Pharmaceutical Price Regulation

The 2-pack EpiPen has gone from $100 to over $600 since 2008

Mylan Laboratories, sensing that Teva Pharmaceuticals will soon get their generic version of the EpiPen approved, have been steadily hiking the price for the dosing pen in order to extract as much benefit as possible before increased competition drives down prices.

In 2008, the 2-pen pack carried a suggested retail price of $100. Today, the retail price is $608, although production costs have barely changed.

"So what?", you might ask. "Mylan operates in a free market environment where they have the freedom to set whatever price they may want."

In order to understand the "so what", we need to understand what the EpiPen does. The EpiPen is an easy-to-use dosing mechanism for injectable epinephrine, which is used to reverse anaphylactic shock in patients with certain life-threatening allergies. For people with those allergies the EpiPen can literally be the difference between life and a swift death.

Therefore, an exorbitant 6x increase in price will inevitably lead to reduced accessibility to the product and increased risk to those with certain allergies, and to difficult choices since dollars spent on the EpiPen compete with dollars spent on other health care priorities.

If you hear Mylan talk about it, the increase is altruistic in nature: by increasing the price to those with a pharmaceutical benefit to their health coverage they can fund programs to subsidize the pens to those who cannot afford them. So is Mylan Robin Hood, or simply robbin' da 'hood?

I would say the latter. Mylan is looking after its shareholders by seeking to extract as much benefit as possible from their monopoly position in the market for a necessary product before they lose that power.

That is why I believe that price lists for patent and off-patent drugs should be subject to FDA review and approval in order to prevent predatory pricing practices which inevitably emerge where the supplier has complete pricing power.

The FDA, in working with the pharmaceutical companies to set pricing, should take into account development costs, raw material costs, production costs, distribution costs and the extent to which public research played a role in drug development.

Additionally, the FDA should strictly regulate drug marketing. It is my opinion that prescription drugs should not be marketed directly to consumers by any media outlet.  Additionally, pharmaceutical companies should not be permitted to provide free samples to doctors, nor should they be permitted to engage in any other quid pro quo with physicians and hospitals that might be expected to result in more prescriptions being written for their products.

The pharmaceutical companies spend billions on samples and mass marketing, money that will flow to their bottom line under the new regime of FDA regulation. And, consumers and benefits companies will be able to better budget knowing that pricing for drugs is regulated and relatively stable.

In exchange, the U.S. Congress should cap pharmaceutical company liability for unexpected reactions or side effects that the developers of the drug and the FDA's own scientists did not anticipate.

These proposals will yield lower prices for brand-name drugs and robust profits for the pharmaceutical companies tasked with innovating and bringing to market life-saving remedies, slightly higher prices for most generics (which will attract more companies to this important market segment and help insure adequate drug supplies), and faster time to market for new medications and generics alike.

Slow Pulse Response

When you are bleeding from a gunshot wound, every second counts.

After analyzing the timeline of the Orlando Pulse nightclub shooting, one thing seems painfully clear: the authorities who responded were timid and ineffectual.

The assault began at 1:58 a.m. Somehow, the shooter made it past security and onto the dance floor where he opened fire. Hearing the shots, an armed off-duty police officer working security at the club engaged the shooter briefly, but quickly felt that he was "outgunned" and retreated to the street outside the club.

By 2:05 a.m. more officers had entered the club and exchanged fire with the shooter, including members of a SWAT team who just happened to be riding shotgun in a patrol car that was nearby. They, too, felt like their lives were being placed at risk by engaging the attacker, and retreated to await back up.

At 2:22 a.m. the shooter felt safe enough to start making phone calls to 911 to announce that this was, in fact, a terror attack and that he was an agent of ISIS. At 2:45 a.m. he called an Orlando television station and speaks to a producer. He starts scanning Facebook looking for comments about the attack. He even has time to post to his timeline.

By 2:51 a.m. the shooter is still actively shooting people. One victim, Eddie Jamoldroy Justice, is texting with his mother during the ordeal. His texts start at 2:09 a.m. and end at 2:51 a.m. when he is fatally shot.

Orlando Police tries to negotiate unsuccessfully with the shooter for the next two hours before deciding around 5 a.m. to detonate explosives and breach a wall with an armored vehicle. The shooter, apparently tired of the ordeal, emerges through the hole created by the breach of his own volition, engages with officers outside, and is fatally wounded.

The timidity demonstrated by the Orlando Police is shocking. This assault should have been over by 2:15 a.m. at the latest. From the time that the first officers engaged the shooter they should have applied constant pressure, at risk to their own well-being, until the shooter was neutralized. If the shooter retreated deeper into the building, the officers should have followed. If he barricaded himself in a bathroom, they should have stormed it. When there is an active shooter every second counts. Any hostages trapped with the shooter are effectively already dead, or will soon be dead, if the shooter is not neutralized. Therefore, extreme measures, including measures that put innocents at risk, must be used to prevent wider casualties.

Finally, we need officers who are willing and able to lay down their life in the line of duty, just as we have soldiers on the front line called on to do the same thing. That the initial responding officers would have felt that they were "outgunned" and retreated is unacceptable. They should have kept pressure on the shooter until one of them got close enough to take him out.

The way our authorities handled this angers me. It makes us look weak and ineffectual in the eyes of the world and increases the risk of similar attacks. I hope that local police forces across the country use this incident as a case study of how NOT to deal with a terrorist attack and act with much greater decisiveness, courage and lethality when this happens again.

Is a Kasich Knockout Even Feasible?

The John Kasich campaign is bargaining on winning the hearts of minds of delegates committed to vote, in the first round, for Donald Trump and Ted Cruz, in spite of the fact that he currently has fewer delegates to his name than Marco Rubio, who dropped out weeks ago after losing his home state of Florida to Donald Trump.

In defense of their strategy, they cite other contested Republican conventions in which the candidate with a plurality of the delegates going into the convention did not emerge the winner.

In particular, the Kasich campaign cites two: the 1860 nomination of Abraham Lincoln and the 1952 nomination of Dwight Eisenhower.

However, in both cases the ultimate winner went into the convention in second place in the delegate count.

For example here were the results from 1860:

Source: https://en.wikipedia.org/wiki/1860_Republican_National_Convention

As you can see, Abraham Lincoln went in with a high number of delegates, well ahead of the third place contender.

Similarly, in 1952 Eisenhower went into the convention nearly neck-and-neck with his rival, Ohio Senator Robert A. Taft.

Therefore, I have a hard time envisioning a scenario where the nomination does not go to Donald Trump or Ted Cruz and I am not sure, as much as I hate to admit it, what John Kasich is still doing in the race.

Brexit a No-Brainer

Never having merged currencies with the EU means Britain can sneak
away relatively unscathed and be potentially stronger for it.

Unity is such a strong word. Isn't unity want we want? If you ask people if they view "unity" favorably or unfavorably, chances are they will view it favorably without even knowing what sort of unity we are talking about. That is because most of us really just want to get along.

However, the European Union honeymoon is long over, and I believe that it is in Great Britain's best interest to go it alone from here.

Here are some reasons why:

• They already have their own currency and central bank.
• Their economy is strong, with unemployment at 5.4% and headed lower.
• Their debt to GPD is 90%, which is lower than France, higher than Germany, but not out of control (yet).
• There is huge migrant pressure at their doorstep.
• The Greece/Spain/Portugal debt crisis is not over yet.
• A lower pound in a relatively low-inflation environment would make their exports into the EU more competitive.
• Scotland rejected secession in a definitive manner, which means that Great Britain is stronger going forward and does not need the EU as much as it would otherwise. 

So far, the EU has dodged a few bullets, not the least of which is the looming potential default of Greece, Spain and Portugal. If and when that happens, the impact on the larger EU partners will be huge. If Britain leaves now they can avoid having to foot the bill for southern european profligacy.

Since Great Britain never gave up the pound sterling (and, rightly so), they could be in a unique position if they decouple from the EU and take steps to gradually weaken their currency relative to the euro and dollar. Such a move would bolster their industrial output by making their exports less expensive.

Finally, while Great Britain faces a tight labor market and is in need of more skilled laborers, it is better for them to control that flow and be selective as far as who they let in and who they do not.

Basically, I don't see the clear advantage to Great Britain of staying in the EU other than a love of a word, "unity".

Follow-up 8-4-18

With UK-EU negotiations stalling, the world press is ratching up the fear quotient, warning that Britain will suffer, amongst other things:

• Massive food shortages
• Loss of manufacturing facilities employing tens of thousands of people
• The failure of their nuclear power plants
• The loss of countless jobs in the financial sector

However, these fears are solely based on the theory that Brussels decides to impose self-destructive trade barriers with the UK after they leave the common market.

Britain is not seeking any trade barriers whatsoever, and wants completely free trade with the bloc. EU negotiators are presenting the possibility of vindictive retributory actions 

Instead, leaving the common market will permit the UK to free itself from cumbersome EU regulations that will make it more competitive. I predict, for example:

• Greater money flows into UK investment banks as financial regulations are relaxed.
• An increase in jobs in the UK as Britains loosen strict EU work rules.
• No net effect on food trade.

Brussels realizes that the UK will be at a competitive advantage to the bloc countries, which is why they are going to use every trick in the book to scare the Brits out of leaving.

Are the Contents of my iPhone Protected by the Fifth Amendment?

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

The question is: if I lock my iPhone with the intent of keeping its contents a secret, can I be compelled to unlock it? Or, before or after my death, can the government legally hack into my iPhone in order to reveal its contents?

In most cases, I believe the answer to be "no". I believe that hacking into someone's personal cell phone is tantamount to forcing him to testify against himself. And, the simple act of putting a password and encrypting the contents of a cell phone is a statement that should be interpreted to mean, "I wish to invoke the rights afforded me by the Fifth Amendment and not allow my phone to bear witness against me."

Our personal cell phones are almost like extensions of our brains in the extent to which we use them to think, muse, comment, plan and remember things about our lives. That is a big part of the reason why the password and encryption that we place on them should be protected by our 5th Amendment right against self-incrimination, in spite of the difficulties that this might cause for law enforcement.

Ironically, in the case of the San Bernardino shooter's iPhone 5c (which is the reason that this issue is currently in the news), I believe that the government has every right to compel Apple Computer to unlock the phone if Apple has it in their ability to do so, BECAUSE THE SHOOTER WAS USING HIS WORK PHONE WHICH WAS, AND IS, PROPERTY OF THE STATE OF CALIFORNIA, AND ON WHICH HE COULD HAVE NO EXPECTATION OF PRIVACY.

So, I expect Apple to lose this case and ultimately unlock the shooter's phone for the FBI. I also believe that the contents will not reveal anything new because the shooter had set up the phone to sync to iCloud (the FBI only wants the data since the last web sync) and knew that the phone was legally not even his. Therefore, I find it difficult to imagine that he could have been using it for any nefarious purpose.

When considering points of law such as this, I like to transport myself back in time and try to find useful analogies to 18th century jurisprudence. The closest analogy to a locked iPhone is a padlocked personal diary. It is my opinion that the contents of one's personal diary should be inadmissible in court unless the defendant has made prior reference to the diary, or used certain entries in support of his defense, in which case the entire diary would be in play. Since it can be reasonably imagined that one's personal cell phone could contain private thoughts and musings, a simple statement to that effect by the defense should render its contents safe from prying eyes on 5th Amendment grounds.

While this clearly represents a serious setback to law enforcement and the prosecution in certain cases (and, in fact, does so on a regular basis), we must remember that it is the communication that occurs between the cell phone and other phones or through the Web that are of most interest, and these communications are NOT shielded by the 5th Amendment. While the government may not be able to legally force a defendant to turn over the password to his private phone, they can certainly get a warrant to monitor and log all his data and voice communications, which could help them build a case. And, IF THOSE COMMUNICATIONS SHOW THAT THE DEVICE (iPHONE, CELL PHONE, ETC.) WAS USED IN THE COMMISSION OF A FELONY, THEN THE DEVICE ITSELF, INCLUDING ALL CONTENTS THEREIN, ARE FAIR GAME.

So, while one's personal diary, or personal cell phone, in most cases should be shielded from prying eyes by the Fifth Amendment, there are circumstances in which these protections would not apply.

Too Big to Fail = Too Big to Exist

The Milwaukee Fed's Mr. Clean wants to tidy up systemic risk

The fact that Neel Kashkari was on the front lines during the 2008 financial crisis adds special urgency to his calls to dismantle the major banks, a position that I support.

When the Federal Reserve and U.S. Congress chose to keep the major banks alive and intact, they created huge systemic problems that are adversely affecting the financial markets to this day.

The main problem, as I see it, is in terms of price and competition. Currently, the market for financial services is dominated by a handful of big players who offer relatively few product options and limited price competition. The majors must be broken apart into regional banks that can compete with one another, and compete with other local and regional banks. These smaller banks, being closer to their customers and local businesses, are generally more willing to take a chance and underwrite loans that the majors would not touch. Additionally, more competition will help to improve customer service and lower fees for the retail customers.

Secondly, "too big to fail" carries moral hazard and an implicit guarantee that can distort risk evaluation and decision-making by investors and the banks themselves, exacerbating the "too big to fail" problem.

Finally, we need to restore the firewall that previously existed between depository institutions and investment banks. We cannot allow investments in derivatives to put FDIC insured deposits at risk.

Therefore, on the depository side, the major banks should be broken down into distinct regional banks with new names and a new organizational structures. The original parent bank can retain the investment banking activities, but can no longer accept federally-insured deposits.

This will serve to streamline and invigorate the financial industry, for the benefit of the nation.

It Takes Chutzpah

I wonder if proof that his mother had sworn allegiance to Canada would wipe
that smug look off his face... (Source: Newsweek)

Leave it to Ted Cruz to believe that he is actually eligible to serve as President of the United States, in spite of having a Canadian birth certificate and dual citizenship:

Ted Cruz has never renounced his Canadian citizenship, so if things don't go well for him
here, he's always got a place to stay north of the border.Source: mrconservative.com

By his logic, since his mother was born in Delaware, that makes him a "natural born" citizen of the United States. EXCEPT, for some reason, his mother applied for and received Canadian citizenship during the time she was living in Canada, along with her Cuban-born husband.

Source: Newsweek

Clearly, the "natural born citizen" clause must be clarified by the courts, as it has wide-ranging implications. Are the children born to a foreign mother in the United States temporarily (or illegally), automatically U.S. citizens upon birth? The answer is not at all clear. It would seem to me that the child is whatever the parents are, independent of the geography of the live birth. The courts have already held that the children of diplomatic attaches on assignment in the States are NOT eligible for U.S. citizenship because the parents have a sworn allegiance to another nation and not to the United States. For me, the same logic applies to foreign nationals who come to the U.S. to give birth in order to imbue their offspring with U.S. citizenship.

So, it seems that Ted Cruz was born in Canada to two parents who had both sworn allegiance to Canada at the time of his birth, which seems to me to be WHOLLY AND COMPLETELY INADEQUATE to justify eligibility to hold the highest elected office in the land.