Welcome to week 354! The articles below caught my attention this week. What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********). Article titles preceded by [SR] require a subscription.
(21 December 2018): “How to Buy a Cure” Bloomberg.com
********This is the eighth and final episode of the Prognosis series: “A podcast about people living on the edge of medical innovation.” This episode looks, quite literally, at “How to Buy a Cure” for a disease, in this case cystic fibrosis. In the world of Big Pharma and Big Health Insurance, especially the former, it is not enough to have a disease that causes suffering, there has to be a way to make money from it. The featured interviewee of the podcast is Bob Coughlin, a “recovering politician” whose son has CF. Coughlin is the President of the Massachusetts Biotechnology Council and has a clear and unapologetic perspective on how diseases are cured. An eye-opening podcast, I listened to it about a month ago and it is impressing me, again, as I write these words.
(January/February 2019): “Snake-Oil Economics: The Bad Math Behind Trump’s Policies” Foreign Affairs
********This is a review, by N. Gregory Mankiw, of Trumponomics: Inside the American First Plan to Revive Our Economy, by Stephen Moore and Arthur B. Laffer. In short, Mankiw has little use for Trumponomics, I call attention to the review primarily because of its first page, which summarizes “three possible voices” that economists can choose among “to convey their message.” First, that of the textbook authority. Second, that of the nuanced advocate. Third, that of the rah-rah partisan. Mankiw holds that Moore and Laffer’s book is written in the third voice, embracing “economic tribalism.” In developing his review, Mankiw draws attention to Arthur Okun’s valuable little book, Equality and Efficiency: The Big Tradeoff. The policies of “pie growing” and “pie division,” to which Okun referred, are sure to be continual themes as we move toward the next presidential election in 2020. See page 178 of the review to see the reference to Okun.
(23 January 2019): “Robert Nelson, U-Md. professor and expert on belief systems, dies at 74” The Washington Post
——–Robert H. Nelson died on December 15th at the age of 74 from acute appendicitis while attending a conference in Helsinki, Finland. After 18 years of service as a policy analyst for the Interior Department, he joined the staff of the University of Maryland’s School of Public Policy in 1993. Although trained as an economist, he “branched into other fields, including climate change and theology.”
********Nelson’s website includes much information about the man and his writings. To the extent that I know him, it is through the titles of three books that grapple with economics, religion, and the environment. They are: Reaching for Heaven on Earth: The Theological Meaning of Economics (1991); Economics as Religion: From Samuelson to Chicago and Beyond (2001); and The New Holy Wars: Economic Religion vs. Environmental Religion (2010). For description of these and four of his other books, check out the books section of his website.
(25 January 2019): “Big Pharma’s Drug Studies Are Getting a NASA-Style Makeover” Bloomberg Businessweek
——–“Discoveries of new cancer-fighting and antiviral medicines grab headlines and sometimes win Nobel Prizes. But after the breakthroughs and backslapping are over, Big Pharma’s grunt work is just beginning. . . . it can take more than $2 billion and 12 years to launch a new treatment.” According to Justin Hoss, a consultant on technology and the life sciences for KPMG, drugmakers “do an excellent job of drug discovery” but they encounter a big bottleneck when “they get to a point of doing clinical trials.” So, “The faster they get people through clinical trials, they’re going to know whether their investment was worth it or not.” Delays during human testing are common. “French drugmaker Sanofi estimates that as many as 7 out of 10 trials are hit by enrollment snags. Every extra week getting to market subtracts about $300,000 from sales before cheaper copies emerge.” That’s why “companies from Novartis AG to Sanofi to AstraZeneca Plc are turning a microscope on the efficiency of their drug trials.” To do so, “Novartis dispatched teams to jetmaker Boeing Co. and Swissgrid AG, a power company, to observe how they use technology-laden crisis center to prevent failures and blackouts. That led to the design of something that looks like the pharma version of NASA’s Mission Control: a global surveillance hub where supercomputers map and chart Novartis’s network of 500 drug studies in 70 countries, trying to predict potential problems on a minute-by-minute basis.”
********I would presume that project management is an active field of research for drugmakers, as anything that can be done to get drugs to market more quickly, ceteris paribus, will surely provide a competitive advantage. For one view of the drug development process, take a look at the five steps outlined by the U.S. Food and Drug Administration. There is a similar process for medical devices.
(27 January 2019): [SR] “New Job for Robots: Taking Stock for Retailers” The Wall Street Journal
——–“Retailers that have been turning to robots to handle inventory in warehouses are testing whether machines can handle a new task: detecting when store shelves need restocking. Keeping track of inventory and doing it quickly has become one of the most pressing supply-chain concerns for merchants as they try to put into place new strategies for selling and delivering goods under the fast-changing demands of e-commerce. Services including rapid home delivery and buy online-pickup in store ae pushing retailers to blur the lines between distribution centers and stores—and obscure their view of how many items may be in stock and where the goods are held. The complicated blending of inventories in stores and warehouses has some retailers testing the use of shelf-scanning robots that roam store aisles and send restocking data back through their networks.”
********A provocative article that has made me think a bit more about the relationships between the online portal, retail stores, and distribution centers. It certainly makes clear to me how relatively simple the operation of Amazon—distribution centers and online—as opposed to Wal-Mart that does all three. I thought the comments on the article—8 at my reading—were more interesting than usual. For example, will better knowledge of store inventory, say in grocery stores, lead to shallower displays since less stock will need to be displayed at a given time?
(28 January 2019): “On patrol with the enforcer of D.C.’s plastic-straw ban” The Washington Post
——–“Nine years after the District [of Columbia] instituted a nickel tax on plastic bags and three years after it banned plastic foam food containers, it has turned on plastic straws—the newest target of environmentalists trying to reduce millions of tons of plastic that ends up in trees, waterways and in the bellies of wildlife.” Zach Rybarczyk is one of three inspectors dispatched by the city of Washington, D.C. to “check cafeterias, bars and restaurants” to see if recent plastic straw legislation is being adhered to (and give businesses warnings if they are not). He will check in July to see if the law is being followed, with a possible fine of $800 if it is not.
********I was interested to learn that there are people whose job descriptions include the enforcement of plastic straw laws.
(28 January 2019): [SR] “Soy Prices Are in a Trough After China’s Sick-Pig Slaughter” The Wall Street Journal
——–China’s pig population is shrinking, and that’s bad news for American soybean farmers. The country is the world’s largest importer of soybeans, which are mostly crushed to produce oil and soybean meal—a high-protein feed for livestock, including pigs, cattle and even fish. China’s 400 million-plus hogs are the biggest consumer of the lot. But last summer a disease called African swine fever was detected in some pigs in the north, and as the virus spread to many parts of the country farmers and authorities have culled hundreds of thousands of pigs in hopes of containing the problem. A shrinking pig population means less need for soybeans. And while the virus, deadly togs, isn’t harmful to humans, it has turned some people off the meat, denting pork sales.”
********This is a simple story of economic interdependence—African swine fever in China decreases the size of the pig population in China, thereby reducing the demand for soybeans and driving soybean prices down (also reported in the story). As a result, farmer income declines, in the U.S. and elsewhere, especially Brazil.
********It turns out that African swine fever is on the minds of the residents of Denmark, as indicated by “Boar-der security: Fearing disease, Denmark builds a wall to keep out swine” The Washington Post. “Fearing the spread of African swine fever, the country began erecting its own southern border wall Monday. . . . The 43-mile-long steel-mat fence ill stand five feet tall and extend across the Danish-German border. The project, aimed at barring wild boars from the Danish countryside, is scheduled to be completed within the year. Though there have not been any reported cases of African swine fever in Germany, Belgium’s Federal Agency for the Safety of the Food Chain observed an increase in reports from Western Europe last fall, including to confirmed cases in the Belgian province of Luxembourg.” There is concern that an outbreak of African swine fever . . . could devastate Denmark’s $4.5 billion pork industry. No treatment or vaccination for the disease exists.”
********Interesting that two stories on African swine fever appeared on the same day—one from China and one from Denmark. So how prevalent is ASF? The World Organisation for Animal Health provides much information on many aquatic and terrestrial animal diseases, African swine fever. On that page, you can find links to a variety of reports, include the situation report for December 15, 2018—January 17, 2019 which shows ASF outbreaks during that period. A look at the spatial distribution map for Europe is somewhat ominous.
(29 January 2019): “Warning! Everything Is Going Deep: ‘The Age of Surveillance Capitalism’” The New York Times
********Shoshana Zuboff’s book The Age of Surveillance Capitalism has raised quite a stir. Today NYT columnist Thomas Friedman weights in on some of the issues Zuboff raises in her book. In doing so he takes us on a quick tour of recent technological developments that provide access to “deep” levels of human experience to sell ads and make a profit. Friedman says some important things we he notes:
Regulations often lag behind new technologies, but when they move this fast and cut this deep, that lag can be really dangerous. . . . This has created an opening and burgeoning demand for political, social and religious leaders, government institutions and businesses that can go deep — that can validate what is real and offer the public deep truths, deep privacy protections and deep trust. But deep trust and deep loyalty cannot be forged overnight.
Trust, it seems, is a long-run phenomenon. But what do we do in the meantime?
May you have a good week!