Hello MishSecond Pharmaceutical Research Scientist Responds
I work in the pharmaceutical industry and can make a stab at answering some of the questions you raised. This is from the perspective of a manager/scientist with wide project contacts and some interactions with upper management.
Is pharma only interested in treating symptoms, as opposed to curing disease? I've never hear the distinction made internally. We basically target certain areas (like cancer, obesity, muscular) and research particular target proteins that have a proven or suspected involvement in that area. Then we try to stop those proteins. Whether its a cause or a symptom, if it has a market then pharma is interested. So we do try to cure cancer (i.e. completely eradicate the cancerous cells), but we also try to develop new pain medications and weight loss medications, which are more symptoms.
We spend the vast majority of our time investigating medications that ultimately fail. The FDA has made this very difficult and any success is hijacked by 'generics' which congress gives special protections. So the short answer is we're interested in both, and try everything in our areas and hope for something that will actually turn a profit. As long as people will pay to treat symptoms, we will develop drugs to treat symptoms (though not exclusively).
I can't comment as an expert on the attention deficit disorder. It does seem like it's a modern phenomenon/invention. I've always suspected bad parenting, bad teaching and hyperactive disease diagnosis syndrome. I have heard some anecdotal evidence that its diet related, but haven't researched it.
Drug advertisements are highly regulated, so it's no wonder they're whacked.
Why is medicine so ****'d up? The answer is a long history of government involvement, starting with special tax status granted to the Blues, then employer provided healthcare, as well as Medicare, Medicaid, etc. Because government is paying for everything it should be no surprise that prices are going up.
Pharma is not guiltless.
We've been supporting increased government involvement (including supporting Obamacare) for a long time. Hell, its our medicines the government is buying. However, I sense that justice will someday come and we will pay dearly for selling the taxpayer down the river. I sure hope so.
Cheers,
"PS"
Hi Mish,Special Education Teacher Responds
I am totally against advertising pharmaceuticals. And I have worked as a research scientist in the pharmaceutical industry for 25 years.
You can blame the Clinton administration for lifting the ban on prescription drug advertisement.
The industry spends more on those obnoxious ads than they do on research and development! There are a lot of wonderful benefits that society has received from the pharmaceutical industry (e.g. antibiotics and vaccines). However, drug advertising is not one of them. As for hyperactive children, you can blame poor diet (e.g. too much sugar and too little of omega-3- fatty acids) and lack of exercise.
Thanks, Jeff
Hello Mish,Medical Doctor Responds
Over-diagnosing ADD has evidently grown stale to a number of psychologists, as they have moved on to Autism as the general catch-all for why certain children struggle in school (not to mention other wonderfully vague diagnoses such as almost any of the behavioral disabilities).
I work with people with disabilities (currently with adults, but in the past with children in schools as a behavior consultant) and I never cease to be amazed by the vast number of students who are diagnosed with disabilities they do not have.
Most of the children with behavior disabilities are actually troubled by their home life and act out as an attention-seeking behavior. Over the course of a school year it is possible to render most of these attention-seeking behaviors extinct with the correct support and teachers who are willing to make an effort.
Unfortunately most teachers are not willing, preferring instigating the child’s problem behaviors in order to have them removed from the classroom, despite demonstrations that basic support will prevent the problem behaviors to begin with. Of the 20 teachers at the elementary school I worked at, only two were willing to listen to the recommendations of Special Education teachers and behavior specialists.
I think the problem is that most people have never actually met a person with Autism (or perhaps even with ADD) and so they ascribe any peculiarities the child might have to a disability. Most people have a basic understanding of Autism, so they think that any antisocial behavior or lack of interest in certain situations is indicative of Autism. If they were to meet a person with Autism (with their extreme behavior peculiarities and tics, not to mention their absolute disinterest in interpersonal communication as a general rule) teachers would recognize that most of these students are just a little different, not suffering from an actual disability.
The same is true of ADD; having met a student with actual ADD (only one in a school of 400-500 students) there was no possible way to confuse the mild behavior of most of the students diagnosed with ADD (who were just a tad fidgety or occasionally disruptive) with that of the student who was actually unable to focus (even on tasks he generally enjoyed would only hold his attention for a few minutes). The best example we will ever have of the ridiculous level of over-diagnosis comes from Jenny McCarthy’s child, the poster child for Autism, who was supposedly cured of the disability (rather than the obvious fact that the child never suffered from Autism).
Anyone with an ounce of common sense would recognize that Autism is not a curable condition; It is like looking for a cure for Down Syndrome. Really, it should be obvious to people that Autism is over-diagnosed now that some countries are claiming rates of 1 in 68 or higher.
Unfortunately we may be stuck with over-diagnosis for a while, in part because it is the easiest thing to do for everyone involved. Since the diagnostic criteria for things like ADD and Autism are so broad, and there are monetary incentives in the way of additional funding for students with disabilities, and parents would rather hear their child has a disability than that they might somehow be at fault for poor discipline, everyone at the diagnosis level benefits.
In my experience, the normal diagnosis process is this. The child is acting out in class, so the teacher refers the case to the school psychologist and possibly the Special Education teacher for review. The school psychologist visits the classroom and observes the child acting out. In a few of the children I observed, they acted out more when the school psychologist was there because she responded to the behavior. Because the school psychologist is not willing to either blame the teacher (for having poor control of the classroom) or the parents (for failing to provide discipline to the child), the only choice left is a diagnosis that justifies the behavior.
If a child falls behind and performs poorly in class, the teacher assumes they are learning disabled instead of assuming the children had poor teachers at earlier grades.
No one wants to take responsibility. To be fair to the teachers, there are cases where they have little choice but to make the referral. If the student is seeking attention by acting out, most teachers do not have the skills necessary to handle these students without the help of an expert, and the only way to get that help is to make the referral.
My wife has both a Bachelor’s and Master’s Degree in Education, and I was always amazed that she never had to take a single class on managing problem behavior on an individual level.
Sorry for this being such a long missive, but this is an issue that is near and dear to me. Having worked with the kids being given false diagnoses, I have discovered the diagnosis itself is a major inhibitor of progress. Once students attend their first Special Education meeting, they come to view themselves as disabled and justified in their acting out. I have been told by many of them that they see no point in attempting to control their behavior, because it can’t be controlled, and because no one likes them anyway due to their past behavior.
I have never dealt with a student whose behavior could not be drastically improved by basic behavior management behaviors, and have never personally dealt with a student that I felt needed to be medicated.
Now that I work with adults (sometimes with the worst of the worst, people whose behavior was significant enough to see them institutionalized or imprisoned) I see the outcome of our poor education environment. It takes one person at the elementary level to manage thirty kids with behavior problems. It takes one person at the adult level to manage a maximum of four adults with behavior problems, and if we institutionalize or imprison them, we also bear the cost of feeding and clothing them. Our current system is creating future criminals by justifying their behavior rather than attempting to correct it.
Special Ed Teacher
Hello MishChemistry Professor Responds
I've written before.
I have no love lost between myself and pharmaceutical companies and their insurance henchmen. However, you frustration here is misplaced.
Americans are hooked on prescription drugs less because of marketing or even physician indifference and far, far more because that is what Americans want. You can see this yourself at your local mall. Americans want to eat. They do not want to walk. They are unhappy at there appearance but they are not interested in self-restraint or altered lifestyles. Even the most obese in my patient population stubbornly insist they do not overeat and that they must have a glandular problem or some other explanation.
The overweight and immobile constitute the vast majority of those with Type II diabetes, cholesterol elevations, hypertension and esophageal reflux (treated with the purple pill). Much of the treatment of these problems would vanish were Americans willing to eat less and walk more.
Similarly, Americans want a pill to solve their emotional and child rearing problems rather than engaging with life.
There are huge parallels here as regards American's approach to their financial lives. They want stuff and they want it now. In their opinions it is not their fault if they lack the necessary income. They simply to wish to gorge on physical goodies and then they are surprised at their state of fiscal health.
Love your musings.
"MB" MD
Hello MishSeveral readers have asked why I devote time to topics like health care, unions, politics, etc. The answer is all of these are part of the structural defects facing our nation. No other economic blog touches these important issues in depth.
I read your article on prescription drugs. I am a chemistry professor and my line of research brings me to pharmaceutical companies quite often, including offers to take "research money".
The reasons I refuse such offers are common sense ones.
What I see these days is that so-called "lifestyle drugs" bring pharmaceutical companies the most profit since they can be fed to patient for tens of years, in many cases covered by taxpayers/insurance.
Many of the issues can be treated with diet and exercise (cholesterol), or discipline (ADHD). Instead, it is easier to pop pills especially if you are insured. Consequently, the blame lies on both sides - general population does what is easier, and pharma stimulates this behavior. Also, I have to note that there IS a legitimate need for these drugs, but definitely not on scale that they are prescribed now.
Things like antimalarials or antibiotics for which there is a legitimate need are almost not developed because you can cure those diseases in months and the profit will be very small. Put it against the development costs and companies will not get their 20% profit.
A good blog about medicinal chemistry issues is "In the Pipeline"
Chemistry Professor
State Sen. Dave Luechtefeld was in session in Springfield earlier this year when he got a call from the secretary in his district office. She was calling from her cell phone because the district office phones, which are paid for by the state of Illinois, had been disconnected for nonpayment.United Steelworkers Tries to Organize Car Washes
"That was the first time," recalled Luechtefeld, R-Okawville.
His office phones were later cut off again, with the state still months behind in paying for the service. He's now getting renewed threats from the phone company of a third cutoff. "It's laughable," he said, "but it's not."
It's the same story at the district offices of Illinois' elected legislators across the state: Phone, utilities, garbage and rent payments months behind, prompting a monthly flurry of terse late notices and cutoff threats to offices with the state emblem on the doors.
Of course, in a state where teachers are getting laid off, hospitals are struggling and small businesses are failing because the state isn't paying its bills, the office budget plight of a relative handful of politicians isn't going to cause anyone to take to the streets.
But the news of a northern Illinois legislator who was forced to shut down her district office because the state had stiffed her landlord for so long certainly drives home the depth of Illinois' $13 billion budget crisis
Illinois legislators keep offices in or around the Capitol in Springfield, and also have district offices back home. The state allots $69,409 per year for the district office expenses of each House member, which goes toward salaries for office staff, rent, utilities, supplies and related costs. For senators, who have larger districts and often maintain more than one district office, the annual allotment is $83,063.
Lawmakers have often complained that the annual allotment is too small, given the need for clerical workers, professional office space and other significant expenses. However, the current problem of deadbeat district offices isn't about the budgeted amount, but rather about the state's cash flow problems, which stem from a deficit that's roughly 50 percent the size of the state's entire regular operating budget.
"We have 220,000 vouchers sitting in our office waiting to be paid, because we don't have the money to pay them," said Alan Henry of the Illinois comptroller's office, which is responsible for cutting the checks. Those backlogged vouchers at the end of August totaled about $4.5 billion in late bills, which are paid as money becomes available to the state from taxes, fees and other sources.
The carwashes of Los Angeles would appear to be an unlikely target for a unionization drive. Many of the estimated 10,000 workers in the business here are illegal immigrants, who are too scared to speak out or give their bosses any excuse to fire them. Many carwash companies have just two or three outlets, not 20 or 30, requiring scores of separate organizing efforts. And carwash owners, who invest a million dollars or more in each facility, are fiercely resisting the prospect of being tied down by collective bargaining and union rules.Although I am not in favor of minimum wage laws, enforcing those laws and especially work conditions is a reasonable thing to do.
Nonetheless, labor organizers have set out to unionize this city’s carwash workers, hoping to improve their paltry pay and end widespread abuses. The unions, led by the United Steelworkers, acknowledge that it is a struggle, but they voice confidence that they can organize the first carwashes in the next few weeks or months, and that this will start a domino effect once other owners realize that unionized businesses can survive and even thrive.
California officials have estimated that two-thirds of the 500 carwashes in Los Angeles violate workplace laws. Many workers say they are paid just $35 for a 10-hour workday — less than half the minimum wage — and some say they are not paid for time during which no cars go through the wash. Others complain that they are not given gloves or goggles even though they often use stinging acids to clean tire rims.
Randy Crestall, owner of Autospa Chevron Hand Wash in Valencia, a Los Angeles suburb, said that law-abiding owners resented their scofflaw competitors.
“They’re a blight on our industry,” said Mr. Crestall, a former president of the Western Carwash Association. “As good operators, we don’t like them to be on the same playing field as us.”
Mr. Crestall said the unionization push would hurt everyone. “Having a union will mean higher wages, and that will lead to higher prices,” he said. “That will mean fewer consumers coming to carwashes, and fewer jobs for these workers.”
The unionization drive calls itself the Clean Carwash Campaign and has created a brigade of former carwash workers, many of whom had been fired for backing a union.
“This is not the type of campaign you win overnight,” said Chloe Osmer, the campaign’s strategic coordinator. “It’s the type of campaign where you have to bring the floor up in the industry before you can really have some unionization success.”
Although no carwashes have gone union, the campaign helped persuade city officials to investigate the Pirians’ carwashes. Last year, the city attorney charged them with a total of 220 misdemeanors that could have meant 120 years in jail. In mid-August, the brothers pleaded no contest to six charges, including grand theft and conspiracy. They were ordered to repay $1.24 million to 54 underpaid workers.
New Jersey Governor Chris Christie will unveil legislation that aims to trim a $46 billion pension deficit by scaling back benefits and suspending cost-of-living increases, said a person familiar with details of the proposals.Cheers for New Jersey, Boos for Illinois
The measures would roll back a 9 percent increase in pension benefits that was enacted through legislation in 2001, and suspend cost-of-living increases for at least three years, said the person, who declined to be identified because he isn’t authorized to speak ahead of Christie’s announcement next week.
Kevin Roberts, a spokesman for Christie, said the governor will propose pension measures “early next week” and declined to confirm details of the plan.
“It will be a plan to bring solvency to a system that is dangerously on the brink,” Roberts said today in an interview. Any changes Christie will outline are designed to “ensure the system is going to be there in the long-term for those employees that are already here,” Roberts said.
Legislators in 2001 changed the formula used to calculate pensions for new retirees by dividing the number of years worked by 55, rather than 60, which in effect resulted in a 9 percent benefit enhancement. Christie is seeking to reverse that legislation and return to at least 60 for current workers, the person said. Legislators previously rolled back the higher benefits for workers hired after May 22, according to state bond documents.
Mary,I seriously doubt management will budge on replacing the pension plan with a 401(k) plan. I do not know is if Cessna is talking about new employees or existing employees. I suspect a bit of both with grandfathering of accrued benefits.
The union needs to understand the gravity of the situation. The union likely has one shot at negotiating a contract. It is possible Cessna has already made preparations and the moment the union rejects the offer, the jobs will leave immediately and permanently.
Whether you like it or not, the union has a choice. The union can accept the contract or reject it. Perhaps there is some room for negotiation but likely not much.
My advice, which I expect not to be taken would be for the union to accept the offer outright or counter by accepting most of what management is asking, perhaps proposing something like 20% of health care costs and a 2.5 percent pay cut.
Inventories at U.S. wholesalers rose in July by the most in two years as a rebound in demand prompted companies to add to stockpiles.Census Bureau Report
The 1.3 percent increase in the value of inventories was three times the median estimate in a Bloomberg News survey and followed a 0.3 percent gain the prior month, Commerce Department figures showed today in Washington. Sales at distributors climbed 0.6 percent, the most since April, after falling 0.5 percent.
Economists forecast inventories would increase 0.4 percent, following a previously reported 0.1 percent gain in June, according to the median of 32 projections in a Bloomberg survey. Estimates ranged from increases of 0.1 percent to 0.8 percent. The July gain was the biggest since July 2008.
Wholesalers make up about 30 percent of all business stockpiles. Factory inventories, which comprise more of the total, advanced 1 percent in July, the Commerce Department said last week. Retail stockpiles, which make up the rest, will be included in the Sept. 14 business inventories report.
Today’s report showed wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 1 percent in July, led by gains in autos, furniture, machinery and metals.
The Commerce Department’s latest figures on gross domestic product showed the economy is getting less of a boost from inventories. Stockpiles added 0.63 percentage point to growth in the second quarter, compared with 2.64 percentage points in the prior three months and 2.83 percentage points in the fourth quarter.
Inventories
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $405.0 billion at the end of July, up 1.3 percent (+/-0.4%) from the revised June level and were up 2.5 percent (+/-1.2%) from a year ago. The June preliminary estimate was revised upward $0.8 billion or 0.2 percent. End-of-month inventories of durable goods were up 1.0 percent (+/-0.4%) from last month, but were virtually unchanged (+/-1.6%)* from last July.
Inventories of metals and minerals, except petroleum were up 2.7 percent from last month and electrical and electronic goods were up 2.1 percent. End-of-month inventories of nondurable goods were up 1.7 percent (+/-0.7%) from June and were up 6.4 percent (+/-2.1%) compared to last July. Inventories of farm product raw materials were up 11.6 percent from last month and inventories of apparel, piece goods, and notions were up 4.1 percent.
Inventories/Sales Ratio
The July inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted da data, was 1.16. The July 2009 ratio was 1.27.
To restore monetary policy effectiveness in a low interest rate environment when confronted with deflationary or contractionary shocks, it is necessary to get rid of the zlb [zero lower bound] completely. This can be done in three ways: abolishing currency, taxing currency and ending the fixed exchange rate between currency and bank reserves with the Fed. All three are unorthodox. The third is unorthodox and innovative. All three are conceptually simple. The first and third are administratively easy to implement.Fundamental Flaw
The first method does away with currency completely. This has the additional benefit of inconveniencing the main users of currency—operators in the grey, black and outright criminal economies. Adequate substitutes for the legitimate uses of currency, on which positive or negative interest could be paid, are available.
The second approach, proposed by Gesell, is to tax currency by making it subject to an expiration date. Currency would have to be "stamped" periodically by the Fed to keep it current. When done so, interest (positive or negative) is received or paid.
The third method ends the fixed exchange rate (set at one) between dollar deposits with the Fed (reserves) and dollar bills. There could be a currency reform first. All existing dollar bills and coin would be converted by a certain date and at a fixed exchange rate into a new currency called, say, the rallod. Reserves at the Fed would continue to be denominated in dollars. As long as the Federal Funds target rate is positive or zero, the Fed would maintain the fixed exchange rate between the dollar and the rallod.
All three methods for eliminating the zlb, although administratively feasible and conceptually simple, are innovative and unorthodox. Central banks are conservative. The mere fact that something has not been done before often is sufficient grounds for not doing it now. The cost of rejecting institutional innovation to remove the zlb could, however, be high: a material risk of continued deficient aggregate demand, persistent deflation and, in the U.S. and the U.K., unnecessary conflict between short-term stabilization and long-term sustainability and rebalancing.
