Tuesday, June 30, 2020

BWorld 441, Decline in pneumonia incidence

* My column in BusinessWorld, June 25, 2020.

While we have gotten used to this continuing COVID-19 scourge, there is some good health news somewhere, particularly the decline in other infectious and communicable diseases like pneumonia incidence.

While checking data on comorbidity and leading causes of death in the Philippines, I noticed an interesting trend — the decline in pneumonia incidence in the country from 12.3% of total deaths in 2013 to only 9.6% in 2018, according to data from the Department of Health (DoH) and Philippine Statistics Authority (PSA, see the table).

Effective anti-pneumonia vaccines, particularly against pneumococcal diseases caused by the bacteria Streptococcus pneumonia, are among the reasons for this good news. This bacteria can affect people from all ages and pneumococcal diseases are a leading cause of death among children below five years old. When the bacteria reach the lungs, they can cause pneumonia and death. When they invade the bloodstream or the tissues and fluids surrounding the brain and spinal cord, they can cause meningitis and death.

Thanks to continuing health innovation, pneumococcal conjugate vaccine (PCV) against the bacteria was invented. PCV10 is among the early and effective vaccines, it protects against 10 strains of the bacteria and the DoH procured the vaccine in 2012.

In 2014, the DoH shifted to tridecavalent PVC13 as it protects against 13 strains of the bacteria including serotypes 3, 6A and 19A which are not covered by PCV10. This is after World Health Organization (WHO) cost-effectiveness studies showing that PCV13 is more cost-effective than PCV10. Serotype 19A in particular is a serious bacteria, can lead to meningitis, invasive diseases and severe pneumonia. As shown in the table above, pneumonia has killed about 57,000 people in the Philippines yearly from 2016-2018, it is the fourth most deadly disease in the country.

Then late last year, some controversy arose when PCV procurement of nearly P5 billion for 2020 was questioned by some individuals.

I searched several scientific studies on the comparative medical advantages of PCV10 vs PCV13. These two papers I found to be cool and useful.

1.) “Do Pneumococcal Conjugate Vaccines Represent Good Value for Money in a Lower-Middle Income Country? A Cost-Utility Analysis in the Philippines” by Manuel Alexander Haasis, Joyce Anne Ceria, Wantanee Kulpeng, Yot Teerawattananon, and Marissa Alejandria (PLoS One. 2015; 10(7): e0131156. Published online July 1, 2015, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4488861/). They noted that “PCV13 achieves better value for money compared to PCV10, thus, PCV13 should be a better choice in the Philippines…. PCV13 is superior to PCV10 in terms of its broader coverage of serotypes; a universal vaccination program with PCV13 would lower the potential for serotype replacement….”

2.) “Comparison of the Impact of Pneumococcal Conjugate Vaccine 10 or Pneumococcal Conjugate Vaccine 13 on Invasive Pneumococcal Disease in Equivalent Populations” by Pontus Naucler, Ilias Galanis, Eva Morfeldt, Jessica Darenberg, Åke Örtqvist, Birgitta Henriques-Normark (Clinical Infectious Diseases, Volume 65, Issue 11, Dec. 1, 2017, Pages 1780–1790.e1, https://academic.oup.com/cid/article/65/11/1780/4061316). They observed that “Invasive pneumococcal disease incidences decreased between 2005 and 2016 in vaccinated children (by 68.5%), and in the whole population (by 13.5%), but not among the elderly (increased by 2%)… serotype 19A increased in PCV10 counties… Serotype 6C increased in PCV10 counties, but not in PCV13 counties, suggesting cross-protection with 6A, which is included in PCV13.”

These and other studies show the medical superiority for PCV13 but it has a higher cost, about 10% higher than PCV10 or about P500 million. Comparing this additional cost with protecting additional thousands or millions of children from more virulent and fatal diseases, the health advantage should be higher than the fiscal disadvantage. This should be an important consideration for the Health Department and the Department of Budget andManagement in vaccine procurement.

Meanwhile, new treatments and vaccines against COVID-19 may be available by late 2020 or early 2021. The bad news is that while these will be quickly available in the US, Europe, Japan, Singapore and other developed and emerging countries, they may be available in the Philippines only after one or two years delay. We have drug price control policies (EO 821 in July 2009, then EO 104 in February 2020) which discouraged many innovator companies from entering the Philippines or staying here, or, among those that stay, the registering and launching of new medicines and vaccines are delayed by about 26 months on average.

Ensuring quicker and greater access to more modern, more effective new medicines and vaccines should be a higher priority than per unit cost. People value their health and lives more than monetary savings from old, less effective treatments.

See also:

Drug Price Control 48, DOH orientation on MWP, MRP

There was a DOH orientation for patients and consumer groups about EO 104 last week, June 26. I learned about it from CHAT googlegroups, I forgot to register early, I registered midnight the night before, DOH said registration already closed. I wrote to Saiym of DOH Secretariat, she replied late because her messages were swamped and saw my mail evening that day.
Anyway, I heard from some friends that (1) Ric Samaniego, Chairman of the Philippine Coalition of Consumer Welfare Inc. (PCCWI) and a consultant of Sen. Bong Go, dominated the discussion because Doc Meme Guerrero of DOH left the virtual meeting for another meeting. And (2) Ric mentioned that PHAP infiltrated some groups to echo their campaign. I posted these two pooints at the Adv Council email loop hoping for correction, there was no reply or correction, so I assume these two points did happen.

I asked Ric if he was referring to me. No reply. I wrote several articles in my column in BusinessWorld arguing that EO 104 should be rescinded. My last paper on the subject, 

I was also interviewed in some radio-tv programs like in DZBB hosted by Joel Zobel and Mr. Salvacion last June 04.

Also in Agila TV (Eagle Broadcasting Corp.), hosted by Partylist Cong. Angelo Palmones, last March.

Peter Wallace also argued the same in about two his columns in the Inquirer. And the Joint Foreign Chambers (JFC, composed of the US, Canada, EU, Australia-NZ, Japan, Korea Chambers of Commerce, plus PAMURI) also argued the same. 

I told Ric that if here referred to me, then he is wrong and spreading disinformation and fake news. I don't need "infiltration" or influencing because I have been writing against drug price control as soon as RA 9502 was enacted into a law in 2008.

My first article about drug price control was in June 2008,

The first Medicines Transparency Alliance (MeTA) forum, a big one, was held in January 2009 and price control was among the topics, I wrote it here,

Then the Advisory Council meeting June 05, 2009, presided by then USec Alex Padilla, and the head of Secretariat and chief spokesman for price control was Dr. Robert So. I attended it,

PHAP was then headed by Reiner Gloor, PCPI headed by Edward Isaac, PPhA headed by Leonie Ocampo, PMA represented by Dr. Art Catli, Private Hospitals Assn. still headed by Dr. Rustico Jimenez, etc. Edward said in one of the Council meetings in 2009 that it was the first time that PCPI has the same position as PHAP, opposing drug price control. It was easy for them to take a position on issues because whatever PHAP takes, they just take the opposite, but price control has united them.

What I write and argue today are generally the same as what I wrote 11-12 years ago. A collection of my essays on price control plus paper presentations in two health conferences (Cebu and Singapore) published in my first book (2011, 233 pages), 

Now DOH is planning to expand price control to more molecules, the 4 criteria it uses are all technically illegal, not in RA 9502 or its IRR, they just arbitrarily invented the criteria. Take criteria #4 of EO 104, "Drugs where the innovator product is the most expensive yet most prescribed and/or dispensed in the market." Similar to criteria #4 of EO 821 (July 2009), "If the innovator is the top selling product."

The fault and illogic of this criteria -- if it's a successful, more disease-killing, more modern medicine, more prescribed by doctors -- then demonize and penalize it with price control. Hoping that the manufacturers will pull it out and not sell at a loss, then the less-prescribed, less-effective medicines will make money, and DOH jumps with joy?

Electricity from gensets is expensive, around P15-20/kwh generation cost, which is 3x-4x more expensive than average generation charge in Meralco of around P5/kWh. Yet companies -- like hotels, hospitals, BPOs, others that run 24/7 -- will keep their gensets in case there are blackouts, at least they have continuous electricity. Darkness or using candles are more costly to their business than running a genset.

Similar to "expensive" but more powerful medicines. Don't buy it if cost is a higher priority than saving lives. But if things become desperate, if the doctor says to patient, "Hey, this drug is more expensive but you have not improved in other cheaper drugs, we should use it if you want to get well fast, or survive this disease."

If these DOH-penalized effective drugs are pulled out by their manufacturers, who will the public and patients blame when they desperately need them -- Sec. Duque and President Duterte? Sens. Bong Go and Imee Marcos? Will they accept responsibility? Very likely deadma lang.

See also:

Sunday, June 21, 2020

BWorld 440, Growth recovery via stable, cheaper electricity

* My article in BusinessWorld, June 17, 2020.

There is a direct and close relationship between electricity consumption and GDP growth so the former with real-time data can be used as a proxy to estimate the latter which are often announced about six weeks after the end of the quarter.

From the Independent Electricity Market Operator Philippines (IEMOP) data for the Luzon-Visayas grids, here are the changes and demand contraction in April, May and June 1-15 in 2020 versus same period in 2019: April -20.3%, May -15.6%, June 1-15 -7.9%, average -14.6%.

At this rate, a GDP contraction of -10% or higher is possible for the second quarter (Q2) 2020, much worse than -0.2% in Q1 2020, which was already a big dip from +6.4% in Q4 2019.

Note also the April 2020 labor force data: 7.3 million unemployed in the labor force plus 3 million working age Filipinos who did not join the labor force anymore, did not look for a job because they knew that there will be no jobs available. Total of 10.3 million working age but idle Filipinos, a huge number.

This plus the projected deep GDP contraction in Q2 2020 and beyond should set a panic mode for the government’s economic managers. Since they and other members of IATF (Inter-Agency Task Force for the Management of Emerging Infectious Diseases) cannot admit that the hard lockdown was wrong, at least they should have further relaxed and opened up the economy in the second half of June, but they extended the general community quarantine (GCQ) instead, another wrong move.

Now as the Philippines and many countries figure out how to recover early from the economic damage of prolonged lockdowns, there are many sectors that push irrational proposals of higher environment and energy taxes, more expensive energy.

Two proposals stand out: One, small and poor countries pressuring rich countries that regardless of their current hardships, they must honor their commitment in the Paris Agreement 2015 to give $100 billion/year of climate money starting 2020. And, two, the Frankfurt School-UN Environment Program-BloombergNEF (FS-UNEP-BNEF) study and lobby to raise investments for solar-wind and other intermittent sources by $3.1 trillion from 2020-2030 or average of $300 billion/year.

Two recent reports in BusinessWorld reflect these pressures: “Renewables seen key in powering post-pandemic recovery” (June 11), and “ADB makes pitch for more clean energy investment in stimulus spending: (June 17).

I checked the comparative electricity prices of selected countries, and I saw two reports from the International Energy Consultants (IEC) and the Global Petroleum Prices (GPP). Then I checked the solar-wind use of countries, data from the BP Statistical Review of World Energy (SRWE) 2019, to see if there is any connection. The result is interesting (see the table).

European countries, especially Denmark, Germany, Belgium and Spain, have high electricity prices, double or triple those of the US, Thailand, and South Korea, partly or largely because of their high reliance on intermittent solar-wind.

These intermittent sources need large batteries, and the grid transmission and distribution systems need extra devices and mechanisms to stabilize wild swings in power surges and dips. These automatically raise their cost. Then consider the endless subsidies like feed in tariff allowance (FIT-All) that all electricity consumers in the Philippines have to pay now and many decades to come.

Many East Asian economies actually hardly pay attention to injecting more solar-wind into their national electricity grid. Singapore, Hong Kong, Vietnam, Malaysia, and Indonesia have a solar and wind share of only 0.1 to 0.6% of their total electricity generation.

As the Philippines moves towards more house-based online work and education, the need for more stable reliable power, with no blackouts for even a minute, and cheaper electricity becomes even more important than before.

People may have the gadgets, electronics, and faster internet, but if they have unstable power from intermittent sources, their work and online education will be disrupted and affected. Reason and economic realities must prevail over ecological biases and alarmist climate projections.

Weekend Fun 71, Father's day, Husband's day

A cool Father's Day meme,

(All photos and memes here I got from the web or shared in various social media)

Q: Difference among Complete, Finished and Completely finished?

A: If you married the right woman, your life is Complete.
If you married the wrong woman, your life is Finished.
And if your (wrong) wife catches you with another woman, you are Completely finished.

The wedding day changes the  woman from a relatively permissive to an aggressive wife. Why?
As she walks down the church to the altar, there is a repeated music... 

Altar hymn, Altar hymn,
Alter hymn, Alter hymn,
Alter Him, Alter Him. 

When couples argue, remember Econ 11.
Talk is cheap because the supply is larger than the demand.


Now I want to share a short note written by my eldest daughter, turning Grade 9 this school year. Ahh, the joy of fatherhood :-)

Dear papa,

I thank you for being my slave at times when I want to relax. You pamper me in times when I am lazy or sad. You feed me food that make my taste buds happy, and you help me deal with things i sometimes don't want to do.

You have made a big impact to my life and taught me that even if you can be lazy and stubborn, you can still achieve many things if you actually put some effort.

And that no matter how often your relationships seem to be at an end, it doesn't always mean its not meant to be but that you are not perfect. You have influenced me to become more mature, responsible and caring. and i thank you for all the years you have raised me -

Love, your eldest daughter,


See also:

Friday, June 19, 2020

Covid 14, It's abnormal, not lousy "new normal"

This pandemic started with natural human fear of the unknown (Fotu). Then the socialists and authoritarians jumped in and expanded the hysteria. Socialists believe that many corporations, multimillionaires and billionaires are evil, so seeing many of them going bankrupt or poorer by the billions give them happiness.

Authoritarians hate individual freedom so closing all public parks, beaches, pools, malls, churches, etc.  give them happiness. Authoritarians by nature are hypocrites and always double talk. Take the BLM, Antifa rallies and protests in the US by tens of thousands, bonus of looting, stealing, burning. No social distance, hardly masks but ok with some city Mayors so long as public parks, churches, etc are closed to avoid crowd gathering together.

(this photo from https://www.theatlantic.com/photo/2020/06/images-worldwide-protest-movement/612811/)

Socialists, explicit and implicit, are rejoicing that formerly huge corporations like airlines, hotel chains, fast food chains, are on massive financial bleeding and reduced to begging for state bail out money otherwise they will go bankrupt. This will weaken the corporate sector while strengthening the State and its powers. Money is no problem for the state because they can borrow or just print money by the billions and call it as QE or MMT or Econ Stimulus.

So from natural and spontaneous Fotu to deliberate, planned prolonged lockdown and massive restrictions on human mobility and entrepreneurship. The socialists and authoritarians, from politicians to NGOs, consultants and media, they are winning. A very successful political grab, simply by prolonging the hysteria and endlessly announcing and sharing 2nd wave, 3rd wave, nth wave. Keep scaring the public, forever if possible.

We should not call this as "new normal" or "better normal." This is abnormal. Thousands of consumers coming together benefit from huge bargains, Sales in malls and Dept stores. Thousands or millions of passengers benefit from budget airlines that pack people in tight seats but cheap air fares, also in mass transit like trains, and so on. But these are now prohibited or will soon be prohibited. Mass transit are cheap Bec people are packed tight. Beautiful resorts and parks in the provinces are seen by many people Bec of cheap airlines that pack people inside.

The consumers, passengers, entrepreneurs are the big losers of these abnormal policies and prohibitions. Invented by the socialists and authoritarians.

NYT headline "Trump trying to spread Covid-19" because he will hold a political rally. But no headlines like "BLM, Antifa trying to spread Covid-19" with their daily or nightly rallies and protests.

Similar to the city Mayors of Seattle, Minneapolis, NYC, DC, Chicago, LA, etc. Huge protest rallies, no social distance are ok. But churches and parks are not ok and should be closed.

Meanwhile, I like these two stories: 

(1) Tear Down this Plexiglass! 
Tony with readersAnthony Gill   June 17, 2020

I pray that masks are not the new normal. I implore our leaders to understand that the lack of trust in society is what prevents poor neighborhoods and cities from flourishing. Work to banish mistrust, not spread it further.

To paraphrase Ronald Reagan, who challenged Mikhail Gorbachev to eradicate another major symbol of fear and mistrust in the world, I urge us to tear down this plexiglass. 

(2) Americans Should Never Again Comply With Pandemic Lockdown Orders
By John Daniel Davidson  JUNE 18, 2020 

BLM Rallies Are Safe, Trump Rallies Are Not? 
The starkest contradiction of all might be the reactions to President Trump’s rally planned for Saturday in Tulsa, Oklahoma. Local health officials are warning it could become a disastrous “super spreader” event—a term media outlets like The New York Times have been eager to repeat under headlines warning, “Trump’s rally in Tulsa Could Spread Virus,” using language they would never use to describe any of the large-scale protests, rallies, and riots nationwide…

Public officials in Tulsa have also adopted this double standard. The mayor and a cadre of other officials have publicly implored Trump not to go ahead with the rally, citing concerns about COVID-19. But these same officials dared not say a word against recent BLM rallies held in the city and suburbs, including a large one that got out of control and spilled onto a busy highway, where several protesters were injured.

See also:

Tuesday, June 16, 2020

BWorld 439, Inter-Agency to Terminate Functional businesses (IATF)

* My column in BusinessWorld, June 11, 2010.

The Philippines has perhaps the most draconian, most hysterical lockdown policies in East Asia and even in other countries in the world. From mid-March to end-May, all public transportation — planes, buses (provincial and Metro Manila), jeepneys, regular taxis and TNVS, tricycles and motorcycle taxis — were disallowed. Taxis were allowed to operate starting June 1, the rest were still prohibited.

Three economic dysfunctions have occurred. One, our GDP contracted at -0.2% in the first quarter (Q1) of 2020, the second biggest drop in the region from Q4 2019 next to China. Two, our unemployment rate in April rose more than three times the January level, the second highest next to India in the whole of Asia. And, three, our stock market is -18% lower than it was a year ago, the second lowest to Indonesia. Even though our COVID-19 deaths per million population are among the lowest in the world (see the table).

Other notable things and comments from the numbers shown in the table are as follows:

One, among the selected European countries, no-lockdown Sweden is the only one that did not experience a growth contraction in Q1 2020. It experienced a rise in unemployment but not as high as that in Spain, and has had growth in the stock market.

Two, hard lockdown US experienced modest growth in GDP and the stock market (DJIA) but it experienced a four-fold increase in its unemployment rate.

Three, no or light lockdown South Korea, Taiwan, and Japan have growth in their stock markets, also in GDP, except Japan which has had a contraction in growth even before the pandemic.

Four, the Philippines’ GDP was pulled down by low growth in household consumption (only 0.2% growth) while private investments contracted to -18.3%. The big challenge is to raise these two which constitute about 83% of GDP.

Five, aside from the Philippines’ three-fold increase in its unemployment rate, new entrants to the labor force declined from 44 million in April 2019 to only 41 million in April 2020. The corresponding labor force participation rate thus declined from 61.3% to only 55.6% over the same period.

Six, the big decline in the Philippine stock market reflected not only the closure of many businesses starting mid-March, but also the deterioration in the investments climate. Two recent high-profile examples:

One is President Duterte’s unreasonable outburst against the two water concessionaires and the cancellation of their contract extension until 2037. Two is the non-renewal of ABS-CBN’s franchise, partly because of its issuance of Philippine Depositary Receipts (PDRs) to foreign investments, even while other media outlets like GMA have also issued PDRs and the issue was not taken against them.

I saw several documents with plans to jumpstart the Philippine economy. Many of these papers are good and proactive, except that there is nothing in them that admits the hard lockdown was wrong. Since it was not wrong, then the government can continue it today and tomorrow.

In particular, there is a big focus on the government’s Build, Build, Build (BBB) program. With so many restaurants and bars, hotels and shops, bus lines and other businesses already bankrupt or shutting down in the next few weeks and months, are the waiters and cooks to become construction workers? The bus drivers and plane pilots, are they to become backhoe drivers and crane operators? Are these easily doable? Likely not.

Then there is the mandatory social distancing which means that the cost of people mobility in public transportation — planes, boats, buses, vans, jeepneys — must further increase, or these public utilities will go bankrupt.

It is not what businesses should do to survive bankruptcy. Rather, it is what government should NOT do. There are too many bawal-bawal, restrictions and prohibitions in our lives already. Government should step back from too many restrictions that so far have succeeded in crippling and terminating many functional businesses. Open up the economy, wide and clear.

See also:

Sunday, June 14, 2020

Jayant Bhandari on the recent US riots

I am reposting some recent fb postings by an Indian-Canadian friend, Jayant Bhandari. I don't agree with everything he says but he's frank and clear, I like it. So here goes...

June 13

It is much easier to clean a swamp of crooks who know they are crooks but cleaning an ideological swamp of indoctrinated, politically correct, virtue-signaling people is not easy. Trump has certainly exposed how deep and wide the swamp is, but he cannot drain it.

I think as long as there is a democracy it is impossible to drain the swamp. The institutions must reflect the character of those who vote. Under the current form of democracy, it is the bottom 50% (plus 1) who decide. Populists get to the top, for that is what the psychology of the bottom 50% enables. Then the elected truly believe in what started as populism. After 3 generations, the way of thinking enabled by universal suffrage is set in concrete.

We should progress towards no government. And all efforts should be to minimise the size. Whosoever runs should be of merit.

I think the only thing that can help without burning the whole place down is to restrict democracy to 6% of the population. I know doing this sounds impossible, but no more impossible than burning down Harvard. Restrict to landowners, tax payers, men, above 35 years of age with a productive life, etc. This is what the US was like in 1780.

(US getting for another civil war) I think it is inevitable. This not because there are crazy people in the society, but because their craziness has been rationalized by the larger society, and the institutions are morally incompetent to put the crazies on a leash.

June 12

This is Minneapolis Sheraton after it passed through the hand of the rioters. This is what leftists do. They reduce everything to medieval existence. They have a natural pull towards subsistence, wretched, Malthusian existence.

June 11

Leftism is a product of low-IQ. Leftists have no goals and no values. They throw stones and destroy monuments. They don't understand production. They are feral. They have only animal instincts.

This is truly sad that politically indoctrination has corrupted the passions of so many Americans. They have become do-gooders, with their emotions unconstrained by reason. They have bought into the leftist narrative. Secretary of Defence and Chairman of Armed forces have gone against Trump, again, mostly because they genuinely believe in it. The rot in the US institutions is far too deep and wide for Trump to change the course of its future. I wonder how different these Guardsmen are from what the kids during Mao’s Cultural Revolution were.

‘What I saw was just absolutely wrong’: National Guardsmen struggle with their role in controlling protests 

June 9

The Left is parasitical. It is anti-civilization, regressive and feral. Unchecked, it eats away the innards of any society. Universal suffrage was an unmitigated disaster for the West.

Police unions under fire from left as calls for reform ring out in aftermath of Floyd death 

June 8

Rioters are always a tiny minority. 1% of society? Behind them are the vast majority who give their acquiescence. The biggest culprit is the tiny minority that has the responsibility to be asking to shoot the arsonists. This minority is missing, made impotent by political correctness, and comfortable life that they don't want to put at risk.

June 5

NYC mayor's daughter was arrested in NYC. I wonder how a mayor could let her daughter go out late at night when the city was burning. Theirs has to be a family of true-believers and do-gooders. And they must be an extra-ordinarily pervert. Look at the rings on the face. Perhaps, this is a mature stage of democracy, which throws out very pervert go-gooders as leaders. Look at Modi, Trudeau, etc. I wonder how their minds are structured.

Mayor Bill de Blasio’s daughter arrested at Manhattan protest 

 On the China-India territorial conflict:

June 13

Rule of thumb: When the US is not watching, the rest of the world starts to fall apart. China has a history of being non-aggressive. And why was India caught sleeping during Kargil? And why again now? Indian local-language media is going crazy talking about how much better the Indian army is compared to the Chinese. In 1962, the Chinese and the Indian GDP were similar. Now the Chinese GDP is 5x that of the Indian. And, contrary to the Indian media, the Chinese army is far better equipped and trained.

India-China Standoff: India Counters China's Design; India's Build-Up From Ladakh To Sikkim
Jun 11, 2020

See also other reposts of Jayant's ideas: 
Pol. Ideology 64, Big World Government or Smaller Countries and Governments? June 03, 2015 
Jayant Bhandari on Democracy, Trump and Soleimani, June 04, 2020.

Saturday, June 13, 2020

Welfarism 36, On mandatory 20% discount for seniors, PWDs

On mandatory 20% discount for senior citizens (SCs) and persons with disability (PWDs) -- it should be voluntary, not mandatory and hence should not have been legislated. If it's voluntary, cost is on the resto. Like a marketing come on to seniors hoping they bring their children and grandchildren too. If it's mandatory, government should shoulder the cost, but govt regardless of administration doesn't think this way.

The mandatory discount results in price distortion upwards. Say the price of a ChickenJoy meal shd be P100. But with forced discount not assumed by the govt, the resto raises the price to say P105. So it's the non seniors who pay for the discount.

It was somehow ok before this Covid hysteria and business shutdowns, many non seniors have stable income. Now many non seniors minimize eating out and cook food at home instead. So the restos will have fewer customers to pass on the price distortion, barely surviving and forcing them to give 20% discount might push them to bankruptcy.

The (PWDs), non seniors deaf, blind, on wheelchair, etc also get discounts. In drugstores, hospitals, clinics, restos, bars, airlines, bus lines, etc.

Also 20% discount for students in fares during classes. Another law last year made the 20% discount for students all year round, even during sem break, summer break, holidays. And covers not just buses, ships, planes, also taxi, TNVS.

Some resto chains give 20% discount to all of their card holders, seniors or not. 30% discount on Mondays. This is voluntary type of price discount and it's working.

The legislators just make mandatory and forced discounts left and right bec the cost does not come from their pockets while expanding their pol mileage to run for reelection or higher posts.

The forced discount on medicines caused many small, non-chain drugstores to go bankrupt even before this Covid hysteria. Since they are small, small volume purchase, they get small discount from the drug manufacturers and they can't price higher or similar to Mercury, Watson's, so their average margin is around 5-10% only. Forcing them to give 20% discount means selling at a loss. To avoid further bleeding and bankruptcy, they stop selling drugs often bought by the seniors and PWDs. The typical case of "cheap but not available."

SCs can use their 20% discount in big chains like Mercury, Watson's, TGP, Generika, because these are big volume purchasers, they get big discount from drug manufacturers, have economies of scale. But for small, non chain drugstores, better not use the SC discount at least during this period because you may contribute to their bankruptcy.

For airlines and hotels, I would like to think that rich seniors should also not use their SC discount. The losses 3 months are horrible, next 2-3 months losses may be bearable.

Ultimately, mandatory price discounts, another form of state price control, should be avoided, and existing laws on the subject should be reversed or cancelled.

See also:
Welfarism 33, Janitor turned lawyer, self-reliance vs welfare-dependence, May 05, 2017 
Welfarism 34, Larry Reed on poverty and self-reliance, December 07, 2019 

Welfarism 35, Healthcare is not personal/parental responsibility, only state responsibility, February 14, 2020.

Tuesday, June 09, 2020

BWorld 438, Meralco lockdown billings and coal contracts

* My article in BusinessWorld, June 3, 2020.

The adverse impact of prolonged community quarantine (CQ) in Metro Manila and the rest of Luzon since mid-March is shown by the huge decline in electricity consumption. From the Independent Electricity Market Operator Philippines (IEMOP) data for Luzon-Visayas grids, I compared the April-May 2020 data to the same months in 2019 and the result is really bad.

The decline in average electricity demand was as follows: -2,101 MW (-20.3%) in April 2020, and -1,713 MW (-15.6%) in May 2020. Assuming a -5% decline for June 2020, the second quarter 2020 average would be -13.6% and this can translate to potential GDP contraction of about -10% or higher this quarter. The number of job losses and business bankruptcies should be very high this quarter.

Meanwhile, the country’s biggest energy company, Meralco, has been attacked recently based on half-truths with three or more agenda: refund consumers due to “overcharging,” push for free electricity up to 200 kwh, and kill coal and mandate more wind-solar energy. The sporadic attacks as reported in other newspapers came from the Power for People Coalition (P4P)/Gerry Arances, Bayan Muna leaders Neri Colmenares and Congressman Carlos Zarate, and Tony la Vina.

Let us check the facts to see if these claims and agenda hold water or thin air.

First, Meralco “overcharging” in May 2020 billings due to averaging of December-February electricity consumption for the March-April billings, “least favorable to customers because December usage is usually higher than normal” so the average is inflated.

This is not so. December-February are the coldest months of the year and hence, electricity consumption is lowest then. From IEMOP data on the Luzon-Visayas grids in 2019, the average power demand for January, February and December was 9,098 MW, while average power demand for March to November was 10,333 MW, higher by 1,235 MW.

Meralco’s mistake is not overcharging but that they used the consumption in the coldest months as the reference period for March-April billings, which created a moral hazard problem — consumers consumed more electricity since they would just pay the low kWh average for the cold months. Then the ECQ was extended to May, and the moral hazard problem was extended by another month, and when the actual meter reading was made, mid-May minus mid-February, the actual electricity consumption in kwh was big, and this created the surprise and conspiracy theory of “over-charging.”

Second, that Meralco should “waive the electricity bills of customers consuming an average of 200 kwh or less… and the first 200 kwh of households who consume 200 to 500 kwh.” To cover generation, transmission, distribution and other charges.

This is socialistic and parasitic thinking. Power plants do not get free fuel, free labor, free interest payment for their loans, etc. The same for the grid/system operator, the distribution utilities (DUs), and electric cooperatives (ECs). It is very unlikely that Bayan Muna would demand this kind of irrational electricity freebies from all other DUs and ECs in the country, they just target the biggest and richest DU for media mileage and other political interests.

Third, Meralco has a “preference for dirty energy from coal and fossil fuels” when “coal power causes sickness and makes people sick” so the solution is more renewables like biomass, solar and wind (BSW) plus a silent endorsement for natural gas.

Again, this is not so. Among the richest and most developed economies in the world with healthier people who have a high life expectancy are the major coal consumers — the US, Germany, Japan, Taiwan, Australia, South. Korea, Malaysia, etc. Coal consumption in million tons oil equivalent (mtoe) is divided by population to derive the kilos of oil equivalent (koe) per capita (see the table).

The Philippines’ coal consumption of only 153 koe per person in 2018 is the smallest, the lowest among developed and emerging East Asian countries and yet certain lobbyists of renewables want to further restrict coal power development in the country. DUs like Meralco and ECs should get more coal power contracts, not less.

Fourth, variable renewables like BSW are cheap and abundant enough to replace coal power. Far out. In 2019, the BSW plants reached 1.7 gigawatts (GW) or 6.7% of total installed capacity of 25.5 GW. But BSW’s actual electricity generation was only 3.3 terawatt hours (TWH) or 3.1% of total power generation of 106 TWH. In contrast, coal power constituted 41% of total capacity but produced 55% of total electricity consumption in the country.

All the attacks and claims are plucked from thin air and emotionalism, and are not based on hard data and reason.

See also:

Covid 13, Hard lockdown and hysteria caused the 17.7% unemployment rate

Philippines unemployment rate jumped high from 5.3% in January 2020 to 17.7% in April 2020. Palakpakan, clap the hard lockdown. People wanted to be employed, Government said they should be unemployed, anyway government has helicopter money and cash freebies naman. Bow.

(All images here I got from the web)

Some of the resorts, hotels, big restos in the provinces are already bankrupt, shut down. The rest are dying and bordering on bankruptcy too. They need many tourists and visitors, locals especially and government, IATF guys especially PNP and LGUs make this more difficult, more costly and bureaucratic. The new purpose of government is to penalize businesses then legislate huge spending and borrowings to "stimulate" business. Lousy.

From this report, a person took two weeks to get LGU health certificate, then days or weeks to get PNP travel pass. 

This could be another reason why government should cut the number of personnel. Some or many of them are not exactly useful, so they must "do something"... Something to further slow down the economy.

To survive bankruptcy, it is not so much what businesses should do. They know their field. Rather, it is what government should NOT do. Too much bawal bawal, lots of restrictions.

In private businesses, big and small, it's automatic, no brainer, that when the business is in crisis bordering on bankruptcy, let go of some workers and officers, remove entire division, and/or everyone accepts no salaries and allowances for 1 or 2 months. Until things normalize and the company survives bankruptcy. Far out this will happen in govt. The personnel and officials might even expand.

Those "hundreds of thousands" of lives saved in the PH by hard lockdown as peddled by the IATF and its member agencies are fictional and delusional. The GDP growth contraction at -0.2% in Q1 2020, the unemployment rate of 17.7% in April, the economic damages are real and factual.

Would people estimate how much misery and deaths were caused by the lockdowns on patients who needed regular diagnostics and check-up but non-Covid clinics, laboratories, doctors, financial support are not available? People in current depression because their life savings to out up a nice resto or bar or boutique hotel are now bankrupt.

See also: 
Covid 10, Big global pandemics, fatality rate, May 06, 2020 
Covid 11, Dire Straits and lockdowns, May 18, 2020 

Covid 12, Open up the economy, lockdowns are wrong, June 03, 2020.

Monday, June 08, 2020

Rule of Law 29, Looting and burning are unrelated to BLM, race issues

Burning cars, shops, malls, have nothing to do with the killing of the Minneapolis policeman of George Floyd two weeks ago. Looting were done for the purpose of stealing 100%, zero relation with Floyd. The police officer and his buddies were already arrested and charged, publicized, that is rule of law. So all the looting and burning have zero justification, nada, zilch.

(All photos here I got from the web, various sources)

Big problem of the US, Europe. Criminal acts of looting, burning are now implicitly or explicitly justified, even glorified as righteous acts by many in media, NGOs, people themselves. They have accepted criminality as justified.

The armed citizens of America who came out openly with their guns as the protesters were passing by are correct in their action. Private property is private property. Not collective or communal or socialized property. Priv individuals are correct, justified, in protecting their cars and shops from criminal looters and arsonists.

Most US media especially the big ones like NYT, CNN, WaPo, are not likely to call these looters as criminals and thieves. They are not to blame for the stealing and burning that happened. For them there is one person to blame - Trump.

A good comment from a friend in my fb wall:

Todd Foster: It's been building for years as these run down, dysfunctional, Democrat inner cities excuses more and more anti-social behavior. Yes, broken doors policing may sound bad to us that may lean libertarian, but this is what you get when you start excusing bad behavior. You have two elements. You have Marxist whites using the protests as an excuse to destroy things. The welfare class blacks use the protests as an excuse to loot things. So you have department stores looted of everything and things like book stores burned to the ground. So like the Philippines, leftists are turning violent in America. It's just what low class people do when they're not civilized enough to live with the give and take of democracy. I do save plenty of blame for the enablers, including every moron protesting and taking knees in the name of a life long thug that met up with an incompetent cop.

See also:

Wednesday, June 03, 2020

BWorld 437, Drug price control, winners and losers

* My column in BusinessWorld, May 28, 2020.

Some questions on Executive Order No. 104 (EO 104) — the new drug price control via the imposition of a maximum wholesale price (MWP) and a maximum retail price (MRP) which was issued on Feb. 17, to be implemented on June 2:

1. Is price control being imposed on the most prescribed innovator medicines in the hopes that the products will be pulled out, to make the less-prescribed medicines make money? Is the Department of Health (DoH) advancing pharma and health cronyism?

2. EO 104’s four criteria are subjective while RA 9502 (Cheaper and Quality Medicines Act of 2008) and its Implementing Rules and Regulations (IRR) have objective, legislated criteria, so why were all of these ignored?

3. From 2014-2019, only nine of 166 new molecules or modern medicines that were launched in developed economies were launched in the Philippines, and this after two years’ delay. What is the DoH explanation for this?

4. When the anti-COVID-19 medicines and vaccines are finally available abroad, they may not be made available in the Philippines because the price control penalizes and demonizes successful medicines — is this the DoH goal?

These are the questions I raised during the DoH Advisory Council’s virtual meeting last Tuesday, May 26.

The Council is composed of many stakeholders — government (the Departments of Health, Trade and Industry, Finance, the Food and Drug Administration, the Philippine International Trading Corp.), private companies (innovator and generic pharma, drugstores, hospitals), and NGOs (patient groups, think tanks, health professional organizations).

Questions Nos. 1 and 2 were answered by the health department, saying that they are not advancing cronyism but only fair pricing of highly priced drugs, and that RA 9502 does not preclude or stop the health department from generating new criteria for price controls.

Questions Nos. 3 and 4 were not answered by the health department.

EO 104 will cover 133 drug preparations, expandable to 205. Surprisingly, some medicines have an anomalous situation where the projected retail margin is big but price reduction to consumers is zero or almost zero. Consider these 17 drugs (see the Table).

So EO 104 will have winners and losers. The favored winners will be: 1.) non-innovator manufacturers as their less-prescribed drugs will become more-prescribed if the successful innovator drugs (or companies themselves) pull out; 2.) retailers and drugstores, thanks to higher margins on certain products; 3.) Health Secretary Francisco Duque and some legislators like Senator Bong Go who will claim political credit for political intervention in pricing.

The penalized and losers will be: 1.) innovator manufacturers, since the law will force them to sell at low profit or at a loss, and they may consider pulling out their successful drugs, if not the companies themselves; 2.) physicians, who will have fewer drug options for their patients if innovator drugs are pulled out; 3.) patients, especially when the drugs they particularly need become unavailable; and, 4.) the Department of Finance since tax revenues will decline when some products or companies pull out.

There are other distortions that EO 104 has created, like certain drugs which were procured months ago by hospital pharmacies and drugstores and projected to be sold out by June 1 but are still there due to the COVID-19 pandemic. Low demand for certain products bought at higher prices and which must be sold at lower, MRP levels. There are two options, extend the transition period and EO implementation beyond June 2, or reimburse the price difference between acquisition cost and MWP. This cropped up during the Advisory Council meeting last Tuesday.

Then I heard on the radio Vic Dimagiba of Laban Konsyumer Inc. (LKI) praising price dictatorship, saying that the innovators’ federation scenario of potential tax losses of P28 billion under price control is teasing and provoking the government.

Vic should see the table in this column — some or many LKI supporters and donors may be among the losers of the price dictatorship that he advocates. The Finance department should remove the VAT exemption of drugs procured by senior citizens to raise more revenues — after all, the seniors, rich and poor, already get a mandatory 20% discount.

I saw the statement by the Joint Foreign Chambers of the Philippines (JFC) dated May 19, “Recommendations for Facilitating Business Operations of Healthcare Companies Under the ‘New Normal’” that was sent to officials in the Executive and Legislative branches. In their five-pages position, they stated, “the JFC urges the Philippine government to rescind the implementation of Executive Order No. 104… Alternatively… Institutionalizing price negotiation based on sound review of medicine prices and economic viability of reduced prices of pharmaceutical products.”

Amen to this. Market mechanisms and not political coercion will produce non-distortionary outcomes and compromise among various stakeholders.

See also:

Covid 12, Open up the economy, lockdowns are wrong

Oil crisis, food crisis, overpopulation crisis, NCDs crisis, inequality crisis, climate crisis, plastic crisis, US-Iran war crisis, forest fire crisis,... now Covid crisis.

Soon it will emerge that like all those "crisis" this Covid hysteria is just false alarm. But the perpetrators want maximum damage to the economy, to capitalism and the profit system in particular, before the false alarm is exposed.

Covid 19 or Wuhan virus itself is not a crisis, it is part of nature including the estimated 380 trillion viruses plus 38 trillion bacteria that are residents in our body. It's the lockdowns and hysteria that created the econ crisis for many businesses.

If there is no real crisis, governments, the multilerals, big media and NGOs will invent a fictional crisis with just one goal – they are the “saviours” of humanity and so governments and UN and their allies must keep expanding. The taxes, regulations and prohibitions must keep expanding.

Remember again the conditions during the Spanish flu 1918-1919: horrible life after WW1 1914-1918, many people were sick, wounded, jobless; no vaccines, no modern medicines and PPEs, no ventilators, etc. And yet humanity survived, herd immunity prevailed, and humanity expanded. The lockdown dictatorship won’t admit this, they will insist that govts and their expanding regulations are the solution.

Not opening up the economy fast enough will lead to more corporate bankruptcies, more unemployment, needing more govt corporate bailouts and econ subsidies, more money printing. Later lead to nationalization of many sectors and corporations, towards more, bigger government.

Meanwhile, some interesting reports here:

Meet the trillions of viruses that make up your virome
By David Pride, Associate Director of Microbiology, University of California San Diego and Chandrabali Ghose, Visiting Scientist, The Rockefeller University
October 11, 2018

… the human body is occupied by large collections of microorganisms, commonly referred to as our microbiome, that have evolved with us since the early days of man. Scientists have only recently begun to quantify the microbiome, and discovered it is inhabited by at least 38 trillion bacteria….

It has been estimated that there are over 380 trillion viruses inhabiting us, a community collectively known as the human virome. But these viruses are not the dangerous ones you commonly hear about, like those that cause the flu or the common cold, or more sinister infections like Ebola or dengue. Many of these viruses infect the bacteria that live inside you and are known as bacteriophages, or phages for short. The human body is a breeding ground for phages, and despite their abundance, we have very little insight into what all they or any of the other viruses in the body are doing.

There are more viruses than stars in the universe. Why do only some infect us?

An estimated 10 nonillion (10 to the 31st power) individual viruses exist on our planet—enough to assign one to every star in the universe 100 million times over.
Viruses infiltrate every aspect of our natural world, seething in seawater, drifting through the atmosphere, and lurking in miniscule motes of soil.

Not All Viruses Are Bad For You. Here Are Some That Can Have a Protective Effect

Bacteriophages (or "phages") are viruses that infect and destroy specific bacteria. They're found in the mucus membrane lining in the digestive, respiratory and reproductive tracts.

Mucus is a thick, jelly-like material that provides a physical barrier against invading bacteria and protects the underlying cells from being infected. Recent research suggests the phages present in the mucus are part of our natural immune system, protecting the human body from invading bacteria.

See also:
Covid 9, GDP growth of lockdown vs No/Lite lockdown (preliminary), May 05, 2020 
Covid 10, Big global pandemics, fatality rate, May 06, 2020 

Covid 11, Dire Straits and lockdowns, May 18, 2020.

Monday, June 01, 2020

Drug Price Control 47, Article in August 2010

I just found this, my guest article in Manila Times nearly 10 years ago, reposting.
Below it is part of the one-page statement by various organizations on price control that will be implemented tomorrow. It was posted by PHAP in the DOH Advisory Council members (about 75 names and email ads), me included.

Drug price control a year after
August 19, 2010

The drug price control or price regulation policy will turn exactly 1-year-old on August 15, 2010. A year after its implementation began, has the policy achieved its goal of making essential, popular and branded drugs become more accessible to the poor?

To help us answer this question, let us see some sales data from two drugstore chains, MedExpress/Manson drugstores and Watsons, which, starting this year, has become the second biggest drugstore chain in the country. The officials of these stores gave me permission to use their data for this article.

MedExpress’ sales data for the price-controlled drugs showed the following: From August to December 2009 vs. same months in 2008, sales volume fell by 3.4 percent and sales value tumbled 34.3 percent. From January to May 2010 vs. same months in 2009, sales volume has managed a 7.3-percent increase but the value plummeted by 65.4 percent, whacking the retailers’ margins.

The sales value decline is now bigger than the mandatory 50-percent price reduction because there are additional government-imposed discounts, such as the mandatory 20-percent off for senior citizens and people with disabilities (PWDs).

Data from Watsons show that from mid-August to December 2009 compared to same months of 2008, sales volume of all price-controlled drugs increased by 35.9 percent although sales value declined by 13.2 percent. And from January to April 2010 vs. January to April 2009, sales volume has increased even higher to 57.2 percent while the peso revenue was flat at 0.2-percent growth.

What are the implications of these numbers?

At first glance, one may conclude that price control was a success in making more popular, previously expensive drugs by multinational pharma companies become more affordable to the poor. Wrong.

Watsons drugstores are located mainly in the malls, especially in SM malls, which the richer ABC income class of people frequent. A 50-percent forced reduction in prices by some of the most popular, branded drugs by multinationals prompted the ABC class to patronize these products and abandoned some of the generics drugs that they used to patronize.

This result is a clear setback to the government’s 22-years old campaign to promote generics through the Generics Law of 1988.

Did the government, the DOH officials in particular, foresee this huge and glaring contradiction between its old policy of generics promotion and its new branded drugs promotion?

What about the poorer consumers and patients, those who are in the rural areas and do not frequent the malls, did they also join the bandwagon shift to the branded drugs?

Judging from MedExpress’ sales data, the answer seem to be No. The 7.3-percent modest growth in sales volume in the first five months of 2010 can be attributed to the shift by some of MedExpress’ wealthier consumers in the provinces to the branded drugs. If the poor also joined the bandwagon, then the increase in sales volume would have been larger than 7.3 percent.

Prior to the imposition of price control policy last year, there was already a healthy competition among many pharma companies, especially between the innovators and generics manufacturers. One clear example is amlodipine molecule used to treat hypertension. The cheapest generic available on the market prior to price control was selling for only P8. The most popular brand name version was Pfizer’s Norvasc, selling for P44 a 5mg tablet. After the mandatory 50-percent discount, it became P22.

For the poor who used to patronize the P8 generics, the P22 Norvasc was still expensive and thus, a shift to the branded drugs is still not viable.

Meanwhile, a number of small and independent drugstores, those which do not belong to any drugstore chains, have been forced to drastically shrink their operating costs including laying off some staff. Some also have had to stop selling some of the price-controlled drugs altogether as they encountered problems in getting rebates from the manufacturers, and they could no longer make useful profits. The situation of “cheap but not available” drugs in some rural areas has become more pronounced.

If the policy is a failure, then the DOH should consider advising the new President to recall or abrogate Executive Order 821 issued by the past President imposing price control on certain drugs.

It is time to move on, abandon politicized pricing of certain drugs, and focus our energy on the bigger issue of healthcare coverage for many Filipinos.



See also: