Category Archives: Public Policy and Governance

Socializing Risk, Privatizing Profits: Big Pharma Edition

My friend Fran Quigley has an important article in Truthout about the skyrocketing prices of lifesaving drugs. The current outrage over a steep hike in Epipen prices makes it particularly timely.

As Fran notes, We the Taxpayers provide research dollars to support drug development (socializing the risk that any particular line of research will hit a dead-end). Big Pharma spends more on marketing than on R and D, charges what the market will bear and then some for the drugs it does develop–and pockets the profits.

It is hard to overstate the level of dysfunction in the US medicines system. The headline-producing greed of “pharma bro” Martin Shkreli was just the most dramatic example of a pharmaceutical industry whose patent monopolies grant it immunity from market forces while its political clout shields it from government regulation. Taking full advantage of taxpayer-funded research, drug corporations make record profits, even by Fortune 500 standards, and pay their CEOs as much as $180 million a year. Those corporations spend far more on incessant marketing to consumers and physicians than they do on research — part of the reason they have largely failed to develop new medicines that address the most deadly illnesses and diseases.

The United States is alone among western democracies in not negotiating drug prices. Medicare and Medicaid represent huge portions of pharmaceutical company customers, but Congress has consistently defeated measures that would allow government to use its leverage to bargain on prices. As a result, as Fran points out, “One in every five US cancer patients can’t afford to fill their prescriptions, and many seniors on Medicare are forced to cut their pills in half to stretch their supply.”

Congressional reluctance to push back against inflated prices and unwarranted price hikes can be attributed to politicians’ disinclination to kill the goose that lays the golden egg: each year, Big Pharma ranks among the biggest spenders on both lobbying and campaign contributions.

A ballot initiative in California–the Drug Price Relief Act– is taking aim at this status quo.

The initiative, recently certified by the California Secretary of State as Proposition 61, calls for state agencies to be blocked from paying more for a prescription drug than the price paid by the US Department of Veterans Affairs. Unlike the Medicare program, the VA is free to negotiate the price it pays for drugs and as a result, pays as much as 42 percent less than Medicare and usually significantly lower than state Medicaid programs. The primary force behind the ballot measure, the AIDS Healthcare Foundation, says the law could save Californians hundreds of millions of dollars a year in lower government costs and lower individual co-payments. The California Legislative Analyst Office says it cannot provide an accurate estimate of the savings, concluding that it is impossible to predict how pharmaceutical companies would react to this first-ever restriction on state drug spending…A July 2016 poll conducted by the initiative campaign, Californians for Lower Drug Prices, showed over two-thirds of voters supporting the ballot measure.

Predictably, the measure is being opposed by the pharmaceutical industry, which is pouring big bucks into a campaign against it. It will be very interesting to see what happens–both in other states and nationally–if the ballot measure succeeds.

There’s an old saying that pigs get fed, but hogs get slaughtered. California voters will decide which category best fits Big Pharma.

Stay tuned….

 

A Political “To Do” List

Pretty much everyone I know is absolutely obsessed with this bizarre Presidential race. In one sense, that’s good—people paying attention are unlikely to break for Trump. But the intense focus on the national race means that the 2016 down-ticket elections aren’t getting the attention they deserve—not just the Senate, which is critically important, but also the House and especially state-level offices. A decent-sized Hillary victory is likely to tip the Senate. The sixty-four thousand dollar question is: If Hillary wins big, could Democrats take the House?

Conventional wisdom says no. After the 2010 census, Republicans dominated state governments in a significant majority of states, and they engaged in one of the most thorough, most strategic, most competent gerrymanderings in history. If you have not read the book “Ratfucked”—buy it and read it. (And yes, that’s the real name of the book.) The 2011 gerrymander did two things: as the GOP intended, it gave Republicans 247 seats in the House of Representatives to the Democrats’ 186. That’s a 61 vote margin– despite the fact that nationally, Democratic House candidates received over a million more votes than Republican House candidates.

But that gerrymander did something else; it destroyed Republican party discipline. It created and empowered the 80+ Republican Representatives who comprise what has been called the “lunatic caucus” and made it virtually impossible to govern. That unintended consequence has now come back to haunt the GOP and frustrate the rest of us.

The structural advantage created by the gerrymander was big enough to put the House out of reach for Democrats in any normal Presidential year. But this is not a normal Presidential year.

The author of “Ratfucked,” says that GOP control of the House was designed to withstand a Presidential-year loss “up to and including” 5% nationally. If Hillary Clinton were to win by more than 5%, Democrats could theoretically swing enough seats to control the House. Obviously, that depends on turnout, on the political culture of various districts, and on the quality of individual candidates, but theoretically, at least, it’s do-able.

As endlessly fascinating as the current electoral horse-races are, we need to pay more attention to the systemic problems that are at the root of our increasingly undemocratic electoral system; if we don’t address those, we will never regain a level playing field, and there will be no incentive for the Republican Party to grow up and abandon its current reliance on appeals to racial grievance. Both America and the Democratic Party need an adult, responsible center-right opposition.

Gerrymandering is the practice of partisan redistricting. The desired outcome is as many safe districts as possible: Pack as many members of the opposition party into as few districts as possible, and create less-lopsided but also safe districts for the party in charge.

Safe districts breed voter apathy and reduce political participation. Why get involved when the result is foreordained? Why donate to a sure loser? For that matter, unless you are trying to buy political influence for some reason, why donate to a sure winner? Why volunteer or vote, when it doesn’t matter?

It isn’t only voters who lack incentives for participation: it becomes increasingly difficult to recruit credible candidates to run on the ticket of the “sure loser” party. The result is that in many of these races, voters are left with no meaningful choice.  We hear a lot about voter apathy, as if it were a moral deficiency. Political scientists suggest that it may instead be a highly rational response to noncompetitive politics. People save their efforts for places where those efforts count, and thanks to the increasing lack of competitiveness in our electoral system, those places may NOT include the voting booth.

In a safe district, the only effective way to oppose an incumbent is in the primary–and that generally means that the challenge will come from the “flank” or extreme. In competitive districts, nominees know that they have to run to the middle in order to win a general election. When the primary is, in effect, the general election, the battle takes place among the party faithful, who also tend to be the most ideological voters. So Republican incumbents will be challenged from the Right and Democratic incumbents will be attacked from the Left. Even when those challenges fail, they leave a powerful incentive for the incumbent to placate the most rigid elements of each party. Instead of the system working as intended,  we get nominees who represent the most extreme voters on each side.

Lawmakers who are elected from safe deep-red or deep-blue seats respond almost exclusively to incentives from their districts. They are perfectly willing to ignore their party’s leadership if they think that will get them points back home, or help them avert a primary challenge. As a result, the ability to demand party discipline is a thing of the past. (Just ask John Boehner or Paul Ryan, if you don’t believe me.)

Even worse– reduced participation in the political process, and the feeling that the system has been rigged, diminishes the legitimacy of subsequent government action. Is a Representative truly representative when he/she is elected by 10% or 20% of the eligible voters in the district?

It isn’t just gerrymandering. Money in politics has always been a problem; Citizens United unleashed torrents of dark money, prompted the creation of SuperPacs, and added to the perception that America is no longer a democracy, but an oligarchy.

Particularly worrisome, at least to me, are the persistent efforts to suppress the vote of likely Democratic constituencies. Indiana has the dubious distinction of being the first state to pass a voter ID law. Voter ID, as you know, was justified as a measure to prevent in-person voting fraud—a type of vote fraud that is virtually non-existent. Voter ID laws are really intended to discourage poor people and people of color from voting.

The Voter ID law recently struck down in North Carolina is a case in point: as the court noted, photo IDs most used by African Americans, including public assistance IDs, were removed from the list of acceptable identification, while IDs issued by the Department of Motor Vehicles—which blacks are less likely to have—were retained. Cutting the first week of early voting came in reaction to data showing that the first seven days were used by large numbers of black voters. Other changes made voting harder for people who had recently moved, and blacks move more often than whites.

Indiana not only has Voter ID, we are also one of only two states where the polls close at six, making it more difficult for working people to cast a ballot. We need to change these and other systemic disincentives to democratic participation.

  • We need to work for a Constitutional Amendment overturning Citizens United.
  • We need to establish election day as a national holiday.
  • We need to work for redistricting reform, so that voters choose their representatives instead of allowing Representatives to choose their voters.
  • We should also look at alternatives to the way we conduct primaries, and
  • We need to investigate ways to mitigate the effects of residential sorting.

All of those reforms would help reinvigorate American democracy.

Of course, if Donald Trump becomes President, none of that will matter. The world as we know it won’t be the world as we know it; Canada will probably build the wall and pay for it, and I plan to volunteer for that mission to colonize Mars.

 

 

 

 

Apparently, It Isn’t Just Flint

Water, water everywhere…but not a drop to drink.

For several months, headlines about Flint, Michigan have documented a failure of government that is truly unforgivable. Whatever one’s preferred ideology about the proper size or function of government, only the most extreme libertarians or anarchists would argue that government has no responsibility to provide and maintain essential infrastructure.

In the wake of these disclosures, there has been public outrage and condemnation leveled at Michigan Governor Snyder and his administration. That condemnation is deserved. The outrage has reflected a belief that the actions of the administration were “beyond the pale,” that they were a rare and unacceptable deviation from the most basic duties of governance.

Or so we would like to think.

Megan Davies, North Carolina’s chief epidemiologist, resigned this week in the latest bit of drama over drinking water safety — drama that involves the state’s biggest utility and the administration of Republican Gov. Pat McCrory. Davies, who accused state officials of deliberately misleading residents, gives up her post of seven years and an $188,000 annual salary.

The story begins in 2014, when a Duke Energy power plant spilled 40,000 tons of toxic coal ash and 27 million gallons of wastewater into the Dan River. The ash is a byproduct of burning coal, and it’s harmful to people and ecosystems, containing silica, mercury, cadmium, and arsenic.

When the spill occurred, the state told residents that their well water was unsafe, and Duke Energy provided bottled water to those affected. When the state lifted that order, telling those in the area that the water was now safe to drink, a number of scientists working for the state criticized that move, insisting that the water was still unsafe. Davies has now resigned in protest.

There is still no order from the state requiring Duke Energy to clean up the coal ash deposits. This is corruption and it is potentially costing many lives and damaging the environment enormously.

For those of us who live in the Hoosier state, there’s similarly disquieting news closer to home. Think Progress recently reported that “An Indiana City is Poised to Become the Next Flint.”

In East Chicago, the problem is lead contamination in the soil.

Some environmental law experts say the national attention on Flint may have finally ignited action in East Chicago, where residents like Daniels finally learned the scope of the issues with their soil just two weeks ago. The EPA office responsible for East Chicago, Region 5, is the same one that oversaw Flint, Michigan’s contaminated water system.

But these are hardly the only communities with long-ignored contamination tucked into low-income neighborhoods.

The unfolding health emergency in East Chicago is a window into a larger environmental justice crisis playing out in neighborhoods across the country. And the historically minority, lower-income residents of the Calumet neighborhood will suffer the consequences.

Children exposed to lead at a young age can be left with severe brain damage, resulting in irreversible mental disorders, seizures, behavioral disorders like ADHD, and stunted educational growth.

These disclosures join a number of other signs that governments–especially at the state level–are not discharging their most basic responsibilities. In Indiana, unsafe bridges have also made the news. Nationally, Congress has yet to authorize funds for needed upgrades to the electrical grid. The neglected infrastructure list goes on.

A country that cannot maintain its infrastructure is a third-world country.

I can’t help thinking that this is what happens when a society’s dominant discourse constantly characterizes government as unnecessary, inept and corrupt. It becomes a self-fulfilling prophecy. When “good enough for government work” attitudes demean public service, government stops attracting the “best and brightest,” the people who want to serve, to make their communities better; instead, it becomes a refuge for second-raters seeking power or influence.

When I worked for the City of Indianapolis in the late 1970s, I was constantly impressed by the number of administration officials and municipal employees who cared deeply about doing a good job, who worked extra hours and took pride in improving their city.

At some point, when “government work” became a sneer, a lot of those civic-minded people left.

Instead, we have the Snyders, McCrorys and Pences.

A Timely Reminder

The most recent issue of the Harvard Law and Policy review was devoted to analyses of the “State of the States: Laboratories of Democracy.” The introductory essay, by Joel Rogers, made an important point that is all too often obscured by our focus on national issues, personalities and campaigns: the federal government really doesn’t run the country.

The federal government controls many public functions, some of them uniquely: macroeconomic policy and interstate commerce, the currency and its value, war and foreign policy. But on nearly everything else that government touches, state and local government play a far greater and more active role. Our national government is essentially a big insurance company, debtor, and gigantic military. Takeaway non-discretionary income transfers, debt service, and national defense, and its 2014 spending was only 0.7% of GDP, its total investment and consumption was only $472 billion, its total non-defense civilian employment was only 1.3 million. By comparison, in that same year, state and local governments spent 10.3% of GDP, did $1.9 trillion of investment and consumption, and employed 14.3 million people respectively, fifteen, four, and eleven times as much as the federal government.

Furthermore, he points out that the areas of our common lives that are subject to local control tend to be areas that are pretty important to most citizens.

That includes, inter alia, the quality of their public schools (where state and local governments not only provide ninety percent of funding, but also control what and who is taught, by whom, and how); environment (through state and local government control of energy use, transportation, most water, and waste disposal); neighborhoods (through their control of land use, zoning, housing, parks and other public spaces, police, and emergency response); and our democracy (through their control of voting rights, campaign and election administration, and decennial redis-
tricting). The power of the federal government is distant, and slight, com-
pared to this.

Take a close look at the list of decisions made by state and local government units, and then consider which candidates and/or parties are most likely to perform those tasks competently and in the public interest.

Here in Indiana, at the state level, the Pence administration has a truly deplorable record on education (what some have characterized as a “war” on public schools). It has fought environmental regulations to the point of suing to avoid compliance. And the Indiana legislature has an equally deplorable record, especially when it comes to democracy: not just redistricting, which has allowed legislators to choose their voters, rather than the other way around, but refusing to extend voting hours  or to consider other measures to encourage, rather than discourage, voting.

We need to remember the importance of our “down-ticket” choices when we go to the polls in November. Donald Trump may pose a more existential threat, but that’s no excuse for failing to appreciate the importance of offices closer to home.

It’s Not Politics: It’s Morality

Jennifer Rubin is a conservative columnist for the Washington Post. Her column on July 31st was a scathing analysis of Donald Trump and the political and moral challenge his candidacy poses to the GOP.

House Speaker Paul D. Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.) and vice-presidential nominee Gov. Mike Pence of Indiana (R) knew what they were getting into when they climbed aboard the Donald Trump bandwagon. They had watched him insult minorities, POWs, the disabled and women. They had seen for themselves how utterly ignorant he was about basic policy concepts. They knew he lied about big and small things (e.g., falsely saying he opposed the Iraq War, reneging on charity pledges until shamed by The Post). They knew he’d stiffed and swindled Trump U students. They never should have backed him; they were abetting a vile individual attaining the country’s most powerful office, for which he was patently unfit. Pence went a step further in agreeing to be his running mate, and now travels around the country cheerleading for Trump.

Rubin recounted the now-ubiquitous details of Trump’s attack on the Kahns–a Muslim Gold Star family–and notes in passing that it would be political karma if, after smearing all Muslims, his attack on these particular Muslims was the “bridge too far” that ultimately brought him down.

Rubin’s column wasn’t written to add to the mounting recognition of the danger Trump poses for America, however. It was a challenge to the Republicans who continue to support and enable him.

What does Pence, father of  Marine 2nd Lt. Michael J. Pence, do? He directs the press wanting comment to Trump. Really, that’s it? One wonders how 2nd Lt. Pence — and all the other Americans risking their lives — feel about that. Pence’s silence and continued presence on the ticket suggest he considers Trump within the bounds of normal political discourse. If Pence had a modicum of dignity or decency, he would tell the American people, “I made a terrible mistake. Mr Trump is so morally bankrupt and of such shabby character that I could not possibly serve with him.” Failing to do so, the same should be said of Pence….

The offices of Ryan and McConnell wouldn’t comment on Trump’s slur against Ghazala Khan or ludicrous claim he’s “sacrificed” just as the Khans have. Their spokesmen would only repeat the bosses’ prior remarks on Trump’s Muslim stances. That’s not the point. They know this but they are abdicating moral leadership because they cannot possibly justify their support of Trump. In their silence, they condone Trump and stand with him.

Rubin is unimpressed with the excuse that other Republican candidates find themselves in a difficult bind, unwilling to incur the hostility of Trump’s supporters by distancing themselves from his repugnant accusations.

Republicans who fell in line behind Trump cannot escape the moral stench he emits. He disrespects parents of a fallen warrior; they do as well with their silence. He attacks other Americans, lies habitually and embodies none of the qualities we expect of elected leaders; they demonstrate moral and political cowardice in refusing to condemn him.

At the end of the day, Rubin–and the many other Republicans who have publicly refused to support the GOP nominee–is making a moral argument. For moral individuals, love of country, concern for civility and fair play, and simple intellectual honesty should take precedence over partisan loyalty.

Paul Krugman recently made the same point.

The real sinners here are Republican leaders — people like Paul Ryan and Mitch McConnell — who are actively supporting a candidate whom they know poses a danger to the nation. It’s not hard to see why they’re doing this. Opposing their party’s nominee, no matter how awful he is, would probably end up being a career killer.

But there are times when you’re supposed to put such considerations aside. The willingness of some people who know better to support Donald Trump is understandable; it’s also despicable.

And these columns were written before Trump suggested that “2nd Amendment people” could “take care” of Hillary.