Thursday, May 28, 2020

My favorite political shirts

Among my favorite, most memorable shirts, below. (1) pilipinasforum@yahoogroups.com, "where immortals argue", we formed in 1999, verrry active political and economic discourses. It helped me focus my advocacy towards Minimal Government, a small political movement we formed in 2004. I was granted an Atlas International Fellowship that year, I attended the Mackinac Leadership conf in Michigan, the Atlas liberty conf 2004 in Chicago, among others.

Then the 2009 Atlas commemoration of the 20th anniversary, fall of the Berlin Wall (Nov. 1989) held in Washington DC. It was also my last Atlas-sponsored conf abroad.


Thanks again to Jo Kwong, former Atlas VP for Institute Relations, for her support and belief in me, she sought funding for my travels in Atlas liberty forum 2008 in Atlanta, Liberty Forum in March 2009 in LA, then Nov. 2009 in DC, Tearing down the wall conf. Jo resigned in end02009 I think, and Atlas has stopped sponsoring me after that, 11 years now.

But it was ok with me. I am happy that other friends see my contribution to free market movement until now, 16 years since 2004 -- ATR, PRA, IPN, FNF, Heartland, Geneva Network, etc. FNF and PRA especially. Thank you, friends.

Last July 2019, I went back to Washington DC to attend the Heartland 13th ICCC. After the conference I visited some friends, including Jo Kwong. I was very happy to see her again since 2009. She picked me up from a Metro station and brought me to her house in old Alexandria, VA. I also have beer with her hubby.



See also Jo Kwong rocks (Feb 09, 2010).

Sunday, May 24, 2020

Agri Econ 31, Rising world rice prices, falling corn, poultry prices

This pandemic period showed big jump in world rice prices since last March. Peak price over the last five years was $18 per hundredweight (cwt) reached last  April 29, 2020. A cwt = 100 pounds in the US, = 112 pounds in UK.

https://tradingeconomics.com/commodities

The main reason is the rice production disruptions in Vietnam and India, agri workers on quarantine or lockdown, and expected rise in demand for Thailand rice.
See this report for instance, https://www.cnbc.com/2020/04/08/rice-prices-surge-to-7-year-high-as-coronavirus-sparks-stockpiling.html

Corn prices on the other hand are falling, now around $317/bushel.


The main reason perhaps is the drop in demand for biofuel, ethanol, along with drop in prices and demand for petroleum products. Another reason is that  world demand for poultry products are falling, prices now only $3.9/kilogram. Corn is the main ingredient for chicken feeds.


Milk (and cheese) also falling. People are getting poorer, they consume less milk, now only $12/cwt. Milk is highly perishable, cannot be stored for long.


The more reason that this lockdown dictatorship worldwide should end. Mobility of agri workers and entrepreneurs, traders, processors and shipping should no longer be hampered.
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See also:

Saturday, May 23, 2020

BWorld 436, Growth lockdown and low carbon economy

* My column in BusinessWorld, May 21, 2020.


The hard lockdown countries experienced deep economic contraction in their GDP in first quarter (Q1) of 2020: France -5.4%, Italy -4.8%, Spain -4.1%, Belgium -2.8%, Germany -2.3%, and UK -1.6%. In Asia, the hard lockdowners and their contractions are: Hong Kong -8.9%, China -6.8%, Singapore -2.2%, Thailand -1.8%, and the Philippines -0.2%.

Japan is not a hard lockdown country but it still experienced a contraction of -2% because it was already contracting in the previous quarter with -0.7%. Japan is now technically in an economic recession.

The most adversely affected countries in Asia are China and the Philippines. From high growth of 6%+ in Q4 2019, they just went negative the next quarter.

The Department of Finance (DoF) showed sensitivity to the plight of many losing businesses. It has tweaked the CITIRA (Corporate Income Tax and Incentives Reform Act) bill, changed it to CREATE (Corporate Recovery and Tax Incentives for Enterprises Act) bill with the following tax adjustments, among others: corporate income tax (CIT) cut from 30% to 25% by July this year; applicability of net operating loss carry over (NOLCO) extended from the current three years to five years; the 5% gross income earned (GIE) transition has been prolonged from two to seven years to four to nine years.

These are perhaps the deepest tax cuts the Philippines ever experienced. Bravo, DoF.

Now some sectors want to push very parochial interests and want to penalize Philippine businesses with more expensive energy which will be passed on to consumers.

HB 2184 or the “Low carbon economy bill,” authored by Deputy Speaker and Antique Representative Loren Legarda, plans to penalize fossil fuel energy and establish the emission Cap-and-Trade System in the industry and commercial sectors to reduce greenhouse gas emissions. The bill was discussed in a public hearing by the House Committee on Climate Change on Feb. 26.

A quick survey of GDP size and coal consumption would show that this bill is very parochial and anti-business. The Philippines’s coal use in 2018 was only 16.3 million tons oil equivalent (mtoe), among the lowest in Asia. The world’s four biggest economies are also among the world’s biggest consumers of coal energy (see the table).


According to the Department of Energy (DoE) Power Statistics 2019, the country’s total installed power capacity was 25.5 gigawatts (GW). Of this: coal was 10.4 GW (40.8%), oil-based 4.3 (16.9%), natural gas 3.4 (13.5%), hydro 3.8 (14.9%), geothermal 1.9 (7.4%), and solar+wind+biomass 1.7 (6.7%).

The actual electricity generation is not really reflective of this. Out of 106.0 terawatt hours (TWH), total generation from coal was 57.9 TWH (54.6%), natural gas 22.4 (21.1%), geothermal 10.7 (10.1%), hydro 8.0 (7.5%), oil-based 3.7 (3.5%), and solar+wind+biomass 3.3 (3.1%).

So the power source demonized by the low-carbon, cap-and-trade advocates, coal power, constituted only 41% of total capacity but actually produced 55% of total electricity consumption in the country. In contrast, the favored and pampered variable renewables solar+wind+biomass constituted 7% of power capacity but produced only 3% of total electricity consumption.

So this low carbon bill would want even more expensive electricity, a more unstable power supply, and more potential blackouts because it will restrict the already small fossil fuel capacity in the country. The lobbyists want more subsidies and mandates, direct and indirect, to variable renewables that by nature are intermittent and weather dependent. Adding batteries to solve intermittency problems would add extra costs to power. And even so, there are days and weeks that are cloudy and non-windy so there is little or no solar and wind power produced to store in batteries.

Congress, the DoE and the public should ignore parochial and self-serving interests to further penalize the Philippine economy, instead of jump starting it after the downturn caused by the COVID-19 pandemic. Expensive energy to “save the planet” — from whom and from what? From Al Gore and the UN, from less rain and more rain, less floods and more floods, less storms and more storms?

Let the people, let the market, decide the kind of energy that will give them the least cost.
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See also:

Friday, May 22, 2020

Energy 135, Oil, gas and coal prices

Highest oil price was recorded on June 02, 2008 at $142/barrel (WTI), then April 01, 2011 at $115/barrel. Then last month we saw a seemingly unthinkable price, -$26/barrel, with intra-day low of around -$40 last April 21, 2020.

https://tradingeconomics.com/commodity/crude-oil

The reason was the absence of enough storage. Traders with supply contracts few weeks ahead could not find any storage for the oil pumped out as all tankers, storage houses were full because of the big slump in global oil demand. Blame the Covid hysteria and lockdown dictatorship in many countries.

Natural gas peak price over the last 25 years was $14/MMBtu (million British thermal unit) reached on September 01, 2005, then $13.6 on June 02, 2008. And last month we saw steep decline to $1.55, April 03, 2020.

https://tradingeconomics.com/commodity/natural-gas

For coal, its highest price in the last 10 years was $133/MT reached on January 03, 2011. Its lowest price in recent years was $51.5 last April 27, 2020.

https://tradingeconomics.com/commodity/crude-oil

All three charts above as of around 10:30pm today, Manila time.

With low gas prices, is it true that it's now more cost-effective than coal in power generation?

From this chart, the answer is No.



https://www.statista.com/statistics/189180/natural-gas-vis-a-vis-coal-prices/

Economies and corporations, power producers and consumers, should be left alone in the market in determining what's the best energy mix for them. Climate alarmism and anti-fossil fuel drama should not be factors in achiving energy security and economic recovery after the prolonged lockdowns due to the Wuhan virus scare.
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See also:

Thursday, May 21, 2020

IPR and Innovation 47, Our Joint Declaration on WHA, May 18

Minimal Government Thinkers is one of 31 independent, non-govt think tanks around the world that signed this declaration, officially launched last Monday, May 18 as officials of the WHO member-states gathered in Geneva for the World Health Assembly.



The seven main advocacies are:

1. Abolish tariffs on medical supplies and medicines
2. Reject export bans on medical supplies
3. Reduce customs red tape
4. Enable the free flow of relevant health data across borders
5. Maintain transparency in collecting and sharing epidemiological data
6. Increase cooperation with other countries to speed up drug approval
7. Support innovation, including intellectual property rights.

Concluding statements:

The IP system is working well in the pandemic. More than 140 experimental coronavirus treatments and vaccines are under development worldwide, including 11 in clinical trials. Lifesciences companies everywhere are searching their patent and molecular reference libraries for promising compounds – all of which owe their existence to the patent system.

There is no evidence that IP rights will pose a barrier to access, as most companies working in this area have stated any new products will be available on a non-profit basis. This is welcome, although it is important as many organisations as possible are incentivised to commit their resources to COVID-19 treatments and vaccines.

Now is not the time to undermine IP rights. They underpin the global medicine innovation ecosystem. Governments should therefore commit to cooperating with the private sector in the quest for COVID-19 treatments and vaccines.
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See also:

My zoom webinars today

On average I join about four webinars a week, two of which from our UPSEAA group. But today, I have three webinars and two are in conflict or have similar time slots, 3-5pm. I registered first with the FNF and GPCCI event.


Withour checking my calendar, I also registered in this webinar, about trade and health policies.


I will just open later both webinars and shift from one to the other depending on the topic and speakers. 

Then our UPSEAA webinar -- exclusive only to members and UPSE alumni. Non-members are removed by the moderators and Viber group administrator.


Mahar and I share the same non-hysteric, end-the-lockdown attitude in this Wuhan virus pandemic.

Monday, May 18, 2020

BWorld 435, Drug pricing in Asia and WHO assembly

* My article in BusinessWorld, May 14, 2020.


As the COVID-19 global pandemic lingers, the search for new medicines and vaccines continues as existing treatments and medicines cannot cope with virus mutation. Public policies on the pricing of innovative, newly invented medicines and vaccines are among the important considerations, whether these new treatments will become available in certain countries or not.

I checked the drug pricing policies of our neighbors in the ASEAN and developed Asia. A friend showed me a copy of the latest quarterly report of IQVIA (formerly IMS Health) as it is a by-subscription paper only. Only the Philippines instituted a new drug price control policy, Malaysia plans to have one but no details are available at the moment. The rest use mechanisms that are more market-oriented and not coercive (see Table 1).



February’s EO 104, which imposed a max wholesale price and a max retail price for certain drugs, is on top of drug price control under EO 821 (July 2009, Gloria Arroyo administration) which remains in effect until today.

IQVIA also produced a country report on “Access to Innovation.” The main objective of the study is to understand the Philippines’ access to innovative medicines. I am thankful to another friend who shared with me that by subscription-only report.

The result is not good – so many new medicines, more disease-killing treatments are available in the developed world but are either not available in the Philippines, or made available only after more than two years (see Table 2).


The old EO 821 price control, threats of patent-confiscation via compulsory licensing, and endless attempts to have another round of drug price control, are among the factors why this thing happens.

There is a possibility — a danger — that when new treatments and vaccines are available against COVID-19 by early 2021, they may not be made available in the Philippines because of existing policies like price controls that penalize innovators.

President Rodrigo Duterte, Health Secretary Francisco Duque III, Senator Bong Go and other the other senators that pushed for price controls should be aware of the dangers of their policy. There are many mechanisms that government can take to have cheaper medicines like more competition among more innovators, negotiated pricing, bulk purchase, RSAs and PVAs, as shown in Table 1e.

On May 18, the member states of the World Health Organization (WHO) will gather in Geneva for the World Health Assembly and they will discuss new policies to fight the COVID-19 pandemic, among others.

That same day, a global coalition of 31 independent, non-government think tanks will release a new report, “A Joint Declaration on the Importance of Collaboration, Open Trade, and Innovation in Tackling COVID-19” (May 2020). Of these 31 think tanks, five are from the ASEAN: CIPS and Paramadina Institute (Indonesia), the Galen Center and KSO Institute (Malaysia), the Adam Smith Center (Singapore), and Minimal Government Thinkers (Philippines).

Our paper suggests seven simple measures that governments can make to save more lives now:

1. Abolish tariffs on medical supplies and medicines;

2. Reject export bans on medical supplies;

3. Reduce Customs red tape;

4. Enable the free flow of relevant health data across borders;

5. Maintain transparency in collecting and sharing epidemiological data;

6. Increase cooperation with other countries to speed up drug approval; and,

7. Support innovation, including intellectual property rights.

We hope that member-governments of WHO will consider these points. Private investments and research have a natural inclination to find new solutions to old and emerging problems, they just need to be unshackled from various restrictions, regulations, and high taxation by governments.
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Covid 11, Dire Straits and lockdowns

I was listening to some Mark Knopfler (Dire Straits) songs and checking their lyrics, three of his songs somehow portrayed the lockdown hysteria that the world has seen.


(1) Telegraph Road (1982)

I used to like to go to work but they shut it down
I got a right to go to work but there's no work here to be found
Yes and they say we're gonna have to pay what's owed
We're gonna have to reap from some seed that's been sowed...

From the anger that lives on the streets with these names
'Cos I've run every red light on memory lane
I've seen desperation explode into flames
And I don't want to see it again...

(2) Industrial Disease

On ITV and BBC they talk about the curse.
Philosophy is useless, theology is worse.
History boils over there's an economics freeze.
Sociologists invent words that mean "industrial disease".

(3) Your latest trick,

And we're standing outside of this wonderland
Looking so bereaved and so bereft
Like a Bowery bum when he finally understands
The bottle's empty and there's nothing left.

Great songs, as always. Thanks Mark.
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See also:
Covid 8, Deaths in lockdown vs No lockdown countries, May 04, 2020 
Covid 9, GDP growth of lockdown vs No/Lite lockdown (preliminary), May 05, 2020 

Covid 10, Big global pandemics, fatality rate, May 06, 2020.

On POGOs in the PH

From free trade perspective, those PH Offshhore Gaming Operations (POGOs) are good. Remember factor price equalization (FPE) theorem in Econ 141 or 241, free mobility of factors of production like capital, labor and (gambling) tech ceteris paribus (all other things being equal or unchanged), will result in long term flattening and equalization of wages, interest, technology cost.

But from rule of law perspective under institutional economics, these POGOs in PH are bad. They don't follow many rules: tax laws, labor laws, immigration laws (no formal work contract), local government business permits, etc. Burara de communista lang.



Re institutional econ, Nobel Econ awardee Douglas North is among the famous personalities. I made a graph about his contribution to econ on the role of property rights, rule of law. 

Toast to Douglas North (March 19, 2016) 

Things that are often sidetracked under communista societah like China incl their POGOs.

Wednesday, May 13, 2020

Drug Price Control 46, Pricing policies in 10 Asian economies

I am curious if there is any drug price control (DPC) or simply price dictatorship policy being done in our neighbors in the ASEAN and developed Asia. A friend showed me a copy of the latest quarterly report of IQVIA, formerly IMS Health. It is a by-subscription paper only. It’s cool. I checked two categories in the report and I chose 10 economies (this picture from drugs.com).

The country abbreviations are as follows:

PH – Philippines; ID – Indonesia; TH – Thailand; VN – Viet Nam; MY – Malaysia;
SG – Singapore; JP – Japan; KR – S. Korea; TW – Taiwan; HK – Hong Kong.

IQVIA MARKET PROGNOSIS 2020-2024 Key Findings
Published March 2020


Drugs Pricing
Pharmaceutical Business Environment
PH
* EO 104 (Feb. 17, 2020) has MWP, MRP for 87 molecules or 133 drug formulas. Plus additional 35 molecules.
* Mandatory 20% price discounts for senior citizens, PWDs. To be extended to cancer patients, spouses of OFWs, single parents.
* Manufacturers say they have been hit hard by VAT exemptions and introduction of 20% discounts on medicines for senior citizens.
* After diabetes, high cholesterol, and hypertension, the next tranche of VAT-exemptions planned to be applied on drugs targeting cancer, psychiatric disorders, tuberculosis and kidney diseases, expected to come into effect from 2023 onwards.
* Some companies may withdraw some drugs, or withdraw completely from the market. Price cuts could drive reduction up to 1/3 in pharma jobs.
* Previous withdrawal of some multinationals (Eli Lilly and Bristol-Myers Squibb)
* Attractive market for foreign generic houses.
* Lack of skilled labor, high utility costs.
* Generics-only pharmacies will continue to flourish. Pharmacy and drugstore chains will further expand, small, independent players to become marginal.
* Pharmacies to witness demand spike in first part of 2020 due to panic purchases of cough and cold remedies, immune supplements, anti-infectives etc.

ID
* Explicit regulatory price controls remain unlikely, tools designed to limit the price of products on the FORNAS will remain in place
JKN funding issues, HTAs, competition for e-catalogue tenders and private hospital cost containment efforts will all ensure that pressure on drug prices remains intense.
* Private hospitals now have access to e-catalogue bid prices, demand for discounts.
* Regulators to attach other factors like quality and supply capabilities, which would rule out submission of bids by small, low-quality manufacturers.
* Margins on JKN business will remain thin while demand for larger discounts in the private sector will pose further threat to manufacturer profits.
* Virus to negatively impact local pharma manufacturers given their heavy reliance on imported raw materials from China. Lengthy disruption to manufacturers’ supply could add upward pressure on prices particularly generics.
* Outbreak to boost demand for OTC medicines. Vitamins, antibacterial gels, cough and cold meds.
* Few multinationals will invest significantly  unless the operating climate improves. Regional generics and biosimilar players are more likely investors but will have to operate through joint ventures with local partners unless existing caps on foreign investment are relaxed.
* More consolidation in the distribution sector where falling prices, payment delays and rising compliance costs will further squeeze margins.

TH
* Median pricing of National List of Essential Meds (NLEM) and some non-NLEM drugs will remain a key cost-containment policy in the public sector’s three healthcare schemes.
* Manufacturers enacting strategies to mitigate impacts of median pricing like  promoting product differentiation to compete with generics, forging partnerships with government bodies or local suppliers, investing in R&D, outsourcing sales and marketing activities.
* Competition among manufacturers to supply government hospitals will remain intense, with ministerial regulations under the Procurement Act favoring GPO and products on the Thai innovation list.
* Surge in air pollution in 2019-2020 to see surge in demand for-and-uptake of OTC medicines for respiratory and skin ailments, vitamin C supplements.  Exacerbated by COVID-19 outbreak as a result of the anticipated shift in patient behavior.
* Greater innovation in pharmaceutical sector,  formation of the Ministry of Higher Education, Science, Research and Innovation in May 2019. More conducive environment for R&D through clinical research roadmap (2018-2022), expanding the Thai innovation list, and speeding up the launch of and access to innovative medicines. 
* Government Pharmaceutical Organization (GPO) will continue as supplier of generic medicines to government hospitals.
VN
* Drug prices under growing pressure as efforts to curb SHI reimbursement costs are stepped up.
* MOH to pursue consolidated tendering for more drugs. Logistical issues will limit near-term increases in the use of national tenders, however, leaving provincial tenders as the dominant mechanism for levering down prices in the public sector.
* Procurement prices for 139 off patent originator (OPO) products will be subject to negotiations, with negotiated prices coming into effect from early 2020.
* Further development of local manufacturing will be encouraged but regulatory compliance costs will lead to exit of some small domestic players.
* Demand for generics will continue to rise, driven by public sector procurement strategies, SHI reimbursement policies and further gradual increase in SHI coverage.
* Imposition of tighter quality standards will improve physician and patient attitudes to generics but regulatory compliance costs will trigger a degree of consolidation in the generics market. Biosimilars and cheaper ‘biocopies’ will gain some traction.

MY
* MOH announced in May 2019 that external reference pricing will be used to benchmark against cheaper medicine prices in eight other countries, with a ceiling price being set based on the average of the three lowest prices identified.
* Timeline of implementation and reference countries considered are uncertain.
* Information sharing by the MOH, Ministry of Defense (MOD) and  Ministry of Education (MOE) will place them in stronger negotiating position with manufacturers.  
* Government plans to implement price controls at wholesale and retail level. No specific proposals have yet been publicized. 
* Malaysian companies increasingly looking to the export market as a new revenue stream over the past 12 months. They face the challenge of increasing volumes to generate economies of scale to compete with Indian manufacturers on price. 
* Innovative drug sector – dominated by foreign companies – still accounts for a sizeable value share of pharmaceutical market, faced with a number of headwinds over the next few years. These include a large patent cliff, greater drug price regulation, and competition for tenders in the public sector.
* Future growth may be curtailed by the price controls that the government is planning to impose at the retail level.
SG
* Pricing pressure in public sector will remain strong as subsidy list expands.
* Downward prices intensified by government’s bulk-purchasing practices. 
* Medicine prices in private sector will face less pressure than in public settings, with regular market dynamics remaining the main factor affecting price in the near-term at least. Major private hospital groups began to establish centralized purchasing agreements for some therapies.
* Multinational drugmakers are well established in Singapore and continue to expand their manufacturing output via new production plants and upgrading existing facilities.
* Retail pharmacists are set to take on a larger role in the primary care setting, relieving the burden on doctors and helping to reduce repeat general practitioner (GP) consultations. The separation of prescribing and dispensing functions remains a distant prospect.
JP
* According to MHLW, the April 2020 biennial NHI price revision will see price cuts averaging 4.38%, whilst any price rises will not be permitted to exceed prices set in the one-off price revision of October 2019.
* More than a dozen high-cost therapies will undergo considerably larger price cuts on the basis of their high sales values, including leading product Keytruda (pembrolizumab). 
* Revision to methodology for setting prices of new medicines will see more innovative medicines that are not PMP-eligible undergo price cuts four years after their initial listing.
* Japan’s pricing environment progressively eroding prospects for innovative medicines.
* Industry unlikely to withdraw investment in developing and commercializing new products in the near term, but global launch strategies could place Japan lower down the priority list in the longer term.
* COVID-19 impact on pharma manufacturing since China is a key global source of APIs.
* Sales force retained by many pharmaceutical companies is declining. Research-based companies are refocusing on specialty medicines, which require more targeted promotional activity.
KR
*Ministry of Health and Welfare (MOHW)  committed to expand patient access to medicines for rare diseases (such as cancer).
* These will be in addition to actual transaction price (ATP) cuts imposed every two years; ATP cuts in January 2020 averaged 1.96%.  
* Risk-sharing agreements (RSA) to become more prevalent to secure reimbursement subsidies for high-cost medicines.
* Changes to generic pricing system will be phased in from July 2020. Generic products currently priced at 59.5% of the originator price in the 12 months following patent expiry, falling to 53.55% after one year.
* Domestic companies are diversifying business interests beyond generics. Leading players are investing in R&D activities and upgrading manufacturing facilities to boost export trade
* Environment for multinational companies is perceived as somewhat hostile. The market is considered to offer sufficient growth potential to remain attractive, but pricing pressures will mean careful consideration of launch strategies to avoid damaging prices in key markets such as China.
* Sales and marketing activities being held to increasingly higher standards as a result of legislative changes and industry-imposed standards.
TW
* Price volume agreements (PVAs) will remain one of the main tools to limit the budget impact of expensive new drugs. PVAs limit the amount a company can earn, they have the advantage of enabling new drugs to obtain reimbursement listing more quickly.
* Companies with a Managed Entry Agreement (MEA) likely to need to sign PVA.
* First MEAs were implemented in 2019 for three immuno-oncology products. MEAs are one way for a new product's price to be screened from international comparisons.
* Stricter regulatory standards resulted in some consolidation in the domestic industry over the past few years; low prices at home have increased the importance of export markets, especially for new products seeking better price.
* Growth in imports is outpacing that of exports and imports account for much of the Taiwanese market.
* Strong growth in biomedicine start-ups, helped by extensive government support. First new drugs from Taiwanese companies being launched worldwide.

HK
* Tendering and negotiations are central to drug pricing. Benchmarking with competitors is the norm, although prices remain free from explicit regulatory control. Institutional market prices will continue to be controlled indirectly by tender-based procurement and the significance of HADF listings, while health maintenance organizations (HMOs) and private providers will adopt more aggressive approaches to purchasing in a bid to lever prices down.
* Private sector growth will be fueled in part by immediate post-launch demand for new drugs from Chinese patients, although this has begun to moderate as China’s drug launch lag narrows to three months from prior 1-2 years.
* Enhance R&D capabilities of public hospitals through an earmarked sum of HK$17 million in fiscal 2020 budget. Government set aside HK$1.2 billion to fund Hong Kong Genome Project implementation through 2025 to deliver improvements in cancer and rare disorders treatment.  

So of the 10 economies reviewed here, only the Philippines has new DPC policy. And this EO 104 (February 2020) is on top of price control under EO 821 (July 2009) which remains in effect until today.

Malaysia plans to have DPC both at the wholesale and retail levels, but no details yet when, how many molecules and so on.

Some good alternatives to drug price dictatorship are as follows:

1. Indonesia’s HTA, competition in e-catalogue tenders, private hospitals’ access to e-catalogue bids.
2. Thailand’s stiff competition among manufacturers to supply government hospitals.
3. Vietnam’s negotiated pricing for off patent originator (OPO) products.
4. Malaysia’s information sharing by different Ministries/agencies.
5. Singapore’s government bulk-purchasing practices.
6. Japan’s high sales values and volume, bulk purchase.
7. Korea’s Risk-sharing agreements (RSA) to reimburse subsidies for high-cost medicines.
8. Taiwan’s Price volume agreements (PVAs) with manufacturers.
9. Hong Kong’s Tendering and price negotiations. And
10. Philippines’ own Generics law, new off-patent medicines become available to local generics firms for cheaper mass production.

The important thing is that innovators should be encouraged to bring their new, patented drugs to the country. Let them come and compete among each other. We should not scare and demonize them with price dictatorship and even patent confiscation via compulsory licensing. Later the local generics firms will join the competition.
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See also:

Tuesday, May 12, 2020

Asian stocks and the virus, Part 3

From the GDP growth in Q1 2020 below, an updated data for Asia that includes the Philippines here:

No/Light lockdowns: Vietnam 3.8%, Indonesia 3.0%, Taiwan 1.5%, S. Korea 1.3%.

Hard lockdowns: Hong Kong -8.9%, China -6.8%, Singapore -2.2%, Philippines -0.2%.

There. More/hard lockdowns do not really lead to lower deaths per million population, only lead to economic contraction. And now President Duterte and the IATF announced today an extension of the "modified" ECQ for Metro Manila and two provinces, Laguna and Cebu.

I checked the stockmarkets in AsPac today. The PSE remains the worst performing, both year to date (Ytd, Jan. 01 to May 12, 2020) and the past 52 weeks.

https://www.wsj.com/market-data/stocks/asia

I looked back at my last review of the regional stockmarket, last March 16, PSE was the 2nd worst performing then, next to Thailand.


The extension of M.Manila lockdown from the original target of April 15 to April 30 was wrong. Extension to May 15 was also wrong. And now extension to May 31 is even wrong.

I posted these random thoughts tonight in my fb wall:

The dictatorship minded have won again, applause. 2 1/2 months of "bawal-bawal" prohibitions until May 31. GDP contraction, what's that for them? They are saving "hundreds of thousands of lives" in PH, a fictional figure taken from bolang kristal.

Meanwhile, 5 days ago Mr. Original lockdown Salceda expressed favoring the easing of the ECQ rather than its extension. Too late, Mr Congressman. The dictatorship-minded have enjoyed the great powers they have now. Next time, be careful what you wish for. You might get it and too late to cancel or discontinue.

Bawal-bawal is pera-pera, money-money. Madami bawal, madaming huli, madaming pakiusap, pera pera. In an open economy, income source is decentralized, people earn from many sources, little opportunity for corruption and robbery in government.

In ECQ de subsidy, many people's income is centralized, SAP cash and helicopter money from the government, which presents big opportunity for corruption and robbery. If people think that the virus has suddenly transformed the corrupt into angels, then good luck.
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See also:
Asian stocks and the virus, March 02, 2020 
Asian stocks and the virus, Part 2, March 13, 2020.

BWorld 434, Growth lockdown and Solar sa Politika

* My column in BusinessWorld, May 7, 2020.


Some countries and economies have released their first quarter (Q1) 2020 GDP growth data already and I compared the growth rate of those that imposed a hard lockdown with those that have no or a light lockdown. The result is interesting (see Table 1).


Sweden did not impose a lockdown and nor business shutdowns yet it has fewer deaths per 1 million people compared to four other European countries, and it managed to escape growth contraction.

The same is seen for Asian economies with Q1 2020 data as of this writing — hard lockdown economies China, Hong Kong, and Singapore suffered contractions.

The Philippines will report its Q1 2020 growth on Thursday. One indicator of how bad things are in the country is the huge drop in electricity demand as many businesses were shut down. Consequently, electricity prices at the Wholesale Electricity Spot Market (WESM) declined big time in March-April (see Table 2).

  
NOT SO FREE ELECTRICITY

With a huge decline in electricity prices — of P2.73/kWh in March then P6.68/kwh in April 2020 compared to their year ago levels — there is no reason or justification for certain populist and socialistic groups to call for “free electricity” for lifeline customers (those who consume 50 kwh per month or less). Big losses were experienced by many generation companies (gencos) at these low prices.

The deep decline in electricity demand is an indicator of deep business losses starting March 16 when the enhanced community quarantine (ECQ) was imposed. The extension of the ECQ until May 15 was wrong and there should be no further extension beyond May 16 even for a single day.

SOLAR POWER WOES

A group of residents of Paluan, Occidental Mindoro sent me some materials about the sudden rate hike by the Solar Para sa Bayan Corp. (SPBC). This firm was granted a Congressional franchise via RA 11357 (July 31, 2019), the only genco in the country that was granted a legislative franchise. The firm is headed by Leandro Leviste. SPBC promised cheap electricity because the sun is free. True, the sun is free but the solar panels, the power conditioning unit, AC and DC disconnect, and other components are not free. Transportation and installation in far away areas are not free. The batteries to extend power for a few hours at night, backup diesel generating units for use at night, are not free.

In a site inspection in some barangays in Occidental Mindoro served by SPBC conducted by the Philippine and Rural Electric Cooperatives Association, Inc. (PHILRECA) in November 2018, they found out that aside from almost daily blackouts for several hours, while the rate started at a low P2.34/kWh it later rose to P11/kWh.

In a letter dated Feb. 13, 2020, SPBC informed its customers that it would raise its rate to P18/kWh because it needed to upgrade solar PV, procure its own diesel generating units, and it was still waiting for its subsidy (missionary electrification). I summarized the evolution of pricing by SPBC (see Table 3).


SPBC employed deception when it promised “cheap electricity” in seeking a Congressional franchise. Intermittent energy like solar will not be cheap, there should be backup units like battery and diesel gensets and the purchase of diesel fuel — and these are not cheap. Solar hates shade — from tall trees, thick clouds, and rain. Shade immediately reduces solar output.

The Energy Regulatory Commission (ERC) and LGUs should not grant the SPBC that big and sudden rate hike to P18/kWh, nearly double what electricity consumers in various electric cooperatives and private distribution utilities pay, despite paying many other charges (transmission charge, distribution charge, system loss, universal charge, etc.). SPBC should stick to its mandate of providing low electricity prices under RA 11357.

Mindoro island (composed of two provinces), along with other island-provinces like Palawan, Masbate, Marinduque, and Bohol should also get their own baseload power plants and not rely on huge gensets and endless subsidies via the universal charge for missionary electrification (UC-ME) that are passed on to all electricity consumers nationwide.

Lowering electricity prices in the Philippines is possible via the eradication of unnecessary costs like the UC-ME, reducing the feed-in-tariff (FIT) allowance for variable renewables, and reducing the wide and thick bureaucracies before gencos can put up new power plants, which contribute to higher power costs.

Having cheap, stable electricity, no blackouts even for a minute, is an important factor to allow the Philippines to bounce back from the growth lockdown because of the prolonged and extended ECQ.
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See also:

Monday, May 11, 2020

Climate Tricks 93, Solar cycle and another attack on Willie Soon

During the big Australia forest fire last January to around mid-February this year, we see many reports like “Global warming: 2020 expected to be warmest year on record.” Then the forest fire ended, the rains came, and the forest regenerated.

Similarly, during the big El Nino of 2015-16, then mild El Nino in late 2018 to mid-2019, we often read stories of "worsening El Nino." Which is not true because El Nino-La Nina cycle just naturally occurs.

Last week in Makati and other cities of Metro Manila, there were rains 3x at night (Wed, Sat, Sun, about 10-60 mins rain, street flooding last Wed) and showers once (Thurs). Officially not rainy season yet, still in regular hot-dry month of May, but we are entering a seemingly big La Nina phase, projected to be around 3rd week June or about 5-6 weeks from now.


That means we should expect more rains, more flood, more mosquitoes. Flu-dengue season in the Philippines in a few weeks, the real killer by the thousand. Dengue killed 1,083 in 2018 in the country, 1,565 in 2019, when it was El Nino season. Dengue deaths this year might possibly eclipse Covid deaths.
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A good article in NTZ,

Earth’s Mean Temperature Falling, Planetary Alignment Suspected As Driver Of The 11-Year Solar Cycle
By P Gosselin on 9. May 2020

Prof. Fritz Vahrenholt’s Monthly Solar Report

What causes the sun to have an 11-year cycle?

Since the Dessau pharmacist Heinrich Samuel Schwabe discovered in 1843 that the sunspots of the sun increase and decrease in an 11-year cycle, science has been puzzling over the reason why this cycle lasts 11 years and why the solar magnetic field also changes its polarity in this rhythm: the north pole becomes the south pole and vice versa.

In July last year, scientists at the Helmholtz Centre in Dresden Rossendorf made a little-noticed but exciting discovery. Every 11.07 years, the planets Venus, Earth and Jupiter are aligned quite precisely. At this point in time, their gravitational force acts jointly in one direction on the Sun….

And talking about solar physics and climate, the Gorebal warming campaigners resorted again to personally attacking scientists whose work they cannot refute. They attacked again Dr. Willie Soon, a Malaysian-American astrophysicist, formerly with the Harvard-Smithsonian Center for Astrophysics. Willie is my friend, I met him in 2009 during the Heartland Institute's 2nd ICCC in NYC. Photo here from left: Barun Mitra of Liberty Institute, India; Willie, Jose Tapia of ILE, Chile; me.

Here is the video on new attacks against Willie.

Scientist Falsely Accused
May 8, 2020

The climate activists in the West tend to single out Willie. Maybe because he's not pure White, he's Asian, and they cannot endure the sight of a very bright, articulate, non-white astrophysicist demolishing many of their scary climate scenarios?

Hold on, Willie. You have many friends and supporters who understand your science.
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See also: 
Climate Tricks 39: Many Attacks on Dr. Willie Soon, He Replied, March 03, 2015

Friday, May 08, 2020

Some unseen negative effects of stay home orders

(This photo from MarketWatch)
I am reposting below some news reports that have a counter-narrative, that stay home orders do not seem to help in controlling the spread of the virus.
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Cuomo says it’s ‘shocking’ most new coronavirus hospitalizations are people who had been staying home
PUBLISHED WED, MAY 6 202012:25 PM EDT
Noah Higgins-Dunn      Kevin Breuninger

Early look at data from 100 New York hospitals shows that 66% of new admissions related to the virus are people who were at home, Cuomo said.
He also said a majority of the cases in New York City are minorities, with nearly half being African American or Hispanic.

Gov. Cuomo shares data on COVID-19 hospital patient survey
by: Corina Cappabianca
Posted: May 6, 2020 / 05:08 PM EDT / Updated: May 6, 2020 / 05:19 PM EDT

(My friend Cathy who lives in NYC says “I'll bet they will find that the people "staying at home" have had exposure that is not being accounted for in these numbers. I've been "staying at home" but I have to go out to get food. There is a lot of exposure going on here in New York, even without people going to work. And there are idiots ignoring the mask rules, and probably other guidance as well.”)

Millions predicted to develop tuberculosis as result of Covid-19 lockdown
Liz Ford
Wed 6 May 2020 07.15 BSTLast modified on Wed 6 May 2020 07.16 BST

With attention focused on coronavirus, undiagnosed and untreated TB cases will cause 1.4 million to die, research suggests

Up to 6.3 million more people are predicted to develop TB between now and 2025 and 1.4 million more people are expected to die as cases go undiagnosed and untreated during lockdown. This will set back global efforts to end TB by five to eight years.

Nearly 1.5 Million More Tuberculosis Deaths Expected Due To Coronavirus Lockdowns
by Tyler Durden   Wed, 05/06/2020 - 20:05

(My friend Cathy commented again, "We have effective treatments for TB. We don't have them for COVID-19. We need to slow the spread while we race for a cure.")

Parts of Asia that relaxed restrictions without a resurgence in coronavirus cases did these three things
PUBLISHED THU, MAY 7 202011:16 AM EDT
William Feuer

South Korea and Hong Kong successfully relaxed pandemic restrictions without having another rise in cases by data sharing, using targeted testing and contact tracing.
The varying results of efforts across Asia to contain the virus and reopen society present policy options and perhaps lessons for countries behind on the outbreak’s timeline.
Public health specialists who spoke with CNBC said they’re not confident U.S. officials are taking note of what’s working and not working in Asia.

Japan’s Coronavirus Cases Fall Sharply Without Compulsory Measures
By Alastair Gale   Updated April 27, 2020 9:51 am ET

Nation hasn’t imposed a lockdown backed with fines or other penalties and has shunned widespread testing.

The data is in — stop the panic and end the total isolation
BY DR. SCOTT W. ATLAS, OPINION CONTRIBUTOR — 04/22/20 12:30 PM EDT

Stanford doctor explains why coronavirus lockdown policies need to end: 'Ignore the panic and rely on facts'
APRIL 24, 2020  Aaron Colen
https://www.theblaze.com/news/stanford-doctor-end-coronavirus-lockdown


Anxiety From Reactions to Covid-19 Will Destroy At Least Seven Times More Years of Life Than Can Be Saved by Lockdowns
By Andrew Glen, Ph.D. and James D. Agresti
May 4, 2020

Based on a broad array of scientific data, Just Facts has computed that the anxiety created by reactions to Covid-19—such as stay-at-home orders, business shutdowns, media exaggerations, and legitimate concerns about the virus—will destroy at least seven times more years of human life than can possibly be saved by lockdowns to control the spread of the disease. This figure is a bare minimum, and the actual one is likely more than 90 times greater.

KFF Health Tracking Poll - Early April 2020: The Impact Of Coronavirus On Life In America
Ashley Kirzinger, Audrey Kearney, Liz Hamel, and Mollyann Brodie
Published: Apr 02, 2020

more than half now reporting being worried that their investments will be negatively impacted for a long time (59%), they will be laid off or lose their job (52%), and nearly half worried they will lose income due to a workplace closure or reduced hours (45%). And while Americans increasingly worry about the impact on their own incomes, about half (53%) continue to be worried that they or a family will get sick from coronavirus.

Coronavirus and Americans’ Mental Health: Insights from BSG’s Pulse of America Poll
April 4, 2020

55% of Americans say the situation has already affected their mental health either a great deal or somewhat, compared to the only 19% who say the situation has not affected their mental health at all.
71% of Americans say they are concerned that “social distancing” measures will have a negative impact on the country’s mental health – including 28% who are extremely or very concerned about this.

New Poll: COVID-19 Impacting Mental Well-Being: Americans Feeling Anxious, Especially for Loved Ones; Older Adults are Less Anxious
Mar 25, 2020

Nearly half of Americans (48%) are anxious about the possibility of getting coronavirus, COVID-19, and nearly four in ten Americans (40%) are anxious about becoming seriously ill or dying from coronavirus, but far more Americans (62%) are anxious about the possibility of family and loved ones getting coronavirus. This is according to a new national poll released today by the American Psychiatric Association (APA).

THE ECONOMIC BURDEN OF ANXIETY AND STRESS DISORDERS
RONALD C . KESSLER,  PAUL E . GREENBERG
Neuropsychopharmacology: The Fifth Generation of Progress. Edited by Kenneth L. Davis, Dennis Charney, Joseph T. Coyle, and Charles Nemeroff.
American College of Neuropsychopharmacology 2002.