During the Oversight Committee meeting on cheaper medicines law two weeks ago, the Pfizer-Unilab row over Atorvastatin was said to have been raised by some legislators. Pfizer owns the brand “Lipitor” while Unilab started selling last month its generic version, “Avamax”, said to be of similar molecule but 30% much cheaper than Lipitor.
The two corporations are slugging it out in the courts. The biggest pharma company in the world but only 3rd biggest in the Philippines (Pfizer) vs. the biggest pharma company in the Philippines (United Laboratories), with sales perhaps 4x that of the former.
Mercury Drugstore does not sell yet the Avamax. Some legislators, and many in the public and media, were questioning why Mercury is “depriving” the public of the cheaper generic version since there is no decision by the court yet.
I think the Pfizer-Unilab row in this case is a a legal and technical issue, not political. Is atorvastatin calcium crystalline the same as atorvastatin calcium amorphous molecule? That’s among the technical issues that I know.
If I am the drugstore, there is a temptation to sell also the cheaper but supposedly “equally effective” medicine. But since there is a legal dispute at the moment, I’d rather not sell that. Why?
Here’s one analogy. You’re a big real estate dealer. You know a piece of land – good location, cheap – but there’s a legal dispute over its ownership. Would you sell that land and at the same time protect your corporate image as seller of “clean” and non-contested real properties?
Most likely No.
Similar case here. While land is physical property, patent is intellectual (or non-tangible) property. And there is a legal dispute over ownership of the patent.
Let the courts decide over ownership of the Atorvastatin molecule. If Pfizer wins, that it still owns the patent to Atorvastatin calcium, then no harm to Mercury Drugstore. If Unilab wins, that Pfizer no longer owns that patent, still no harm to Mercury. If Mercury will sell Avamax and Pfizer later wins, then Mercury will be in trouble too.
----
I discovered a blog entry on this subject, "Dr. Arroyo and the law of intended consequences",
http://www.whitespacelab.com/2009/11/25/dr-arroyo-and-the-law-of-intended-consequences/
The paper referred to Unilab's action as:
"It appears that the business model for Pharma companies in developing nations is violate the law, copy the drug, steal the market share, and if necessary, settle in court since the future profits from capturing the generics market share sooner rather than later far outweighs legal ramifications. And President Gloria consolidates another political victory for the local under-dog.
Innovation be damned. The Law be damned.
Tej Deol, M.D."
Monday, December 28, 2009
Saturday, December 26, 2009
Warming Hysteria: Climate Extortion and Mayon Volcano
It is too common. When one cannot argue with data and facts, they attack the people or institutions that bring the idea. That is, they shoot the messenger, not the message.
This practice is very visible in the anthropogenic [man-made] global warming (AGW) claims. Many campaigners of such claim are too impatient to hear any opposing idea, so they douse any dissenting voice as "that's big oil lobby" and similar statements.
One article from mother jones has pathetically attacked the Atlas Economic Research Foundation, the International Policy Network (IPN), the Civil Society Coalition on Climate Change (CSCCC), and other think tanks and coalitions/network that do not agree with the AGW claim, see here.
http://motherjones.com/environment/2009/12/climate-deniers-atlas-foundation
The author is Mr. Josh Harkinson. The science and data behind AGW claim is highly suspect. I wrote a few papers on this, the latest of which is "Warming lies", http://www.minimalgovernment.net/media/mg_20091201.pdf.
Atlas is helping small think tanks around the world that advance individual liberty, not because they are questioning AGW. Most or all of those think tanks are fighting dictatorships, corruption, trade protectionism, high taxation, private property rights confiscation, among others. Questioning AGW is a small part of their work.
The CSCCC is a big international coalition of independent think tanks and institutes in more than 40 countries that don't believe in ecological central planning. Since there is no consensus yet about the science behind AGW, there should be no global coercion on environment and energy policies.
Talking about money, I think that while it is true that some oil money like Exxonmobil's was mobilized to help some "skeptics" groups, another big oil, Shell, is on the side of the warmers and most likely be giving them money too.
One estimate of lobby is goes like this:
against AGW, about $2m/year.
pro-AGW: $4 billion/year from the US federal government alone.
This is for climate researches that support the man-made warming conclusion. See for instance, http://scienceandpublicpolicy.org/images/stories/papers/originals/climate_money.pdf
--------
My related short papers recently:
(1) Winterstorm and Climate Extortion
December 20, 2009
I saw in my facebook account, pictures just a few hours ago, of my Filipino and American friends in deep snow in front of their houses in DC-VA and NYC. In this picture, my good friend Jo Kwong of the Atlas Economic Research Foundation in DC.
That's one day after the conclusion of the Copenhagen meeting to "fight unequivocal global warming."
US President Obama was forced to cut his trip in snowy Copenhagen to head back to DC because of the winter storm. But before flying, he and State Sec. Hillary Clinton promised "$100 billion a year starting 2020", all to fight global warming. The agreement in Copenhagen was to "limit global warming to only 2 C". The IPCC AR4 warned of "best case" 4 C rise in global temperature, with worst case of 6.4 C rise by 2100.
I would say that the Copenhagen meeting was an event of irony and hypocrisy. Let me enumerate a few points why I say this.
1. The $100 B/year promise by Mr. Obama will be made long after his term in the White House has ended, by 2020. It's the typical "promise everything" or "scare everyone with scenarios" long after you yourself is gone from your office or from the face of the Earth. The IPCC scientists for instance who predicted in 2007 of "up to 6.4 C rise by 2100" will all be dead by then.
2. Extortion by poor country governments. There was high political heat and bickering among poor country govts. vs rich country govts. vs. big environmental NGOs, in pressuring how much carbon emission cuts by whom and by when. In the end, they talk about money, money, money. European government initially said $10 billion/year, poor country governments said "No, We want $300 to $400 billion/year!"
Haggling and bickering, they end up with $100 B/year promise by Obama, plus contributions by EU and other rich governments. So in a sense, it was a meeting for extortion by poor country govts. But the leaders of those poor countries are ALL rich.
3. Venezuelan socialist President Hugo Chavez spoke in Copenhagen, lambasted the evils of capitalism and how capitalist corporations destroyed the planet. And many government representatives and NGOs applauded and gave him a standing ovation! Last time I checked, it was capitalism which gave them all commercial airlines, private jets, expensive limos and sedans, that brought them to capitalist Copenhagen. And they stayed in capitalist hotels, ate in capitalist restaurants in the city. Capitalist power plants gave them uninterrupted power and electricity for their meeting, and capitalist media outlets broadcasted their meetings and riots all around the world. And those politicians and bureaucrats say "capitalism is evil."
4. Blizzard in Copenhagen and upcoming winter storm in DC and surrounding states while they are meeting to "fight global warming". This time, it's the Earth telling them, "Get real guys. I got no fever. I'm chilling, and so are you."
Readers, feel free to add your list of irony and hypocrisy in all those lies and alarmism.
This practice is very visible in the anthropogenic [man-made] global warming (AGW) claims. Many campaigners of such claim are too impatient to hear any opposing idea, so they douse any dissenting voice as "that's big oil lobby" and similar statements.
One article from mother jones has pathetically attacked the Atlas Economic Research Foundation, the International Policy Network (IPN), the Civil Society Coalition on Climate Change (CSCCC), and other think tanks and coalitions/network that do not agree with the AGW claim, see here.
http://motherjones.com/environment/2009/12/climate-deniers-atlas-foundation
The author is Mr. Josh Harkinson. The science and data behind AGW claim is highly suspect. I wrote a few papers on this, the latest of which is "Warming lies", http://www.minimalgovernment.net/media/mg_20091201.pdf.
Atlas is helping small think tanks around the world that advance individual liberty, not because they are questioning AGW. Most or all of those think tanks are fighting dictatorships, corruption, trade protectionism, high taxation, private property rights confiscation, among others. Questioning AGW is a small part of their work.
The CSCCC is a big international coalition of independent think tanks and institutes in more than 40 countries that don't believe in ecological central planning. Since there is no consensus yet about the science behind AGW, there should be no global coercion on environment and energy policies.
Talking about money, I think that while it is true that some oil money like Exxonmobil's was mobilized to help some "skeptics" groups, another big oil, Shell, is on the side of the warmers and most likely be giving them money too.
One estimate of lobby is goes like this:
against AGW, about $2m/year.
pro-AGW: $4 billion/year from the US federal government alone.
This is for climate researches that support the man-made warming conclusion. See for instance, http://scienceandpublicpolicy.org/images/stories/papers/originals/climate_money.pdf
--------
My related short papers recently:
(1) Winterstorm and Climate Extortion
December 20, 2009
I saw in my facebook account, pictures just a few hours ago, of my Filipino and American friends in deep snow in front of their houses in DC-VA and NYC. In this picture, my good friend Jo Kwong of the Atlas Economic Research Foundation in DC.That's one day after the conclusion of the Copenhagen meeting to "fight unequivocal global warming."
US President Obama was forced to cut his trip in snowy Copenhagen to head back to DC because of the winter storm. But before flying, he and State Sec. Hillary Clinton promised "$100 billion a year starting 2020", all to fight global warming. The agreement in Copenhagen was to "limit global warming to only 2 C". The IPCC AR4 warned of "best case" 4 C rise in global temperature, with worst case of 6.4 C rise by 2100.
I would say that the Copenhagen meeting was an event of irony and hypocrisy. Let me enumerate a few points why I say this.
1. The $100 B/year promise by Mr. Obama will be made long after his term in the White House has ended, by 2020. It's the typical "promise everything" or "scare everyone with scenarios" long after you yourself is gone from your office or from the face of the Earth. The IPCC scientists for instance who predicted in 2007 of "up to 6.4 C rise by 2100" will all be dead by then.
2. Extortion by poor country governments. There was high political heat and bickering among poor country govts. vs rich country govts. vs. big environmental NGOs, in pressuring how much carbon emission cuts by whom and by when. In the end, they talk about money, money, money. European government initially said $10 billion/year, poor country governments said "No, We want $300 to $400 billion/year!"
Haggling and bickering, they end up with $100 B/year promise by Obama, plus contributions by EU and other rich governments. So in a sense, it was a meeting for extortion by poor country govts. But the leaders of those poor countries are ALL rich.
3. Venezuelan socialist President Hugo Chavez spoke in Copenhagen, lambasted the evils of capitalism and how capitalist corporations destroyed the planet. And many government representatives and NGOs applauded and gave him a standing ovation! Last time I checked, it was capitalism which gave them all commercial airlines, private jets, expensive limos and sedans, that brought them to capitalist Copenhagen. And they stayed in capitalist hotels, ate in capitalist restaurants in the city. Capitalist power plants gave them uninterrupted power and electricity for their meeting, and capitalist media outlets broadcasted their meetings and riots all around the world. And those politicians and bureaucrats say "capitalism is evil."
4. Blizzard in Copenhagen and upcoming winter storm in DC and surrounding states while they are meeting to "fight global warming". This time, it's the Earth telling them, "Get real guys. I got no fever. I'm chilling, and so are you."
Readers, feel free to add your list of irony and hypocrisy in all those lies and alarmism.
(2) Mayon Volcano and Climate
December 19, 2009
Mayon volcano, the most active of the Philippines' 21 active volcanoes (and several dozens inactive ones), has been very active recently. In the last century, it was exploding every 10 years on average, I think. This decade and century, this will be it's 3rd explosion. First was February 2000, 2nd on August 2006, and now December 2009. That volcano is contributing lots of CO2 and other gases into the atmosphere.
Contribute to global warming? No. Exploding volcanoes release lots of gases, CO2 among them; also dust and smoke, into the lower and upper atmosphere. Such gases and particles tend to block sunlight from reaching the Earth's land and ocean surfaces, resulting in cooling.
When Mt. Pinatubo erupted in 1991, that event alone caused global cooling by at least 0.4 C for nearly 3 years. Thick volume of ashes, smoke and gases that navigated around the globe several times, blocking sunlight. When it erupted, certains hours of the day in Metro Manila, Pampanga and nearby provinces became dark.
One friend, Winthrop Yu, wondered how much cooling a Mayon eruption would contribute. Should be small, maybe by only 0.0__ C, but cooling, nonetheless.
And we go back to the IPCC 4th Assessment Report (AR4). On its "analysis" table, 8 out of 9 factors are anthropogenic (man-made), only 1 was natural, solar irradiance.
Whaaattt??? Galactic cosmic rays (GCRs) don't contribute to the earth's climate? Volcanoes, water vapor, clouds, biosols, pacific decadal oscillation (PDO), other natural factors, do NOT contribute to the EArth's climate?
PDO cycles of cooling and warming average about 25 years. The warming phase is over, we're now entering the cooling phase.
Last September, NASA reported that there were 19 percent more GCRs in the Earth's atmosphere than last year. GCRs come from exploding stars from across the universe, within and outside our galaxy. They help create aerosols that become the "seeds" for more clouds.
The IPCC relied 100 percent of their climate predictions for the next 100 years on their global computer models (GCMs).
Seriously, anyone believes those computer models' predictive capacity of what will happen in the Philippines' weather, US weather, Europe weather, the world's weather, 1 or 2 weeks from now? For instance, the temperature range of hi-low, by Dec. 31, 2009? Because the IPCC's GCMs say they CAN predict the Earth's temperature range 90 or 100 years from now! And they have the figures, "best case" prediction of 4 C rise, max range of up to 6.4 C, by 2100!
Contribute to global warming? No. Exploding volcanoes release lots of gases, CO2 among them; also dust and smoke, into the lower and upper atmosphere. Such gases and particles tend to block sunlight from reaching the Earth's land and ocean surfaces, resulting in cooling.
When Mt. Pinatubo erupted in 1991, that event alone caused global cooling by at least 0.4 C for nearly 3 years. Thick volume of ashes, smoke and gases that navigated around the globe several times, blocking sunlight. When it erupted, certains hours of the day in Metro Manila, Pampanga and nearby provinces became dark.
One friend, Winthrop Yu, wondered how much cooling a Mayon eruption would contribute. Should be small, maybe by only 0.0__ C, but cooling, nonetheless.
And we go back to the IPCC 4th Assessment Report (AR4). On its "analysis" table, 8 out of 9 factors are anthropogenic (man-made), only 1 was natural, solar irradiance.
Whaaattt??? Galactic cosmic rays (GCRs) don't contribute to the earth's climate? Volcanoes, water vapor, clouds, biosols, pacific decadal oscillation (PDO), other natural factors, do NOT contribute to the EArth's climate?
PDO cycles of cooling and warming average about 25 years. The warming phase is over, we're now entering the cooling phase.
Last September, NASA reported that there were 19 percent more GCRs in the Earth's atmosphere than last year. GCRs come from exploding stars from across the universe, within and outside our galaxy. They help create aerosols that become the "seeds" for more clouds.
The IPCC relied 100 percent of their climate predictions for the next 100 years on their global computer models (GCMs).
Seriously, anyone believes those computer models' predictive capacity of what will happen in the Philippines' weather, US weather, Europe weather, the world's weather, 1 or 2 weeks from now? For instance, the temperature range of hi-low, by Dec. 31, 2009? Because the IPCC's GCMs say they CAN predict the Earth's temperature range 90 or 100 years from now! And they have the figures, "best case" prediction of 4 C rise, max range of up to 6.4 C, by 2100!
Monday, December 21, 2009
Drug price control, Sen, Pia style
I just read that the Congressional Oversight Committee on Cheaper Medicines Law held a committee meeting last Wednesday, Dec. 16, at the Senate. Among those present were Sen. Pia Cayetano and Cong. Arthur Pinggoy, Chairman of the House Committee on Health.
Sen. Pia attacked the Department of Health (DOH) and Sec. Duque for not coming up with a second batch of medicines for drug price control as many people she said, still complain that they don't feel the cheaper prices of medicines yet. She cited the following:
1. Cisplatin 500 mg (anti-cervical cancer), original price at P2,804, price control at P1,125, but can be bought only at P770 from PGH's Cancer Institute.
2. Ramosetron 100 mg (anti-cervical cancer), price control at P860, but can be bought at PGH's CI at only P156.
I do not know how such a big discrepancy can happen. I also wish to see if the drugs cited by Sen. Pia are of the same drug by the same manufacturer and the same distributor. And not one is a generics counterpart, or one is parallel-imported, or other differences.
I think the DOH should conduct a review first of the policy. The drug price control policy is now more than 4 months old (since August 15, 2009). A review is necessary if the policy is beneficial to the public, both short-term and long-term, or not. If it can be proven that it indeed benefited the public, then an extension, if not expansion, of the policy is warranted. Otherwise, the policy should be terminated very soon.
Perhaps BFAD and the DOH can help answer these possible questions in assessing the effectivity or benefits of the policy:
1. Health result of some patients who are chronic or repeated users of certain drugs that were price-controlled?
2. Instances of drug withrawals, say generics products that cannot compete the sudden low prices of branded and/or innovators drugs?
3. Instances of revolutionary and more powerful medicines against cancer, hypertension, and other killer diseases in the country, that are available in neighboring Asian countries which have no drug price control policy, but are not available in the Philippines?
4. General reaction of other players in the health sector -- drugstores (big and small), hospitals (government and private), pharma companies (local and multinational), professionals' organizations (pharmacists, physicians, nurses, etc.).
I hope that drugs pricing will be depolicicized as soon as possible. When there is heavy politics involved in the pricing of something (drugs, oil, food, house rental, electricity, bus fare, etc.), there is always distortion that will adversely affect the number and quality of players and producers in a given sector.
Sen. Pia attacked the Department of Health (DOH) and Sec. Duque for not coming up with a second batch of medicines for drug price control as many people she said, still complain that they don't feel the cheaper prices of medicines yet. She cited the following:
1. Cisplatin 500 mg (anti-cervical cancer), original price at P2,804, price control at P1,125, but can be bought only at P770 from PGH's Cancer Institute.
2. Ramosetron 100 mg (anti-cervical cancer), price control at P860, but can be bought at PGH's CI at only P156.
I do not know how such a big discrepancy can happen. I also wish to see if the drugs cited by Sen. Pia are of the same drug by the same manufacturer and the same distributor. And not one is a generics counterpart, or one is parallel-imported, or other differences.
I think the DOH should conduct a review first of the policy. The drug price control policy is now more than 4 months old (since August 15, 2009). A review is necessary if the policy is beneficial to the public, both short-term and long-term, or not. If it can be proven that it indeed benefited the public, then an extension, if not expansion, of the policy is warranted. Otherwise, the policy should be terminated very soon.
Perhaps BFAD and the DOH can help answer these possible questions in assessing the effectivity or benefits of the policy:
1. Health result of some patients who are chronic or repeated users of certain drugs that were price-controlled?
2. Instances of drug withrawals, say generics products that cannot compete the sudden low prices of branded and/or innovators drugs?
3. Instances of revolutionary and more powerful medicines against cancer, hypertension, and other killer diseases in the country, that are available in neighboring Asian countries which have no drug price control policy, but are not available in the Philippines?
4. General reaction of other players in the health sector -- drugstores (big and small), hospitals (government and private), pharma companies (local and multinational), professionals' organizations (pharmacists, physicians, nurses, etc.).
I hope that drugs pricing will be depolicicized as soon as possible. When there is heavy politics involved in the pricing of something (drugs, oil, food, house rental, electricity, bus fare, etc.), there is always distortion that will adversely affect the number and quality of players and producers in a given sector.
Saturday, December 19, 2009
On health socialism
In one of my discussion yahoogroups, I mentioned that I will not vote for Mar Roxas for VP in the May 2010 elections. Though he was the leader of a Liberal party that was supposed to advance liberal politics and liberal economic policies, he chose the socialist policy of drug price control, among others. There was no national health emergency at the time they forced drug price control (May to July this year). There was only political emergency as his then Presidential survey ranking was very low at that time. With high media mileage caused by his endless Senate hearings on price control, his ranking inched upwards. Until he realized that Noynoy is a better candidate than him, at least in their party.
Another member of that list countered, "what do you do with the drug cartel? In India Pfizer sell Ponstan at P3.50 and still made profit. Here it sold it at P43.00."
I replied with 2 points.
First, where's that figure P3.50 vs. P43 coming from? How is the conversion into pesos arrived at? Is the P3.50 price from real Pfizer's Ponstan or a counterfeit Ponstan? I asked that question because we have it here too, super-cheap copy-cat drugs, 1/5 or 1/10 the price of the original drug, and your disease expands.
Second, assuming the price difference is even worse, P3.50 India vs. P100 or P200 in Manila, both by the same Pfizer (or GSK or Roche or Sanofi or whatever pharma). If there is NO competing drug on the same generic or molecular property, then one can say there is a cartel or monopoly. But if there are 20 or 50 other competing drugs from various manufacturers, innovator or generics, what's the fuss? Why insist on buying P43 or P100 from one manufacturer when you can buy a competing drug with supposedly the same curative capacity from other manufacturers selling at only P3, P5, P10?
So long as there is competition, then let us allow any manufacturer or seller to over-price itself out of the market, out of the competition.
One good example is amlodipine(? ), a drug against hypertension. I heard that there are about 200 different drugs from different manufacturers against this disease. So the competition is very stiff, with prices ranging from P11 (or lower) to P44 (or higher). But the envious eyes of the politicians, media and activist NGOs are on Norvasc, made by Pfizer. Before the Roxas-Gloria drug price control policy in late July this year, it was sold at P44 for its customers with Sulit card. After the socialist policy of price control, it was coercively brought down to P22. The goal was to "help the poor" patients.
But the poor won't buy Norvasc at P22. It's still expensive for them. Other products of the same molecule are sold at P11 or lower. So did health socialism help the poor? No. It helped the rich and the middle class who used to buy at P44, now they pay only P22.
Again, my favorite analogy.
There is NO govt. restaurant, NO govt carinderia, NO govt turo-turo, NO govt supermarket, etc., and people are eating.
There ARE many govt. hospitals and clinics, there ARE many govt. drugstores and botica, there IS govt. health insurance, there IS govt. drug price control, and health problems are endless.
Health socialism -- or education socialism, housing socialism, socialism in general -- creates more problems than solutions.
--------
Part 2
Some people would not consider or admit that drug price control and similar schemes are tantamount to health socialism because the goal of such measures is "to help only the poor have access to medicines."
The current Cheaper Medicines Law (RA 9502) allows "parallel importation" scheme for drugs. Thus, anyone can now import a drug that is currently patented and sold higher in the Philippines, from another country which sells the same drug at a lower price. Thus, importing Pfizer India's Ponstan into the country is technically and legally allowed.
But many doctors, pharmacists, hospital administrators and informed patients are not comfortable with this scheme. Even assuming that the parallel-imported drug is 100% of the same molecule (not counterfeit, not substandard) as the one sold expensively here, there is the question of (a) storage, (b) handling and distribution, and (c) accountability.
Take drug A that specifies it should be stored and handled at temp. range of 15-25 C at ALL time. When it's stored and/or transported at 26 C or higher for 1 hour or more, it will have a lower or lesser effectiveness already. And a patient will either not get well, or develop new disease as the current disease that is supposed to be controlled or killed by a particular medicine, has already managed to mutate inside the body of the patient.
Under a parallel import scheme, the (a) foreign manufacturer, (b) foreign wholesaler or aggregator, (c) local importer and distributor, can be 2 or 3 different entities. They are never the same entity. So if something bad happens to the medicine being imported and given to the patient, and something bad happens to the patient, who is to be held accountable? A or b or c, or the local patent holder, or the physician and the hospital, or the drugstore, or the DOH?
Saving money is understandable. But saving lives is non-compromisable.
That is why I am not in favor of parallel importation scheme, not in favor of compulsory licensing, not in favor of drug price control, not in favor of government use, etc. ALL of those provisions are now allowed in the Cheaper medicines law. That is why I consider the said law as part of health socialism. The promises are holy and unquestionable – cheaper and affordable medicines. But the schemes used and allowed are generally confiscatory.
The law also does not say anything or amend medicine taxation. Such taxes comprise between 13 to 20 percent of the retail price of drugs. So government is a hypocrite, true blue hypocrite, for calling for “cheaper medicines” but is responsible for expensive medicines by slapping the product with various taxes, as if medicines are like beer and hamburger that should be taxed as much as possible.
So again, my 2 simple proposals to lower medicine prices, both of which were not included, explicitly or implicitly, in the cheaper medicines law:
1. abolish taxes on medicines
2. increase competition among drug manufacturers and retailers
I wrote a paper on drug price control, “Access to medicines through politics: Preliminary assessment of drug price control policy in the Philippines”, http://www.minimalgovernment.net/media/mg_20091014.pdf
It’s 33 pages, word document, including annexes and tables. I presented it in an international conference in Singapore last Oct 14-15 this year. There is one table there where I showed there are sooo many multinational pharma companies abroad that are not yet here, that have the potential to further push the competition among innovator manufacturers, but somehow they are not here. There should be some government policies here that scare them from coming in. Which reduces competition.
Another member of that list countered, "what do you do with the drug cartel? In India Pfizer sell Ponstan at P3.50 and still made profit. Here it sold it at P43.00."
I replied with 2 points.
First, where's that figure P3.50 vs. P43 coming from? How is the conversion into pesos arrived at? Is the P3.50 price from real Pfizer's Ponstan or a counterfeit Ponstan? I asked that question because we have it here too, super-cheap copy-cat drugs, 1/5 or 1/10 the price of the original drug, and your disease expands.
Second, assuming the price difference is even worse, P3.50 India vs. P100 or P200 in Manila, both by the same Pfizer (or GSK or Roche or Sanofi or whatever pharma). If there is NO competing drug on the same generic or molecular property, then one can say there is a cartel or monopoly. But if there are 20 or 50 other competing drugs from various manufacturers, innovator or generics, what's the fuss? Why insist on buying P43 or P100 from one manufacturer when you can buy a competing drug with supposedly the same curative capacity from other manufacturers selling at only P3, P5, P10?
So long as there is competition, then let us allow any manufacturer or seller to over-price itself out of the market, out of the competition.
One good example is amlodipine(? ), a drug against hypertension. I heard that there are about 200 different drugs from different manufacturers against this disease. So the competition is very stiff, with prices ranging from P11 (or lower) to P44 (or higher). But the envious eyes of the politicians, media and activist NGOs are on Norvasc, made by Pfizer. Before the Roxas-Gloria drug price control policy in late July this year, it was sold at P44 for its customers with Sulit card. After the socialist policy of price control, it was coercively brought down to P22. The goal was to "help the poor" patients.
But the poor won't buy Norvasc at P22. It's still expensive for them. Other products of the same molecule are sold at P11 or lower. So did health socialism help the poor? No. It helped the rich and the middle class who used to buy at P44, now they pay only P22.
Again, my favorite analogy.
There is NO govt. restaurant, NO govt carinderia, NO govt turo-turo, NO govt supermarket, etc., and people are eating.
There ARE many govt. hospitals and clinics, there ARE many govt. drugstores and botica, there IS govt. health insurance, there IS govt. drug price control, and health problems are endless.
Health socialism -- or education socialism, housing socialism, socialism in general -- creates more problems than solutions.
--------
Part 2
Some people would not consider or admit that drug price control and similar schemes are tantamount to health socialism because the goal of such measures is "to help only the poor have access to medicines."
The current Cheaper Medicines Law (RA 9502) allows "parallel importation" scheme for drugs. Thus, anyone can now import a drug that is currently patented and sold higher in the Philippines, from another country which sells the same drug at a lower price. Thus, importing Pfizer India's Ponstan into the country is technically and legally allowed.
But many doctors, pharmacists, hospital administrators and informed patients are not comfortable with this scheme. Even assuming that the parallel-imported drug is 100% of the same molecule (not counterfeit, not substandard) as the one sold expensively here, there is the question of (a) storage, (b) handling and distribution, and (c) accountability.
Take drug A that specifies it should be stored and handled at temp. range of 15-25 C at ALL time. When it's stored and/or transported at 26 C or higher for 1 hour or more, it will have a lower or lesser effectiveness already. And a patient will either not get well, or develop new disease as the current disease that is supposed to be controlled or killed by a particular medicine, has already managed to mutate inside the body of the patient.
Under a parallel import scheme, the (a) foreign manufacturer, (b) foreign wholesaler or aggregator, (c) local importer and distributor, can be 2 or 3 different entities. They are never the same entity. So if something bad happens to the medicine being imported and given to the patient, and something bad happens to the patient, who is to be held accountable? A or b or c, or the local patent holder, or the physician and the hospital, or the drugstore, or the DOH?
Saving money is understandable. But saving lives is non-compromisable.
That is why I am not in favor of parallel importation scheme, not in favor of compulsory licensing, not in favor of drug price control, not in favor of government use, etc. ALL of those provisions are now allowed in the Cheaper medicines law. That is why I consider the said law as part of health socialism. The promises are holy and unquestionable – cheaper and affordable medicines. But the schemes used and allowed are generally confiscatory.
The law also does not say anything or amend medicine taxation. Such taxes comprise between 13 to 20 percent of the retail price of drugs. So government is a hypocrite, true blue hypocrite, for calling for “cheaper medicines” but is responsible for expensive medicines by slapping the product with various taxes, as if medicines are like beer and hamburger that should be taxed as much as possible.
So again, my 2 simple proposals to lower medicine prices, both of which were not included, explicitly or implicitly, in the cheaper medicines law:
1. abolish taxes on medicines
2. increase competition among drug manufacturers and retailers
I wrote a paper on drug price control, “Access to medicines through politics: Preliminary assessment of drug price control policy in the Philippines”, http://www.minimalgovernment.net/media/mg_20091014.pdf
It’s 33 pages, word document, including annexes and tables. I presented it in an international conference in Singapore last Oct 14-15 this year. There is one table there where I showed there are sooo many multinational pharma companies abroad that are not yet here, that have the potential to further push the competition among innovator manufacturers, but somehow they are not here. There should be some government policies here that scare them from coming in. Which reduces competition.
Tuesday, December 15, 2009
Electing socialists
In one of my various discussion ygroups, there was one proposal to support a politician from the left-leaning BAYAN MUNA (country first) for Senator because she's a fellow UPSE alumni.
I have to spoil the party, err the proposal, as always. Electing to a higher legislative office politicians who believe that price control (petroleum, medicines, house rental, etc.) is good economics, is not a wise move.
Any candidate campaigning on near-socialist economic agenda, we should junk. Unless people think that socialism and forced collectivism is good. Socialism simply means that they will socialize health care, socialize education, socialize credit, socialize pension, etc., including socialize our pockets, socialize our personal bank savings, socialize personal efforts and ambitions or the lack of them.
Modern socialists don't even call themselves as such. But one can easily identify them through their words and actions:
* More and higher taxes to provide welfare and subsidies to the poor -- even if poverty is caused by plain laziness and personal irresponsibility.
* More business regulations and costly business compliance processes, more rigid labor laws to protect workers from "capitalist exploitation" .
* More financial regulations to "prevent" future financial crisis.
Such socialists serendade us during elections. Some socialists work in multilateral institutions, oppose any significant income tax cut but themselves are not subject to mandatory and confiscatory income witholding tax.
Double talk and hypocrisy is also very evident in the minds of those socialists. For instance, they shout "cheaper medicines" but are totally silent, if not absolutely supportive, of continued taxes on medicines (5% import tax + 12% VAT + other fees) that contribute to expensive medicines.
So, whether they are fellow UP alumni or not, if they act like modern robbers who, in the name of "welfare for the poor", would confiscate more from our pockets, or force private enterprises to provide mandatory subsidies to the public while collecting endless taxes from such enterprises -- what exactly happened with drug price control and oil price control -- we should junk them.
------
Two political quotes:
(1) "As a politician, these are my principles!
If you don't like them, well, I have others."
-- Groucho Marx
(2) "If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it."
-- Ronald Reagan
The 2nd somehow alternatively defines what socialism is. The politicians who make promises along those lines, often implicitly, may call themselves "Bayan Muna", or "Dyos Muna" (God first), "Nacionalista" , "Liberal", "Nationalist People", etc.
But their mark or signature is one and the same, regardless of their label or political party: they just love more regulation and more taxation.
I have to spoil the party, err the proposal, as always. Electing to a higher legislative office politicians who believe that price control (petroleum, medicines, house rental, etc.) is good economics, is not a wise move.
Any candidate campaigning on near-socialist economic agenda, we should junk. Unless people think that socialism and forced collectivism is good. Socialism simply means that they will socialize health care, socialize education, socialize credit, socialize pension, etc., including socialize our pockets, socialize our personal bank savings, socialize personal efforts and ambitions or the lack of them.
Modern socialists don't even call themselves as such. But one can easily identify them through their words and actions:
* More and higher taxes to provide welfare and subsidies to the poor -- even if poverty is caused by plain laziness and personal irresponsibility.
* More business regulations and costly business compliance processes, more rigid labor laws to protect workers from "capitalist exploitation" .
* More financial regulations to "prevent" future financial crisis.
Such socialists serendade us during elections. Some socialists work in multilateral institutions, oppose any significant income tax cut but themselves are not subject to mandatory and confiscatory income witholding tax.
Double talk and hypocrisy is also very evident in the minds of those socialists. For instance, they shout "cheaper medicines" but are totally silent, if not absolutely supportive, of continued taxes on medicines (5% import tax + 12% VAT + other fees) that contribute to expensive medicines.
So, whether they are fellow UP alumni or not, if they act like modern robbers who, in the name of "welfare for the poor", would confiscate more from our pockets, or force private enterprises to provide mandatory subsidies to the public while collecting endless taxes from such enterprises -- what exactly happened with drug price control and oil price control -- we should junk them.
------
Two political quotes:
(1) "As a politician, these are my principles!
If you don't like them, well, I have others."
-- Groucho Marx
(2) "If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it."
-- Ronald Reagan
The 2nd somehow alternatively defines what socialism is. The politicians who make promises along those lines, often implicitly, may call themselves "Bayan Muna", or "Dyos Muna" (God first), "Nacionalista" , "Liberal", "Nationalist People", etc.
But their mark or signature is one and the same, regardless of their label or political party: they just love more regulation and more taxation.
Inflation and CBs 6: Central Banks with Bloated Staff
Central banks, being central planners in monetary policy and often, central regulators of the private banking system in each country, are often among the bloated and over-staffed agencies in many countries.
The Economist magazine, December 3, 2009 issue, showed this interesting chart. Five (or more) countries have 5 or more CB staff per 100,000 population -- Russia, France, Germany, Italy, US. I assume that the UK, Belgium are also included in this list.
Chart source,
http://www.economist.com/markets/indicators/displaystory.cfm?story_id=15019848&CFID=100581702&CFTOKEN=90738853
Note that there is already the European Central Bank (ECB), and some EU countries still have their own central banks. I think Asian CBs (Japan, China, India) are not that full of monetary bureaucrats.
-------
Meanwhile, I wrote these short notes:
(1) Should central banks be abolished?Central banking is definitely central planning at the monetary sector. I have ambiguous position at the moment whether CBs should be abolished or not, but little sympathy for their continued stay. Should they continue though, I think they should be shrank.
"Inflation targetting" and "price stability" as their main mision -- they never fully achieve that. Price is mainly a function of supply and demand of various goods and services. Housing price and house rental is high because there are not enough condo buildings, townhouses, low-cost housing, etc. The supply of housing unit is low compared to the demand. The price of galunggong, lapu-lapu, other seafood rises because of heavy typhoon which damaged many fishing boats, while demand remains the same. Or overall prices rise because taxes, fees, bribes and bureaucracies keep rising, and producers and traders have to pass such cost to consumers. Monetary policy has little direct bearing on those things. (2) Euro Prisoners
Not only Spain but also Greece, Ireland, Portugal, Italy, Belgium are problematic. And on a longer horizon, France and Germany, these countries can be considered as "Euro Prisoners". The absence of a national currency will make it difficult for their governments to institute currency devaluation, only "internal devaluation".
These developments will make it hard for the lobbyists of an Asian currency and an Asian Central Bank to push their proposal. There are just too many central planners around. National central planning like central banking is not enough, there should be regional or continental central planning with a new regional or continental bureaucracy.
Can't people just become plain entrepreneurs who live off not on forcible revenue aka taxes, but on voluntary exchange with the rest of humanity? Lousy entrepreneurs will not satisfy their customers, they ultimately close their business, and they revert back to become average employees or managers. Efficient entrepreneurs satisfy their customers, they expand, they hire more people. Only the lazy and super-choosy will be unemployed and go hungry. Which can be a good thing to discourage laziness and irresponsibility in society.
----------
See also:
Inflation and CBs 1: Central Banks Can Be Anti-Globalists, June 29, 2006
Inflation and CBs 2: Panama has no Central Bank, February 20, 2008
Inflation and CBs 3: "Bank of Last Resort", March 18, 2008
Inflation and CBs 4: Subsidies and Money Printing, August 07, 2008
Inflation and CBs 5: Capitalism Without Failure is Like Religion Without Sin, September 30, 2008
Thursday, December 10, 2009
Warming Hysteria: Challenge Them to a Debate...
Recently, I've been challenging to a public debate the leaders of Oxfam Philippines, IBON, WWF, Greenpeace, etc. re warming hysteria.
I know their usual arguments, the IPCC mantra being paraded, as follows:
a) there is unequivocal warming,
b) this warming is unprecedented in history, and
c) CO2 and other GHGs are the main cause of warming.
For me this is a big SCAM.
And I will argue the following:
1. NO warming in global temperature (northern hemisphere, southern hemisphere, tropics) that occured since 1998.
2. There were periods in the past which are a lot WARMER than today's levels. In particular, the Medieval Warm Period (MWP).
3. CO2 is NOT the main driver of the earth's climate cycle (or natural climate change) of warming-cooling. It's the SUN and other natural factors (PDO, cosmic rays, volcanoes).
A few days have passed, there reply is...
Nothing, nada, zero, wala.
Well, IBON said that they will invite me in some of their activities, I said ok, but I wish it will be a debate format -- charts vs charts, tables vs tables, graphs vs graphs. No additional comment from them yet.
I was also sending some of my presentations showing that we are experiencing a global cooling, not warming, to 2 PAGASA officials, including the affable Nathanial "Tani" Cruz. So far, got no comment or countercomment from them.
One of my friends, Ozone Azanza, asked his friends at the DOST if they will comment on my papers that Ozone sent him, probably engage me in a debate, he said no comment from them either.
Well, I would assume that all leaders of the Filipino warmers are in Copenhagen now. So I should receive a reply from them later.
Meanwhile, I will have a debate with Dr. Joey Comiso, perhaps the only Filipino scientist, at NASA. This will be on late Feb or early March 2010. Organizers will be the Filipino Foresters assn. they plan the venue to be either at the DENR or UPLB. I will just wait for details later.
---------
My three related short papers recently:
(1) Hottest Decade?
(Global temperature from satellite data of the troposphere, 8 kms. above sea level; data interpreted by the Univ. of Alabama in Huntsville [UAH], 2002 to Oct. 2009. CO2 data is from Mauna Loa, Hawaii).
Yesterday, well almost everyday before and during the Copenhagen meeting on climate, we hear and read news reports from the UN, from various governments, and from big environmentalist groups, saying we're doomed unless we follow their ecological central planning agenda.
One such report yesterday, is a news report from the UN saying that "this decade likely to be the hottest on record",
http://www.gmanews.tv/story/178855/un-2000-2009-likely-warmest-decade-on-record
I was interviewed yesterday by Ms. Steph Ongkiko of RPN Channel 9 to ask me about my reaction to such report. I said "the UN IPCC is lying. This decade, the planet is cooling, not warming."
This argument and the chart to prove it is contained in my recent paper, "Warming time out amidst climate hysteria" that I presented at the Las Pinas Chamber of Commerce and Industry (LPCCI) last November 24, 2009,
http://www.minimalgovernment.net/media/mg_20091124.pdf
I showed there the following:
1. Earth this decade is experiencing cooling, not warming.
2. Arctic ice is melting, and growing, and melting, and growing.
3. Sea level height is not rising, it is even declining by 0.51 mm/year.
4. Number of hurricanes around the world is not rising, it is declining.
and so on.
Arctic ice extent as of Dec. 8, 2009, red line. The level of ice there this year, this month, is no different from recent years' levels. Data from the International Arctic Research Center (IARC) and Japan Aerospace Exploration Agency (JAXA).
Meanwhile, the hypocrisy of the "saviours of the planet" who want the world to cut on carbon emission, brought to Copenhagen 1,200+ carbon-guzzling limousines, 140 extra private jets, not to mention SUVs, sedans, lots of commercial planes. See here,
http://wattsupwiththat.com/2009/12/07/december-7th-2009-a-day-that-will-live-in-hypocrisy/
I know their usual arguments, the IPCC mantra being paraded, as follows:
a) there is unequivocal warming,
b) this warming is unprecedented in history, and
c) CO2 and other GHGs are the main cause of warming.
For me this is a big SCAM.
And I will argue the following:
1. NO warming in global temperature (northern hemisphere, southern hemisphere, tropics) that occured since 1998.
2. There were periods in the past which are a lot WARMER than today's levels. In particular, the Medieval Warm Period (MWP).
3. CO2 is NOT the main driver of the earth's climate cycle (or natural climate change) of warming-cooling. It's the SUN and other natural factors (PDO, cosmic rays, volcanoes).
A few days have passed, there reply is...
Nothing, nada, zero, wala.
Well, IBON said that they will invite me in some of their activities, I said ok, but I wish it will be a debate format -- charts vs charts, tables vs tables, graphs vs graphs. No additional comment from them yet.
I was also sending some of my presentations showing that we are experiencing a global cooling, not warming, to 2 PAGASA officials, including the affable Nathanial "Tani" Cruz. So far, got no comment or countercomment from them.
One of my friends, Ozone Azanza, asked his friends at the DOST if they will comment on my papers that Ozone sent him, probably engage me in a debate, he said no comment from them either.
Well, I would assume that all leaders of the Filipino warmers are in Copenhagen now. So I should receive a reply from them later.
Meanwhile, I will have a debate with Dr. Joey Comiso, perhaps the only Filipino scientist, at NASA. This will be on late Feb or early March 2010. Organizers will be the Filipino Foresters assn. they plan the venue to be either at the DENR or UPLB. I will just wait for details later.
---------
My three related short papers recently:
(1) Hottest Decade?
(Global temperature from satellite data of the troposphere, 8 kms. above sea level; data interpreted by the Univ. of Alabama in Huntsville [UAH], 2002 to Oct. 2009. CO2 data is from Mauna Loa, Hawaii).Yesterday, well almost everyday before and during the Copenhagen meeting on climate, we hear and read news reports from the UN, from various governments, and from big environmentalist groups, saying we're doomed unless we follow their ecological central planning agenda.
One such report yesterday, is a news report from the UN saying that "this decade likely to be the hottest on record",
http://www.gmanews.tv/story/178855/un-2000-2009-likely-warmest-decade-on-record
I was interviewed yesterday by Ms. Steph Ongkiko of RPN Channel 9 to ask me about my reaction to such report. I said "the UN IPCC is lying. This decade, the planet is cooling, not warming."
This argument and the chart to prove it is contained in my recent paper, "Warming time out amidst climate hysteria" that I presented at the Las Pinas Chamber of Commerce and Industry (LPCCI) last November 24, 2009,
http://www.minimalgovernment.net/media/mg_20091124.pdf
I showed there the following:
1. Earth this decade is experiencing cooling, not warming.
2. Arctic ice is melting, and growing, and melting, and growing.
3. Sea level height is not rising, it is even declining by 0.51 mm/year.
4. Number of hurricanes around the world is not rising, it is declining.
and so on.
Arctic ice extent as of Dec. 8, 2009, red line. The level of ice there this year, this month, is no different from recent years' levels. Data from the International Arctic Research Center (IARC) and Japan Aerospace Exploration Agency (JAXA).
Meanwhile, the hypocrisy of the "saviours of the planet" who want the world to cut on carbon emission, brought to Copenhagen 1,200+ carbon-guzzling limousines, 140 extra private jets, not to mention SUVs, sedans, lots of commercial planes. See here,
http://wattsupwiththat.com/2009/12/07/december-7th-2009-a-day-that-will-live-in-hypocrisy/
(2) Al Gore Stupidity
At one TV interview last month, he said that the temperature of the Earth at 2 kilometers below the surface was "millions of degrees" (correct answer: between 500 to 900 C)
The other day, when he was interviewed, he said that the climategate emails, "the most recent one is more than 10 years old". Boo-boo. The most recent emails there were several days old when they were hacked/passed on. See here,
http://wattsupwiththat.com/2009/12/08/al-gore-cant-tell-time-thinks-most-recent-climategate-email-is-more-than-10-years-old/#more-13904
It's really dangerous to put politicians as "spokesmen" of major natural science issues. They talk junk science and propose junk solutions and the world is implementing them!
The other day, when he was interviewed, he said that the climategate emails, "the most recent one is more than 10 years old". Boo-boo. The most recent emails there were several days old when they were hacked/passed on. See here,
http://wattsupwiththat.com/2009/12/08/al-gore-cant-tell-time-thinks-most-recent-climategate-email-is-more-than-10-years-old/#more-13904
It's really dangerous to put politicians as "spokesmen" of major natural science issues. They talk junk science and propose junk solutions and the world is implementing them!
(3) Early Snow and Copenhagen
December 07, 2010
Last week, supposedly dry Houston received snow, people there were surprised. My Filipino friends there were happy of course that their kids got their pictures in the snow, for they just migrated from Singapore a few months ago.
This morning, another Filipino friend in NJ posted pictures of his wife and son playing in the snow, saying early winter is here. And tonight, another Filipino friend in Rocklin, north California, was surpirsed to find snow in their backyard!
Meanwhile in Copenhagen, some 15,000 climate bureaucrats, 5,000 media people and environmentalists, went to Copenhagen to fight global warming and climate change. More than 1,200 limousines were not enough, 140 extra private jets, not to mention commercial planes, sedans and SUVs, are crowding the city. Yes, those officials, showbiz celebrities, environmentalists, and so on want to save the world! Here's the link for the above figures,
ttp://www.telegraph.co.uk/earth/copenhagen-climate-change-confe/6736517/Copenhagen-climate-summit-1200-limos-140-private-planes-and-caviar-wedges.html
Meanwhile in Copenhagen, some 15,000 climate bureaucrats, 5,000 media people and environmentalists, went to Copenhagen to fight global warming and climate change. More than 1,200 limousines were not enough, 140 extra private jets, not to mention commercial planes, sedans and SUVs, are crowding the city. Yes, those officials, showbiz celebrities, environmentalists, and so on want to save the world! Here's the link for the above figures,
ttp://www.telegraph.co.uk/earth/copenhagen-climate-change-confe/6736517/Copenhagen-climate-summit-1200-limos-140-private-planes-and-caviar-wedges.html
Saturday, December 05, 2009
Mutant diseases and turtle research
The cold season has been in the country for a month now. Diseases that showed up during the warmer months tend to mutate to a “cousin” and slightly different strains during the cooler months. Such is the case of flu and its mutant varieties – ordinary flu, bird flu, cow flu, and swine flu, among others.
This week, both the Department of Health (DOH) and the World Health Organization (WHO) announced that they are tracking the flu virus in the country as it is now flu season in the northern hemisphere and many people are traveling across continents for the Christmas holiday season. Thus, the flu virus can easily mutate as innocent people who contracted the flu but do not show clear symptoms yet move across the northern and southern hemispheres and the tropics. The WHO noted that the strain has been mutating in many countries.
PAGASA reported yesterday that Metro Manila’s recent temperature records were 2 degrees Celsius colder than average temperatures in the past 30 years. It was a cold November and it will be another cold December as the northeast monsoon is surging. Such cooler than average weather means more susceptibility of more people to cold weather diseases.
As public demand for newer and more powerful medicines and vaccines against certain flu strains and other diseases rise, supply of such innovative drugs should also rise. For many diseases, this might be the case. But for some, like HIV/AIDS, disease-killing vaccines are not invented yet. There is turtle-pace in research.
Why is this so, and what are the incentives and disincentives that are hounding the research and vaccine development against HIV?
While pharmaceutical and biotech companies have the expertise in vaccine development and commercialization, and almost all vaccines used globally today come from them, it is notable that private sector R&D investment in anti-HIV is small. How did it come to this situation, considering that AIDS is a high profile killer disease that has victimized thousands of lives already?
Jeffrey Harris, “Why we don’t have an HIV vaccine, and how we can develop one”, Health Affairs, Nov./Dec. 2009, Vol. 28 No. 6, made these 3 observations why there is low private sector spending, in anti-HIV/AIDS research. One, political risk. Governments’ decisions to implement large-scale vaccination program or not is volatile and uncertain. Two, another political risk, the growing threats of compulsory licensing (CL) against the effective, safe, popular and highly saleable products. Add also drug price control policies that are in place in some countries like the Philippines. And three, scientific risks: all-or-none proposition from vaccine R&D, that an innovator company must spend big and lose big, or earn big, in discovering a very elusive treatment against the HIV scourge.
A combination of various interventionist and statist policies that demonize innovator companies mainly because they are big and are global corporations, is the main reason why there is turtle pace in medicine R&D for both old and new or emerging diseases.
The current drug price control policy that was imposed by both the Department of Health and the Office of the President is now 3½ months old. It should be noted that it was not an ordinary price-freeze type of control, such as the one imposed after the 2 devastating typhoons that hit Metro Manila and northern Luzon provinces in late September to mid-October this year. Rather, it was a coercive and mandatory price cut by 50 percent that targeted medicines against some of the top 10 killer diseases in the country, but medicines that were very popular and highly saleable. An element of envy against successful and innovative products cannot be discounted as the main motive for such price control order by the government.
One danger of such subjective and almost arbitrary declaration of drug price control, is that innovator companies that have more powerful and more revolutionary medicines and vaccines, will not bring their products into the country. There will always be a fear of another round of drug price control policy anytime, without regard for explicit public health emergencies , but only for consideration of political emergencies by the politicians in power.
The ultimate loser of this situation will be the Filipino patients. Both poor and rich patients. When we are saving the lives of our beloved family member or friend, money becomes a secondary issue. The main issue is the availability of life-saving drugs and treatments that can kill the diseases that weaken the body and spirit of persons who are close to our heart.
Mutant diseases should be met by mutant medicines and treatment, not by turtle-pace research and treatment, discouraged by heavy politics and political intervention in what are clearly non-political concerns like saving the lives of people who are dear to us.
* Note: this article, with a table in it, was originally posted at
http://www.thelobbyist.biz/lobbyist.biz/perspectives/columns/back_to_personal_responsibility/804.html
This week, both the Department of Health (DOH) and the World Health Organization (WHO) announced that they are tracking the flu virus in the country as it is now flu season in the northern hemisphere and many people are traveling across continents for the Christmas holiday season. Thus, the flu virus can easily mutate as innocent people who contracted the flu but do not show clear symptoms yet move across the northern and southern hemispheres and the tropics. The WHO noted that the strain has been mutating in many countries.
PAGASA reported yesterday that Metro Manila’s recent temperature records were 2 degrees Celsius colder than average temperatures in the past 30 years. It was a cold November and it will be another cold December as the northeast monsoon is surging. Such cooler than average weather means more susceptibility of more people to cold weather diseases.
As public demand for newer and more powerful medicines and vaccines against certain flu strains and other diseases rise, supply of such innovative drugs should also rise. For many diseases, this might be the case. But for some, like HIV/AIDS, disease-killing vaccines are not invented yet. There is turtle-pace in research.
Why is this so, and what are the incentives and disincentives that are hounding the research and vaccine development against HIV?
While pharmaceutical and biotech companies have the expertise in vaccine development and commercialization, and almost all vaccines used globally today come from them, it is notable that private sector R&D investment in anti-HIV is small. How did it come to this situation, considering that AIDS is a high profile killer disease that has victimized thousands of lives already?
Jeffrey Harris, “Why we don’t have an HIV vaccine, and how we can develop one”, Health Affairs, Nov./Dec. 2009, Vol. 28 No. 6, made these 3 observations why there is low private sector spending, in anti-HIV/AIDS research. One, political risk. Governments’ decisions to implement large-scale vaccination program or not is volatile and uncertain. Two, another political risk, the growing threats of compulsory licensing (CL) against the effective, safe, popular and highly saleable products. Add also drug price control policies that are in place in some countries like the Philippines. And three, scientific risks: all-or-none proposition from vaccine R&D, that an innovator company must spend big and lose big, or earn big, in discovering a very elusive treatment against the HIV scourge.
A combination of various interventionist and statist policies that demonize innovator companies mainly because they are big and are global corporations, is the main reason why there is turtle pace in medicine R&D for both old and new or emerging diseases.
The current drug price control policy that was imposed by both the Department of Health and the Office of the President is now 3½ months old. It should be noted that it was not an ordinary price-freeze type of control, such as the one imposed after the 2 devastating typhoons that hit Metro Manila and northern Luzon provinces in late September to mid-October this year. Rather, it was a coercive and mandatory price cut by 50 percent that targeted medicines against some of the top 10 killer diseases in the country, but medicines that were very popular and highly saleable. An element of envy against successful and innovative products cannot be discounted as the main motive for such price control order by the government.
One danger of such subjective and almost arbitrary declaration of drug price control, is that innovator companies that have more powerful and more revolutionary medicines and vaccines, will not bring their products into the country. There will always be a fear of another round of drug price control policy anytime, without regard for explicit public health emergencies , but only for consideration of political emergencies by the politicians in power.
The ultimate loser of this situation will be the Filipino patients. Both poor and rich patients. When we are saving the lives of our beloved family member or friend, money becomes a secondary issue. The main issue is the availability of life-saving drugs and treatments that can kill the diseases that weaken the body and spirit of persons who are close to our heart.
Mutant diseases should be met by mutant medicines and treatment, not by turtle-pace research and treatment, discouraged by heavy politics and political intervention in what are clearly non-political concerns like saving the lives of people who are dear to us.
* Note: this article, with a table in it, was originally posted at
http://www.thelobbyist.biz/lobbyist.biz/perspectives/columns/back_to_personal_responsibility/804.html
Thursday, December 03, 2009
Market manipulation and information assymetry
A friend in one of my discussion yahoogroups posted an article, "The Catastropic end of market manipulation" by Bix Weir. The article talked about market manipulation by some key finance officials of the Obama government and the rise from near-bankruptcy by some big American banks last year, to very high stock prices this year.
End of market manipulation?
There is NO end to market manipulation, and there can never be.
You get off on a bus terminal in a city or municipality that you are not familiar with. The tricycle driver that will take you to your destination will try as much as possible, to charge you 2x, even 5x, the regular fare if they know that you do not know your way to your destination. That's market mannipulation.
Buying a cellphone in Baclaran or other bargain centers hoping that the price there for the same unit and model of a Nokia or Samsung is at least 20% cheaper if you buy it from a typical mall. You didn't know that the seller could sell it to you even at 70% cheaper and still make a profit, and proceeded to sell you the unit at 21% cheaper. Still market manipulation.
A person with PhD can give a political or economic advise to a rich man or corporation for a handsome price, even when the adviser or consultant perfectly knows that the advice he gave was next to garbage.
Go up the ladder of financial transactions, market manipulation -- by a seller or a buyer -- is possible anywhere, anytime. Why? Because of information assymetry, or unequal knowledge, imperfect information, between a buyer and a seller.
The good news is that with information revolution like the internet and google search and facebook capitalism, information across almost all sectors are becoming more generalized and accessible. For instance, you want to go to Oslo or Helsinki. Without the internet, your only source of information of the airline that can take you there, their plane fare, discounts if any, etc., will be your travel agent or by calling the different airlines by phone, which is very time consuming and even costly. With internet, you can check the various airlines landing at End of market manipulation" ?
There is NO end to market manipulation, and there can never be.
Getting off on a bus terminal in a city or municipality that you are not familiar with. The tricycle driver that will take you to your destination will try as much as possible, to charge you 2x, even 5x, the regular fare if they know that you know your way to your destination. That's market mannipulation.
Buying a cellphone in Greenhills or Baclaran hoping that the price there for the same unit and model of a Nokia or Samsung is at least 20% cheaper if you buy it from Glorietta or SM. You didnt know that the seller could sell it to you even at 70% cheaper and still make a profit, and proceeded to sell you the unit at 21% cheaper. Still market manipulation.
A person with PhD can give a political or economic advise to a rich man or corporation for a handsome price, even when the adviser or consultant perfectly knows that the advice he gave was next to garbage.
Go up the ladder of financial transactions, market manipulation -- by a seller or a buyer -- is possible anywhere, anytime. Why? Because of information assymetry, or unequal knowledge, imperfect information, between a buyer and a seller.
The good news is that with information revolution like the internet and google search, even facebook networking, information across almost all sectors are becoming more generalized and accessible. For instance, you want to go to Oslo or Helsinki. Without the internet, your only source of information of the airline that can take you there, their plane fare, discounts if any, etc., will be your travel agent or by calling the different airlines by phone, which is very time consuming and even costly. With internet, you can check the various airlines landing at Manila airport (NAIA), get their destinations, itinerary, fare, etc. That's reducing the cost of gathering info, that's reducing or abolishing info assymetry. Market manipulation can be minimized or eradicated, at the micro level; ie, at the personal or corporate level.
Most of the points in that article are more of alarmism.
Nothing to worry or wonder about huge jump in asset prices, later to crash.
Corporate expansion and bankruptcy are 100 percent part of capitalism.
Capitalism without failure is like religion without sin.
So the recent global financial turmoil was just natural. The extent of financial dislocation may have been big compared to previous financial crisis, but it's all part of the natural business cycle. Some guys make great business decision, like a successful technological innovation, they make super-super big money and profit. Fine. Other guys make huge risks and made huge losses later, they go bankrupt. Fine.
This is not to say that market manipulation per se is desirable. It's not. Manipulation is just a natural behavior of some people if they know that they can hoodwink some guys, and get away with any crime later on.
That is why Gloria Magtatagal Arroyo, or better yet, Gloria Magtatagal-Garapal Arroyo, will keep manipulating us, because they know something that they think we do not know. LIke they know that they can bribe some influential media or election officials at X price, while we thought that those guys that they bribed were unbribable.
End of market manipulation?
There is NO end to market manipulation, and there can never be.
You get off on a bus terminal in a city or municipality that you are not familiar with. The tricycle driver that will take you to your destination will try as much as possible, to charge you 2x, even 5x, the regular fare if they know that you do not know your way to your destination. That's market mannipulation.
Buying a cellphone in Baclaran or other bargain centers hoping that the price there for the same unit and model of a Nokia or Samsung is at least 20% cheaper if you buy it from a typical mall. You didn't know that the seller could sell it to you even at 70% cheaper and still make a profit, and proceeded to sell you the unit at 21% cheaper. Still market manipulation.
A person with PhD can give a political or economic advise to a rich man or corporation for a handsome price, even when the adviser or consultant perfectly knows that the advice he gave was next to garbage.
Go up the ladder of financial transactions, market manipulation -- by a seller or a buyer -- is possible anywhere, anytime. Why? Because of information assymetry, or unequal knowledge, imperfect information, between a buyer and a seller.
The good news is that with information revolution like the internet and google search and facebook capitalism, information across almost all sectors are becoming more generalized and accessible. For instance, you want to go to Oslo or Helsinki. Without the internet, your only source of information of the airline that can take you there, their plane fare, discounts if any, etc., will be your travel agent or by calling the different airlines by phone, which is very time consuming and even costly. With internet, you can check the various airlines landing at End of market manipulation" ?
There is NO end to market manipulation, and there can never be.
Getting off on a bus terminal in a city or municipality that you are not familiar with. The tricycle driver that will take you to your destination will try as much as possible, to charge you 2x, even 5x, the regular fare if they know that you know your way to your destination. That's market mannipulation.
Buying a cellphone in Greenhills or Baclaran hoping that the price there for the same unit and model of a Nokia or Samsung is at least 20% cheaper if you buy it from Glorietta or SM. You didnt know that the seller could sell it to you even at 70% cheaper and still make a profit, and proceeded to sell you the unit at 21% cheaper. Still market manipulation.
A person with PhD can give a political or economic advise to a rich man or corporation for a handsome price, even when the adviser or consultant perfectly knows that the advice he gave was next to garbage.
Go up the ladder of financial transactions, market manipulation -- by a seller or a buyer -- is possible anywhere, anytime. Why? Because of information assymetry, or unequal knowledge, imperfect information, between a buyer and a seller.
The good news is that with information revolution like the internet and google search, even facebook networking, information across almost all sectors are becoming more generalized and accessible. For instance, you want to go to Oslo or Helsinki. Without the internet, your only source of information of the airline that can take you there, their plane fare, discounts if any, etc., will be your travel agent or by calling the different airlines by phone, which is very time consuming and even costly. With internet, you can check the various airlines landing at Manila airport (NAIA), get their destinations, itinerary, fare, etc. That's reducing the cost of gathering info, that's reducing or abolishing info assymetry. Market manipulation can be minimized or eradicated, at the micro level; ie, at the personal or corporate level.
Most of the points in that article are more of alarmism.
Nothing to worry or wonder about huge jump in asset prices, later to crash.
Corporate expansion and bankruptcy are 100 percent part of capitalism.
Capitalism without failure is like religion without sin.
So the recent global financial turmoil was just natural. The extent of financial dislocation may have been big compared to previous financial crisis, but it's all part of the natural business cycle. Some guys make great business decision, like a successful technological innovation, they make super-super big money and profit. Fine. Other guys make huge risks and made huge losses later, they go bankrupt. Fine.
This is not to say that market manipulation per se is desirable. It's not. Manipulation is just a natural behavior of some people if they know that they can hoodwink some guys, and get away with any crime later on.
That is why Gloria Magtatagal Arroyo, or better yet, Gloria Magtatagal-Garapal Arroyo, will keep manipulating us, because they know something that they think we do not know. LIke they know that they can bribe some influential media or election officials at X price, while we thought that those guys that they bribed were unbribable.
Gloria Magtatagal-Garapal Arroyo
(Note: for non-Filipino readers, "Magtatagal" means to stay longer; "Garapal" means a vulgar, shameless person)
President GMA's decision to run for Congress reflects the following:
1. She is too greedy for political power. Not content with being the 2nd longest-serving President after the dictator Marcos, now she wants to become a Congresswoman, possibly become a Speaker of the House, then orchestrate a charter change to move to a parliamentary form of government, then she can become a Prime Minister. She wanted to become the Prime Minister by next year by attempting several times this year and previous years, to change the Constitution and move to a parliamentary form of government.
2. Her greed for political power is directly proportional to the amount of corruption scandals and 2004 election cheating scandals that she and her family face. One can connect her deep desire to cling on to high political power in order to protect herself and her family from political and legal investigations that will come their way after her term will end in June 2010, especially when any of the opposition candidates will win.
3. Her running for a lower political position, instead of just retiring from politics, has no precedent. Past Presidents Cory Aquino and Fidel Ramos simply retired from politics after their term ended. Contrast that with former President Erap Estrada, a convicted criminal by the courts until GMA gave him presidential pardon, and the current President herself, who is mired in endless scandals.
4. Her running for a Congressional seat is leading to another legal and electoral, and possibly a Constitutional, question. She will be the ONLY Congressional candidate who enjoys all the powers and privileges of the Office of the President, as commander in chief of all armed forces of the Philippines (air force, army, navy) and overall head of the Philippine National Police (PNP). Fairness in elections is already totally demolished.
5. She is the President of the 92 million Filipinos but her attention has been focused on a few thousand residents and voters in the 2nd District of Pampanga. And she will do the same for the next 6 months.
6. The promulgation of the rule of law has suffered the worst during her 9 years term (2001 to 2009) as President of the Philippine Republic. The Maguindanao massacre that happened last week (57 people killed in broad daylight by a clan that is very close to her administration) was among the latest example of the disrespect of the rule of law, and the institutionalization of the rule of men. So many scandals in her government all these past 9 years and not a single official in her administration went to jail. For instance, former Comelec head Benjamin Abalos who was clearly identified as among the top engineers of the NBN-ZTE multi-million dollars corruption scandal, remains. Well, above Abalos, the President herself and her husband were the clear masterminds of the aborted robbery.
Wednesday, December 02, 2009
Warming Hysteria: Kyoto Protocol and Climategate
A good friend of mine asked me what's wrong with the Kyoto Protocol (KP) and the forthcoming Copenhagen meeting (to start next week) projected to produce a sort of KP Part II in binding environmental commitments. He does not see such international environmental regulations restrict economic freedom and individual liberty.
For me, the main problem with KP and soon, the planned Copenhagen agreement, is the extent of new environmental regulations, energy rationing, carbon taxation, carbon cap and trade, carbon tariff and eco-protectionism. In short, an expanded ecological central planning.
The science behind anthropogenic global warming (AGW) is highly questionable, if not discredited. The current "climategate" scandal is one proof that the AGW claim is not even a theory because of the presence of so many contrary data and facts that do not conform with the predictive capacity of the "theory". Thus, imposing those carbon emission restrictions and regulations based on suspicious, heavily debated, if not wrong science, is wrong.
About clean development mechanisms (CDMs), certified emission reduction (CERs) and related schemes for carbon mitigation, these are among the offshoot of carbon rent-seeking. Consider the following examples.
Philippine Airlines (PAL), Cebu Pacific airline, Superferry shipping line, Victory bus line, San Miguel Corp., for instance, will be assigned a carbon cap by the DENR or a new climate bureaucracy by the Philippine government, say at X tons per year starting 2010. Then such climate or carbon control agency will declare,
"You PAL (or Cebu Pacific or Superferry, etc.), your carbon emission cap by 2015 will be reduced to (X - 10%); by 2020, it will further be reduced to (X-20%); by 2030, it will be further reduced to (X - 30%), and so on."
So as the number of airplanes of an airline company, or the number of boats of a shipping company, the number of buses of a bus company, etc. are increasing because the population and passengers are rising and people are driving less too, the emission from these corporations will be rising.
So you have a situation of rising emission from these companies but the cap given by government is reducing. What will these airline, shipping line, bus line and other companies do? One is invest in emission-reduction technologies to be put in the engines of their airplanes, boats, vehicles, and other machineries. If this is not technologically possible, or very expensive to do, another option is to buy carbon credits from some companies, whether in the Philippines or abroad, that sell extra carbon offsets (say from a solar power plant or wind power farm).
As carbon caps across the world are declining, the number of companies seeking to buy carbon credits expanding, the price of carbon credits naturally will rise. The price of carbon per ton will rise. So those airlines, shipping lines, hotel and restaurant chains, bus lines, vehicle manufacturers, etc. will be passing on the extra cost of higher carbon credits to their consumers, to their passengers, to the public.
CDM sounds "clean" in theory if the AGW science is absolutely correct. But in reality, such mechanisms contribute to higher prices, both of energy and consumer items. Lots of reports that such cap and trade system as CDM has resulted in job losses and company closure, in Europe. The value of carbon trading was $128 billion in 2008 alone, and those do not include companies in the US as the US government is not a signatory to the KP.
At home, some political families were said to have made big money with the mandatory Ethanol 10% (E10) and biodisel 5% (B5) provisions. They capitalized on the carbon restrictions, that all petroleum companies in the country, big and small, will be forced to buy from them. Of course there is a related issue of agricultural lands previously planted to food crops have now been converted to fuel crops, contributing to the recent and continuing food price inflation.
A poor household will soon face higher electricity bill as "non-clean" but cheap energy sources like coal will be slapped with high carbon taxes. A poor and middle class family will soon face higher bus fares, higher airfares and boat fares, because of those carbon caps and trade and related CDMs.
So those supposedly "market-based" instruments to drastically cut carbon emission in the atmosphere like CDM and CER, are actually very distortionary of the market economy. Banks, carbon traders and other private and government bodies that live off implementing and monitoring those schemes become the new carbon rent-seekers. They produce not a single kilo of food, transport not a single passenger, or produce not a single kwh of electricity, but they make big money, hundreds of billions of dollars of carbon traded money every year.
My friend suggested that Kyoto Protocol (KP) is an application of the polluter-pay principle. He also suggested that most developing countries, or Annex II countries, are not obliged by KP to make drastic carbon emission cuts.
I think he is right that for now, developing countries like the Philippines are not obliged to make deep emission cuts. But it's just a matter of time. When KP was sealed in 2005 I think, China, India, Brazil, Indonesia, S. Africa, Mexico, etc. were just innocent countries. Now in the Copenhagen meeting, there are direct cap being expected, if not imposed, on them, especially China. In addition, some rich countries are threatening that developing but very big economies like China and INdia, should make their own deep emission cut, otherwise they will impose high carbon tariffs ("eco-protectionism") on their exports. And this makes implementation of the emission cut less transparent. Any rich country can slap different carbon tariffs for different countries, like +10% on top of existing tariff duties for Mexican exports, +15% for Chinese exports, etc.
So for the Philippines having 92 million people, the 12th biggest population in the world, it should be a matter of time and we will be given carbon cap by some international climate bureaucrats.
But even if there will be no carbon emission cap to be imposed on the Philippines and other poorer countries say, in the next 30 years, such economies will also suffer from low and anemic growth that will happen in rich countries. Why? Because the rich countries are the main buyers of our exports, the main employers of our outbound workers (the OFWs), among the main sources of in-bound foreign tourists and foreign investors.
Losing jobs as a result of restricting environmental and energy regulations in rich countries. Last month I read about the biggest aluminum plant in the US closing, going bankrupt. Why -- energy prices in the US becoming more and more expensive. Some states are more strict than the federal government in practically killing coal power plants (which supplies about 60 percent of all US energy needs).
I mentioned that coal is cheap energy source because I read that the per kwh cost of generating electricity from solar and wind power is 10x that from coal. At least in the US energy situation.
I also doubt that the Philippines will be able to sell substantial carbon credits to companies from rich countries because growing domestic demand for more power are often not enough. Whatever new power plants to be put up, from renewables like hydro and geothermal, will be snapped up by domestic industries and households, no credit to be left to foreign companies from abroad wanting to buy carbon credits.
Finally, we should visit and review some scientific literature on anthropogenic global warming (AGW) science, that it is highly debatable if not discredited, because all those carbon regulations are based from that "theory".
---------
On Climategate
Here's one online search even for fun:
Google "global warming", you get 9.8 million entries (as of this writing)
Then google "climategate", you get 13.4 million entries!
The former is 3 decades old, the latter is only 2 weeks old.
The latter is about the hacked emails, thousands of emails and documents at the Climate Research Unit (CRU) of the Univ. of East Anglia in Britain, where a number of warming scientists were emailing each other how they cheated on climate data to "hide the decline" in global temperature, how to hide or destroy climate data to escape UK's Freedom of Information law, how to kill and not publish scientific papers that question man-made warming in some scientific journals, and so on.
These warming scientists and politicians that give them millions of dollars of climate research funds have one major goal: to scare the world of "impending environmental catastrophies" so that the world will accept their planned ecological central planning agenda.
The big problem of the UN, Al Gore and other warmers now, is that millions of people around the world have already known and read the climate data manipulation and bastardization of climate science. And these people are angry.
-------
A number of NGOs and institutes in the Philippines are pushing now the Freedom of Information (FOI) bill. It was passed in the House of Representatives, awaiting action at the Senate. MG Thinkers is among the 70+ institutes and NGOs that signed the FOI statement.
The UK has a Freedom of Information (FOI) law. In the "climategate" or climate scandal still on-going, a number of the hacked emails showed that the head of the Climate Research Unit (CRU), Dr. Phil Jones, was emailing other warming scientists, "don't let them know that UK has a FOI law" as a number of skeptical scientists were demanding certain climate data. In succeeding emails, Phil Jones later exhorted other scientists to "destroy" climate data before the skeptics would find and see them under the FOI law.
I myself have difficulty getting RP temperature data from PAGASA. I was emailing one official of the meteorology department, cc'd Nathaniel Cruz -- yes, the known and affable Tani Cruz -- and they won't reply to my email. They know my stand that I question man-made warming. Is this the reason?
So, go ahead with FOI bill in the Philippines. Time is very short for the Senate to act as the election campaign period is fast approaching.
Liars and robbers in government hide from transparency and accountability because they are not obliged by the law to open up certain information to the public.
For me, the main problem with KP and soon, the planned Copenhagen agreement, is the extent of new environmental regulations, energy rationing, carbon taxation, carbon cap and trade, carbon tariff and eco-protectionism. In short, an expanded ecological central planning.
The science behind anthropogenic global warming (AGW) is highly questionable, if not discredited. The current "climategate" scandal is one proof that the AGW claim is not even a theory because of the presence of so many contrary data and facts that do not conform with the predictive capacity of the "theory". Thus, imposing those carbon emission restrictions and regulations based on suspicious, heavily debated, if not wrong science, is wrong.
About clean development mechanisms (CDMs), certified emission reduction (CERs) and related schemes for carbon mitigation, these are among the offshoot of carbon rent-seeking. Consider the following examples.
Philippine Airlines (PAL), Cebu Pacific airline, Superferry shipping line, Victory bus line, San Miguel Corp., for instance, will be assigned a carbon cap by the DENR or a new climate bureaucracy by the Philippine government, say at X tons per year starting 2010. Then such climate or carbon control agency will declare,
"You PAL (or Cebu Pacific or Superferry, etc.), your carbon emission cap by 2015 will be reduced to (X - 10%); by 2020, it will further be reduced to (X-20%); by 2030, it will be further reduced to (X - 30%), and so on."
So as the number of airplanes of an airline company, or the number of boats of a shipping company, the number of buses of a bus company, etc. are increasing because the population and passengers are rising and people are driving less too, the emission from these corporations will be rising.
So you have a situation of rising emission from these companies but the cap given by government is reducing. What will these airline, shipping line, bus line and other companies do? One is invest in emission-reduction technologies to be put in the engines of their airplanes, boats, vehicles, and other machineries. If this is not technologically possible, or very expensive to do, another option is to buy carbon credits from some companies, whether in the Philippines or abroad, that sell extra carbon offsets (say from a solar power plant or wind power farm).
As carbon caps across the world are declining, the number of companies seeking to buy carbon credits expanding, the price of carbon credits naturally will rise. The price of carbon per ton will rise. So those airlines, shipping lines, hotel and restaurant chains, bus lines, vehicle manufacturers, etc. will be passing on the extra cost of higher carbon credits to their consumers, to their passengers, to the public.
CDM sounds "clean" in theory if the AGW science is absolutely correct. But in reality, such mechanisms contribute to higher prices, both of energy and consumer items. Lots of reports that such cap and trade system as CDM has resulted in job losses and company closure, in Europe. The value of carbon trading was $128 billion in 2008 alone, and those do not include companies in the US as the US government is not a signatory to the KP.
At home, some political families were said to have made big money with the mandatory Ethanol 10% (E10) and biodisel 5% (B5) provisions. They capitalized on the carbon restrictions, that all petroleum companies in the country, big and small, will be forced to buy from them. Of course there is a related issue of agricultural lands previously planted to food crops have now been converted to fuel crops, contributing to the recent and continuing food price inflation.
A poor household will soon face higher electricity bill as "non-clean" but cheap energy sources like coal will be slapped with high carbon taxes. A poor and middle class family will soon face higher bus fares, higher airfares and boat fares, because of those carbon caps and trade and related CDMs.
So those supposedly "market-based" instruments to drastically cut carbon emission in the atmosphere like CDM and CER, are actually very distortionary of the market economy. Banks, carbon traders and other private and government bodies that live off implementing and monitoring those schemes become the new carbon rent-seekers. They produce not a single kilo of food, transport not a single passenger, or produce not a single kwh of electricity, but they make big money, hundreds of billions of dollars of carbon traded money every year.
My friend suggested that Kyoto Protocol (KP) is an application of the polluter-pay principle. He also suggested that most developing countries, or Annex II countries, are not obliged by KP to make drastic carbon emission cuts.
I think he is right that for now, developing countries like the Philippines are not obliged to make deep emission cuts. But it's just a matter of time. When KP was sealed in 2005 I think, China, India, Brazil, Indonesia, S. Africa, Mexico, etc. were just innocent countries. Now in the Copenhagen meeting, there are direct cap being expected, if not imposed, on them, especially China. In addition, some rich countries are threatening that developing but very big economies like China and INdia, should make their own deep emission cut, otherwise they will impose high carbon tariffs ("eco-protectionism") on their exports. And this makes implementation of the emission cut less transparent. Any rich country can slap different carbon tariffs for different countries, like +10% on top of existing tariff duties for Mexican exports, +15% for Chinese exports, etc.
So for the Philippines having 92 million people, the 12th biggest population in the world, it should be a matter of time and we will be given carbon cap by some international climate bureaucrats.
But even if there will be no carbon emission cap to be imposed on the Philippines and other poorer countries say, in the next 30 years, such economies will also suffer from low and anemic growth that will happen in rich countries. Why? Because the rich countries are the main buyers of our exports, the main employers of our outbound workers (the OFWs), among the main sources of in-bound foreign tourists and foreign investors.
Losing jobs as a result of restricting environmental and energy regulations in rich countries. Last month I read about the biggest aluminum plant in the US closing, going bankrupt. Why -- energy prices in the US becoming more and more expensive. Some states are more strict than the federal government in practically killing coal power plants (which supplies about 60 percent of all US energy needs).
I mentioned that coal is cheap energy source because I read that the per kwh cost of generating electricity from solar and wind power is 10x that from coal. At least in the US energy situation.
I also doubt that the Philippines will be able to sell substantial carbon credits to companies from rich countries because growing domestic demand for more power are often not enough. Whatever new power plants to be put up, from renewables like hydro and geothermal, will be snapped up by domestic industries and households, no credit to be left to foreign companies from abroad wanting to buy carbon credits.
Finally, we should visit and review some scientific literature on anthropogenic global warming (AGW) science, that it is highly debatable if not discredited, because all those carbon regulations are based from that "theory".
---------
On Climategate
Here's one online search even for fun:
Google "global warming", you get 9.8 million entries (as of this writing)
Then google "climategate", you get 13.4 million entries!
The former is 3 decades old, the latter is only 2 weeks old.
The latter is about the hacked emails, thousands of emails and documents at the Climate Research Unit (CRU) of the Univ. of East Anglia in Britain, where a number of warming scientists were emailing each other how they cheated on climate data to "hide the decline" in global temperature, how to hide or destroy climate data to escape UK's Freedom of Information law, how to kill and not publish scientific papers that question man-made warming in some scientific journals, and so on.
These warming scientists and politicians that give them millions of dollars of climate research funds have one major goal: to scare the world of "impending environmental catastrophies" so that the world will accept their planned ecological central planning agenda.
The big problem of the UN, Al Gore and other warmers now, is that millions of people around the world have already known and read the climate data manipulation and bastardization of climate science. And these people are angry.
-------
A number of NGOs and institutes in the Philippines are pushing now the Freedom of Information (FOI) bill. It was passed in the House of Representatives, awaiting action at the Senate. MG Thinkers is among the 70+ institutes and NGOs that signed the FOI statement.
The UK has a Freedom of Information (FOI) law. In the "climategate" or climate scandal still on-going, a number of the hacked emails showed that the head of the Climate Research Unit (CRU), Dr. Phil Jones, was emailing other warming scientists, "don't let them know that UK has a FOI law" as a number of skeptical scientists were demanding certain climate data. In succeeding emails, Phil Jones later exhorted other scientists to "destroy" climate data before the skeptics would find and see them under the FOI law.
I myself have difficulty getting RP temperature data from PAGASA. I was emailing one official of the meteorology department, cc'd Nathaniel Cruz -- yes, the known and affable Tani Cruz -- and they won't reply to my email. They know my stand that I question man-made warming. Is this the reason?
So, go ahead with FOI bill in the Philippines. Time is very short for the Senate to act as the election campaign period is fast approaching.
Liars and robbers in government hide from transparency and accountability because they are not obliged by the law to open up certain information to the public.
Wednesday, November 25, 2009
Abolish Income Tax 5: Consumption taxes, other government fees
Income tax (both personal and corporate incomes) is one of the clearest proof of the absence of rule of law. Rule of law says the law is above everyone else, no one exempted and no one can grant exemption.
In the income tax system, at least in the Philippines, the following do not pay income taxes:
1. robbers, hold-uppers, smugglers, drug pushers, illegal gambling operators, etc.
2. many informal sector workers like ambulant vendors, jeepney and tricycle drivers, prostitutes, etc.
3. professionals; well mostly pay but highly understated income, resulting in very low income tax payment.
4. officials and employees of multilateral institutions like UN, WB, IMF, ADB, WTO, also staff of foreign aid govt. bodies like USAID, JICA, SIDA, CIDA, KOICA, GTZ, EC, etc. Here, Filipino staff of those agencies are expected to simply declare their income and pay income tax to the Philippine government, but they are not subject to mandatory and automatic income tax deduction, like personnel of private corporations and national/local government agencies.
If you count the above people, they are numbering millions of people. So what is the point of enforcing a law that exempts million of people from its application? Either you enforce the law that it applies to everyone, or you abolish the law that penalizes the honest and productive people.
Another importatnt reason: people hide their actual income and the source/s of their income, so it is very difficult to fully enforce the law on income taxes. But people flaunt their consumptions -- their new house, new car, new appliances, new cell phone, new computer, new jewelries and clothing, new travel, etc. Even the above-mentioned groups of people would tend to flaunt their material possessions. And since those consumption are generally covered by various consumption-taxes, it is much easier to collect these taxes.
Among the consumption-based taxes are:
1. value added tax (VAT)
2. excise tax (for alcohol, tobacco, petroleum products; new cars, mining, etc.)
3. travel tax (international travel)
4. amusement tax (collected by local government units, LGUs)
5. vehicle registration tax (plus mandatory "smoke emission test" fee)
6. real property tax (also collected by LGUs)
7. local taxes on top of VAT for various consumption goods and services.
And there are various transaction taxes and fees, among others are:
1. documentary stamp tax
2. import tax
3. import processing fee
4. forced and mandatory contributions in SSS, PhilHealth and Pag-IBIG
5. franchise tax
6. common carriers' tax
And of course there are dozens of other various fees and duties, collected by both national and local governments:
1. driver's license fee (plus mandatory "medical test" fee and "drug test" fee)
2. passport fee
3. police or NBI clearance fee
4. terminal fee (airports, seaports, some bus terminals)
5. birth certificate fee, death certif fee, burial fee
6. marriage certif. fee, annulment certif. fee, etc.
7. health and sanitation fee
8. garbage collection fee
9. building permit and inspection fee
10. electrical and fire department permit fee
11. residence certificate fee
12. village/barangay business location fee
13. city/municipal mayor's business permit fee
About corporate income tax, well, corporations do not pay taxes. People do. Corporations are just legal entities. People pay the taxes in behalf of the registered corporations. The consumers in the form of higher prices, the employees and managers in the form of lower wages, and the owners and stockholders in the form of lower earnings and equities.
Thus, if we abolish both personal and corporate income taxes government will not go "dry" as there are dozens of various taxes, duties and fees, plus penalties and mandatory contributions, that the government collects.
But a better result of zero income tax regime is that millions of Filipinos working abroad, foreign businessmen and entrepreneurs, and foreign corporations will be rushing to come to the Philippines and do business here. And in the process, create tens of millions of new jobs.
There is not a single country in the world I think, that has a zero income tax policy. Thus, the Philippines will be a unique investment-friendly country that will attract those businesses who want to flee the high taxes countries of the rich world. More businessmen, more employees, and more corporations will be paying more VAT and other consumption-based taxes to the government. This will more than compensate for whatever revenue losses to be created by the zero income tax policy.
I want to start an "Abolish income tax coalition" here in the Philippines. I hope many will join and we will present this single, important agenda to major political parties. Whoever will support this move, we will support in the 2010 elections just 9 months from now.
Interested individuals, email me at minimalgovernment@gmail.com and we will arrange for initial meetings and actions.
---------
See also Part 4, Ayn Rand and income tax, November 02, 2009
In the income tax system, at least in the Philippines, the following do not pay income taxes:
1. robbers, hold-uppers, smugglers, drug pushers, illegal gambling operators, etc.
2. many informal sector workers like ambulant vendors, jeepney and tricycle drivers, prostitutes, etc.
3. professionals; well mostly pay but highly understated income, resulting in very low income tax payment.
4. officials and employees of multilateral institutions like UN, WB, IMF, ADB, WTO, also staff of foreign aid govt. bodies like USAID, JICA, SIDA, CIDA, KOICA, GTZ, EC, etc. Here, Filipino staff of those agencies are expected to simply declare their income and pay income tax to the Philippine government, but they are not subject to mandatory and automatic income tax deduction, like personnel of private corporations and national/local government agencies.
If you count the above people, they are numbering millions of people. So what is the point of enforcing a law that exempts million of people from its application? Either you enforce the law that it applies to everyone, or you abolish the law that penalizes the honest and productive people.
Another importatnt reason: people hide their actual income and the source/s of their income, so it is very difficult to fully enforce the law on income taxes. But people flaunt their consumptions -- their new house, new car, new appliances, new cell phone, new computer, new jewelries and clothing, new travel, etc. Even the above-mentioned groups of people would tend to flaunt their material possessions. And since those consumption are generally covered by various consumption-taxes, it is much easier to collect these taxes.
Among the consumption-based taxes are:
1. value added tax (VAT)
2. excise tax (for alcohol, tobacco, petroleum products; new cars, mining, etc.)
3. travel tax (international travel)
4. amusement tax (collected by local government units, LGUs)
5. vehicle registration tax (plus mandatory "smoke emission test" fee)
6. real property tax (also collected by LGUs)
7. local taxes on top of VAT for various consumption goods and services.
And there are various transaction taxes and fees, among others are:
1. documentary stamp tax
2. import tax
3. import processing fee
4. forced and mandatory contributions in SSS, PhilHealth and Pag-IBIG
5. franchise tax
6. common carriers' tax
And of course there are dozens of other various fees and duties, collected by both national and local governments:
1. driver's license fee (plus mandatory "medical test" fee and "drug test" fee)
2. passport fee
3. police or NBI clearance fee
4. terminal fee (airports, seaports, some bus terminals)
5. birth certificate fee, death certif fee, burial fee
6. marriage certif. fee, annulment certif. fee, etc.
7. health and sanitation fee
8. garbage collection fee
9. building permit and inspection fee
10. electrical and fire department permit fee
11. residence certificate fee
12. village/barangay business location fee
13. city/municipal mayor's business permit fee
About corporate income tax, well, corporations do not pay taxes. People do. Corporations are just legal entities. People pay the taxes in behalf of the registered corporations. The consumers in the form of higher prices, the employees and managers in the form of lower wages, and the owners and stockholders in the form of lower earnings and equities.
Thus, if we abolish both personal and corporate income taxes government will not go "dry" as there are dozens of various taxes, duties and fees, plus penalties and mandatory contributions, that the government collects.
But a better result of zero income tax regime is that millions of Filipinos working abroad, foreign businessmen and entrepreneurs, and foreign corporations will be rushing to come to the Philippines and do business here. And in the process, create tens of millions of new jobs.
There is not a single country in the world I think, that has a zero income tax policy. Thus, the Philippines will be a unique investment-friendly country that will attract those businesses who want to flee the high taxes countries of the rich world. More businessmen, more employees, and more corporations will be paying more VAT and other consumption-based taxes to the government. This will more than compensate for whatever revenue losses to be created by the zero income tax policy.
I want to start an "Abolish income tax coalition" here in the Philippines. I hope many will join and we will present this single, important agenda to major political parties. Whoever will support this move, we will support in the 2010 elections just 9 months from now.
Interested individuals, email me at minimalgovernment@gmail.com and we will arrange for initial meetings and actions.
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See also Part 4, Ayn Rand and income tax, November 02, 2009
Warming Hysteria: From GW to CC, Green Protectionism
Yesterday, I gave a talk at the Las Pinas Chamber of Commerce and Industry, a local branch of the Philippine Chamber of Commerce and Industry. The President of Las Pinas CCI, Mohammad Yasin Badr, is my friend, my "classmate" in Rotary Intl. Dist 3830. The title of my paper was "Warming time out amidst climate hysteria" (22 slides, 1.5MB). It should be posted in our website within the week, www.minimalgovernment.net.
Another friend and "classmate" in rotary, Rodolfo "Inky" Reyes, who is a top official of the Philippine National Red Cross (PNRC), is in Nairobi, Kenya, for an International Red Cross assembly and meeting. Inky said that if I were in their event, I would love the discussions on climate change (CC).
Well, if I were in Nairobi, I'm sure I would figure in endless debates with many participants there who believe in anthropogenic [man-made] global warming or AGW. The warmers have almost monopolized the discussion for at least 2 decades that it is considered a sacrilegious act to even question AGW, much more to present charts and data that contradict that claim. That is why they declared a few years ago, "There is no more debate, shut up." And it is that dictatorial mindset that somehow crippled public debate, until the global temp data -- tropospheric and surface station data, ocean heat and ocean level data, Arctic temp. and Arctic ice extent data, etc. -- showed that there was NO warming that is happening for the past 10 years. The data have a negative answer to the Rotary test, "Is it the truth?"
The shift from GW to CC was a face-saving act by the warmers. They saw the temperature data, the warming years that should happen now as predicted by their computer models did not happen. So CC is used more often while retaining the warming scare. That is, melting polar ice and Greenland ice (due to GW), that will result in rising ocean by up to 7 meters (about 2 storeys high) just 90 years from now, according to Al Gore, more hurricanes, more typhoons-more drought, etc.
The important point is: there is NO scientific consensus yet of AGW and CC. Big debates still happening.
So if there is no consensus, there should be NO global coercion in energy and environment policies. But here we are, debating how much carbon emission cut by whom and by when. Kill or over-tax cheap energy sources like coal, subsidize from tax money clean but expensive and low-power output wind farms and solar farms, create climate bureaucracies from the national to provincial levels (look at political has-been Heherson Alvarez, now a "climate czar" secretary). And a number of politicians made big money putting up ethanol and bio-diesel plants because all oil companies, big and small, are forced to buy from them because of the mandatory E10 gas and B5 diesel products.
Further money from CC alarmism -- carbon taxes (in the US, about $300 billion/year in Obama cap and trade bill alone, on top of existing federal environmental taxes, on top of existing state and county env'l taxes), carbon trading (in 2008, $128 billion from corporations in the EU, Japan, etc., excl. the US as the US is not a signatory to Kyoto), carbon tariff and eco-protectionism.
So it's the distortions in energy, environment, fiscal and trade policies in almost all countries in the world that are being targeted by the warmers. Ecological central planning is a pernicious game plan. Some of those central planners wish that we stop riding our cars soon and ride bicycles "to save the planet" while they're jet-setting almost every month in endless global climate meetings, not to mention national and provincial climate meetings.
-------
My related short papers recently:
(1) Warmers' Intellectual Dishonesty Uncovered
November 22, 2009
Another friend and "classmate" in rotary, Rodolfo "Inky" Reyes, who is a top official of the Philippine National Red Cross (PNRC), is in Nairobi, Kenya, for an International Red Cross assembly and meeting. Inky said that if I were in their event, I would love the discussions on climate change (CC).
Well, if I were in Nairobi, I'm sure I would figure in endless debates with many participants there who believe in anthropogenic [man-made] global warming or AGW. The warmers have almost monopolized the discussion for at least 2 decades that it is considered a sacrilegious act to even question AGW, much more to present charts and data that contradict that claim. That is why they declared a few years ago, "There is no more debate, shut up." And it is that dictatorial mindset that somehow crippled public debate, until the global temp data -- tropospheric and surface station data, ocean heat and ocean level data, Arctic temp. and Arctic ice extent data, etc. -- showed that there was NO warming that is happening for the past 10 years. The data have a negative answer to the Rotary test, "Is it the truth?"
The shift from GW to CC was a face-saving act by the warmers. They saw the temperature data, the warming years that should happen now as predicted by their computer models did not happen. So CC is used more often while retaining the warming scare. That is, melting polar ice and Greenland ice (due to GW), that will result in rising ocean by up to 7 meters (about 2 storeys high) just 90 years from now, according to Al Gore, more hurricanes, more typhoons-more drought, etc.
The important point is: there is NO scientific consensus yet of AGW and CC. Big debates still happening.
So if there is no consensus, there should be NO global coercion in energy and environment policies. But here we are, debating how much carbon emission cut by whom and by when. Kill or over-tax cheap energy sources like coal, subsidize from tax money clean but expensive and low-power output wind farms and solar farms, create climate bureaucracies from the national to provincial levels (look at political has-been Heherson Alvarez, now a "climate czar" secretary). And a number of politicians made big money putting up ethanol and bio-diesel plants because all oil companies, big and small, are forced to buy from them because of the mandatory E10 gas and B5 diesel products.
Further money from CC alarmism -- carbon taxes (in the US, about $300 billion/year in Obama cap and trade bill alone, on top of existing federal environmental taxes, on top of existing state and county env'l taxes), carbon trading (in 2008, $128 billion from corporations in the EU, Japan, etc., excl. the US as the US is not a signatory to Kyoto), carbon tariff and eco-protectionism.
So it's the distortions in energy, environment, fiscal and trade policies in almost all countries in the world that are being targeted by the warmers. Ecological central planning is a pernicious game plan. Some of those central planners wish that we stop riding our cars soon and ride bicycles "to save the planet" while they're jet-setting almost every month in endless global climate meetings, not to mention national and provincial climate meetings.
-------
My related short papers recently:
(1) Warmers' Intellectual Dishonesty Uncovered
November 22, 2009
As incriminating emails and documents from the hacked website of, or stolen data from, the Climate Research Unit (CRU) in UK are spreading like wildfire in the web, the extent of intellectual dishonesty, if not intellectual prostitution, of a number of known warming scientists, are discovered. It's chilling to hear or read how those scientists deliberately alter or hide info that can show decline in global temperatures.
The most exposed scientists are Phil Jones, the head of CRU, and Michael Mann, main author of the "hockey stick" shape of global warming chart.
I wonder what alibi, if any, they can produce since the number of emails and documents that all seem to be original, are just too many? But if they admit that they indeed lied, that they indeed prostituted science for their political designs and desire for millions of dollars of research contracts, then that should be the end of their scientific career. They better go to the most isolated islands or the most uninhabitable place on Earth, with no internet or electricity, to escape global ridicule.
The most exposed scientists are Phil Jones, the head of CRU, and Michael Mann, main author of the "hockey stick" shape of global warming chart.
I wonder what alibi, if any, they can produce since the number of emails and documents that all seem to be original, are just too many? But if they admit that they indeed lied, that they indeed prostituted science for their political designs and desire for millions of dollars of research contracts, then that should be the end of their scientific career. They better go to the most isolated islands or the most uninhabitable place on Earth, with no internet or electricity, to escape global ridicule.
(2) No to Green Protectionism
November 17, 2009
Consumers need more choices and options, not more restrictions and prohibitions. Trade protectionism via carbon taxes and similar schemes limit choices and create more poverty, which push more poor people to use more environmentally-degrading technologies.
Please sign the petition against eco-protectionism,
http://www.policynetwork.net/trade/news/petition-against-green-protectionism
The opening paragraph of the petition says it clearly:
You have no doubt heard about the UN’s climate conference in Copenhagen next month. Chief among the bad ideas being touted by environmental activists and politicians in the run-up to that meeting is a proposal to permit trade restrictions on the grounds that they will help to prevent climate change (for example by encouraging governments to sign up and comply with an international agreement to restrict emissions). Pascal Lamy, director of the World Trade Organization, has even sanctioned this approach, saying that the world’s priorities should be “climate first and trade, second.” And – surprise surprise – uncompetitive industries and other vested interests have jumped on the bandwagon.
Please sign the petition against eco-protectionism,
http://www.policynetwork.net/trade/news/petition-against-green-protectionism
The opening paragraph of the petition says it clearly:
You have no doubt heard about the UN’s climate conference in Copenhagen next month. Chief among the bad ideas being touted by environmental activists and politicians in the run-up to that meeting is a proposal to permit trade restrictions on the grounds that they will help to prevent climate change (for example by encouraging governments to sign up and comply with an international agreement to restrict emissions). Pascal Lamy, director of the World Trade Organization, has even sanctioned this approach, saying that the world’s priorities should be “climate first and trade, second.” And – surprise surprise – uncompetitive industries and other vested interests have jumped on the bandwagon.