Beto O’Rourke’s Ambitious Health Care Plan

America's health care system remains a nightmare for countless Americans who are either under insured or find themselves with medical decisions being driven my insurance companies seeking to minimize payouts rather than doctors and medical professionals.  And even with "good coverage," the deductibles can be staggering and can financially strain average Americans who simply do not have thousands of dollars lying around. Something needs to be done, but the question is what.  Some Democrat presidential candidates are lauding "Medicare for all" - Medicare still is not free and requires regular payments - which those on the right (who put little value of on the lives of most of us) say is too costly. In a response to the problem, Beto O'Rourke seems to be fashioning a proposed solution.  A piece in Slate looks at the matter.  Here are highlights:

Beto O’Rourke may not be feverishly churning out policy white papers like some of his presidential rivals, but over the last few days, the hand-wavy former representative from Texas has at least started clarifying his position on health care. And for a candidate who seems to be carving out space in the Democratic field as a relative moderate, it’s strikingly ambitious.

While campaigning in Iowa on Friday and over the weekend, O’Rourke backed away from his previous support for Bernie Sanders’ single-payer bill. The former Senate candidate told an audience that he was “no longer sure” it was “the fastest way” to achieve “guaranteed, high-quality universal health care for all.” Instead, he talked up another piece of legislation currently kicking around Congress known as “Medicare for America.”

Introduced by a pair of progressive congresswomen, Reps. Rosa DeLauro and Jan Schakowsky, Medicare for America offers a sort of middle ground between a true, Sanders-style single-payer system—which would ban private comprehensive health coverage—and a more modest public insurance option. (It is extremely similar to a proposal crafted by the Center for American Progress, which I’ve described as “single-payer with American characteristics.”)

The bill creates a new, revamped version of Medicare that would be open to all adults and children. It would automatically enroll newborns, the elderly, and the uninsured. It would also bar insurance companies from selling policies to individuals that duplicated the government’s coverage, meaning it would largely wipe out the nongroup market as we now know it. However—and this part is key—the bill would permit businesses to continue offering private insurance as a benefit, as long as it was as comprehensive as today’s gold plans. Companies would also have the option of purchasing Medicare for their employees by paying a tax equal to 8 percent of their annual payroll. Individual workers could opt for the government plan, as well.

One of the major political selling-points of Medicare for America is that it wouldn’t necessarily force workers off of the health plans they currently receive through their jobs, which many people still like, or at least are hesitant to give up. Polling suggests that support for Medicare for All drops drastically when voters are told that it would eliminate private insurance . . . . (The Kaiser Family Foundation has found that 73 percent of Americans back the idea of a national health plan if it would let them keep their current coverage).

That seems to be Beto’s wager.

“It responds to the fact that so many Americans have said, ‘I like my employer-based insurance. I want to keep it. I like the network I’m in. I like the doctor that I see,’ ” O’Rourke said of the bill, according to the Texas Tribune. “It complements what already exists with the need that we have for millions of Americans who do not have insurance and ensures that each of them can enroll in Medicare. It then suggests additional investments in that program so it becomes the program of choice and people who have private insurance migrate over to the Medicare system.”

Another advantage to Medicare for America is that it would be cheaper than single-payer, at least so far as the federal budget is concerned. There are no public cost-estimates for the bill yet. But it would almost certainly save Washington money compared to the Sanders approach, because it would not require immediately transitioning the entire employer-sponsored market onto a government health plan. The new version of Medicare also wouldn’t be free for everyone; families earning more than 200 percent of the poverty line would pay premiums—they would go up with income, but be capped at no more than 9.69 percent of a household’s earnings—as well as copays and deductibles. Of course, the Sanders bill wouldn’t exactly be free either; instead of paying “premiums,” households would simply pay taxes. To a certain extent, the difference there is semantic. While Medicare for America is not a single-payer system, it could create the bones of one, and gradually transition the country in that direction over time as it automatically enrolled more individuals and more businesses chose to buy in. At the same time, by preserving private coverage, it could leave a pressure valve in place, giving voters another option in case the new system doesn’t work out quite as smoothly as its supporters hope (we all remember the rough early days of Healthcare.gov, after all). In the scheme of major Democratic health care plans, it’s arguably the second most far reaching after the Sanders bill; it would do more to fundamentally change the U.S. insurance system than the Medicare or Medicaid buy-ins that other candidates have talked about, which would basically graft a public option onto Obamacare’s framework. Medicare for America would be something genuinely different.

PrEP Use Increasing, But Too Low Due to Extreme Cost

The United States' health care system remains one of the most inefficient of any developed nation and medications that cost little in Europe and Canada are exorbitantly expensive and out of financial reach of many.  A prime example is so-called PrEP which prevents HIV/AIDS infections.  At a cost of $2,000 -$3,000 per month, even good insurance coverage leaves one with thousands of dollars in out of pocket costs. A generic version sells for $200.00 a year and, as this blog has noted before, the actual production costs is about 6 cents per pill.  Making matters even more outrageous, government programs and charities funded the development research, not Gilead which markets the drug making obscene profits.   As long as insurance companies and pharmaceutical company greed control America's health care, quality health care remain out of the reach of millions. Meanwhile, the rest of us pay the price through astronomical hospital and drug costs.  A piece at NBC News looks at the under usage of PrEP.  Here are excerpts:

Thirty-five percent of gay and bisexual men at high risk of HIV infection were using PrEP, or pre-exposure prophylaxis, the daily pill that prevents HIV infection, in 2017, according to data released Thursday by the Centers for Disease Control and Prevention. In 2014, just 6 percent of these men used PrEP.

However, despite the nearly 500 percent jump in PrEP use among men who have sex with men, the CDC notes “PrEP use remains too low, especially among gay and bisexual men of color.”

The study was presented Thursday in Seattle at the 2019 Conference on Retroviruses and Opportunistic Infections, a major annual HIV/AIDS conference, and was based on more than 8,000 interviews in 20 American cities.

More than 40 percent of white gay and bisexual men at high risk of HIV used PrEP in 2017, while only 30 percent of their Latino counterparts and 26 percent of their African-American counterparts did so. The updated data highlights the fact that minorities access PrEP at lower rates than whites, despite being at higher risk of HIV infection.

The data also found high awareness of PrEP, which is also known by its brand name, Truvada, among all gay and bi men: Eighty-six percent of African-Americans know about it, as do 87 percent of Latinos and 95 percent of whites.

“The study’s findings suggest that efforts to increase PrEP awareness and use among populations at risk is working, but it remains underutilized,” according to a press memo distributed by the CDC.

Many people struggle to access PrEP because of its high cost — a roughly $2,000 per month list price — and complex insurance procedures.

“Of the estimated one million Americans at substantial risk for HIV and who could benefit from PrEP, fewer than 10 percent are actually using this medication,” the CDC noted, referring to low uptake overall among heterosexual and injection-drug-using populations that are also at high risk of HIV infection.

The CDC said it is funding government and private health organizations’ efforts to spread awareness of PrEP, and “developing new ways to connect gay and bisexual men of color and transgender people to PrEP."

Break Gilead's strangle hold on PrEP and allow generic forms and I suspect you would see usage surge.  But that would mean members of Congress would have to vote against their financial overlords. 

Pharmaceutical Company Greed Impedes Fight Against HIV

The Center for Disease Control and Prevention describes PrEP as follows:

Pre-exposure prophylaxis, or PrEP, is a way for people who do not have HIV but who are at substantial risk of getting it to prevent HIV infection by taking a pill every day. The pill (brand name Truvada) contains two medicines (tenofovir and emtricitabine) that are used in combination with other medicines to treat HIV. When someone is exposed to HIV through sex or injection drug use, these medicines can work to keep the virus from establishing a permanent infection.

When used consistently, PrEP has a very high success rate of preventing HIV infection. So why aren't many more Americans on PrEP if it works so well.  The answer is simple: the cost. In the USA, the cost can be over $20,000.00 per year. In other parts of the world, the cost is $100.00 per year.  Why do Americans pay 200 times what those in other countries?  Simply put, because American's utterly screwed up health care system allows it. Typically, pharmaceutical companies justify shockingly high costs by citing the cost of developing new drugs.  That argument does not work with PeEP because the federal government and charities funded the development costs. So again, why the exorbitantly high cost?  I offer a few other possible factors: (i) the current Trump/Pence regime caters to allowing large corporations to act as the robber barons of old, and (ii) gays and increasingly blacks, including black women, are disliked by the Trump/Pence regime and its extremist supporters.  As reported by the New York Daily News, in New York State, some are beginning to demand that federal government use its existing authority to make PeEP available to the masses, not just the rich.  Here are article highlights:

As the number of people in New York City living with HIV or AIDS continues to rise, local advocates are calling for the federal government to take steps to make the life-saving prevention drug PrEP more affordable.

City Council Speaker Corey Johnson joined other politicians and activists at the city’s AIDS Memorial on Monday to demand that the National Institute of Health “break the patent” on the drug, which dramatically reduces the spread of the HIV virus.

“It’s life or death for people who do not get access to this live-saving medication that they need,” said Johnson, who is HIV-positive. “Other countries pay $100 year for PrEP. Americans end up paying more than $20,000 a year for the same medication.”
 
Advocates say a major barrier between patients and PrEP is the cost of the drug, which is patented by Gilead Sciences and was approved for use by the FDA in 2012.

“Gilead Sciences charged over $2,000 a month for a drug that costs them less than $6 a month to make, and whose research was funded entirely by the fed govt and other charities,” Christian Urrutia, co-founder of the PrEP4All Collaboration, said on Monday.

Because the U.S. government funded the research for PrEP, federal law allows the NIH to exercise “march-in” rights to break its patent and allow other manufacturers to produce it at generic costs.

The legal maneuver dates back to 1980 and the passage of the Bayh-Dole Act, which requires patent holders of federally-backed drugs to allow third party companies to produce the drug when requested by the government.

The advocates are calling on the feds to make such a request for PrEP.  If the price of the drug plummets for New Yorkers, advocates believe the rate of new HIV infections would follow.

America's Insanely High Prescription Drug Prices

As the prior post noted, America continues to have one of the most flawed and expensive health care systems of any developed nation.  Much preventative treatment is not covered and our prescription drug prices are obscenely high compared to drug prices in other developed nations.   Why? Largely, because large pharmaceutical companies have bought and paid for members of Congress, especially Republicans.  The other reason is that programs like Medicaid and Medicare continue to fail to negotiate lower prices, in part because of politicians in the pockets of the pharmaceutical companies.  Imagine if there was a drug that could have a 99% track record of preventing disease but was so expensive - at least in America - that only a tiny percentage of those who would benefit can afford it even if they have "good insurance."  Due to the lack of affordability, many become ill and huge medical costs are incurred - costs that could have been avoided.  The drug exists: Truvada which taken daily and known as PrEP prevents HIV infection.  It cost about $55 to produce a year's supply, yet in America, the cost to patients is $20,000 per year.  I have focused on PrEP, but the same phenomenon applies to countless drugs that drive up medical costs into the stratosphere.  A piece in the New York Times looks at the USA experience versus other developed nations.  Here are highlights:

Last week, the High Court of England and Wales announced a momentous decision: It invalidated the pharmaceutical company Gilead’s patent on Truvada, opening the way to generic competition.

Truvada, a combination of two drugs, is one of the world’s most-used H.I.V. medicines. For treating H.I.V., it’s used along with a third drug. But many H.I.V.-negative people also take Truvada daily as a preventive. That’s called pre-exposure prophylaxis, or PrEP.
In the United States, Truvada is available only as a brand-name drug. It costs $20,000 a year.

Here’s how it will work in Britain’s National Health Service, according to Dr. Andrew Hill, a senior research fellow at Liverpool University who studies the cost of medicines. “The N.H.S. will say to a group of generic companies: ‘We need PrEP for 20,000 people. Give us your best price.’” The cost of making PrEP is $55 per year, Dr. Hill said. He believes that the generic will sell for between $100 and $200.

All over the world, more and more people are taking H.I.V. drugs. These medicines are very good at their job — keeping people healthy and noncontagious — so most patients will take them until they die of something that isn’t H.I.V. Patients are also starting earlier on antiretroviral therapy; the new recommendation is to start immediately upon diagnosis. And now with PrEP, a potentially enormous new group of patients has arisen: H.I.V.-negative people who are at risk for catching the virus.

It’s lucky, then, that Truvada will have generic competition. It should allow the health service to greatly lower costs and offer PrEP to anyone who needs it.

The health service does an admirable job with H.I.V. Around the world, countries measure the percentage of people living with H.I.V. who have no virus detectable in their blood. In the United States, only 49 percent have achieved this. In Britain, the number is 78 percent.

While the National Health Service has a lot of problems, it has some huge advantages over the American system that allow it to provide high-quality H.I.V. care in a cost-efficient manner. So it’s worth looking at what the British health service does right, because some of those strategies could work in America, even though the two systems are structured very differently.

Even when brand-name drugs have no generic equivalents, the medicines in the British system cost a small fraction of what they cost in America. Most brand-name triple therapies cost about $6,500, said Dr. Laura Waters, an H.I.V. physician who is a member of the health service’s H.I.V. Clinical Reference Group, which sets policy. She said that a combination pill that includes some generics would cost between $2,600 and $4,000. Full generics usually cost 70 to 80 percent less than comparable brand names. One completely generic H.I.V. regimen costs $400 per year. If America were to use more generics, much of the savings would stay with insurance companies and pharmacy benefit managers. That doesn’t help people with H.I.V. “The resources saved can and should finance a more aggressive effort to fight AIDS in America,” said Anil Soni, head of global infectious diseases for Mylan.

Could it happen with Medicare or Medicaid? Just a few states — New York, Georgia, Florida, California and Maryland — are responsible for a large share of Medicaid’s spending on H.I.V. drugs. They could lead a drive toward using more generic drugs. These drugs are already available, but doctors don’t prescribe them. Like the National Health Service, Medicaid would have to find ways to encourage (or cajole, entice or force) doctors to prescribe generics. If the generics were more widely used, that would encourage competition that could further drop the price.

Every day, America pays for H.I.V. drugs at higher and higher prices, for more and more people. There is no choice but to reform an unsustainable system.

“I just don’t understand why American payers don’t look up reference prices,” Dr. Hill said. “It’s $150 in England, so why are they spending $10,000? Surely they don’t have unlimited budgets in the U.S. But they behave as if they do.”

 Again, the same phenomenon applies to countless other drugs and is one of the reasons for America's exploding health care costs. 

Suicide: A Public Health Crisis

The suicide deaths of designer Kate Spade and the celebrity chef Anthony Bourdain have at least temporarily - the American media has the attention span of a gnat - focused attention on the growing suicide rate in America which, like so many other things (e.g., gun violence) exceeds that of other advanced nations. Having made two serious attempts myself over a decade ago, it's a topic I am familiar with and on which I have strong opinions as to the causation.  While treatment for depression is much more common, much of what is available simply doesn't work, plus there is the impediment of the social stigma than many still hold towards seeking treatment, especially among men.  Like so much in American medicine, the most common approach seems to be simply prescribing drugs to mask the situation rather than deal with underlying causation. Feeling like one's body is not fully one's own and being drugged up is not a satisfactory long term solution.  Getting to the underlying causation, however, means extended therapy and counseling sessions - things for which most American health insurance plans  provide paltry coverage.  Thus, unless one has the ability to pay out of pocket, long term therapy simply doesn't happen in all too many cases.   The consequences can be literally deadly.  A piece in the New York Times looks at the growing public health crisis.  Here are excerpts:

Treatment for chronic depression and anxiety — often the precursors to suicide — has never been more available and more widespread. Yet the Centers for Disease Control and Prevention this week reported a steady, stubborn rise in the national suicide rate, up 25 percent since 1999.

The rates have been climbing each year across most age and ethnic groups. Suicide is now the 10th leading cause of death in the United States. Nearly 45,000 Americans killed themselves in 2016, twice the number who died by homicide.

After decades of research, effective prevention strategies are lacking. It remains difficult, perhaps impossible, to predict who will commit suicide, and the phenomenon is extremely difficult for researchers to study.

One of the few proven interventions is unpalatable to wide swaths of the American public: reduced access to guns. The C.D.C. report found that the states where rates rose most sharply were those, like Montana and Oklahoma, where gun ownership is more common.  It is predominantly men who use guns to commit suicide, and men are much less likely to seek help than women.

The escalating suicide rate is a profound indictment of the country’s mental health system. Most people who kill themselves have identifiable psychiatric symptoms, even if they never get an official diagnosis.

The number of people taking an open-ended prescription for an antidepressant is at a historic high. More than 15 million Americans have been on the drugs for more than five years, a rate that has more than tripled since 2000.

[O]ne recent study, by Danish researchers, supported the benefits of therapeutic intervention.  Using detailed medical records, the investigators studied more than 5,500 people who had been treated for deliberate self-harm, including cutting and clear suicide attempts.

Over decades, the portion of those people who got psychotherapy at suicide clinics were about 30 percent less likely to die or commit further self-harm than those who did not.  “I personally think that it’s the quality of care that matters, not the quantity,” Dr. Insel said. “We need more access, better measures and better quality of care.”

But in this country, many of those who commit suicide have received little or no professional help. Indeed, they rarely tell anyone beforehand of their plan — when there is one. Often the act is impulsive. . . . . the wide majority of people who die by suicide “explicitly deny suicidal thoughts or intentions in their last communications before dying.”

Andrew Spade, Ms. Spade’s husband, said she had seemed fine when he’d talked to her just before her suicide. Mr. Bourdain was filming one of his clever, humorous shows in Strasbourg, France, when his body was discovered.

The rise of suicide turns a dark mirror on modern American society: its racing, fractured culture; its flimsy mental health system; and the desperation of so many individual souls, hidden behind the waves of smiling social media photos and cute emoticons.

More recently, the economists Anne Case and Angus Deaton of Princeton have argued that the hollowing out of the economy and loss of middle and working class supports, like unions, have contributed to a broad increase in self-reported pain in those groups, both mental and physical.

The aggressive marketing of opioids by Purdue Pharma and others eased some of that pain — and helped create a generation of addicts, tens of thousands of whom die each year. Opioids are the third most common drugs found in the systems of suicides, after alcohol and anti-anxiety medications like Xanax, the C.D.C. reported.

A decline in marriage rates has likely played a role, as well. In her research, Dr. Phillips has found that in 2005 single middle-aged women were as much as 2.8 times more likely to kill themselves than married women, and their single male peers 3.5 times more likely than married men to do the same.

“In contrast to homicide and traffic safety and other public health issues, there’s no one accountable, no one whose job it is to prevent these deaths — no one who gets fired if these numbers go from 45,000 to 50,000,” Dr. Insel said.  “It’s shameful. We would never tolerate that in other areas of public health and medicine.”  

With Trump and Republicans dismantling heath care coverage, quality treatment will likely decline and, most likely, the death toll will increase.  Not that Trump or the GOP give a damn about ordinary citizens. 

If you are having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK) or go to SpeakingOfSuicide.com/resources for a list of additional resources.

The Health Care Crisis in Rural America

Grafton, West Virginia

Here in Virginia, many feel that West Virginia's exit from Virginia during the Civil War was a net positive for Virginia.  That belief is re-enforced daily by West Virginia's near basket case status and its residents' constant voting against their own self-interest. Throw in the embrace of ignorance and religious extremism, and it is perfect recipe for a never ending downward spiral.  A piece in the Washington Post looks at the dental care crisis in West Virginia but which is common in other rural areas.  One comment on the piece summed up my views:

It's an old story. Poor rural whites depend on the government but try to destroy it by voting for the worst people they can find. Republicans exploit their ignorance and bigotry to get them to vote against their own self-interest. It's hard to feel sorry for them.

Harsh?  Perhaps, but nonetheless descriptive of the problem.  The Post article looks into the causes of the crisis and the difficulty of finding a solution.  Here are article excerpts:

Lynnel Beauchesne’s dental office hugs a rural crossroads near Tunnelton, W.Va., population 336. Acres of empty farmland surround the weathered one-story white building; a couple of houses and a few barns are the only neighbors. But the parking lot is full. Some people have driven hours to see Beauchesne, the sole dentist within 30 miles. She estimates that she has as many as 8,000 patients. Before the office closes at 7 p.m., she and her two hygienists will see up to 50 of them, not counting emergencies.

About 43 percent of rural Americans lack access to dental care, according to the National Rural Health Association, and West Virginia, among the poorest and most rural states, is at the center of the crisis. All but six of the state’s 55 counties include federally designated “Health Professional Shortage Areas,” “Medically Underserved Areas” or both. 

One seemingly obvious solution is to persuade more dentists and other oral-health providers to come to places like West Virginia, a goal of various public efforts. The federal National Health Service Corps program, for example, offers up to $50,000 in loan assistance to doctors and dentists willing to work two years in a designated shortage area. And several states have passed or considered legislation authorizing “dental therapists” — midlevel providers akin to nurse practitioners — to provide certain kinds of primary dental care in areas where dentists are scarce.

[A]dding more providers will not solve the problem of rural oral health. People don’t go to the dentist if they can’t afford to, no matter how many dentists there are. “Affordability is the big thing,” said Richard Meckstroth, chair of the department of dental practice and rural health at West Virginia University.

And affordability cuts both ways. Recruiting more providers into shortage areas can compound the problem, said Meckstroth, putting local dentists into tougher financial straits by increasing competition for a relatively small pool of paying patients. The dentists who arrive under loan forgiveness programs also tend to leave after their two-year obligation is up, what Meckstroth calls a “revolving door” that deprives patients of continuity of care.

According to the state’s Bureau for Public Health, only 40 percent of adults in West Virginia have access to dental benefits of any kind, compared with about 65 percent of working-age adults nationwide.While the state’s Medicaid program covers preventive care for children, adults get no coverage except for extractions or treatment for infections. Medicare offers no dental benefits, either. As a result, according to the West Virginia Oral Health Coalition, 43 percent of West Virginians ages 55 to 64 have lost six or more teeth because of disease or decay; 61 percent of residents older than 65 without a high school diploma have lost all their teeth.

The lack of affordability and access to dental coverage in West Virginia is of course tied to the state’s overall economic precariousness. Bruce Cassis, a dentist who practices in Fayetteville, said access to high-quality dental insurance in his area has declined along with the fortunes of coal. “Less than 5 percent of my patients are affiliated with the coal industry,” Cassis said. “Thirty years ago, they used to be 60 percent of my patient base.” Today, the major employer in his region is the county school board. “They have the best insurance in the area.”

The same is true for the Perrines and Beauchesne, whose best-insured patients typically have government jobs, such as with the school district or the fire department.

Still, the dental-care crisis in rural America is closely linked to the broader economic challenges in the parts of the country that have not yet caught up in this recovery. “How you improve access in rural America,” says Meckstroth, “is to get people jobs.”

Bringing jobs, of course means (i) accepting the reality that the coal industry is moribund, and (ii) an area must be attractive to new business, often those that would be relocating from elsewhere.  This, of course, where West Virginia's (and much of Southwest Virginia) embrace of ignorance, racial bigotry and religious extremism and hate makes the likelihood of businesses moving to the area remote. Meanwhile, those suffering continue to embrace the very things and politicians that have brought on their misfortune. 

Politicians Continue to Allow Big Pharma to Screw Americans

Americans pay more for healthcare than residents of any other developed country.  The same goes for drugs.  It is common for American consumers to pay three times (often many times more) the prices paid in Europe, Canada and even Mexico.  The reasons for this rip off of American consumers?  First, the lack of a decent, national health insurance system where managing care, not maximizing prices for private interests, is the goal  Nowhere is the greed and rapaciousness in American healthcare worse than in the area of prescription drugs.  Big Pharma is allowed to hold monopoly power and charge whatever outrageous price it wants and the government refuses to force price negotiations of prices for programs such as Medicare.  The result stems from politicians being bought by pharmaceutical companies.  Indeed, Congress has played a huge role in allowing the opioid epidemic to grow by tying the hands of would be government regulators.  A piece in the New York Times looks at America's broken system.  Here are excerpts: 

So Donald Trump broke another promise: he did not, after all, empower Medicare to negotiate lower drug prices. Instead he (and Michael Cohen, who definitely isn’t his bagman) took money from drug lobbyists, appointed them to key positions, and announced a plan that sent drug stocks soaring. I’m sure you’re shocked.

But promise-breaking aside, would introducing a policy of bargaining drug prices down have been good for America? Actually, yes.

Oddly, I never got around to doing my homework on the economics of drug-price bargaining – partly because I was realistic enough about the political economy to realize that it wasn’t going to happen in America any time soon. Still, the fact that Trump promised to do something makes it somewhat relevant, even if he did predictably break that promise. And it turns out that the economic case for doing what Trump just didn’t do, for putting caps on drug prices, is remarkably strong.

Let’s start with where things are right now. After a drug company gets a patent, it has a temporary monopoly on sales of its drug. So its situation looks like that of a standard monopolist . . . It charges a price that is above the marginal cost of producing the drug – usually well above marginal cost.

[O]verall, society gains from the drug’s existence. However, . . . . society would gain more if someone – regulators, purchasing managers at government agencies, whatever – forced the drug company to charge less than the monopoly price.

[T]he United States would almost certainly be better off with a moderate level of bargaining/price control than it is under the current hands-off regime. Why? I count at least four distinct reasons.

First, a point made by Lackdawalla and Sood is that the profit effects of constraining a monopolist’s price are second-order. . . . . What’s going on here is that the profits lost on existing sales are almost fully offset by the profits on additional sales.

What this means in turn is that the negative effect on innovation is small if prices aren’t pushed down a lot, while the consumer gains are first-order. Some price bargaining is always welfare-improving.

Second . . . . . it’s often argued that pharma companies basically develop too many drugs, wasting resources on what amounts to unnecessary duplication. To the extent that this is true, discouraging some innovation isn’t a bad thing.

Third, the consumer surplus calculation assumes that consumers actually pay for the drug. In fact, many drugs are paid for by insurers – which is necessary, because like much of modern medicine the cost if you need it is far beyond most people’s ability to pay out of pocket. But this means that the price someone is willing to pay may greatly exceed the value to the patient. In general, the interaction of drug insurance with monopoly pricing creates potentially huge distortions in both drug development and drug use, reinforcing the case for bargaining.

Finally, it’s a global market – which means that much of the consumer surplus from drug development accrues to foreigners, not U.S. citizens. Maybe there should be more drug development from the point of view of global welfare. But given the unique unwillingness of the U.S. to bargain over prices, we end up paying a much larger share of the costs of that development than we receive of the benefits. Funny how Trump is America first on everything, except when a nationalist position might be bad for Big Pharma.

Yes, Trump says he wants to force other countries to raise drug prices. Good luck on that.

What this comes down to is that there is a very strong case for doing what Trump promised to do but didn’t. I’m aware that simply saying “let’s bargain over drug prices” isn’t effective unless coupled with a willingness to say no – to tell a drug company that an overpriced drug will be excluded from the formulary. So it wouldn’t be politically easy. But it would be good economics.

Richmond: Inauguration Day 2018.

As I said in a Facebook post, it has been a wonderful and inspirational day here in Richmond as our friend, Ralph Northam was sworn in as Governor, along with Mark Herring who is in his second term as Attorney General, and Justin Fairfax takes office as Lt. Governor (and the second black to be elected to statewide office in America - former Governor Doug Wilder was the first). In the early days of the nation, Virginia provided leadership and inspiration for the founding of the nation and so-called American ideals.  Yes, the Commonwealth was stained by slavery and later by the Jim Crow era and many lest than honorable aspects.  I like to believe that Virginia has turned a corner and is forging a path back to the values of its glory days, if you will.  In the 2017 Virginia elections, Virginians elected a statewide slate of Democrats and resoundingly rejected Trumpism and the reverse Robin Hood agenda proposed by GOP candidate Ed Gillespie and still espoused by Congressional Republicans.   Ralph Northam's inaugural address was, in my view, brilliant and sets the tone for Virginia to recapture it's leadership role that it once had in the founding days of the nation.  Most importantly, it calls for a return to a moral code utterly lost in the current White House administration and among evangelical Christians and others who support the vile occupant of 1600 Pennsylvania Avenue.  Here is the speech in its entirety (some would say it's a politician's speech, but knowing Ralph, he means every word):

Mr. Speaker, Lt. Governor Fairfax, Attorney General Herring, members of the General Assembly, justices of the Supreme Court, Judge Tyler, honored guests, Pam, Aubrey, and Wes, my fellow Virginians.

I am truly humbled that you have taken the time to be with us on such a special day for our commonwealth.

Today we carry out the peaceful transition of power.  Americans invented this ritual.It dates to our earliest days as a country.  It makes us American. And at this hour, more than 1.3 million Americans protect this right.  They serve in our armed forces overseas and right here at home.

They put their lives on the line to protect our way of life and we should always be grateful for their sacrifice.  Please join me in thanking them for their service.  If you ask the men and women who serve why they stepped forward, the answer is often the same:I volunteered.  Because it was my duty. Virginians understand that. Because our commonwealth was founded on public service.

But the way ahead hasn’t always been smooth.  In a church on a hill 15 blocks from here, Virginia’s first elected governor helped launch the American Revolution when he cried, “Give me liberty, or give me death!”

But at the bottom of that same hill, one of the country’s largest slave-trading markets was coming to life.  A place where Virginians would sell men, women, and children for profit.

Our history is complex in Virginia.  It includes good things, and bad. But no other place on earth can claim it. This unique heritage endows us with a responsibility to shape the future — to leave this place better than we found it. That’s the Virginia way.

It’s a model that Governor Terry McAuliffe and his wife Dorothy have followed these past four years. Virginia is better off today because of them, and Pam and I are proud to have been their partners. Two hundred thousand new jobs. $20 billion in capital investment. Voting rights restored for 173,000 Virginians. 10 million more school breakfasts served to children who need them. First state in the nation to functionally end homelessness among veterans.

That’s a record to be proud of, and I am ready to build upon it! The McAuliffe administration has been about putting the needs of the people you serve first. Those values defined my upbringing from the earliest days I can remember.

My mother taught children who were learning English as their second language how to read. She worked in health care, nursing sick people back to health on Virginia’s Eastern Shore. She volunteered with the hospice, comforting people in their final hours. She taught me that, no matter who we are or where we come from, we are all equal in the beginning – and the end. 

My father, who grew up on a farm on the Eastern Shore, served in the Navy during World War II, a member of America’s greatest generation. He became a commonwealth’s attorney and a judge just as his father had before him.

Before my brother joined the Navy and I joined the Army, my father always encouraged us to play sports. I think he knew we would learn the importance of teamwork and the fundamental truth that success isn’t about one person’s individual contributions, it’s about the team.

Watching the things my parents did, for our family and for our community, taught me a lot growing up. But the greatest lesson I learned came from watching how they did those things. Their humble and steady service to the people around them taught me what strength looks like. It taught me that you don’t have to be loud to lead.

I was blessed to grow up on Virginia’s Eastern Shore, and to call it my home. As a kid I spent hours behind our house, crabbing and fishing on the beautiful Chesapeake Bay. To this day that is where I find peace.

When I was just old enough to take to the water myself, my dad helped me build a rowboat and launch it, with strict instructions: stay close to home. As I grew and became more comfortable, I began to take longer trips away from the shore, until I was ready to head out into the open water. I remember standing with my father as I prepared to embark, and like all good dads, he knew I was nervous even before I did. He said, Ralph, remember — when you get out there, you can always trust your compass.

If things get dark or foggy, if you can’t find your way — keep your eye on the compass.It’ll always bring you home safely. He was right about that compass. As I got older and took various jobs on the water, working on a deep sea fishing boat and as the captain of a ferry to Tangier Island, I came to trust that compass to guide me when the way ahead was not clear.

My dad’s advice stayed with me when I reached the Virginia Military Institute and was given a different kind of compass, in the simple words of the VMI honor code: “A cadet will not lie, cheat, steal, nor tolerate those who do.” Those words have stuck with me all these years because they’re so clear. They have become a kind of moral compass for me. They always call me back home safely.

Virginia and this country need that more than ever these days. It can be hard to find our way in a time when there’s so much shouting, when nasty, shallow tweets take the place of honest debate, and when scoring political points gets in the way of dealing with real problems.

If you’ve felt that way, I want you to listen to me right now: We are bigger than this.We all have a moral compass deep in our hearts. And it’s time to summon it again, because we have a lot of work to do.

We’re going in the wrong direction on health care in Virginia and America. More people need coverage, not less. It is past time for us to step forward together and expand Medicaid to nearly 400,000 Virginians who need access to care.

We should also resolve together today to refrain from any effort to curtail a woman’s constitutional right to make her own decisions about her health. 

If we are going to build a healthier Virginia for everyone, we must address the public health crisis of gun violence. Gunshots kill more people in Virginia every year than car accidents, but if you walk into the right gun show, it’s easier to get a firearm than it is to rent a car. I am ready to work with you to make Virginia safer by passing smart reforms that keep guns away from people who shouldn’t have them.

We have to acknowledge that the incredible economic progress we have made in Virginia has been uneven.  As technology companies and skyscrapers rise in many regions, other parts of Virginia are watching blue collar jobs move out while the opioid crisis moves in.And those challenges are not limited to rural areas. In far too many places in Virginia, your ZIP code determines not just how well you will do, but how long you will live.

Here in our capital city, a child born 2 miles that way can expect to live to about age 63.But a child born 5 miles in that direction can expect to live 20 years longer. You don’t have to be a doctor to know that something’s wrong.

The solutions to these problems are not easy. But we do know what they are. The way ahead starts with access to quality health care and public education for every Virginian, no matter whom they are or where they live. It depends on smart interventions in the case of addiction or mental health challenges and a focused economic development strategy that connects the right people with the right skills and the right jobs.

As governor, I will approach these challenges with the same skills I learned as a doctor. Over the years I have taken care of thousands of children. Never once have they or their families asked me if I'm a Democrat or a Republican, nor have I asked them.

Each patient is a person in front of you, who’s sick. A child who needs your help, and who deserves every opportunity to thrive. Doctors are taught that we have a responsibility to do everything we can to make them better.

A good doctor trusts science and brings no pre-conceived notions to the examining table. A good doctor listens first, to what a patient is saying and not saying. A good doctor understands that a symptom may have a hidden cause. The pain in a child’s belly could be an ulcer, for example. Or it could be from hunger because the pantry at home is bare and the last time she ate was at school lunch yesterday.

We learn quickly that the problems patients are having are usually more complex than the symptoms we can see on the surface. And getting them back to health means devoting the time and resources it takes to alleviate those root causes.

As governor, I will draw on these lessons. I will remember that Virginians didn’t send us here to be Democrats or Republicans – they sent us here to solve problems. I will remember that no one has a monopoly on good ideas.

The path to progress is marked by honest give and take among people who truly want to make life better for those around them. I will remember that treating symptoms of problems may be easy in the short-run, but getting to the root of the problem and solving it from the bottom up is always more effective in the long-run.

When we make decisions, we’ll apply this test. • Does this action do the most good for the most Virginians?• Have we been transparent with the public about what we are doing and why we are doing it?• And finally, is there a better way forward that we haven’t yet considered?

The guiding principle of this administration will be simple: we will work together to make our commonwealth work better for all Virginians, no matter who they are or where they’re from.  We cannot rest until every family and every community has the same access to opportunity that others do.

Here are my personal commitments to you.• I will always tell the truth.• I will strive every day to maintain the trust you placed in me on Election Day.• I will always put Virginia’s interests first.• I will work with anyone whose policies help Virginia. And when they do not, I will oppose them.• I will visit every city and county while I’m governor, and every public college and university.• I will continue to personally care for patients at RAM, Virginia’s Remote Area Medical clinic — and keep pushing to cover more and more Virginians.• I will be there personally to welcome Virginia National Guardsmen and women when they return home from overseas.• And my door will always be open to you.

Here’s the last commitment I make to you. And it’s the most important. It comes from an experience that has shaped the way I practice medicine and public service.

Shortly after I left the Army and began practicing as a child neurologist, I met a young couple whose son was living with severe autism. I examined the little boy, and his case was tough. So I explained to his mother that nothing I could do would alter her son’s condition or improve his quality of life. Well, more than a decade later, a woman approached me in the grocery store. She reminded me that I had seen her son years ago, and that she and her family chose not to return for a follow-up.

She asked me if I knew why they had not returned, and I confessed to her that I did not, and that I hadn’t really thought much about it. She looked me in the eye and said, “Dr. Northam, when you said you couldn’t help us, you took away our hope.”

I can still hear her words to this day. When I told her that I was unable to help her son, I diagnosed the problem correctly. But I missed the opportunity to provide the one thing her family still needed the most: And that was hope.

From that moment on, I have recognized the incredible power of hope and my responsibility to preserve it in the people I serve. Hope is not just a source of comfort for the afflicted – it is a wellspring of energy to fight for a better tomorrow, no matter the odds.

I am committed as your governor to fight every day for the hope that tomorrow brings - for all of us, not just some of us. Because it can be. If we work together, tomorrow can be better for the nearly 400,000 Virginians who are one illness or accident away from bankruptcy because they have no insurance.

Tomorrow can be better for the families in rural communities who are praying for new jobs so their children don’t have to move away to build happy lives.

Tomorrow can be better for the children who are sitting in crowded and crumbling schools across this state, tired and distracted from too little food and too much violence in their communities.

Tomorrow can be better for the men and women who depend on clean air and water for their livelihood and for the children who will inherit the environment we pass on to them.

Tomorrow can be better for people who too often face discrimination, harassment or violence because of their race, gender, religion, or sexual orientation.

If we work together today, tomorrow will be better for all of the Virginians who have placed their trust in us to fight for them every day.

This country is once again looking to Virginia to lead the way. Let us lead with humility and optimism, telling the truth, learning from history and removing every obstacle to progress for all Virginians. Let us rely on the compass we all carry to show us the way ahead.

I ask you to join me. Let’s get to work. Thank you so much.

Inaugural Ceremony on the steps of the Virginia Capitol designed by Thomas Jefferson