Ontario trying to Ban a Generic Drug that will Benefit Big Pharma as well as the People

Posted by PITHOCRATES - November 24th, 2012

Week in Review

What is Ontario doing now?  Ontario, like the rest of Canada, puts people before profits.  At least that’s the reason they give for their single-payer health care system.  But now Ontario is doing something that may actually put profits before people (see Ontario urges other provinces, territories to push for generic oxycodone ban by MARIA BABBAGE posted 11/23/2012 on The Globe and Mail).

Ontario is rallying other provinces and territories to put pressure on Ottawa to reconsider its decision not to ban generic forms of OxyContin, a highly addictive and much-abused painkiller.

What?  Trying to ban a cheaper generic drug?  What, are they in bed with Big Pharma?  Choosing profits over people?  And this from a nation that has a single-payer health care system because they do put people before profits?  This makes no sense at all.  Helping to keep cheaper generic drugs off of the market.  What gives, Ontario?

Provincial Health Minister Deb Matthews said she plans to bring in regulations that would limit access to the drug in Ontario unless it’s tamper-resistant.

Under the proposed regulations, long-acting oxycodone products won’t be considered for public funding or be substituted for the brand-name drug by pharmacists unless they meet certain criteria…

OxyContin was meant to manage pain with a formula that released one dose of oxycodone over many hours. However, abusers could circumvent the timed-release feature by crushing the pills…

Since Ms. Aglukkaq’s announcement, doctors, pharmacists, first-nation leaders and police chiefs have expressed deep concerns about the decision, Ms. Matthews wrote in the letter, a copy of which was also sent to Ms. Aglukkaq.

“I am seeking your support in asking that Health Canada reconsider their decision, as this remains the single most effective way to prevent the devastating impact that this drug can have on our respective jurisdictions,” she wrote.

Ontario has the highest rate of prescription narcotic abuse in the country — two to four times higher than any other province, according to Ms. Matthews.

It has devastated many first nations communities, including one small northern reserve where 85 per cent of residents are addicted to opioids.

Oh, it’s not about profits.  It’s about the horrible costs of addiction.  Both monetary.  And societal.  Which makes a strong argument against the decriminalization of drugs.  Even marijuana.  Because people abuse narcotics.  And will abuse them more if they are not illegal.  As prescription narcotic abuse proves.  Especially opioids.  This is why the Chinese fought the British in the Opium Wars.  To keep opium out of China.  As it was destroying a generation of Chinese.  As it is destroying a generation of first nation communities in Canada.

The War on Drugs has been one of the most costly wars in American history.  And we are no closer to winning than when we started.  Some would even say we are worse off because of it.  But when you look at the alternative the cost may even be higher.  Higher addiction rates.  More futures destroyed before kids even get a chance to start their lives.  And more families destroyed.

When it comes to drugs you’re damned if you do and damned if you don’t.  There is no easy answer.  And there may be no answer.  But those who have to deal with the consequences of addiction will surely applaud Ontario for standing strong against addiction.  As they are putting people first.  Even though it may help someone’s profits.

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An Aging Population taxes the NHS such that Patients are Neglected and Marked for Death by Informal Death Panels

Posted by PITHOCRATES - November 24th, 2012

Week in Review

Conditions in some British hospitals grow appalling.  As patients are left in their own filth.  And ‘do not resuscitate’ orders are placed in their files.  Often without consulting their families.  All in an effort to hurry up the death of these most burdensome patients (see Why can’t the NHS get basic care right? by Nick Triggle posted 11/22/2012 on BBC News Health).

Reading the 53-page dossier on poor patient care put together by the Patients Association, you cannot help but be moved by the harrowing stories.

There is the case of a man placed in a dementia-friendly ward with staff, who were given strict instructions to check on him because he had a history of going walkabout, but was able to escape and subsequently drowned in a nearby river.

There are tales of patients left in soiled sheets, their dignity stripped from them, and others being left for hours in pain, their cries for help ignored…

Of course, in an organisation the size of the NHS – it sees 1m people every 36 hours – there will always be cases where standards have slipped…

I recently asked a senior nurse working in a large hospital what she thought had gone wrong.

Her answer was quite clear. She told me: “We have had to become immune, desensitised, to cope with what we do. Every day we see suffering and we can’t always help.

“That does not explain or excuse some of the clear examples of neglect we have heard about. But it has created a culture that means these things can happen.”

She went on to say that at the heart of the problem was the fact that there were many people in hospital that should not be there.

It is an often-quoted fact that two-thirds of emergency admissions are among people with long-term conditions, which covers everything from heart disease to dementia.

Even with national health care people use the emergency rooms for non-emergency conditions.  This was one of the driving forces in passing Obamacare.  We’re paying for these people already in higher hospital costs.  So we might as well give these people health insurance so they don’t use our emergency rooms for non-emergency conditions.  Well, guess that won’t be happening.

It’s not only that these people shouldn’t be there, but when they are there they are getting ‘death panel’ treatment.  As Triggle wrote the previous day, “A number of the patient stories involved people who had been left in soiled sheets and there were examples of patients having a “do not resuscitate order” placed on them without proper discussion with their families.”

So they don’t want them in the hospital.  And if they get into the hospital they are just letting them die.  Through informal and unofficial death panels.  To free up limited health care resources.  Sad.  But this is the reality of national health care.  Combined with an aging population.  Which is forcing the NHS to get by on less funding.  While that aging population is taxing their limited resources.  Something all the opponents of Obamacare warned.  But the Democrats passed their health care bill anyway.  For they don’t care about the ultimate quality of health care.  But the power national health care gives them.

The liberal Democrats always note the size of classrooms when trying to get more funding for teacher pay and benefits.  Saying that large classrooms are bad.  That smaller classrooms in more schools throughout the community though more costly will provide a higher quality education.  The same is true in health care.  More clinics throughout the community though more costly will provide a higher quality of health care.  And keep a lot of patients out of the hospital.  The NHS would like to do that.  But the budget constraints due to an aging population make that impossible.  Leaving hospitals little choice but to pin ‘do not resuscitate’ orders on their more burdensome patients.  Which will likely happen under Obamacare.  As the US also has an aging population.

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Government Regulatory Policies make Greek Milk the most Expensive Milk in the European Union

Posted by PITHOCRATES - November 24th, 2012

Week in Review

Greeks are furious over the high price of milk.  Some cannot even afford it anymore.  While others are calling for government to do something about the high price of milk.  Which is rather ironic as the government is responsible in large part for those high prices (see Price of milk makes Greeks’ blood boil by Karolina Tagaris and Alan Wheatley posted 11/22/2012 on Reuters).

Aravanis reserves his harshest criticism for government bureaucrats, who he says make it hard for farmers to obtain land permits to expand and reap economies of scale. “It’s not as if cows are going to be grazing in their living room,” he said.

George Kefalas, who produces milk on a family farm near the northern city of Thessaloniki, said it can take two or three years to get an operating license…

Attempting direct comparisons with prices elsewhere in Europe is treacherous because so many variables are in play, such as transport costs, rents and consumer preferences.

But Eurostat says the price in Greece of dairy produce -milk, cheese and eggs – was 31.5 percent above the EU average in 2011, the highest in Europe…

Skordas said milk was expensive because of farmers’ high production costs, expensive packaging and the cost of transporting milk to remote islands and villages.

Moreover, fresh milk is sold in Greece with a shelf life of just five days, which means more trips to collect it from farms.

Dairy farmers oppose a long-standing proposal to extend the shelf life of milk to 10 days, as is common elsewhere in Europe.

This could be done relatively simply in the pasteurisation process, but Skordas said cattle breeders feared – unnecessarily, in his opinion – that this would open the door to increased competition from imported milk.

Small farms.  Government restrictions.  High regulatory and compliance costs.  If the Greeks don’t want economies of scales (like they have in the US) and want only fresh milk (unpasteurized milk less than 6 days old) legally sold then milk is going to be expensive.  Especially when dairy farmers lobby government to keep their costly regulations in place to keep out less pricy imported milk.

Only government can keep out less pricy milk.  And only government can keep the cost of milk production high by mandating a short shelf life.  As the Greek milk market is a captive market Greeks have little recourse but to pay high milk prices.  Or demand that government stop raising the price of milk with their regulatory policies.

Milk is like oil in a way.  There is little difference between batches when it comes from the source.  But once it enters the regulated market governments start adding costs.  Making some milk (or oil products) more expensive than other milk (or oil products).  The reason why gasoline prices are different in the US than in Europe is that government taxes and regulations are different.  They’re more costly in the Europe so gasoline is more costly in Europe.  Just as milk is more costly in Greece than elsewhere in the EU.

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India seeking Private Railway Investment to fund Modernization and Capacity Addition face Union Opposition

Posted by PITHOCRATES - November 24th, 2012

Week in Review

India had an explosion of economic growth as they unleashed free market activity.  So much that their infrastructure is struggling to keep up with it.  Especially their railways (see Union Cabinet okays private sector investment in railways by Mahendra Kumar Singh posted 11/23/2012 on The Times of India).

Desperate to attract private investment in the cash-strapped railways, the Cabinet on Thursday cleared the state-run transporter’s plan to rope in the private sector for building new rail lines and plants, and augment capacity, a move that was red-flagged by the unions.

With the policy in place, the railways will be able to get the private sector to connect ports, mines and industrial plants with the rail network by allowing them to invest in laying the tracks for last-mile connectivity. The move is expected to lower the transportation cost and help evacuate minerals, coal and finished products from the production centres…

The move comes as the railways, in the absence of fare increase, has failed to generate resources for funding modernization, leave alone capacity addition despite successive rail ministers adding new trains to appease their constituency. In fact, it has repeatedly failed to meet the targets…

Even this time, the unions are opposing any attempt to hand over operation and maintenance to private players, which could deter investors looking to enter the BOT space for building new lines.

That’s a pity.  For it’s those operation and maintenance costs that consume the capital that they otherwise could use to fund modernization and capacity addition.

In the US there are two types of railways.  Those that make money.  And those that lose money.  Those that make money are privately owned.  Those that lose money are publicly owned.  Every subway, commuter train and Amtrak train loses money because of high operating and maintenance costs.  For the usual reasons.  High pay, pensions and health care costs for active workers and retirees.  While the heavy freight railways make money.  Despite their high operating and maintenance (all union) costs.  For there is no better alternative to moving heavy freight across land.  While every other way to move people (bicycle, motorcycle, car, bus, ship, plane, etc.) is a more cost efficient way to move people than by train.

The freight railways in the US are a modern marvel.  Moving so much freight that main line rails are like polished chrome.  While the best passenger train still pulls onto a siding to let a money making freight train pass.  Clearly showing who makes money.  And who doesn’t.  As well as the difference between a private sector union and a public sector union.  One has accountability.  The other doesn’t.  Customers moving freight have choice between rail shippers.  While people traveling by train have no choice.  The freight railroads have to be able to stay in business by being competitive.  While the passenger railways just keep raising fares.  Or beg for more taxpayer subsidies.  Which is why public sector workers don’t want to privatize their industries.  Because they don’t want to be accountable.  Or work within budgets.  Like everyone in the private sector does.  Including their union brethren in the private sector.  Who often don’t live as comfortably as their public sector brethren live.

If India is to continue her move into a free market economy she needs to privatize her freight railways.  Which could easily become and stay state of the art.  While biting the bullet on her passenger rail that probably will never make enough money to fund modernization or capacity addition.  But at least the money-making private railways can help bolster the economy.  Producing greater tax revenue for investment in the black hole that is passenger rail.

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Big Government in Europe is worried about Glencore cornering the Zinc Market

Posted by PITHOCRATES - November 24th, 2012

Week in Review

With the price of natural gas falling some providers are capping their wells until prices go up.  During the Eighties the price of oil soared, pulling oil producers into the oil business left and right.  Resulting with the oil glut of the Eighties as supply greatly outpaced demand.  OPEC tried to set the price of oil by limiting production.  But they sometimes fail as member states often cheat, selling a little more than their quota to profit from those high prices.  In America, when John D. Rockefeller was selling refined oil products cheaper than any of his competitors it was his competitors who urged the government to bring antitrust actions against him.  Not the people buying his products at low prices.  President Obama has shut down most drilling on federal lands.  But because of demand drilling on private lands is soaring.

Trying to maintain monopoly control is difficult.  And rarely can be done without the help of government (even with the help of government it’s not that easy).  Or by selling at a price below your competition.  Which rarely hurts consumers.  No, low prices hurt those who can’t sell at low prices.  Those who want consumers to pay their higher prices.  This is the power of market forces.  And greed.  For when prices go up greed lures others into the market place to cash in on those high prices.  Which brings prices down.  Supply and demand.  It’s how we have pretty much whatever we want in a complex economy.  Even just the right amount of zinc (see EU steelmakers unhappy with EU conditions on Glenstrata deal by Silvia Antonioli posted 11/22/2012 on Reuters).

EU steelmakers said Europe’s antitrust conditions for Glencore (GLEN.L) to go ahead with its $33 billion takeover of Xstrata (XTA.L) are not sufficient to prevent the dominant influence of one zinc supplier…

“The European steel industry, which uses the lion’s share of zinc metal traded in Europe, will still have to face a leading provider effectively controlling the zinc supply chain from mining to warehousing operations,” Eurofer said in a statement.

Post-merger, the parties will still have a share of around 35 per cent of the European zinc market and the vertical integration of the new entity, which includes mining, smelting, trading, logistics and warehousing, is also concerning according to Eurofer.

What’s really of concern here?  Economies of scale.  The bigger Glencore gets the lower its production costs per unit become.  And the lower their selling price can be.   This is what economies of scales get you.  Not monopoly power.  And who is hurt by lower selling prices?  Glencore’s competition.  And those supplying the other 65% of the European zinc market.

Of course, the argument always goes once someone corners the market (by driving their competition out of business with low prices) they’ll then start raising their prices.  A lot.  Oh my.  Imagine what would happen if zinc prices soared.  It would pull zinc suppliers into the European zinc market left and right to cash in on those high prices.  Can anyone name a supplier who cornered the market with low prices and now is selling at high prices that isn’t propped up by the government?

No.  Because it doesn’t happen.  Because it can’t happen.  Not with free markets.  Because of greed.  For if prices go up more people enter the market out of greed.  And the greater this greed the greater the supply brought onto market.  And the greater prices fall.

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