Newsom’s proposal to cap oil profits in California meets skepticism in first public hearing
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“There are few better emblems of the failures of the US system of medical care than its inability to consistently provide insulin to Americans who need it.
The drug was discovered 100 years ago, and it provides essential and ongoing treatment for millions of people living with diabetes, one of the most common chronic diseases in the country. And yet one in six Americans with diabetes who use insulin say they ration their supply because of the cost. Some people end up spending nearly half of their disposable income on a medicine they must take to stay alive.
Though insulin generally costs less than $10 per dose to produce, some versions of the drug have a list price above $200. This is in part because, in the US, a warped market has allowed three companies to dominate the insulin business.”
“With California leading the way, a handful of states are considering trying to disrupt the market for essential medications, starting with insulin. The plan would be to manufacture and sell insulin themselves for a price that is roughly equivalent to the cost of production.”
“Medicare, the federal health insurance program for seniors, is about to institute a $35 per month cap on insulin costs for its beneficiaries, a provision of the Inflation Reduction Act that Democrats passed last year. But, because of the Senate’s arcane rules, they could not establish the same cap for private insurance, which covers more than half of Americans.”
“The main mechanism the US has for bringing down prescription drug prices is allowing generic drugs to compete with brand-name versions. When a company develops a new drug, it gets a period of exclusivity, 10 years or more, in which it is the only one able to make or sell that drug. But after that exclusivity period has passed, other companies can make a carbon copy and sell it at a lower price. Studies find that once several generic competitors come on the market, prices drop significantly.
But pharma companies are savvy about finding ways to extend their monopolies, with insulin and other drugs, by making minor tweaks to the chemical compound and asking for a patent extension. In the case of insulin, the companies can also modify the delivery device to protect their market share. Each product is meant to be used with specific, company-designed injectors. Though the patents on the artificial insulin developed in the 1990s have started expiring, these companies continue to hold and extend monopolies on either their devices or other chemical compounds, making it harder for generic competitors to enter the market.
Other federal regulations have added to the challenge. The FDA began to treat insulin as a biologic drug in 2020 — meaning it is made with living materials instead of combining chemicals like conventional pharmaceuticals — which comes with a different set of standards for generic versions, which are known as biosimilars, as well as manufacturing challenges given the precise conditions these products must be made in. Biosimilars can cost up to $250 million to produce and take up to eight years to bring to the market, versus a one-year investment of as little as $1 million for conventional generics. And unless the FDA recognizes a new generic insulin as interchangeable with the products already on the market, health insurers might not want to cover it and doctors may not be willing to prescribe it.
To add one more layer of difficulty, the current manufacturers can always decide to drop their prices to crowd out new generic competitors, given the gap between the retail price and the $10 cost of production. The first biosimilar drugs have come onto the market in the past few years, but only one of them has been deemed interchangeable with the brand-name version; ultimately, in late 2021, it was priced at only $20 less than the brand-name insulin it was competing with. More competition is needed to meaningfully depress prices.”
“If manufacturing a cheap generic insulin proves viable for California, the consequences could be enormous and stretch far beyond insulin. California would provide proof of concept, and a fledging public marketplace for public pharmaceutical production could potentially emerge.”
“Why are people moving to San Francisco? In some sense, it’s a matter of popular cities continuing to be popular. That means people still find value and jobs there. The Bay Area is culturally rich, with people — and culture and food — from around the world. While tech companies have been cutting back on hiring lately, the area is still the home base to their giant and lucrative businesses, meaning there’s still plenty of opportunity for workers.
There’s reason to believe that people aren’t just moving back to San Francisco because they want to. The move back also represents a solidification of remote work policies, in which many companies have come down on the side of hybrid work, where people are still expected in the office some of the time. In other words, people who may have wanted to move elsewhere permanently have been forced back to the Bay Area, though perhaps in different locations than they had been.
The decision to return to the Bay Area could also come from employees who are hoping to put in face time with their bosses ahead of a potential recession. Studies have shown that bosses view people who work in the offices more favorably and are more likely to consider them for promotion.”
“California lost 114,000. This is the third year in a row that California—with its can’t quite reach 40-million population—has lost people. This isn’t slowing growth, but actual losses (although the rate of decline slowed this year).
Those Census net domestic migration numbers show that 343,000 Californians left for other states. Immigration and births made up for most of the losses. People always are going to have babies and flee impoverished nations, but the true indicator of success or failure involves people voting with their feet—or their U-Hauls. Californians aren’t fleeing our weather or economy, but our bad public policy.
Let’s quickly recap the many ways California’s progressive-dominated government is failing California residents: endless regulations, punitive tax rates, untouchable public-sector unions that are ransacking budgets and opposing reforms, shoddy school systems and decrepit (but pricey) public services, traffic congestion, absurd housing prices, growing crime rates, failing efforts to provide basic infrastructure and a sprawling homelessness crisis.
Don’t count me among those who describe California as a dystopia. It’s far from it, but because of a lack of political competition this presumably innovative and free-thinking state is remarkably immune to new ideas. We endure the same tired rut: “Here’s a problem. Hey, why don’t we raise taxes and create a new agency?” Did I mention that no one ever holds old agencies accountable?”
“A.B. 2098, which threatens to punish physicians for sharing COVID-19 “misinformation” with their patients. The law, which is scheduled to take effect on January 1, defines “misinformation” as advice “contradicted by contemporary scientific consensus”—an open invitation to suppression of constitutionally protected speech.”
” The new law..makes physicians subject to discipline for sharing their honest opinions regarding COVID-19 if the medical board thinks they deviate from the “scientific consensus,” a term the law does not define. That nebulous standard poses a due process problem, since the law does not give doctors fair notice of which conduct it reaches. It also poses a free speech problem, since it encourages self-censorship.”
“While some unconventional opinions may amount to quackery, others may ultimately be vindicated. Over the course of the COVID-19 pandemic, the conventional wisdom on subjects such as intubation of patients, the utility of cloth face masks, isolation periods, and the effectiveness of vaccines in preventing virus transmission has shifted repeatedly in response to emerging evidence.
In addition to violating doctors’ freedom of speech, A.B. 2098 undermines that discovery process. It tells skeptical physicians to keep their mouths shut, lest they endanger their licenses and livelihoods by candidly sharing their opinions.”
“The pandemic was a mass death event. It was also a very messy one for determining the effects of particular public policy interventions on COVID transmission, death, and economic performance. It’ll take years of research to get anywhere close to definitively answering big questions about what policies worked and what didn’t.”
“When California legalized recreational marijuana in 2016, the state had more than 3,000 weed shops. They ostensibly served the medical market, but the rules were so loose that pretty much anyone who wanted pot could buy it legally. Six years later, California had less than half as many licensed marijuana merchants, accounting for between a quarter and a third of total sales.
Something clearly has gone wrong “when you try to legalize weed and accidentally end up illegalizing it instead,” note University of California, Davis, economists Robin Goldstein and Daniel Sumner. In their book Can Legal Weed Win?, they explain how burdensome licensing requirements, regulations, and taxes have frustrated plans to displace the black market.”
“California will ban the sale of internal combustion engine vehicles, just as it has banned the sale of new lawnmowers and other power equipment that’s powered by gasoline engines. It’s the state’s latest attempt at technology forcing—”a strategy where a regulator specifies a standard that cannot be met with existing technology, or at least not at an acceptable cost,” as Science Direct explains.”
“the same week that California policy makers announced an ambitious plan to shift California’s 27-million drivers into electric vehicles or plug-in hybrids, they also announced that Californians who currently own electric vehicles better not charge them for several days because the grid can’t handle the load.”