The Independent Institute


The Pharmaceutical Industry and Access to Medicines

44323995 - medicines arranged in shelves at pharmacyHaving written critically about a decision made by Doctors Without Borders/Médecins Sans Frontières (MSF) to reject a donation of vaccines by Pfizer, Inc., I am grateful for a new report which ranks research-based pharmaceutical companies on a number of measurements of how they make medicines available to patients in low-income countries.

Jointly funded by the Bill & Melinda Gates Foundation and British and Dutch taxpayers, the Access to Medicine Index ranks 20 large drug makers. It is a very thorough report:

The Access to Medicine Index analyses the top 20 research-based pharmaceutical companies on how they make medicines, vaccines and diagnostics more accessible in low- and middle-income countries. It highlights best and innovative practices, and areas where progress has been made and where action is still required.

The 2016 Index used a framework of 83 metrics to measure company performances relating to 51 high-burden diseases in 107 countries.

One measure that shows little recent progress is affordability, as measured by pricing arrangements that take into account different abilities to pay in different countries. I find this approach odd, because any drug company maximizes profits by engaging in fine price differentiation. This means charging a low price in low-income countries, rather than shunning the market.

Government Failure in Health Systems Is Widespread

41672305_mlThe Commonwealth Fund has published yet another survey comparing health care in the United States to health care in other countries. The title conveys its emphasis: US Adults Still Struggle With Access To And Affordability Of Health Care.

Really? As I’ve previously written, I agree utterly with the Commonwealth Fund scholars that health care in the United States is delivered inefficiently and over bureaucratized. Nevertheless, the suggestion that U.S. health care is the worst overall is not consistent with the data.

The latest survey compares 11 developed democracies. The relationship between government control of health care and various measures of health status is not at all clear, despite other countries having so-called “universal” health systems.

When it comes to actual access to care, 35 percent of low-income Americans (with household incomes below one-half the median income) had to wait six or more days to see a primary-care doctor or nurse the last time they needed care. However, so did 38 percent of low-income Germans and 32 percent of low-income Swedes.

On Virtue Signaling

45263942_mlAccusations of virtue signaling have become all the rage in certain quarters in recent years, especially on social media. And one can easily see why: the accusation is a cheap, easy, universally applicable way of disparaging someone’s expressed opinion or belief, essentially a dismissal of that opinion or belief as mere posturing in quest of approval by like-minded listeners or readers. And sometimes no doubt such an accusation is in order.

But it can scarcely be used indiscriminately without losing whatever force it might have in particular instances. If I express an opinion or belief that has moral valence—a statement whose content can be placed somewhere on the scale from vicious to virtuous—it certainly does not follow that my only reason for making the statement is to attract approval by “the right people.” It is entirely conceivable that I am simply expressing my opinion or belief in utter disregard of how anyone else might receive it, stating it ruat caelum (though the heavens fall). People do have opinions and beliefs with moral valence, and it is stupid to dismiss every expression of them as virtue signaling. Such dismissal is a rhetorical device more applicable to mere debating than to a substantive discussion.

Apocalypse—Probably Not Now

41601948 - people crowd walking on busy street on daytimePeople my age have a wider perspective than most when we think about politics and government. When I hear young friends talking as if Donald Trump’s election portends the end of civilization and every good thing it has fostered, I recall vividly how it felt to live in the USA from 1963 to 1974, a time of mass political turmoil and conflict, of large-scale military slavery, of assassinations of a president and other leading political figures, of millions in the streets protesting a seemingly endless, terribly destructive war, of domestic violence, riots, bombings, and arson, of martial law (when I lived in Baltimore in the spring of 1968), of political leaders so heinous that they beggar the imagination.

That such terrible things happened back then does not mean that equally terrible things cannot happen again. Of course, they might, and the U.S. government has a knack for finding a way to turn any situation into devastation and the suppression of people’s liberties. So the future may turn out to be very dark, indeed, but if so, that future will have to develop in a way that people are scarcely well justified in forecasting at the moment.

The Trump Transition and a Red Apocalypse?

10487405 - white house, washington dc usaPolitical observers and the media, unlike scattered groups of progressives, have accepted a Trump presidency as fact and are now focused on the transition from President Obama and its progressive executive branch. Many may be surprised to realize Donald Trump even had a transition team, given the attention to his bombastic and provocative campaign rhetoric. It’s increasingly clear, however, despite the recent shake-up at the top of the transition pecking order, many people have been working steadily behind the scenes for months to put people in key positions of influence by January in anticipation of a Trump win. I was planning to ignore much of this until I recognized several names on the leadership team, prompting me to dig deeper.

While I have not held a position in the Executive Branch, in my 30-plus years of policy work I have briefed senior executives on policy issues in both the Bush and Obama administrations, worked with federal staff and elected officials, and helped scope out legislative agendas for members. I have also worked directly with two key people on the current transition team, am familiar with many of their organizations, and know several others by reputation and through reading. So, here are a few thoughts, recognizing that all the following could change tomorrow because transition processes are very dynamic and we can only guess at Trump’s real management style.

  1. This White House is shaping up to be the left’s worst nightmare, a Red Apocalypse. Trump campaigned as a pragmatic populist—and I have seen little to suggest he has personally become more principled—but his appointment of VP elect Michael Pence to manage the overall transition suggests the people put in key management and policy positions will be largely principled conservatives. He has worked for the free-market Indiana Policy Review Foundation (a think tank I have worked with extensively), run a radio talk show, and has consistently drummed the conservative line. This suggests his hand will direct the appointment process and shape policy implementation, but as a former congressman, he is also in tune with the need to work with Congress to move an agenda forward.
  2. If Trump attempts to run government like he does his business, these appointees will have a lot of leeway and discretion in designing, interpreting, and implementing policy. Trump is not known for micromanagement. He delegates, focusing on macro performance and strategic issues and problems, rather than managing and dictating the details of his business operations. He will likely focus on the three or four main issues he emphasized in his campaign—immigration, jobs, international trade—and leave the rest to key managers and policymakers. This means that political and other appointees will matter a lot in a Trump Administration. This bodes well for innovation and free markets in some areas (but not others).
  3. A Trump Administration will most likely be “kinder and gentler” than people think. Former Ohio Treasurer and Secretary of State Ken Blackwell appears to have been appointed to direct domestic policy issues and areas. I worked with Ken and his senior staff while at the Buckeye Institute as Vice President for Research and then President between 1994 and 2004. Ken is undoubtedly a steadfast social conservative, but he is also very principled and respectful of those who disagree with him. He actively reached across aisles to put together coalitions. I believe he would use this lens for managing the transition of key staff. He is deeply interested and dives down deep into policy and examines all the angles of a policy position and then commits to the one that he believes is the right one. I saw him in a number of circumstances where he could have backed off a strong free-market policy stance but instead held his ground. He is likely to look for candidates with similar qualities. The Trump transition team leaders are not shrinking violets or people prone to compromise on core values or principles. 
  4. Extensive policy knowledge, understanding, and experience are not an anomaly. Shirley Ybarra is another example. She appears to have a key role in directing the transition for the U.S. Department of Transportation, a department that will be integral in any new spending on infrastructure. I worked with Shirley closely for a number of years while at Reason Foundation, and she has deep, deep knowledge of transportation issues and policy. She is also pro-market, and her network is extensive. I have less personal knowledge of others, but David Malpass is a serious economist with extensive policy experience and a strong free-market bent. Myron Ebell (EPA) has extensive knowledge of environmental policy and is a key staff member of the free-market Competitive Enterprise Institute. Similarly, Andrew Bremberg has a solid background in heathcare policy. On the downside, for libertarians at least, are others such as Dan DiMicco, who is leading the charge for renegotiating trade agreements such as NAFTA. While I disagree with him on trade, as CEO of Nucor he at least has deep knowledge of the interworkings of these trade deals in specific industries (although protectionist tariffs would benefit his industry substantially).

None of this is to suggest Trump will lead an Executive Branch even remotely libertarian. Several of the key transition staff are free market, but a hard conservative line is likely to emerge in the Department of Justice, Office of the Attorney General, and law enforcement. This will probably create challenges for protecting civil liberties. We have yet to see what foreign policy will look like, but Trump has signaled opposition to specific wars, not military intervention more generally as a political tactic. So, libertarians should brace and prepare for the worst even as a few rays of light crack through on economics, environmental, and healthcare policy.

Nevertheless, the transition team leadership suggests this will not be a presidency that is unhinged or unprincipled, unlike the campaign. Presidential Trump will appoint more than 4,000 people to executive positions in the federal agencies and departments. Just 1,200 require Senate confirmation. Another 1,400 serve in confidential and policy roles that do not require Senate confirmation or approval. And still others are executives who work in appointed positions that are below leadership levels requiring confirmation. While much of the media attention has focused on the top, high-profile members of the transition team, clearly most policy will be interpreted and implemented by those completely off the media radar. So, the key people in charge of the transition team and the vetting of candidates for particular departments will be critical.

Almost All Increase in Health Coverage Due to Return of Benefits: An Update

52956886 - close up photo of blood pressure measurementThe best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in the first half of 2016. There are three things to note.

First: 69.2 percent of residents, age 18 to 64, had “private health insurance” (at the time of the interview) in the first half of this year, the same rate as persisted until 2006 (page 1, Figure 1; and page A5, Table III). Obamacare has not achieved a breakthrough in coverage. It has just restored us to where we were a decade ago.

Second: The NHIS includes people with Obamacare coverage (via the exchanges) as privately insured. These comprised 4.8 percent of the population, aged 18 to 64 (page 5, Figure 8). So, slightly fewer than 64.4 percent had employer-based coverage. (A small number of people still have non-exchange individual policies.) That proportion is about the same as from 2010 through 2013 (page A5, Table 3). So, employer-based coverage has held steady.

Third: There has been a significant change from private coverage to government welfare (primarily Medicaid). The shift has been about five percentage points since 2006 and ten percentage points since 1997 Page 1, Figure 1). This trend was especially pronounced among children. In the first half of this year, 42 percent of children had government welfare for medical spending, little changed since 2010. However, between 2000 and 2010, the proportion doubled from about 20 percent to about 40 percent of children (page 2, Figure 2).

Critics of Obamacare who focus on its increasing the proportion of people dependent on Medicaid (a welfare program) ignore the great expansion of Medicaid dependency years before anyone had heard of Barack Obama.

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For the pivotal alternative to Obamacare, see Priceless: Curing the Healthcare Crisis and A Better Choice: Healthcare Solutions for America, by John C. Goodman, published by Independent Institute.

Perspectives on the President Elect

55407307_MLLike many Americans, I was surprised with the results of our recent presidential election. I had assumed, like so many others, that a Clinton presidency was inevitable.

Obviously, I was wrong.

Since the election, friends, students, and others have asked what I think of President-elect Trump. While I tend to shy away (especially with students) from endorsing or disparaging any particular candidate, I feel comfortable discussing particular policies.

Now, President-elect Trump’s consistency with regard to what policies he will implement has been remarkably inconsistent. He has published, however, his “100 Day Plan,” a list of initiatives he says he will work to implement his first 100 days in office.

I thought I’d take this opportunity to discuss my thoughts regarding some of his proposals. As a caveat, what follows largely ignores the all-important issue of political feasibility. (For better or worse, I think a lot of these proposals will be extremely difficult, perhaps impossible, to implement.)

Money in Politics

55416821 - hands holding us dollar bills and small money pouch. toned pictureWe’ve heard the complaints about how money influences politics, but the recent presidential election shows that money doesn’t always Trump voter preferences.

Before the primary elections, Jeb Bush had raised far more money and received more support from major Republican figures than other Republicans in the race; yet he was one of the earlier casualties in the fight for the nomination. In the general election, Hillary Clinton raised far more money for her campaign than Donald Trump did for his. Trump won the primaries and the general election, despite being outspent by his opponents.

Much of the discussion turns on the First Amendment’s guarantee of freedom of speech. If people are prevented from spending money to make their viewpoints heard, this would seem to me (but not to everybody) to be a clear violation of the First Amendment. The 6-5 Supreme Court decision in the Citizens United case shows the division of views on the financing of political speech.

Money influences politics, of course, but the 2016 election shows that those who spend the most are not always able to buy the election outcome they want.

In Politics, Innovation Isn’t Always Progress

40299973 - statue of liberty at sunset as viewed from brooklyn new yorkBoth Donald Trump and Hillary Clinton called for innovative solutions for what ails America. For the former it was a new fence on our southern border that will supposedly be funded by Mexico; for the latter it was free (i.e., taxpayer subsidized) college tuition. Fresh ideas, they told us, could “make America great again” and render us “stronger together.”

Neither campaign stopped to consider that it was an innovation that led to our current woes, one that most Americans view as their country’s greatest contribution to political science: the U.S. Constitution.

Undoubtedly, blaming America’s “paramount law,” as Chief Justice John Marshall called the Constitution, seems like scandalous heresy. Americans are taught that their fledgling nation was going down the tubes until ratification of the Constitution in 1788 ensured that the United States of America would survive the failures of the Articles of Confederation. The standard narrative portrays the Federalists, the proponents of the new Constitution, as visionaries and paints the Anti-Federalists, who opposed ratification, as men of little faith with no concept of future American greatness.

What the conventional tale leaves out are Confederation’s significant accomplishments.

Entitlement Mentality?

59198107 - microphone in focus against blurred crowd. filming protest.I’m not sure what to think about the anti-Trump protests following the election. If the protests occurred before the election (and there were some), I’d think the protesters were expressing their views that people should not vote for Trump or support his policies. Now that he’s been elected, that decision is behind us, and Trump has done nothing since the election that warrants a protest. What are they protesting?

They could be protesting the system itself—the electoral institutions that led to Trump’s victory. Probably not, though. Surely they would have been happy with the system had it chosen Clinton. They could be protesting their fellow citizens who voted for Trump. Those voters are the ones who determined the outcome of the election. Trump was just one of their choices.

What I’m seeing in the protesters is an entitlement mentality. A democratic election in which they happily participated didn’t go their way, so they are protesting the outcome that didn’t give them what they wanted. They are acting like spoiled children, maybe because they are spoiled children.