grimly for a lot of people.

BP's Corexit Oil Tar Sponged Up by Human Skin

| Tue Apr. 17, 2012 5:04 AM EDT
Corexit® dispersed oil residue accelerates the absorption of toxins into the skin. The results aren't visible under normal light (top), but the contamination into the skin appear as fluorescent spots under UV light (bottom).

The Surfrider Foundation has released its preliminary "State of the Beach" study for the Gulf of Mexico from BP's ongoing Deepwater Horizon disaster.

Sadly, things aren't getting cleaner faster, according to their results. The Corexit that BP used to "disperse" the oil now appears to be making it tougher for microbes to digest the oil. I wrote about this problem in depth in "The BP Cover-Up."

The persistence of Corexit mixed with crude oil has now weathered to tar, yet is traceable to BP's Deepwater Horizon brew through its chemical fingerprint. The mix creates a fluorescent signature visible under UV light. From the report:

The program uses newly developed UV light equipment to detect tar product and reveal where it is buried in many beach areas and also where it still remains on the surface in the shoreline plunge step area. The tar product samples are then analyzed…to determine which toxins may be present and at what concentrations. By returning to locations several times over the past year and analyzing samples, we've been able to determine that PAH concentrations in most locations are not degrading as hoped for and expected.

The report states: "Toxicology studies to determine effects of Corexit® dispersant on dermal absorption rates of carcinogenic PAHs through wet skin are needed to assess risk to human health and safety."

Worse, the toxins in this unholy mix of Corexit and crude actually penetrate wet skin faster than dry skin (photos above)—the author describes it as the equivalent of a built-in accelerant—though you'd never know it unless you happened to look under fluorescent light in the 370nm spectrum. The stuff can't be wiped off. It's absorbed into the skin. 

And it isn't going away. Other findings from monitoring sites between Waveland, Mississippi, and Cape San Blas, Florida over the past two years:

  1. The use of Corexit is inhibiting the microbial degradation of hydrocarbons in the crude oil and has enabled concentrations of the organic pollutants known as PAH to stay above levels considered carcinogenic by the NIH and OSHA.
  2. 26 of 32 sampling sites in Florida and Alabama had PAH concentrations exceeding safe limits. 
  3. Only three locations were found free of PAH contamination.
  4. Carcinogenic PAH compounds from the toxic tar are concentrating in surface layers of the beach and from there leaching into lower layers of beach sediment. This could potentially lead to contamination of groundwater sources. 

The full Surfrider Foundation report by James H. "Rip" Kirby III, of the University of South Florida is open-access online here.