Big Pharma is RICH

Drug companies are a huge hate-object for the Left. Because they appear to be big and rich and successful, that alone  provokes hatred in the enviers of the Left.  Add to that the high prices of some drugs and it is clear to the Left that the drug companies are "ripping off" the rest of us.

But are they?  Conservatives point to the huge costs of drug development and the consequent huge losses when the drug is not a success.  So the profitability of drug companies generally is not at all clear.  Big profits are accompanied by big losses.

Fortunately, we now have an attempt at real information on the subject.  An article has recently appeared in JAMA that sets out to answer the question objectively. It is "Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies" by Ledley et al.  An excerpt:


Question:  How do the profits of large pharmaceutical companies compare with those of other companies from the S&P 500 Index?

Findings:  In this cross-sectional study that compared the profits of 35 large pharmaceutical companies with those of 357 large, nonpharmaceutical companies from 2000 to 2018, the median net income (earnings) expressed as a fraction of revenue was significantly greater for pharmaceutical companies compared with nonpharmaceutical companies (13.8% vs 7.7%).

Meaning:  Large pharmaceutical companies were more profitable than other large companies, although the difference was smaller when controlling for differences in company size, research and development expense, and time trends.


So that's it.  Open and shut.  The left have some justification for their views.  But only superficially. The methodology of the study is very poor.  Why compare 35 companies with 357?  Many of that 357 would have been much smaller than the pharma companies.  So you are not comparing like with like. Large companies would normally have some degree of monopoly in their markets, which makes them more profitable than smaller companies.  A more defensible method would have been to pick 35 companies in each sector with comparable market capitalization and compare them in profitability.

But the problems do not end there. Drugs are a very risky business.  You can spend a billion dollars getting a drug approved only to find that a few deaths have been attributed to the drug.  The deaths will most likely to have been coincidences but publc pressure will cause the drug to be taken off the market -- leaving the company in a ditch.

And there is normally a return to risk.  People normally do risky things only if the reward is great.  So a valid comparison to a drug company would need to be with other risky businesses.  But that was not done in this case.  So it seems likely that the higher profits made by drug companies are simply payment for risk taking.  There is nothing unfair about their profits.  Their profits are what is needed to encourage innovation.  Remove that profit and you will see few if any new drugs.  Such profits are needed to get people into drug research and development.

**************************************

Scotland could eliminate the coronavirus – if it weren't for England

SCOTLAND is only weeks away from suppressing the coronavirus altogether, a situation that highlights the different approaches taken by the nation and England in recent months. While Scotland initially made many of the same mistakes as England, since late March, its government has acted on its own scientific advice.

The two nations responded to the coronavirus similarly from January and up until March, says Devi Sridhar at the University of Edinburgh. “There are a couple of things where Scotland’s gone slightly earlier, but not radically.”

One early Scottish success came in community testing for the disease. When Kate Mark at the National Health Service Lothian in Edinburgh realised that suspected cases were increasing, her team began testing people in their homes and set up one of the world’s first drive-through testing centres. But on 12 March, the UK government abandoned all community testing efforts to focus on testing in hospitals and other healthcare settings, due to a lack of resources. From then on, the disease spread fast until, on 23 March, prime minister Boris Johnson announced a lockdown across the UK.

This wasn’t soon enough to prevent waves of deaths in care homes in Scotland and England. In both nations, protecting social care had been deprioritised in favour of healthcare. When Scotland began collecting data on covid-19 in care homes on 11 April, 37 per cent of homes were already infected, according to a report co-authored by David Henderson at Edinburgh Napier University. “In certain weeks, there was a 300 per cent increase in care home deaths in England, and 200 per cent in Scotland,” he says. “We could say we were slightly better, but I wouldn’t say a 200 per cent increase in deaths is something to shout about.”

Then the paths taken by Scotland and England began to diverge. Two days after the national lockdown began, Scotland’s first minister Nicola Sturgeon created a scientific advisory group for Scotland to supplement the advice from the UK-wide Scientific Advisory Group for Emergencies. “That’s probably when you started seeing more divergence,” says Sridhar.

Scotland has been slower to relax lockdown than England and has done so in a step-by-step way, so that each change’s effects can be measured. This differs from England’s rapid relaxation, says Sridhar.

Scotland has also been more successful at building up testing and contact tracing, without banking on the UK government’s much-delayed app. “We’ve stuck to our principles of old-fashioned, traditional, evidence-based contact tracing,” says Mark.

Two other factors have contributed to Scotland’s relative success, says Sridhar. The first is clear messaging. On 10 May, the UK government changed its “stay at home” slogan to “stay alert”, but Scotland stuck to the original line. It has since switched to “stay safe”.

What’s more, “there is a very high level of trust in the Scottish government and in Nicola Sturgeon’s leadership”, says Sridhar. According to YouGov, as of 1 May, 74 per cent of Scottish people approved of their government’s handling of the pandemic and 71 per cent were confident in Nicola Sturgeon’s decisions. In contrast, a June poll found that 50 per cent of British people disapproved of Johnson and only 43 per cent approved of him.

On 29 June, Scotland reported just 5 new cases, out of 815 for the UK as a whole, and announced no new covid-19-related deaths for the fourth day in a row. The nation could soon have days with no new confirmed cases. “Scotland’s weeks away from that,” says Sridhar. “England’s months away.”

Yet in practice, Scotland is unlikely to achieve full elimination in the near future, because it has a 154-kilometre border with England. “Many people cross that border every day,” says Sridhar. “I think we will probably never get, without England’s cooperation, to full elimination.”

On 29 June, Sturgeon said that there are “no plans” to quarantine people who enter Scotland from other parts of the UK, but that the nation would need to “be able to consider all options” to stop the virus bouncing back if infection rates are different elsewhere in the country.

However, it should be possible for Scotland to keep the number of new cases very low – and perhaps encourage England to follow suit.

SOURCE

************************************

The first drug shown to save lives from coronavirus: Dexamethasone

Trump was right

Dexamethasone is the first medicine shown to reduce deaths from covid-19. It belongs to a class of drugs called steroids, which damp down the immune system. Our immune response is normally what saves us from attack by viruses and bacteria, but in people with severe covid-19, it seems to overreact. Immune cells congregate in the lungs, releasing high levels of immune signalling chemicals called cytokines, which attract yet more immune cells, in a vicious circle known as a cytokine storm. This leads to excessive inflammation in the lungs, with fluid leaking into the air spaces, hindering intake of oxygen.

Steroid drugs like dexamethasone are often used to treat other diseases caused by an overreactive immune system, like allergies, and have also been used previously to treat people in intensive care with lung inflammation. But steroids reduce the immune system’s ability to fight bacteria, so it was unclear if they would be beneficial overall in covid-19, where there is a risk that patients develop secondary bacterial infections.

The answer came from a large randomised trial of giving dexamethasone or placebo to people with severe covid-19 in the UK. In people who were on ventilators, 41 per cent of those who got the placebo died, while 29 per cent of those who got the steroid died. This is a relatively large effect, compared with drug treatments for other diseases. There was also a smaller survival advantage in people who were less severely ill and needed supplementary oxygen but weren’t on a ventilator.

People outside of hospital should not start taking dexamethasone or other steroids on their own initiative, though, because the negative effects on the immune system might outweigh any benefits. In fact, the UK trial found dexamethasone gave no survival benefit for hospital patients with covid-19 who were not sick enough to need extra oxygen.

Dexamethasone is not the first medicine shown to help against covid-19. That title goes to remdesivir, a drug that blocks viral replication. However remdesivir has only been shown to hasten recovery, not lower the death rate, so the dexamethasone trial results are seen as a significant milestone on the road to treating coronavirus.

 SOURCE

********************************

4.8 Million Jobs, the USMCA, and the 2020 Election

Democrats and their Leftmedia publicists really do not want the American economy to improve — at least not until Joe Biden (or his running mate in his stead) is ensconced in the Oval Office on January 20, 2021. Thus even with another record-breaking jobs report, the Associated Press is still playing Eeyore, running this headline earlier this morning: “A predicted surge in US job growth for June might not last.” Gotta keep that skyrocketing consumer confidence tamped down.

Once the incredibly great news exceeded expectations, that headline became a rather pedestrian treatment of it: “US adds 4.8 million jobs as unemployment falls to 11.1%.” Then the AP edited the good news out entirely, leaving only the utterly dour: “US unemployment falls to 11%, but new shutdowns are underway.”

In a sense, the pessimism is understandable. “The nation has now recovered roughly one-third of the 22 million jobs it lost to the pandemic recession,” the AP reports, while noting that spiking coronavirus cases and moves to reshutter some businesses will indeed stall a recovery. The economy is certainly not out of the proverbial woods yet, and if governors insist on closing businesses again rather than taking other mitigating efforts, we may collectively take one step forward and two steps back.

Enter President Donald Trump and the United States-Mexico-Canada Agreement (USMCA), which took effect yesterday. As we have noted before, the USMCA serves to keep one of Trump’s campaign promises by improving trade relations with Canada and Mexico. The USMCA is not quite the wholesale replacement of the North American Free Trade Agreement (NAFTA), as the president often claims. Nor was NAFTA a “disaster” or the “worst trade deal ever made,” as he decries. But the USMCA is a general improvement and modernization of the 1994 deal that should help create more American jobs.

“The USMCA is a big deal,” says Reason’s Eric Boehm. “Canada and Mexico are the top recipients of U.S. exports. The United States imports more goods from those two countries than anywhere else except China. The deal will affect more than $1 trillion in annual trade between the U.S. and its two neighbors.”

And as Trump declared, “Manufacturing looks like it’s ready to take off to a level that it’s never been. A lot of that has to do with our trade policy, because we’re bringing manufacturing back to our country.” He has made that a priority like few recent presidents, and, broadly speaking, his economic and regulatory policies deserve credit for why our economy was able to sustain the body blow of the coronavirus pandemic.

In any case, the economic choice this November is clear. One party wants to prolong and deepen a recession and then tax, spend, and regulate our way out of it. The president and his party, by contrast, want to keep America great by preserving lower taxes, less regulation, and Liberty itself.

 SOURCE

***********************************

For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated), A Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here  (Personal).  My annual picture page is here.  Home page supplement

**************************