The Much Bemoaned Market Has Solved the Daraprim “Problem”

The amount of dishonesty surrounding the story of Daraprim is not only staggering, it’s entertaining as hell.

Daraprim is a drug that treats certain kinds of infections, largely toxoplasmosis and malaria.  It’s a decades-old drug that even the manufacturer admits doesn’t work particularly well, but it’s one of very few drugs on the market that works at all so it’s the “standard” for treatment.  The dishonesty about the drug began when Martin Shkreli, an unlikable guy (to be very charitable) decided he wanted to corner the market on the drug and profit like crazy.  Immediately the uneducated ran to the internet to decry the “profiteering” and “price gouging” on this “AIDS” drug and “HIV” drug.

The ignorant critics immediately called for the government to seize the company, order the price lowered, and other nonsense.  Hillary Clinton even turned it (conveniently) into a campaign talking point, and used the opportunity to let loose with her “plan” to set a cap for monthly medication costs and other typical government nonsense responses.

The spin machine was in full effect.  Shkreli was beaten up publicly in a way that became a rallying cry for people who think no one should have to pay for health care.  Bernie Sanders and Hillary Clinton, the only real Democrat Presidential candidates, joined forces to slam Shkreli, and Sanders even took Shkreli’s donation (Shkreli is a Bernie fan) and gave it to an HIV charity (why not a malaria charity?  Oh, right, because Bernie was one of the people promoting the lie that Daraprim is an HIV drug).

When the candidates weren’t spinning, the media was.  Shkreli was referred to as “CE-Bro” and other derogatory things.  But then something really strange happened…  The insults turned into an attack on free markets, which many of us who believe in markets’ ability to solve things like this, found preposterous.

Often we were presented with a plethora of images of how cheap the drug was in Malaysia, or India, or the some other country.  The argument was that if we had single-payer, it would be cheaper because look how cheap it is everywhere else!  While that may be somewhat true, the reality is that the reason it is so cheap elsewhere are two-fold: demand (more people need it, with maybe the exception of the UK), and the US is paying more for it by default.  The costs don’t go down for the drug, the price does.  If you don’t know the difference, you have no business talking about markets in the first place.

Just because the end consumer price is lower doesn’t mean the drug is cheaper, it just means that they’re insulated from the cost.  To put this in terms that every good single-payer advocate can understand: US health care doesn’t get cheaper when Medicare pays the bill, it’s just that the end user is insulated from that cost as government redistributes portions of their income to cover the difference.  The same happens in education.  No one has any idea what tuition is any more because nearly everyone has a student loan to pay for it.  After college, at the first signs of how much needs to be repaid, it sinks in that things can be expensive even when you aren’t seeing the costs.

The calls for increased regulation and price controls are the perfect response from the market-ignorant, but then the typical response of “The market broke this” start and the market is blamed for what the government created.  As is always the case when something gets out of wack, “unrestrained markets” and “unfettered capitalism” are blamed when there isn’t one single example of any market of any kind in the United States that has an unfettered market, and even more so in the case of pharmaceuticals.

Even though Turing had many programs available for people who (legitimately) couldn’t afford Daraprim (not just those who didn’t “want” to pay the price for it) Shkreli was held up as how evil the market was and how broken it was.

Here’s the thing: the market not only isn’t broken, it, in spite of government, has fixed the problem.

Imprimis Pharmaceuticals is about to break Turing’s market conclusively by offering a competing drug for $1 a pill.  For those keeping score, that’s $0.33 more a tablet than the oft-referred to UK National Health Service.  Not bad, and it wasn’t government force that created Imprimis, although that seems to be another thing that the lefties are getting wrong today.

A11207283_10156144460775035_3457582172325000550_nfter Imprimis made their announcement, the immediate response from the uneducated was that Imprimis was entering the same market that Turing (Shkreli’s company) and that any barriers Turing spoke about that kept prices in general high were nonsense.  The problem, of course, is that they’re wrong.  Unsurprisingly.

Imprimis isn’t entering Turing’s market, they’re just producing a competitive drug, but they’re not doing it the same way.  Imprimis isn’t a traditional pharmaceutical company in the same sense Turing is.  The kind of company they are often gets used passingly in stories about the company, but it’s important.

Imprimis is a compounding pharmaceutical company.  They’re not allowed to make direct generic versions of existing drugs, but they are allowed to use existing drugs from other companies and alter them in ways that make them safe for people with, for example, allergies.  Business Insider wrote an excellent article about Imprimis that actually explains the difference in the companies.

Compounding pharmacies are different from major drug companies, which focus on developing new drugs for the US Food and Drug Administration approval. Even generic manufacturers still have to get FDA approval for the drugs they plan to market.

Instead, compounding pharmacies buy FDA-approved compounds that they can then formulate into pills that can be customized to fit certain conditions.

For example, if a drug you need is only available in pill form and you have trouble swallowing pills, a compounding pharmacy can buy that pill and put it into a liquid form that’s easier to take. The only thing they can’t do is directly copy the FDA-approved drug.

That’s what Imprimis plans to do with pyrimethamine, the compound in Daraprim. The company will combine pyrimethamine with leucovorin, a form of B-vitamin folic acid that’s recommended to treat toxoplasmosis by the US Centers for Disease Control and Prevention. The leucovorin counters the bone marrow loss that comes as a side effect of taking pyrimethamine.

So not only is the drug going to be cheaper, it’ll probably be better for the health of the person taking it.  As Shkreli said on many occasions, Daraprim isn’t even a great drug which is why Turing was developing a replacement for it.

It’s important to note that in this case, government exacerbated the problem rather than solving it.  Because of the silly maze of FDA regulations, regular pharma companies cannot make a profit at $1 a pill, but Imprimis can.

Imprimis said it now offers customizable compounded formulations of pyrimethamine and leucovorin in in capsules for as low as $99 for a bottle of 100 capsules. For more information, visit http://www.imprimiscares.com.

There’s a limitation, Baum said: The formulation is not FDA-approved, and can legally only be sold through a doctor’s prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and its compounding operations are FDA-inspected.

Filing for FDA approval of the compound itself would take years and millions of dollars, Baum said. By not filing, Imprimis can keep prices down and make a significant profit, even for less than $1 a capsule, Baum said in a Thursday interview.

The company has formed a division called Imprimis Cares to make special formulations including such high-priced generic drugs, he said. The division serves all 50 states, he said, and many more drugs are forthcoming.

Imprimis will be offering more of these types of drugs, none of which will have the FDA’s blessing, and doctors will have to prescribe their version directly.  The market is responding in a way that avoids the perils and pitfalls of drug regulations.  We’ve seen this before on numerous occasions where FDA regulations have kept terminal patients from trying experimental drugs, telling dying patients that the drugs that may save their lives are off-limits because they haven’t gotten government blessings and even at its best, the right of a dying patient to pursue a treatment that might save them is still heavily limited by government.

Government is actually a death sentence, not hope.

It’s fun watching people who don’t understand this story at all talk about it because of the sheer volume of things they get wrong.  They blame the free market for the price hike, then credit the government with the new drug.  It’s hard to expect honesty, though, when you consider that most people still refer to this drug as an “AIDS” drug or an “HIV” drug in an effort to garner sympathy and rile up the pitchfork and torches crowd.

I should note that I don’t like what Shkreli did.  I don’t condone jacking up the price on something that’s important to the survival of other people.  That being said, I’m even more opposed to putting a gun to someone’s head and ordering them to charge a certain price for their product.  I’d much rather a voluntary non-violent and non-coercive solution and, with no thanks to the FDA, we now seem to have one on the way.  In the end, it will be even better for the patient than the original.  It’s a healthier and cheaper (even than the original price before the price hike) alternative and not one law was needed to get it done.

On top of that, Turing will now take a big hit and probably lose thousands of customers as the cheaper formulation hits the market.  The company will be punished for their behavior without a single court order, jail sentence, or government fine imposed.

That’s how the free market works when you let it.


The Toyota Mystery Is Solved, ISIS Got the Trucks From…

When one watches the coverage of Syria, one can’t help but notice the strange priorities of the people reporting the story.  While the “rebels” and ISIS and other organizations and groups are running around blowing each other up and gassing each other, the media suddenly and together noticed one thing.  ISIS sure has a lot of Toyota trucks.

Somehow this insignificant (to the grander picture) detail became not only the biggest “problem” for our government, but one that required a probe.  An investigation.  Our leaders, fearless and brave, had to get to the bottom of this one in a hurry!

October 10th, USA Today reported that the US Government was examining the connection between Toyota and ISIS.  As if there was one.

Toyota has issued a statement saying it’s going to cooperate with a U.S. inquiry into how relatively new Toyota Land Cruisers SUVs and Hilux pickups have been seen in convoys being run by the terror group in Iraq and Syria, Automotive News reports.

In the statement issued from Japan, Toyota said it is “impossible for automaker to control indirect or illegal channels” used by those who want their vehicles.

Automotive News says the reports are reaction to an ABC News report that the Treasury Department’s Terror Financing Unit is looking into how ISIS fighters were able to get their hands on so many Toyota vehicles. ISIS is also known as ISIL.

The strange part of this story is that it broke all at once in nearly every media outlet.  It was almost as if the federal government planted the seed that they were going to look into it and everyone with a camera, notepad, and press pass fell right in line.  USA Today wasn’t the only, and they weren’t the first.

CNN?  You know they wanted answers.

ABC?  Damn skippy.

The New York Times, via its editorial board, even pressed the panic button about how ISIS having Toyota trucks was contrary to the amazing job that was being done in “choking off” supplies to the terrorist group.

Administration officials say they are making progress in starving the Islamic State of revenue and the ability to spend that money in world markets for military equipment and other supplies like oil production gear. But the sight of brand-name vehicles in the group’s convoys is a sure sign that something is awry, especially when Toyota, the manufacturer, says it has a policy of not selling to purchasers who might modify vehicles for terrorist activities.

The Christian Science Monitor mournfully informs us…

“Regrettably, the Toyota Land Cruiser and Hilux have effectively become almost part of the ISIS brand,” Mark Wallace, a former US Ambassador to the United Nations and CEO of the Counter Extremism Project, a nonprofit working to expose the financial support networks of terror groups.

Toyota has had to make a few statements with regards to their vehicles being used, and has even had to testify before congressional hearings.  Toyota has said time and time again that they have safeguards in place specifically to prevent the sale of their vehicles to terrorist organizations and they did not make the sales directly and have no idea how their vehicles became the number one choice of ISIS.

Everyone is scrambling to figure it all out.

Everyone, except the people who pay attention.

What if we knew in April 0f 2014 exactly where those Toyotas were coming from?

And what if the US government was the group giving them to the “rebels” who would later become ISIS?

And what if the media ignored that fact and just reported it as if they had no idea what was going on?

The Hilux, a pickup truck Toyota has built since the late 1960s, isn’t available in the US, but it’s popular around the globe, including with insurgent groups such as the Taliban, al-Qaeda and Boko Haram.

Recently, when the US State Department resumed sending non-lethal aid to Syrian rebels, the delivery list included 43 Toyota trucks.

Hiluxes were on the Free Syrian Army’s wish list. Oubai Shahbander, a Washington-based advisor to the Syrian National Coalition, is a fan of the truck.

Specific equipment like the Toyota Hiluxes are what we refer to as force enablers for the moderate opposition forces on the ground,” he adds. Shahbander says the US-supplied pickups will be delivering troops and supplies into battle. Some of the fleet will even become battlefield weapons.

You can absolutely expect for many of those trucks to be mounted with crew-served machine guns or other type of equipment, military equipment, that the opposition forces have access to. I mean, that’s one of the reasons why the Toyota Hilux is such an important force multiplier, because it could be used both for humanitarian purposes and for operational purposes as well.”

Syria is only the latest war zone where the Hilux has been a vehicle of choice.

Not only did we supply the trucks, we acknowledged that they could indeed be used for military purposes by the rebel groups we were arming.  You can read more about it here, and listen to the interview as it aired at the link.

When we began arming the “rebels,” many people, myself included, begged the federal government not to get involved in a civil war.  We begged the government not to arm people who could turn against us one day.  We pleaded and pleaded and were drowned out by nosy interventionists who cried about how horrible everyone who didn’t want to “help” was, and now here we are caught in a proxy war with Russia and arms we supplied are in the middle of it.

We did a good thing here, right?

This is an astonishing story for so many reasons, and it’s important that we understand all of them.

  1. The United States government, against the wishes of a large swath of the country, got involved in a civil war that was not directly related to the security of the country.
  2. The government is embarrassed by a symbol of the ISIS rebels and decides to go after an innocent company and blame them for supplying those rebels.
  3. The media jumps in to paint Toyota as terrorist suppliers.
  4. The media absolutely ignores the fact that we supplied them with trucks that we’re now asking about the origins of.  They march in lockstep with the government, reporting the story from the administration’s angle uncritically and without doing any kind of research or fact checking.  None of the stories I linked mentioned that we supplied the trucks.

When I wrote last week about the propaganda arm of the US government that no one cared about, this is exactly what I was talking about.  This is the kind of story that a propaganda arm pushes and exactly the way they push it.  The federal government gives marching orders and the media jumps in line immediately.  Even though the facts are available, some of them over a year old, the truth is discarded and instead we get the spun version of it from our guardians of truth known as the media.

It’s becoming increasingly obvious that the media has no interest in finding the truth, finding the answers, or even reporting the story.  Little by little they have become an extension of the federal government and whatever its message is.  The “adversarial relationship” that we heard was “so important” for 8 years of a Republican president has completely gone by the wayside and it’s time you stopped listening and started thinking for yourself.

The information is out there if you want it.

The “Neighboring States” Game

OASASinfostats02-02New York has a heroin problem.  A bad one.  In the county I live in, the heroin problem is so big and so prevalent that first responders are being trained on Narcan usage, and in some areas it’s as required to carry as anything else in a standard police, fire, or EMS kit.  The kit has saved dozens of lives.  On a regular basis, stories can be found in the local papers talking about how Narcan is a savior, and praising programs to get it in the hands of first responders.

This is a good thing.

Narcan would not be necessary if heroin wasn’t a growing problem.  In Rockland County, Narcan training is now something the average citizen can get at various locations throughout the area and people are encouraged to get the training because it could potentially save a life.

The interesting part of this all isn’t that local governments have finally figured something out that might help people rather than tax them or put them in cages, although that’s a nice side effect.  The interesting part is that heroin is illegal in New York State.  In spite of that illegality, usage is not only constant, but growing.  As the graphic above notes, admissions for treatment (which only counts people who are seeking treatment, not the overall number of people using) has spiked in the past decade in spite of its illegality.

The penalties for heroin possession are stiff, as are the penalties for its sale.  There is no legal market for heroin in the state.

Above are two maps side by side.  On the left, New York.  On the right?  States that border New York.  Do you know what the green states and the red states have in common?  In all of them, heroin is 100% unequivocally illegal.  In all of them, heroin is a growing problem.

The heroin is coming from somewhere, but nobody knows where.  And it’s coming into states that have harsh penalties in a country with harsh penalties and no one can seem to stop it.  Sounds like a real problem, doesn’t it?

In spite of the fact that the heroin is coming from somewhere, you never hear a politician talk about “heroin trafficking.”

Now compare that to guns.

New York has some of the strictest gun laws in the country, and New York City’s laws are even stricter, and yet day after day we hear about shootings in the city.  Strangely, New York City manages to be proud of being a very safe city (admittedly, it is) and at the same time, gun crime rarely raises an eyebrow.  Shootings don’t even make the front page of either of the two local papers any more.  They’re not, by any measure, a thing.

And yet when politicians do talk about gun laws in New York, they still talk about how they need to “enhance” them.  Or “strengthen” them.  Or “close” loopholes.  When you point out that there isn’t much more room to make things tougher, that’s when you get hit with the old common refrain.

“New York has strong gun laws, but surrounding states don’t, and they’re all coming from there.”

It’s a terrible argument, but gungrabbers will use it as if it trumps all other arguments.  In fact, just literally yesterday, New York Governor Andrew Cuomo begged the federal government to help him keep guns out of New York using that same specious argument.

Rather than securing the country’s borders to keep Mexicans out, Gov. Cuomo on Tuesday called on the federal government to protect the state’s borders by keeping firearms from entering New York.

“I’m not worried about Mexicans coming over my border. I’m worried about assault weapons coming over my border,” Cuomo said during an appearance on WNYC radio’s “The Brian Lehrer Show.”

“If you want to protect borders, start by protecting the borders of states and respect their gun laws, which this federal government and the (Bureau of Alcohol, Tobacco, Firearms and Explosives) have been all but wholly absent on.”

Cuomo said despite New York passing its own gun control law in 2013 in the aftermath of the Sandy Hook school shooting in Newtown, Conn., illegal weapons continue to flow from other states like Virginia and South Carolina.

“By definition this is an issue a state can’t do on its own,” the governor said. “That’s why the federal government has to act.

So what Cuomo is essentially arguing is that his pride and joy, the New York SAFE Act is not effective, and that without more laws, New York can’t be truly safe.

That argument, of course, is complete crap for many reasons.

Firstly, it’s established that the federal government cannot control any border anywhere ever.  Just ask anyone in any border town in Texas, California, Arizona or New Mexico.  People flout the border on a regular basis and, at best, it’s a symbolic border mostly patrolled on the honor system.

Secondly, trafficking guns is already a crime.  Buying a gun in any state and transporting it across another state’s border is a crime.  There are some exceptions, but few.  If I buy a gun in Virginia and bring it into New York, I’ve already violated the law (oddly, Virginia does not neighbor New York; which means I have to cross multiple states on my way in, nearly all of which prohibit the transport of guns in from out of state except in special circumstances).

Thirdly, buying a gun legally (which, by the way, most of these guns that are transported aren’t in the first place) with the intention of selling it in another state or in some other way giving it to someone else is a strawman sale.  That’s illegal.  Just ask Gabby Giffords’ activist husband how that works.  He caught a lot of crap after purchasing an AR-15 to try and sell to someone else.  Only after the furor over his actions did his story change, but the dealer put the squash on the sale within the waiting period (yep, the waiting period) because of Giffords’ activist views knowing the gun was being purchased to make a political point.

But let’s get to the heart of the matter.


If the argument that the gun problem in New York is due to the lax regulation of the states surrounding it, why is the heroin problem not discussed in the same manner?  I’d argue that the heroin problem, while growing, is more out of control than the gun problem, and yet heroin is not legal in any surrounding states and unless you’re living under a rock, you know that not all heroin in New York is locally made.  Transporting it in any way, locally or across state lines, is a crime.  There are federal, state, and local penalties for possession and for sale.  Heroin is highly regulated in the entire country.

And yet in New York, a state with the most draconian drug laws in the country, we have a heroin problem.

And in New York, a state with some of the most ridiculous gun laws in the country, we have a gun problem.

And in New York City, a city where a law-abiding citizen has essentially been law’ed out of owning a gun at all, there is still a gun crime problem.

What does this tell you?  Two things.

One: That both the drug war and the gungrabber movements simply do not work.

Two: Banning “things,” whatever they are, does nothing to stop them from getting into the hands of people and only turns average people into criminals.

In my next post, we’re going to talk about an interesting thought exercise that Adam Curry recently proposed on the No Agenda Podcast.  You won’t want to miss that.