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Like many things, like doctors, computer security, and safety maintenance, government often fades into the background when it works, while being a blistering sore when it doesn’t. Building codes for safety, road planning and construction to reduce fatalities, food producer and preparation regulation to reduce illness, the entire criminal court system, the EPA (notice the sky in cities is. Not dark grey anymore), commercial law, etc. these all work pretty well! And for the lauded efficiency of corporations - people inside those constantly complain about inefficiency and stupidity as well. I’m not critiquing public choice economics or anything, just pointing out that the government often works okay, even if often it does not, and is certainly not a failure. The “government” has solved thousands of your problems.

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Not sure about that! The marginal benefit minus marginal cost of a govt dollar or employee or whatever is different between welfare slash wealth redistribution slash poverty remediation and military spending and fda spending and say irs spending (which needs increasing!). I don’t see at all why “the benefit of government is exceeded by the cost” is true as a whole when we can instead say some parts should be expanded and others contracted much of the larger government is, in fact, good - the EPA is pretty nice, and arguably has too little power (well, in some areas, and not in others). Government size is a terrible metric for what should’ve been actual substantiative reforms. Otherwise you’ll get more IRS cuts (thanks Republicans striking that from the infrastructure bill compromise iirc) and cuts for enforcement of important regulatory codes and no changes in money for poor people cuts which is what you want I believe

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The IRS absolutely and definitely needs more funding so they can collect more tax revenue and enforce stuff. https://www.cbpp.org/research/federal-tax/depletion-of-irs-enforcement-is-undermining-the-tax-code and said funding will turn up much more revenue than it costs to fund https://budget.house.gov/publications/report/funding-irs because the irs had its funding markedly reduced to benefit tax evaders and that can be reduced

Even under such a system corporate and rich people still have extremely structurally complicated finances where a lot of the income could be located in different areas and so we will still need tax enforcement. Additionally, finance is complicated and and reforms would surely still be. I’m not opposing tax reform but it’s been tried a lot and the irs would still need funding.

I’m more or less happy that the EPA has moved the goalposts as we’ve found that lots of contaminants that are less obvious are full quite harmful, and suspect that we have much less environmental enforcement in the way of chemical pollution than we need, although we have overreach as well in some areas. I don’t think defunding is the answer, especially if pollutants are still decreasing (and maybe they’ve been replaced by new ones?)

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Is there some way to report spam?

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founding

From [Publisher Agreement](https://substack.com/pa):

> - Reporting a User: You can flag that a user that is violating our Terms of Use by sending an email to tos@substack.com. After you provide us with written notice of this violation, we will determine whether this user’s access to some or all of your newsletters should be suspended or terminated. We will also decide at our sole discretion whether this user’s access to the rest of Substack will be suspended or terminated.

That seems to indicate that Scott would need to report this user but maybe anyone could do it too.

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Seriously? Wow. I thought they were way more professional than that.

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Countering spam, and security more generally, is really hard. And anything you make to do that can itself be 'weaponized'.

That said, I think these comments are the first spam I've seen on any 'newsletter' on Substack so far, which might, if anything, demonstrate that they _are_ pretty "professional" in this regard.

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I agree that stamping out 100% of spam is hard but the blurb sounds like the website isn't even doing the easy things (e.g. statistical filtering).

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I'm less sure as this is the _only_ failure I've witnessed in months. GMail fails – visibly – more often than that for me!

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This clinches it, give Dr. Ogu's herbal medications FDA certification right now! 🤣

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This is not only spam, but a duplicate post.

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It's also on the last Open Thread and the Model City post.

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Better scratch Alzheimers off the list of things it cures.

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founding

LOL

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This is as bad as any FB allowal of known to be fake news.

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Do not post ridiculous comments here. Respect people's opinion

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I do not automatically respect other “opinions.” This is just advertising. Does not belong here. And us bs.

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I think this combination antiviral, antibacterial, antifungal, anticancer, neuroprotecrive, antiparasitic, thrombolytic, anticonvulsant, antihypertensive miracle herbal preparation needs rapid investigation, multiple large trials, breakthrough status, and most of all right for any doctor to prescribe (with informed consent of course) to anyone who needs it.

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This is spam and should be deleted.

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Oh no! In terms of the need to regulation this is example number 1.

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But here we have a patient's testimonial that the natural herbs of Dr. Ogu cure everything from epilepsy to AIDS, what more evidence do you need before licencing it? What are you, some FDA bureaucrat? 🤣

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Is there no "report spam" button?

This is almost as bad as the lack of a Like button.

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Strict? lax? fast? slow? is not the point. FDA does not use cost benefit analysis in it's approval process. Which would not be bad except that nether do doctors or insurance companies including Medicare.

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I think it sort of does, informally, to some degree? This is kind of what some of the fast-tracking programs are - given that this drug is really important, we'll let it through a little faster.

I agree a formal cost-benefit analysis would be better. I genuinely don't know to what degree the FDA does this. And I suspect if you asked them to, it would just be one more six-month-long $100 million piece of paperwork they would have to do before they approved anything.

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To the extent that you can get approved for reducing things like hospitalizations it uses cost benefit and they talk about risk benefit a lot but they are garbage at the latter. I don't think price should go into the FDAs decision at all. But insurers need to prioritize cost benefit and make that the core of their decision making. The FDA should really say is it safe? If so allow people to take it/prescribe it. Is it effective? If so allow drug company to advertise it.

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There should be room for things that are safe but we don't know much else and people can roll the dice and pay out of pocket for that or choose an expensive insurer who'll cover anything. That's basically how we treat supplements. FDA is like airborne won't kill you but we aren't saying anything else.

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The FDA is forbidden from considering price during the approval process. They don't exactly say this in https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/frequently-asked-questions-about-cder#16 but they strongly hint at the fact that price doesn't enter into the evaluation.

That said, individuals at the FDA have their own opinions about drug pricing, and if they think something is just a copycat of another drug with a 100x mark up, that can have an influence on the approval process, largely through making more demands on the approval seeker.

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That could be a problem. Probably the right way to put this is that the procedures should be designed on cost-benefit grounds. Whether a full cost benefit analysis of each decision would be cost effective or not is uncertain.

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NICE in the UK might be an interesting counter example as they explicitly take cost into account. But I've no idea how that works in practice

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NICE is a great example to look at. The QALY based approach is much better than how it's done in the US. (Note, the "death panel" rhetoric seemed to be effective when this sort of thing was last contemplated during the ACA negotiations).

I have a sneaking suspicion that if you allowed insurance companies to deny treatments that are FDA approved, what would stop them from just denying ~all treatments? Maybe the argument would be "in a free market who would buy that insurance", but I think the "FDA approved treatments must be covered by insurance" rule might currently be keystone of the existing regulatory structure and so couldn't be removed without other changes.

I think you'd need to switch to something like single payer to be able to decouple the FDA from insurance approvals. Sketching out a way for this to happen:

1) Medicare for all

2) Medicare is allowed to negotiate drug prices

3) Medicare uses a QALY-based system to decide which treatments it will approve

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I'd like to use an insurance company that says "we will approve anything that costs no more than $X per QALY."

It would take a while to figure out how to actually run the formula: you can add more variables to the function to change the output, but using NICE as a model would work for a first pass.

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A common challenge is a lack of good evidence. In light of that, who would you trust to pick the priors?

For example, NICE says (https://www.nice.org.uk/guidance/ta1/chapter/appendix-c-wisdom-teeth-removal-patient-notes#appendix-c-wisdom-teeth-removal-patient-notes) "Impacted wisdom teeth that are free from disease (healthy) should not be operated on."

Imagine that your dentist is telling you that in a short but unknown number of years, you will have to go through _large number here_ units of pain and suffering if you don't get them extracted now.

What would you like the insurance company to do? If your response is that the patient or dentist could appeal, then you've reinvented the American healthcare system, complete with prior authorizations.

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I think your post points out that they do cost/benefit - but they are weighing the wrong cost (how likely am *I* to be blamed if something went wrong) much too highly.

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My read here is that the FDA is structurally hard-wired for making decisions in a regime where the cost/benefit margin is very narrow, for example where there are already drugs treating the condition and you're just trying to show that you're better than the current best option. In these cases having a long and rigorous process where "default to no action" seems at least defensible. "First do no harm" etc.

So perhaps you could say there's an informal cost/benefit, but I'd argue that it's at best accidental -- and I'm not even sure that this is the right way of framing it, because I really do think that regulators are explicitly opposed to the cost/benefit lens. Certainly, many public health figures recoil in horror when you suggest that this logic should be applied to the problem. Remember when the German regulators said "we know that the risks of Covid are higher than the risks of blood clots, but we must pause the vaccinations because the rules say that all side-effects must be listed on the drug". I think the FDA considers things similarly.

My impression is that the Thalidomide crisis is pretty deeply carved into the FDA's organizational DNA; they still have this historical memory of the time that the EU regulators approved Thalidomide, and the FDA heroically applied skepticism and correctly averted a crisis.

I think a more explicit cost/benefit framework is the solution for the "too strict/not strict enough" mis-calibration you observe. It seems uncontroversial (or at least inconsequential) for the FDA to err on the side of being conservative on approvals for mostly cosmetic treatments (e.g. breast implants) or cases where we already have treatments (e.g. the next anti-depressant), but there's clearly a highly broken process when you look at the cases where inaction actually costs lives; for example, the fact that at the time of the AZ blood clot panic the US was sitting on something like 50m AZ shots that were not approved, despite them obviously working if you looked at the UK data. Deploying these vaccines could plausibly have saved thousands of lives, if we'd got to vaccine saturation 3 months earlier. Similarly, the pause on J&J (though I'm not certain if that was led by FDA concerns).

Having said all this -- based on the current discourse, I don't think the public would be on board with a cost/benefit analysis approach.

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There is nothing about the Thalidomide case that implies that it would have been applied if FDA had been applying a cost benefit approach.

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My point with Thalidomide is just that it gives us a possible explanation for why the FDA might be overly conservative. It's both a lens to understand their existing organizational psychology, and also to test/craft the messaging on any possible solution.

For example, with a cost/benefit approach, if you re-analyze the Thalidomide approval process with a proposed new framework and get the result "this drug is for morning sickness, the absolute benefit is quite small, so we should be extremely conservative", then I think you could persuade FDA people that you're not just opening the floodgates on a wild-west of drug approvals. And (I suspect) if you use Thalidomide as a case study that works well, you might win over more of the establishment.

On the other hand if the new proposal is just "approve any drug that has been approved in the EU", while I personally think that would actually work out as a net positive, it's probably not going to be a popular position with the FDA as it fails the Thalidomide test. Or similarly if you just propose blanket loosening of standards.

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I would think that in a cost benefit approach information from trials run in other countries would have some weight in the outcome. So totally excluding information from those trials would be inconsistent with cost benefit analysis. On the other hand, cost benefit analysis is both more and less than "approve anything approved by certain previously vetted foreign regulatory agencies."

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Thalidomide is a great example of the bankruptcy of the FDA's legitimating arguments. It was rejected in the U.S. based on the old safety standard--does it have dangerous side effects?--but that wax used to leverage a completely different efficacy-testing standard that has essentially no bearing on why Thalidomide was blocked in the U.S. (Added irony that of course it is now a useful drug in number of areas.)

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The rule suggested by Thalidomide is "automatically approve any drug approved in the EU but only do so *after* a short bureaucratic delay - say 2-5 years - to allow us to notice if the new drug produced any blatantly obvious negative effects on the Europeans who started taking it first."

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Re. "In these cases having a long and rigorous process where "default to no action" seems at least defensible. "First do no harm" etc." -- "First do no harm" fails the trolley problem. That's not reasoning; it's just invoking virtue ethics, which IMHO are unethical.

We should at least have a cost/benefit analysis in terms of quality-of-life and of lives saved, and the FDA doesn't do that. It never asks, "Will approving this drug save more lives than it costs?", let alone the same question for quality-of-life.

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They give lip service to cost/benefit analysis. But they clearly use those terms in a sort of subjective gestalt-y way, rather than any attempt to be truly quantitative by, for example, attempting to calculate estimated "net years of life lost" from approving or delaying a drug.

By the way (apologies if you've covered it already). But an ideal A-B test demonstrating the FDA's corruption/incompetence would be to compare it's fast track approval of Remdesivir (expensive, patented and ineffective) with its active discouragement of Ivermectin (practically free, already approved as safe, and lots of data showing efficacy).

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Or alternately: they do use cost/benefit analysis but not with lives lost. If their CBA is entirely in terms of public perception instead of public health, I imagine you'd get a system that looks a lot like the current one.

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Which suggests that getting enough people angry enough with the FDA is the only way to improve it. Probably hard to get the majority of Americans to Scott's level of frustration though!

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Probably less than majority that though "these wonderful people just need to tweak their decision making algorithm a bit" would be sufficient

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A cost benefit analysis implies the price of a drug is known but it isn't. Drug prices change usually going up over time but then going down once they go generic. (Although you can sometimes get rapid price increases in generic drugs, for example if the market is small and there's only one company that goes through the trouble of setting up manufacturing for the drug).

I think an issue missed here is what do you do with a drug whose benefit is difficult to see in the timescale of a reasonable study? A drug that stops or reverses Alzheimers would be ideal and would have no trouble sailing through a study. The reality is we know Alzheimers is a very difficult disease and most likely the best drug we are likely to get before we get to science fiction level technology (i.e. rebuilding brains with nanobots) is one that goes to work early in the process lowering symptoms or delaying the onset of the disease years, even more than a decade later.

The surrogate marker appears to be the only way to get at drugs that fit in that category if we don't want to wait 10-20 years to learn if a drug will work. Perhaps some of the angst here is that all the benefit of the drug derives to the company today and if 20 years in the future we learn the drug did absolutely nothing, well everyone's moved on.

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Drug companies are attempting to cover the costs of approving the drugs that get through the process, as well as the failed attempts. They have to cover it during the period where the successful drugs are covered by patent, because afterwards they are competing solely on price with other companies that didn't pay for that approval. It's not surprising that the price is variable and high, then falls sharply once the patent expires.

Yes you probably know this but I felt it necessary to explain it again.

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Yes, however economics says the price should be 'what the market will bear'. Think of a movie studio that has had a lot of big budget flops. When they get a hit, you don't go to the movies and discover that movie costs ten times as much "because we have to cover all the money we lost on the previous 75 Suicide Squad movies we made". It is what it is and hopefully a studio doesn't get too many duds.

This question though gets very tricky when there's no obvious market mechanism in place. With movies it's very simple. Either peopel are willing to pay ten times the ticket price or they aren't. If they are, the studio will recoup their lossses, if not the studio will eat them and hope their future movies will be more hits than Suicide Squads.

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"What the market will bear" becomes very fuzzy when you have both patents (government interference in who can make the good) and insurance markets (government interference in both who can purchase the goods and at what price, as well as the ostensible customer not knowing what the price is, let alone paying it).

Movie making has its own interference such as subsidies to make movies in certain places with certain classes of people or companies, but drug making has much more. I don't think "what the market will bear" is a useful heuristic.

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Well ultimately we as a society are willing to say we don't care when it comes to movies. If DC studios can't make a great Justice League followup because they had so many bombs investors pull the plug on them, we as a society will shrug. If you can't afford the movies because you spent all your money on vaping stuff, we shrug.

Not a call we are willing to make with life saving drugs unless we are willing to mandate insurance ala Obamacare.

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You don't need to know the cost of a drug for the FDA to do a cost benefit analysis. The cost is side effect/death vs lives saved/improved. The cost of the drug is mostly irrelevent.

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Agreed, but perhaps to flesh this out more, I think there's two cost/benefit calcs to be done.

If approval and insurance coverage were decoupled as Scott suggests, there's a cost/benefit on whether you should approve a drug at all (is it safe). Then there's another cost/benefit on whether your insurance should cover it (is it cost-effective).

When you go down this road you quickly get to "how many dollars can we afford to spend to save 1 life", QALYs, and then people in the US start shouting about death panels. But with limited resources at some point you do need to do cost/benefit to decide how to prioritize who gets the treatment that they need and who doesn't.

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For sure, the devil is in the details. But I think some variation on Scott's 5-Star system is the most straight forward. There are way too many shades of grey and evidence is shifting over time (and tons of arguments on whether or not study X was properly powered, biased, p-hacked, etc). Plus we are barely even scratching the surface on understanding how drugs work with different genetic populations.

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The FDA can say "this drug improves outcomes for people in profile 1 by 2.3 years, and people in profile 2 by 8.2 months. It raises the risk of heart attacks by 30%." And on and on. Be the clearinghouse for that, the one-stop-shop that people go to.

Deciding "is this worth paying for?" needs to be someone else's job. Maybe the numbers come out to be $100/QALY or $billion/QALY. (Maybe, *maybe*, the FDA could even come up with that number, too, but that's as far as they should go.)

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I feel this is already done by the FDA. The FDA will accept a drug with dangerous side effects if it is offset by serious potential benefits for patients with very dangerous diseases. For example, consider most chemotherapies are pretty harmful drugs but are used in cancer because the alternative is uncontrolled spread and death. If someone invented a drug that treated restless leg syndrome but had the same risk profile, I suspect it would be a hard sell to the FDA.

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that's not evidence they do cost/benefit analysis though. That's evidence that they have approved drugs with severe side-effects in some circumstances.

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Well this is from the FDA's web site:

"FDA physicians and scientists then review the drug research and the labeling information on how to use the drug. If the findings show the drug’s benefits outweigh its known risks — and that the drug can be manufactured in a way that ensures a quality product — the drug is approved and can be marketed in the U.S. The FDA will continue to monitor the drug post-approval."

https://www.drugwatch.com/fda/approval-process/

That seems to indicate they balance possible side effects against the medical benefit of the drug.

What they do NOT do is an economic analysis where they ask if the drug's net benefits are worth the current list price of the drug.

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real world evidence (as outline in this very newsletter) seems to suggest that it is not a robust cost/benefit analysis or at least not solely c/b.

FDA should not get involved in how drugs are priced - so not sure how that's even relevant.

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They may say that, but it sure seems like first they inflate the risks by several magnitudes, and only then weigh them against the benefits. Relatively miniscule risks prevent them or delay them from approving tons of drugs with proven benefits that far outweigh those risks.

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They should at least use cost-benefit analysis in determining the standards they're going to use in their approval process. And those standards are much, much too risk-averse.

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Better said, of some risks but not others. There is a probability distribution of both benefits and costs. There is a risk of not approving a highly beneficial drug and a risk of approving a drug with horrendous side effects.

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True. "Risk-averse" is a pretty meaningless term when you think about it. Though I think it's commonly understood that the phrase refers to "risk of something bad *happening*" and not "risk of something good *not happening*".

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But we should expect a better than common understanding of risk from the professionals of FDA.

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From the FDA's site:

"FDA physicians and scientists then review the drug research and the labeling information on how to use the drug. If the findings show the drug’s benefits outweigh its known risks — and that the drug can be manufactured in a way that ensures a quality product — the drug is approved and can be marketed in the U.S. The FDA will continue to monitor the drug post-approval."

The FDA does formally use cost benefit in terms of comparing the drugs benefits to drawbacks. It does NOT do a cost benefit analysis in terms of monetary terms. If you had a drug with a very minor benefit, like a mild sleep aid, but a side effect profile that looks more like strong chemotherapy, it would have a tough time getting approved.

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The other thing we need to unbundle, is drug *endorsement*, unbundling "effectiveness" from "safety". Somebody needs to be in the business of looking at the evidence and saying "yes, this drug actually is an effective treatment", because having all the doctors read all the articles in all the medical journals is not a realistic option. And Derek Lowe is too busy and we all want you to occasionally write about things other than pharmacology.

There's no harm in the FDA approving a drug about which the best that can be said is "mostly harmless", if that's all they are doing. That gives us a long list of mostly-harmless, mostly-useless drugs. And if you're going to have a government bureaucracy telling people what they can and can't do, "you can't inject dangerous stuff into other peoples' veins" is probably a good place to draw that line. If someone else is compiling and evaluating the data on efficacy and sorting everything into "wonder drug", "OK treatment", "might help if nothing else does", and "placebo" categories in a readily accessible way, then we get the outcome we want. But if nobody else is doing that, then doctors and patients and insurance companies are all going to look to FDA approval for that.

And that either gets us lots of prescriptions for mostly-harmless, mostly-useless, $50,000 snake oil, or it gets us prohibitions on putting fish oil in IV nutrient for infants.

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These are slightly unbundled, in that doctors can prescribe drugs off-label, if FDA has approved them for some other disease. Before 1962, they were much more unbundled. FDA's focus was safety and purity and drug innovation was more robust, as Charles Hooper and David Henderson showed last year. https://twitter.com/regardthefrost/status/1322681972628443137?s=20

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Someone had a good rebuttal to this in a previous comments section to the effect of "look at the side effects of cisplatin and tell me that drug is 'safe'". Most drugs are unsafe, to the extent that you would not want to eat them for no reason. Risk/benefit is the only way to look at drugs.

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What that rebuttal tells me is that the safety rating should not be a boolean. Ok, what about a 5-star side effect rating, which we can then compare with the drug's effectiveness rating, and perhaps the severity of the condition? You can still prescribe based on risk/benefit, but measuring and certifying risk and benefit separately looks like a huge improvement over what we currently have.

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It looks to me that the bigger problem is lack of urgency. The FDA doesn't factor in that taking time to decide something kills people. Unbundling risk and benefit means now you have two offices you have to wait for.

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Yes, all these ideas would help. Unfortunately, any healthcare reform efforts immediately get stuck in the fetid mire of U.S. Politics.

(I've written my perspective on aducanumab here: https://denovo.substack.com/p/a-travesty-at-the-fda It's particularly infuriating when compared to the non-approval of COVID vaccines.)

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I have had this exact conversation with my Congressional representative -- that as long as "this drug is safe enough to sometimes try to use" and "this drug is so effective it is a crime for health insurance not to cover it" are conflated, the health care system will both waste tons of money and needlessly delay drugs.

I'm not at all confident anyone will do anything about it. The Democratic majority in the house appears less interested in legislating and more interested in organizing protests. And the Republicans are even less interested in fixing anything with the American health care system.

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I think the lawsuit happy legal environment in the US should get a lot of blame for this also. There are many useless and wasteful things that I have to do in medicine mostly because of the fear of getting sued. I believe many guidelines are developed with this as a background threat also and tend to trigger too many follow-up tests and exams.

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Do you think there's something to learn from the EU? IIRC Tabarrok has been banging the drum for reciprocity in regulatory approval for years. Not that any of this matters unless and until Congress becomes capable of writing and passing legislation again.

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I agree with Tabarrok on basically everything. I haven't read all his stuff, but I didn't think he thought the EU was necessarily better than us - I thought he just felt like we should have reciprocity with them to give two chances for approval instead of just one. I agree with this.

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Also, it means that a pharma company only has to pay a billion dollars to get a drug on the market, rather than a billion on FDA approval and another billion on EMA approval (IIRC, it actually works out more like 800m on trials and 200m on FDA bureaucracy and 200m on EMA bureaucracy, so 1.2bn, but still).

What benefit does it gather for a different bunch of bureaucrats to assess the same evidence to essentially the same standards.

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It is so stupid that we have to run trials in the US for US approval and in Europe for European approval. If the rest of the world was like that there just wouldn’t be any medication for 80% of the worlds population. That’s also how you get into the situation that we still can’t have access to the AZ vaccine here

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And Japan, and Brazil, and ...

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Yeah Japan is usually also that way but I have seen them ok something before where it wasn’t really a Japanese trial and you can also get away with a global trial with just 1 site in Japan. Usually we ignore everything besides us, eu, and Japan

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Is this just protectionism? Want to access our markets? Then you have to subsidize our biomedical research infrastructure.

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Probably not pure protectionism as many countries have independent approval processes without a homegrown pharmaceutical industry.

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This reads as if it is informed by conversations with CDC personnel and not with conversations with FDA personnel, or just based on a bunch of third-hand reporting. FWIW, the real issue here was Trump/Bannon's dismantling of the Global Health Security and Biodefense unit in the National Security Council, which was responsible for pandemic preparedness. In my opinion, you needed someone at that level to bang heads together as between CDC and FDA, and to get the President to make a decision. The rest of the piece is interesting, occasionally useful, but quite misinformed.

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Better, more informed, and accurate criticism, please.

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That's really not helpful, either for the discussion generally or for making your argument look sound. You are acting like you have a hammer, and so everything must be a nail.

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You might want to be a bit more specific there. This isn't Twitter - you can use full sentences, and in this crowd you should.

I genuinely have no idea what you're objecting to, other than the fact that he's on the other side of the issue from you.

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Thanks--that's a totally fair comment, and very helpful. I'll respond now to the bits that set me off, and I may respond more fully later to the inferrable content in the one sentence I found meaningful.

trebuchet's way off-base "restatement" of what I was saying _is_ lousy criticism. It's not even in the same ballpark. It's entirely fair for me to refer to that and ask for better criticism than that. If you don't see the difference between what Trebuchet said and what I said, let me know, and I'll try to clarify.

And then there's the "orange man" reference. That is entirely irrelevant to the argument I was making. It's the kind of statement I've seen before from those on the right who erroneously suggest that I'm making ad hominem arguments when I am not.

So that leaves one sentence, which assumes its erroneous conclusion. FDA didn't feel "compelled to prevent highly qualified doctors and scientists from testing for a deadly virus"-that was the outcome of what could be described as a turf wat between FDA and CDC. There are, arguably, any number of things that are wrong with the FDA. Most of them are "fundamentally" caused not by FDA, but rather by a dysfunctional Congress since about 1994.

So I hope that helps you see why I'm asking for better criticism. with the exception of the "deeply and fundamentally wrong" point, the rest seems to me to be pretty easily recognizable.

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I can see why you don't feel like his summary accurately represents your view, but I can also see why he thinks it does. And since I lean more to his view, I'll elaborate a bit.

Basically, the FDA and CDC are medical agencies who work in this space - the CDC ought to *be* the pandemic preparedness agency, not need an external one, and the FDA ought to have programs in place for expedited approval in emergency situations. Some small(at least, by comparison) coordinating office ought not to be required for them to have done those things. If the lack of a National Security Council unit was the deciding factor here, the CDC/FDA pair were incompetent to begin with. And likely, incompetent to the point where the NSC couldn't realistically help the situation much.

Re "orange man", you specifically named Trump and Bannon in your first comment, and said that their action was "the real issue here". That makes it seem like issues with Trump were a big part of your concern. And, per my last paragraph, I have difficulty seeing how this decision had any effect on the things we're taking the FDA to task for. It could plausibly have saved a day or two in January by monitoring the world situation, but that doesn't seem to have much to do with which test kits get approved or banned.

Re the turf war thing, wasn't the whole issue that the FDA trusted the CDC so blindly that they banned everyone else? That sounds like the exact opposite of a turf war to me.

Re the dysfunctional Congress, that'd be a better explanation if these issues were only post-1994. I wasn't paying much attention to politics before that, but my understanding is that these issues predate that by decades.

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Thanks! There are too many "oughts" and "seem like" and "likely" "makes it seem" for me to really want to respond here. Those all represent your assumptions about the way the world _should_ be. Your "oughts" weren't the facts on the ground at the time, or even now, so the points you make based on those assumptions are hypothetical, to me. Same point with your likely--it's pretty much assuming your conclusion. Issues with Trump qua Trump? I don't care. Issues about Trump making many appointments to HHS (writ large, not just the mothership) that I thought were pretty bad? I care about that a lot.

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How did Trump's decisions affect anything outside the two-ish paragraphs about COVID testing? In fact, how did Trump's dismissal of a different branch of government cause the FDA to ban COVID testing?

I agree that many bad things happened to screw up a potential US test-and-trace program, and Trump's decisions were among them. But I also think that we could have recovered (maybe not completely, but at least partly) from our government's bad decisions if labs/universities/hospitals etc had been allowed to take up some of the slack, and that the FDA's ban on that was genuinely really bad.

I think "Trump knocked the US response down" and "...and then the FDA prevented it from getting up" are perfectly compatible.

As for the rest of the piece being misinformed, if you're going to accuse me of that I've got to insist that you be more specific.

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FDA didn't ban COVID testing; it restricted it to CDC's tests, which were problematic, to say the least. FDA "prevented it from getting back up" because of miscommunication and miscoordination between FDA and CDC-FDA thought CDC had a functioning test. That miscommunication and miscoordination would have been resolved by a functioning Global Health Security and Biodefense unit in the NSC-think of this aspect of it as the semi-circular canals of pandemic response: "Hey, our center of gravity is way misaligned here-better straighten up, or we're going to fall over."

You have a good point about "misinformed" regarding the rest of the piece; I apologize for me poor wording-my judgment was influenced by your writing about the testing. A better choice would have been "unrealistic", as I think you largely acknowledged. The outcomes you're calling for might be improvement (ignoring significant potential unintended consequences), but unless you're willing to even sketch out a realistic path to achieve them, I think "unrealistic" is a fair description.

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No, the FDA stopped private labs from offering in lab covid tests, and dragged its feet on approval. To be absolutely clear, the FDA act doesn't govern lab-developed tests the same way in ordinary times. They acted in a way that made the problem worse, illegally.

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aren't you evading my point about why FDA did that.

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The FDA did not have to exceed what the black letter law says about regulating labs only to get slapped down in courts months late. The FDA did not need to mandate labs validate tests with samples they couldn't get. Even given CDC had a working test, there is no harm in letting Quest run its own tests as well.

Responsibility for the FDA's actions lies in the people who took them. The idea that the FDA needs adult supervision to do its job only underscores the need to sack everyone in that building. Responsibility for not correcting those actions lies with the HHS secretary and ultimately the President.

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It's not about "adult supervision"; it's about turf wars between different agencies, and you need someone with authority to settle those disputes. "sack everyone in the building"-you do know that 18,000+ people work for FDA across the US and overseas, right? You're right about responsibility being with the HHS Secretary (who normally doesn't coordinate these kinds of disputes) and ultimately the President, but you're at least partly wrong about the nature of the problem.

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The FDA did that for the same reason that they do most things - they're professional paranoids, and live in a dream world where everything they touch is secretly thalidomide in a trenchcoat.

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And you wrote that because you’re ignorant of the FDA.

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Lmao so true

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"FDA didn't ban COVID testing; it restricted it to CDC's tests." This is a non-sensical statement that does not address Scott's point, or any of the reporting on this subject. No one thinks that the FDA issued a statement saying, "NO ONE IN THE UNITED STATES SHALL TEST FOR COVID!" That would be absurd. We know they're not mustache-twirling villains. What people think happened, and what this article alleges, is that the FDA only allowed a type of testing which didn't really exist, which you admit when you say "The FDA restricted testing to the CDC's tests." Everyone outside of the FDA was aware that there was no viable testing apparatus being provided by the CDC, so why was the FDA forced to pretend there was one until and unless Trump stepped in?

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"So when I talk about unbundling FDA approval, I mean that instead of the FDA approving the following bundle of things…

It’s legal for doctors to prescribe a drug

It is mandatory for insurances to cover a drug.

…the FDA can say one of those two things, but not the other."

FDA has no authority over insurance companies.

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My understanding is that it's not a black-letter law they have to follow. Instead, it's precedent - if it's FDA approved, and someone kvetches at them for not covering it, the kvetcher usually wins the ensuing lawsuit. Or at least the PR battle.

This does, of course, make it somewhat harder to fix.

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HMOs were extremely effective at keeping costs down by saying "no, that's not worth it." They gradually lost the ability to say "no" by lawsuit after lawsuit.

The history of radical chemotherapy should be instructive here.

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A quote from a piece on Politico which was entirely sympathetic to the FDA (https://www.politico.com/news/2021/01/19/fda-trump-pressure-coronavirus-vaccine-460402):

<quote>

The coronavirus pandemic revealed a “clash of cultures” between the White House pressing for faster progress on vaccines and treatments and the Food and Drug Administration’s efforts to stick to the science, outgoing Commissioner Stephen Hahn told POLITICO.

“I heard loud and clear from the White House — President Trump and others — that they wanted FDA to move faster,” Hahn said in an interview Tuesday, less than 24 hours before President-elect Joe Biden is scheduled to take office.

...

“With time, particularly over mid- to last summer and then into fall, there was a substantial amount of pressure,” said Hahn, who took the helm at FDA a little over a year ago.

</quote>

The Trump administration pressured the FDA to move faster on vaccines throughout the epidemic. This caused the entire US media to align itself with the FDA, and literally every article I've seen on the topic presented the FDA's foot-dragging as standing up for science and rigor in the face of Trump's lunacy. If not for that, this new Atlantic piece would likely never have been published.

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Scott cited the investigative journalism done by the NYT so you know what informed his writing. What part of their characterization of COVID testing mismanagement do you think are misinformed?

The FDA acted like most government agencies at any level - not with malice or hatred but bumbling ambivalence. The solution to that isn’t adding more bureaucrats to “bang heads together”. The solution involves evaluating and changing the incentives of the stakeholders.

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That's a misinterpretation of the one article I looked at. How about you provide a specific link to the specific article and quote the text you think establishes this?

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Nah, Dude. That’s on you.

You made the claim that his post was informed by “a bunch of third-hand reporting”. So “how about” you read more than one of the articles linked if you’re going to imply the source material was too biased for the post to have any use?

Then you’ll find the article about Helen Chu’s kafkaesque tale of fighting with CDC/FDA/IDGAF bureaucrats to do the right/best/sane thing.

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I read one; Scott misinterpreted it, and you expect me to read the rest? Please.

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Let's start by asking this - which article, and what was the misinterpretation?

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Great question! I will get back to you on this.

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Agreed. And then The GodfatherBaritone should do the same.

So many people on line make some sweeping statement about some article they read, and then refuse to be more specific when asked.

I don’t know how much time I’ve wasted trying to find those articles, and coming up blank, but I’m sick of trying.

This is SSC/ACX, and we have a higher standard of discourse here.

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Can you explain in detail what happened, and what people and processes and organizations really caused this? You sound like you know a lot, and are understandably upset at people assuming things, and I’d really like to learn more of what you know here + links to good and long articles to read if you know any.

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I second this

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Subject to confidentiality and huge current demands on my time, I will, when I can.

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Seconding bored-anon's request. You sound like you know a lot, I'm interested to learn from you.

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That unit was one person that does nothing but chairs meetings of the interagency that go on anyway and then writes a summary of conclusions that people yell about and occasionally makes a read book for their boss if they care. Its not some far reaching unit of people who actually do things, its normally like one person from the CDC or DHS or State on rotation for a year who just does their job in a cube at EEOB instead of their agency HQ. Do you have any idea how the NSC actually works?

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I do, at least a bit. That "unit" was a directorate, with permanent staff, prior to the dismantling under Trump/Bolton. Just to be clear, I'm talking about the National Security Council Directorate for Global Health Security and Biodefense, which was headed by Rear Adm. Timothy Ziemer, who reported to the NSA. What are you talking about?

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Was his reporting to the NSA on the offensive or defensive side of cyber warfare, or on some other part of the NSA's portfolio? What does "Global Health Security" have to do with US-internal review and approval of diagnostic tests, given that the rest of the world had plenty of perfectly functional tests for the same disease? How much actual authority do you think that "Directorate" had in less than two years of existence?

You are stretching really, really hard to find some way to blame the CDC and FDA screwups on COVID-19 diagnostics on Trump's White House, and you have yet to show any defensible link between the two.

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The three people in the NSC, two of which were simply moved to the counterproliferation and biodefense directorate in the NSC, still working on pandemic response after the re-org, had approximately zero effect on pandemic preparedness. They didn't direct the CDC or the FDA or anything, they wrote and discussed reports about pandemic preparedness to help keep the NSC keep informed.

See also https://www.washingtonpost.com/opinions/2020/03/16/no-white-house-didnt-dissolve-its-pandemic-response-office/, plus numerous fact checks from various organizations about the elimination claim.

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Yeah, I've read that WP article, and many others. What you're saying is entirely accurate and entirely irrelevant; I was responding to what Mike I said about the Directorate. And you don't address the elimination of the Director position. I mean, they don't put Rear Admirals in positions just because they like the pretty shoulder boards (well, usually.....)

To be more explicit: it would have been Ziemer's role to sound the alarm to the NSA who should have passed it along to the President ("Hey! We don't have tests! Here's why and what we should do about it!"), and to convene a Cabinet-level meeting, etc. So this isn't about "pandemic preparedness", this is about the stature of the Directorate and its ability to get Cabinet-level and Presidential action.

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Why would they be better at that than the CDC/FDA heads? There's literally over 200 people of Rear Admiral rank or higher in the USN(https://officerassignments.com/vice-admiral-vs-rear-admiral/#:~:text=In%202015%2C%20the%20United%20States,35%20Vice%20Admirals), and probably close to a thousand of equivalent rank in the whole military. It's not like any President was likely to know the guy by name. Ziemer > O'Brien > Trump isn't any faster than Hahn > Azar > Trump. (That path would be faster on a scale of minutes, but covid isn't an ICBM, and doesn't operate on that time scale.)

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that department still exists - trying to blame crappy COVID response on minor org reshuffling is misleading at best. And claiming that a government bureaucracy that has never faced a true test would have made all the difference is rather far fetched.

https://www.washingtonpost.com/politics/2020/03/20/was-white-house-office-global-pandemics-eliminated/

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"People are really scared of this solution, because it introduces choice into this system. If you say that insurance companies are allowed to cover a certain drug, but not forced to do so, then different insurances will cover different drugs, and you’ll have the usual capitalism / free market thing."

Unfortunately, you will not. There was a SSC article (or many) covering exactly this. Most health insurance is through employers, and there is often no real choice at all (choose between Plan A or Plan B with minimal differences). Even when there is real choice, it's rarely of the meaningful I'll-take-a-no-aducanumab-plan-for-$100-less-a-month variety - instead, usually it's high-deductible vs low for the same services. And even when there's real choice, it is borderline impossible for anyone to learn enough about the differences to make an informed choice, let alone a rational one comparing risk-adjusted costs and benefits.

Theoretically, sure. But in practice, captitalism/free market choice effects is not how (private, US) health insurance works. SSC has covered this quandary perhaps better than anyone else, so it's odd that this paragraph would be included with a disclaimer or footnote or something.

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> Most health insurance is through employers, and there is often no real choice at all

Isn't that also because the law doesn't allow them to offer choice?

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Yes, but I don’t think it would make a difference. If you’re a company benefits administrator, would you rather deal with one insurance company or 10? Would you get a better price if you had 100% of your employees on one plan or 10% on each of 10 plans? And aside from the few candidates that have a specific rare health problem and need a specific thing to be covered, I don’t think you’d see any real recruiting benefit from offering more choice.

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They wouldn't need 10 insurance companies, just different plans from one company.

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Employees looking for a job ask "Who is your insurance carrier?" and almost never ask "and can you give me the Summary of Benefits and Charges?" I've never known a single employee to ask about the actual list of benefits and charges, which is hundreds of pages long and covers thousands of treatments that you and I have never heard of and will never need. Even if they asked and read them in detail, it would be impossible for anyone to make a truly informed decision about which plan really fits them best. They'll maybe have some family history and take the plan that covers cancers better or something, but that's rare and still unpredictable. Maybe they got the wrong kind of cancer, or got heart disease, or maybe never have a major medical issue. People tend to work at the same company for periods of time in which their health care needs change.

Benefits managers are highly incentivized on costs, and get mostly noise and gibberish otherwise.

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In my professional life, I've had no problem getting a detailed list of benefit from HR. "My wife needs to see it," I say, and it gets coughed up pretty fast, because it's not like it's a secret or anything.

(And my wife *does* read it and says "this is good" or "this is crap.")

But we have Bronze / Silver / Gold that got established through Obamacare, and those mean something, right?

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Those things certainly exist, and I don't doubt that some people have looked at them in detail. As I mentioned, some people know of family history that would make certain types of testing and treatment more important for them. From the perspective of a benefits manager, trying to determine which plan to use, there just aren't enough people doing that to move a company towards or away from plans based on the specifics of coverage. Maybe at a very small company, a voice or two could probably reach the manager and shift attention.

Bronze/Silver/Gold are actuarial differences, and don't really tell you whether "Procedure X" is covered or not. Obamacare actually got rid of a lot of the variations in what is covered, so that plans are far more standardized now than before.

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I don't think so. It's been a while now, but I don't remember this changing materially before and after the ACA. The only things I really noticed were the lifetime limit disappearing and checkups becoming free. The amount of choice either within a provider or between the two providers my work offered didn't change in other ways that I found noticeable.

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Is the concept of “choice” coherent in health insurance? How can one choose a plan that may or may not cover a future illness that may or may not be treated by an as-yet-unapproved drug? The attempt to impose free market concepts to healthcare is fraught from first principles - everything isn’t a widget.

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Then why does it work so well in veterinary medicine?

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Or cosmetic surgery. Boob and nose jobs are almost never covered by insurance, and yet there is a thriving competitive free market in them.

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That's true. I want to say that employers exercising choice is better than nothing, but I guess the "employers will only select good insurances because they want to attract workers to work there" incentive chain is so tenuous as to be almost nonexistent.

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But is that a circular problem? It seems tenuous today because insurance companies are undifferentiated in what they cover, because the law mandates it be so. If it didn't then insurance companies might start trying to build brands on only covering the right things, and that would feed through to employer policies. It might also incentivize the unbundling of health insurance from employment, which is not inherent to the insurance/regulation model but just a historical quirk of the US market.

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But the problem is if some cute kid or sympatric adult is dying of some disease their insurance won't cover the public will insist it be covered. We sure as hell won't say, "Well, you decided to save $100/month buying the insurance that clearly stated on page 543 of the contract that they don't cover that specific treatment for that rare cancer so too bad."

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It's a problem for sure. Health insurances can cover a lot of things that aren't exotic cancers though. In Switzerland a lot of policies famously cover massages. Note: not expert medical massages for people with exotic muscle problems. Massages in general, for anyone. That sort of "lifestyle health care" is where they can differentiate.

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Isn't massage coverage pretty common? Here in Canada a typical employee benefits package might be dental, life/AD+D insurance, prescription drugs, and 'extended health' (massage, physio, counseling, chiropractic, etc.) and providers compete on the specifics of coverage limits, which brand-name drugs to cover vs. generics, co-pay percentages, that sort of thing.

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... and federal civil servants complain about their conspicuous lack of massage coverage compared to every private employer anywhere. Their package is pretty good otherwise though.

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The incentives between insurance companies and employers offering insurance is to be very streamlined to what people tend to want over the timeframe the employer considers relevant. That means weird treatments that cost a lot of money and help few to no people are out. Standard fare regimen treatments for conditions like diabetes and high blood pressure are covered well. Rare items might be covered as well, if they are common enough and treatment is predictable enough to cost it out (think breast cancer or open heart surgery, but not weird diseases nobody has ever heard about).

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Disagree. Those ones are cheap to cover, because they're so rare, and people raise a stink when they get Unheardof's Syndrome and find out it's not covered. It's just that a lot of those niche diseases have extremely expensive treatments, because there's so few patients to amortize development/approval costs over, and those extreme costs per patient are what drive insurers away.

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Rare diseases are an easy cut for insurance companies, because hardly anyone ever complains BEFORE they have the disease, and if they complain after the company has saved millions of dollars in claims by not covering it. That is, if they're allowed to cut them piecemeal. Sure, 200 people across the country may get screwed when they contract the disease, but most people will go on never having heard of it and not complaining about it.

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The problem with this is that the "if it didn't" was recent, and we didn't see that kind of thing. At least, not to my recollection. Other over 40s, anyone remember this differently?

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Insurances will at least be able to lower their prices? That might be good

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>Most health insurance is through employers

I mean, to be fair, "we need X" and "the ideal is Y (which depends on X)" aren't really contradictory. X in this case is "abolishing employer-based health insurance".

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I used to sell group health insurance. There's definitely some differences in which insurers and which plans cover what. And if a wider variety of coverage levels were legal, you'd likely see more choice.

It'd be trivial for insurance companies to offer policies that cover the 2*, 3*, 4*, or 5* formularies, and also fairly easy to explain. And even that very simple level of choice would help a lot with cost control. If you want more choice than that, you'd probably have some intermediate formularies that get assembled by some big prominent medical association to split some of the differences.

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Making what a policy covers more legible, would be a good idea anyway.

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"Consider the police..."

The police also face incentives to be lax when they should be strict and vice-versa. A crazy guy might fight back - better stay away and not get hurt. And someone making money might have stuff worth seizing through civil asset forfeiture.

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And if the crazy guy *does* answer the door and *does* attack them and they *do* shoot him, every piece of news media from here to Mars will have articles on how they should just have talked him down, or let a social worker handle it or something, instead of murdering in cold blood a poor sick man who had done nothing wrong. I can see why they'd decide "well, we tried knocking, nobody home, let's not kick the hornet's nest" and then leave.

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This is somewhat off-topic but Scott's regard about the police seeming omnicompetent compared to the FDA made me think of my own changing views on them. During the GWB administration I would have told anyone that the police are simply the largest organized criminal gang in any city, who commit crimes all the time with impunity. Importantly, crime had been going down for most of my lifetime. Since 2014 and 2020 I have learned what happens when the dominant gang steps back and lots of little gangs are unrestricted enough to shoot each other up and probably not get caught.

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I think the most direct and simple, if incomplete, example of this is to compare how many police kill with how many they arrest. There's a lot of rhetoric about how police go around killing whoever they want whenever they want, but they arrest around 10,000,000 people a year, and only 1000 end up dead. Given that their job is literally to forcibly control people, I think this is not that dangerous a ratio.

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And somewhere over 900 of them turn out to have been armed.

That said, it's still a pretty bad ratio compared to police elsewhere. Per capita, US police kill at least an order of magnitude more than most other developed countries. Some of that can be chalked up to the American public (much more likely to be armed, and often less fond of compliance with authority in general), but not all. There's some real issues in American policing practice.

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>And somewhere over 900 of them turn out to have been armed.

In America you have a near absolute right to be armed. That doesn't excuse the cops shooting you.

The police in America have a conception of themselves as being uniquely endangered (they aren't in the top 10) and as therefore being uniquely justified in doing whatever is necessary to come home ("better to be judged by twelve than carried by six"). This culture leads to a lot of preventable deaths.

I also happen to think that our gun culture does that as well, but I don't think the armed thing should be a qualifying excuse. Especially since most of those guys vote for the political side that brought us lax gun laws over the last generation or so.

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1000 a year is not "a lot" of preventable deaths.

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Sure, I mention being armed mostly to counter one common narrative. (Though of course, a right to be armed is not a right to threaten or attack people, and many of the armed deceased were doing exactly that. Ma'Khia Bryant is an obvious recent example here.)

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There are other developed countries with high rates of gun ownership, but without people actually shooting each other nearly as often. And there are places like Russia where the rate of gun ownership is low (if you can believe the official numbers) but people still shoot each other a lot. The homicide rate is going to be a better predictor of whether the cops themselves are trigger-happy.

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How many people do they kill per capita compared to how many more arrests and crimes there are?

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Per capita, the US has a lot more criminals that most other developed countries. What matters w/re police killings of innocent(*) people is, what is the probability that someone the police approach with the intent of e.g. issuing a jaywalking citation, will turn out to be a drug dealer or whatnot who thinks the cops are coming to bust him for a felony? The higher that probability, the more rational it is for police to rationally approach jaywalkers with a hair-trigger "but this guy might resist arrest with the vigor and violence of someone trying to escape years in prison" response, and the higher the risk of false positives.

* Mostly meaning "guilty but of petty crimes that nobody would imagine shooting someone over", which is of no moral but some practical significance.

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You say that, and then my hand aches again. The police abuse people in a lot more ways then just shooting them dead.

And the real problem is not that occasionally one does so. People go bad sometimes. The real problem but then all the other cops were "looking the other way", or close ranks around them. So, yes, All Cops. Maybe All Cops don't break people's hands in roid rage lulze, but All Cops know those who do, and they "look the other way". All Cops.

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This is a pointless appeal to emotion, akin to to sayin you got bad symptoms from the covid-19 vaccine and therefore the vaccines are bad. No one cares about what some random bad cop did to you anymore than you would change your opinion about cops because you heard an officer went above and beyond the call of duty to save someone from being raped.

The obvious and correct response to there being police officers who do bad things is to record video, prosecute, and otherwise get rid of those officers. It is not to abolish the police. There are also plenty of policy changes that are not abolishing the police or chanting ACAB, like eliminating civil forfeiture, that would make the police better even if they wouldn't salve your emotions.

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If you read the second paragraph of Mark's comment, you'll see that his primary complain is not that an individual officer was abusive but that instead of "record[ing] video, prosecut[ing], and otherwise get[ting] rid of those officers", "all the other cops were "looking the other way"". I agree that the fix is not "no bad cops ever", that's fantasy land, but when the current system is actively opposed to prosecuting and firing bad actors then they do assume culpability even if they aren't themselves actively bad. Police unions are a huge part of the problem here, from what I've read

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You cannot overstate the degree to which the culture of the FDA was shaped by the Frances Kelsey/thalidomide experience.

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Pretty much true, but partial, if I'm understanding you correctly. An equally big issue IMHO these days is the level of political oversight from Capitol Hill, and lack of resources from the Assistant Director level on down.

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This is a good, fair, and understated post from Scott. If anything should be hit harder, it is this point about the public choice aspects of the FDA incentives. Amidst a very long description of how things go wrong, there are two paragraphs that identify a primary root cause of FDA dysfunction, those two about social trust as a limited resource being held hostage to the stupidest person. This could use the same level of exploration. It could even keep the parallels with police, who have similar bad incentives that lead to erring on the wrong side as described.

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It's a good explanation of where the institutional scarring came from, but fighting the last war isn't an acceptable level of performance.

I thought Scott (or Zvi?) wrote an article specifically on the subject, but I can't find it at the moment. I'm not up to re-generating it myself, but the gist was that in order for the FDA's LESS/MORE lever position to be justified on those grounds, it would need to be demonstrably catching something at least as bad as thalidomide multiple times per decade - not merely denying approval of obviously harmful things, but outperforming comparable approval agencies that let something hazardous through.

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Fighting the last war is what the Federal Reserve does, and they're considered one of the best functioning parts of the government.

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Yeah, but it helps that their battle is always largely the same.

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No, that's part of the problem. When it was initially founded, the Fed initially caused a very large amount of inflation (WW1 also played a big role). They then decided the stock market was booming too much and decided to pop the bubble, and persistently denied any responsibility for the Great Depression (Bernanke would later say that Friedman was right about the Fed's responsibility, although they differed on a credit vs money contraction being the issue), but FDR devalued the dollar without any of their input and him arbitrarily picking lucky numbers when he felt like it worked better for the problem they were facing (although they still increased reserve requirements to make things worse prior to the depression ending). After WW2 the dominant Neo-Keynesian view among policymakers was that demand needed to be boosted to avoid unemployment and inflation was a relatively minor concern in comparison. Milton Friedman predicted that the relationship between unemployment & inflation would break down, and indeed it did while mainstream economists tried to attribute inflation to factors other than the money supply. Eventually stagflation was an obvious enough problem that Volker/Reagan "broke the back" of inflation and managed to have a decent economy afterward rather than a prolonged slump (the supply-siders played a role there, in an instance where Friedman was wrong). So afterward fighting inflation was the Fed's focus and in 2008 they saw oil prices inching up and decided to contract the economy at the same time it was facing headwinds and again refused to recognize their responsibility. Bernanke's attempt to stop things involved paying interest on excess reserves, a contractionary measure, because he could head off inflation while merely boosting credit enough to save the economy. Now that the Fed is finally coming around to not being terrified of exceeding the 2% inflation target in a single year, you should expect that in an number of decades they'll make the opposite error AGAIN.

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Fair, I was being a bit simplistic.

Their goals have been the same throughout, as have the underlying laws of economics. Their tactics have ranged from pretty good to pretty bad over that time. However, because they're always dealing with the same issues, they've generally learned from past failures and improved themselves over time. It's not as easy for most other government agencies.

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I agree with this, as an instrumental matter the Fed is much more capable than it was in the 1970s. Brad DeLong has beaten the drum for years about the incompetence of Arthur Burns and in particular, how Nixon had him wrapped around his finger. Unfortunately, competent monetary policy is necessary but not sufficient for a healthy economy.

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I don't think their "goal" has been the same throughout. They typically ignore one half of the dual-mandate while focusing on the other.

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"Eventually stagflation was an obvious enough problem that Volker/Reagan "broke the back" of inflation and managed to have a decent economy afterward rather than a prolonged slump..."

I've been working under the theory that a cost-push stagflation cycle is not possible in the current configuration of the economy because what breaking the back of inflation consisted of was not just the Fed raising the prime rate above 20% but also breaking organized labor. If labor is not capable of demanding higher wages in response to a decline in the purchasing power of a dollar, then how does the feedback cycle close?

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Most of the setbacks suffered by organized labor were too late in the process to be likely candidates for causes. Reagan's mass firing of ATCs was August 5, 1981 (and that's often seen as the first real blow against labor, though in fairness I wasn't alive at the time and I'm just getting this from recollections.)

Inflation peaked at 14.8% in March 1980, and was at 10.8% in August 1981. It was below 9% by the end of the year, and below 4% by the end of the next year. (https://www.usinflationcalculator.com/inflation/historical-inflation-rates/) If unions were a major cause, the causal process would likely be contract renegotiations where the unions got worse deals, the annual wage growth slowed down, and then those savings were passed on to consumers. That's too slow to be fixing things that fast - unions were never a majority of the economy, contract negotiations don't happen instantly or constantly, and lower annual raises don't move that quickly either.

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The cost-push theory was just wrong. It was all monetary policy. When Venezuela or Zimbabwe print lots of money, it doesn't matter if they repress independent labor unions or not.

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If you unbundle allowing doctors to prescribe medicines and mandating insurance coverage, then I see no reason to think a free market will suddenly emerge in the health insurance industry. Changes to FDA procedure would really demand simultaneous changes to health insurance law and tort reform for doctors and probably some other things as well. It sounds like a recipe for a gargantuan bill that will attract special interests for pork and lots of controversy and probably still have negative unintended side effects. In other words, the FDA is totally overdue for reform and I would take 10-to-1 odds it doesn't happen in the next 10 years.

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There would definitely need to be further regulatory changes. Many of the necessary market responses are in fact illegal under current law.

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Wait a minute there, Scott. Just because the FDA approves a drug, it doesn't mean private insurance companies legally have to reimburse me for the drug. I'm a Type I diabetic, and every year or so, my insurance company UHC (United Hellish Care) changes up the types of insulins they'll reimburse me for. Since they also have a large retail pharmacy under their wing, [sub]Optum[al]-Rx, I'm sure they're negotiating with the various insulin producers for the best deal. But that means that on short notice I'm given some new insulin which I have to figure out how to recalibrate my regimen around. It's a real pain in the subcutaneous ass tissue.

Or do insurance companies have to cover meds in certain categories, but they're allowed to the select or reject the meds form each category as long as they cover one of them? However, to my mind the effectiveness of meds within those categories seems to be pretty broad. Just sayin...

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author

I am super not a lawyer, but I think what happens is that insurances can declare some drugs to be not on their formulary, but if a doctor makes a case that the patient needs that drug anyway, they have to respond to the case, and if their response isn't good enough, they can get sued for not providing it.

The usual response is "we cover this other much cheaper drug for the same indication, you should just try that one". I expect this is what UHC does with your insulins. There actually are a few other Alzheimers drugs, which somehow haven't made it into this conversation, but those ones also don't really work. I think the main situation where insurances would have to cover this is if a doctor tried the other 3ish Alzheimers drugs, none of them worked (as in fact they will not), and then asked the insurance company to cover this one. I don't think "we don't believe this works, even though the FDA says it does" would go over very well as an excuse.

I'm not a lawyer and this is based entirely on a few articles I've read plus the fights I have gotten into with insurance company representatives.

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My experience with insurance companies (employer side) is that you are correct. They make the doctors jump through hoops trying all the generics and cheaper versions. If the doctor is persistent enough, they can eventually call the $50,000 drug "medically necessary" with a paper trail showing all the other drugs failed to work. Insurance companies often refuse to cover the expensive drugs up front, if there are alternatives available.

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I mean that does sound like the free market at work. Have insulin prices dropped?

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Forty years ago, insulins were not prescription drugs. I remember purchasing insulin and syringes over the counter. Of course, they were not very sophisticated insulins: Regular, Lente, and NPH. They sold for about $10/bottle. In today's money that would be about $22/bottle. And they were just transitioning from insulins rendered from the pancreatic beta cells slaughtered animals to the new process of making it with genetically modified yeast. And we were told that this would make insulin cheaper for the consumer, plus with the miracle of gene splicing we'd newer types of faster acting and newer extra slow acting insulins. The second prediction came to pass, but the first prediction never came true.

The Pharma companies saw these new insulins as a cash cow. From what I understand, they were probably only making 20 percent margin on the old animal insulins, so I would guess it cost them about $7 or $8 to manufacture a $10 bottle of insulin. The yeast production method made the production much cheaper. I've never seen any figures but considering that after a probably substantial upfront investment in the yeast growing tanks and the refining equipment, these plants can run continuously. I'd be willing to bet that once the costs plants were amortized over a 4 year, it cost big pharma about $2 to manufacture 1cc vial of insulin. But the savings were NOT passed along to consumers.

I don't know whose regulatory arms they twisted but big Pharma made the new insulins Rx-only. And they've been steadily raising the prices over the past 30 years. My fast-acting Humolog costs about $250/1cc vial, and it will provide me enough insulin for about 12 days.The new super long acting insulins sell for $350/1cc vial. Because I use less, one of those vials will last almost a month.

I used to purchase insulins from my local pharmacy, but United Hellish Care evidently stopped reimbursing the small independents enough for them to recoup their costs. Suddenly my friendly neighborhood pharmacist who I had used for 20 years started looking stressed and worried whenever I refilled my Rx's. I didn't know what was going on, until the trainee sales clerk handed my vials with a sticky note on them, and in a tight little scrawl: "Pham, what are we going to do about this?! We're losing money on this Rx!" The scales fell from my eyes. I spoke to the owner, and we had a heart to heart. He admitted that he was running a business and that they were losing money on selling me insulin. I felt bad for him. And outraged at the same time.

Meanwhile UHC was urging me to use their OptumRx mail-order pharmacy. And they were dangling the promise of filling 90-day supplies of insulin (a privilege which they never granted my local pharmacy). So I went with them. The co-pays are the same. But I figure they've got the buying power to negotiate deals with Big Pharma to get their insulins cheaper than my local pharmacy can.

Of course, we blame the insurance companies for this mess. But its not the insurance companies who jacking up the prices of insulin (or any other meds for that matter).

BTW: I checked the prices for insulin in Mexico. I could purchase them over the counter from Mexican pharmacies for about 1.5x what my copay is here (although they don't seem to carry some of the newer types). Likewise insulin is much cheaper in Canada. Canada sets maximum wholesale costs for what Big Pharma can charge. I don't know what Mexico is doing, but somehow Big Pharma hasn't gotten its claws into Mexican health care. So Big Pharma is screwing over US citizens because of the way we've got things set up here.

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That's utterly maddening. Running bioreactors is hard, you've got to know what you're doing but it's certainly a hell of a lot more efficient than harvesting pancreases from pigs. More and more, I'm coming around to Matt Stoller's point of view that market power & oligopoly are the dominant reason for the dysfunction in markets. It's the simplest explanation for how pharmaceutical companies are not just capturing all the productivity gains from improved manufacturing but raising prices on top of that.

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You have to add US subsiding drug development for the rest of the world into this equation or you aren't getting the whole picture. Its not like pharma companies are extraordinarily profitable (4% net margin IIRC)

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I agree with @bored-anon. Sounds exactly like the free market at work.

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Are the old insulins still available if you want them?

If not, are they considered obsolete because the new ones are so much better, or was there some coordinated effort to deliberately kill that market?

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They don't make the old animal-based insulins anymore. One can still buy a bioreactor version of Regular insulin over the counter (but almost no pharmacist will not believe you when tell them that's it doesn't require a prescription). I think it retails for ~$150/1cc vial.

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What's the justification supposed to be for making insulin prescription-only? Is there some weird recreational use? I understand injecting yourself with a bunch of insulin you don't need is a bad idea, but that's true of all kinds of OTC medications if you take enough of them at once.

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Well, back in the late 40's there was fad for losing weight through insulin injections. But that didn't really last long. People really didn't get into the whole injection thing and amphetamine pills became the preferred choice of savvy dieters. ;-)

Also, there may have been some people murdered by perp injecting them with insulin.

https://journals.sagepub.com/doi/abs/10.1258/rsmmlj.67.4.147?journalCode=mljc

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I was under the impression that that's also the case for Medicare/Medicaid - that drug approval was a separate thing from them deciding to cover it. I was surprised to read otherwise, since I seem to remember quite a few instances of a healthcare provider family member not being able to offer certain (definitely-FDA-approved) drugs to people on Medicare, since they wouldn't cover it. Nor would private insurers, of course, but typically those patients would just pay out of pocket.

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I have experienced non-generic medicine being hit-and-miss with different insurance companies. Some will, some won't. I have some insiders I can ask and will try to follow-up here when I do.

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"The answer is: to a first approximation, insurance companies have to cover anything the FDA approves."

I don't think this true. Novo Nordisk just got approval for a drug called Wegovy (semaglutide) for weight loss. The trials were quite impressive. The drug was first approved as a Type II Diabetes treatment and is sold for that indication as Ozempic.

My daughter lost 100 lbs on Ozempic, so I asked my doctor about it. He is wiling to write a prescription for Wegovy, but Medicare has made it clear that they will not cover it under any circumstance. Their policy is not to cover any weight-loss drugs of any type, ever

I will probably go ahead anyway, even though it is ~$1500/mo.

Wegovy website: https://www.wegovy.com/

FDA news Release: https://www.fda.gov/news-events/press-announcements/fda-approves-new-drug-treatment-chronic-weight-management-first-2014

NEJM report on Trial: DOI: 10.1056/NEJMoa2032183

General article: "How a lizard’s venom inspired the promising weight loss drug Wegovy: Semaglutide is the start of a new chapter in obesity treatments." | By Julia Belluz | July 5, 2021

https://www.vox.com/22553793/gila-monster-lizard-venom-inspired-obesity-drug-semaglutide

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Have him prescribe Rybelsus (same mechanism) for “pre-diabetes”. Bet they pay for it.

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He is a very good doctor, and I really like him, but he is not an endocrinologist. He was not willing to look off label. We discussed it. I respect that and will live with it.

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My impression is that most policies are written to specifically exclude "experimental" treatments, and they use non-FDA-approval as a useful (in court) proxy for the definition of "experimental."

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Wegovy is not experimental. It is approved for the indication. I linked the FDA press release above.

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Well, they also exclude entire categories of treatment, approved or not, e.g. until the angry feminists got ahold of them, they would routinely exclude any infertility treatment from coverage. It does not surprise me that they exclude weight-loss treatment.

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Shows you what their real opinion of the obesity epidemic is.

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It may, but I think it more likely represents their own internal cost-benefit analysis. On the cost side, if they exclude coverage, then when Sarah the receptionist who weighs 180 in her underwear is refused coverage for whatever treatment she seeks, the rest of the office *may* be horrified, but probably not, and certainly not in the same way they would be if they refused coverage when Sarah's firstborn turned out to need heart surgery to correct a birth defect -- not least of all because at least half the people will probably snort and say Sarah just needs to cut down on the donuts and add some lunchtime walking -- people are generally remarkably and sometimes cruelly unsympathetic to the struggles of the overweight.

And on the benefit side, obesity is one of those things that can have a generally disheartening course, people can struggle with it for years and years, with victories interspersed with setbacks, and the insurance company really doesn't want to be on the hook for something that open-ended.

I think both those reasons are also why they tend to limit coverage of mental health, too. They don't lose much on the PR front by largely not covering it, especially if they throw in 10 appointments/year of counseling, you know, for when your mother and daughter are killed in a car accident and you need to stop drinking or something. And mental health issues are also the kind of thing that can go on for a long time, so they don't like that.

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