Immigration Policy

Immigration Policy: Europe  
Immigration Policy: Australia
Immigration Policy: USA

The Pharmaceutical Business in the USA

When I travel overseas, pharmacists marvel at the cost of prescription drugs in the USA, compared with their countries.  But, there is little mystery as to why.

In almost all countries in the developed world, the governmental health authority maintains a monopoly on the purchase of pharmaceuticals.  Health officials negotiate with the pharmaceutical companies, and have the likelihood of getting good prices, as they have no competitors for the products.

In the USA, the scenario is completely different.  No negotiation on prices is allowed.  The buyer (commercial pharmacies, clinics and hospitals) can only take or leave the asking price on patented medicines.  The same medicine purchased overseas costs a tenth of what it does overseas.

Can’t the prospective customer in the USA simply choose not to buy the product?  They can.  But, if it is a medicine with no comparable, competing medication (and is protected by patent) and the buyer chooses not to purchase it, the buyer is vulnerable to a wrongful death lawsuit if a patient dies because the medication was unavailable.  Big Pharm has a commercial interest in promoting such lawsuits.

One would think that once the patent on a medicine has expired, other manufacturers would quickly enter the market and sell generic versions of same.  No so.  Sometimes, the former patent holder will pay other drug companies a fee not to offer generic versions.  Of course, this results in the maintenance of a high price on the drug.

An interesting exchange took place during the 2016 presidential debates between Hillary Clinton and Donald Trump.  Mr Trump claimed that Ms Clinton was on the side of Big Pharm, and that he would personally negotiate with the drug companies to bring down consumer prices.

After almost a year in office, Mr Trump had taken no action and became increasingly scrutinized for his lack of action.  Perhaps for the only time during his term in office to date, he admitted he had been wrong on the issue.  He now believed that the fault did not lie with the drug companies.  Foreign buyers were at fault, he claimed.  They were paying too little for drugs produced by American-based pharmaceutical companies.  He reasoned that if they paid their fair share, the drug companies would reduce their prices in the USA.

The Democratic Party response?  Muted at best.  Big Pharm is one of the very largest spenders of lobbying dollars–and they lavishly spend their money on Congressional campaigns of both parties.

It is an incredibly corrupt system, but don’t expect changes in the foreseeable future.

Migration Policy: USA

26 June 2018

Immigration reform is an inflammatory issue for many people. Here is my take on it.

In 1931, immigration policies were introduced during the Hoover administration that severely restricted immigration. Quotas were placed on immigrants from all countries, with a special accommodation for political refugees. Preference was given to prospective immigrants with trades that were considered to be in short supply, such as engineers and medical doctors This system more or less stayed the same until Ronald Reagan became president in 1981.

The system worked. By giving preference to prospective immigrants with marketable skills fetching high wages, the competition for both lower-end jobs and housing was minimal. The disparity of income was very low by historical standards in the USA. Periodic shortages of migrant farm workers during and after WWII were met with contract workers from Mexico, as a part of the Bracero program.

In 1982, the rules for immigration changed under Ronald Reagan, but the changes were already over a decade inn their formation.

In the early 1960s, California was dominated by the Democratic Party as it is now. Attempts to sell a conservative agenda failed. Richard Nixon failed to win the election for governor in 1962, just two years after losing the presidential election to JFK. Ronald Reagan had been the past president of the Screen Actors Guild. But, had no conventional political experience and, had few political convictions other than being a staunch anti-communist.

Aside from being an actor in such classic films “Bedtime for Bonzo”, he was a pitch man for General Electric and host of the popular tv anthology series “Death Valley Days”. He was well liked by the public.

Two powerful, conservative businessmen (Justin Dart and Eli Broad) thought he would be the perfect man to sell the conservative agenda, and supplied him with the financial resources and grooming to become the next governor of California in 1966. He won the election against incumbent Edmund G Brown.

While Mr Dart and Mr. Broad were Republican loyalists, they shared a common objective: the liberalization of immigration policies. Mr. Dart wanted an influx of poor immigrants from Latin America to put downward pressure on the wages he paid for his low-skilled light manufacturing subsidiaries. Mr. Broad–who owned the largest property management company in California–wanted higher rents by having greater competition for his low-end rental properties. Since immigration policy is conducted at the federal level–rather than state level–it would seem that putting their resources supporting Mr Reagan were misplaced. But, they were willing to play the long game–anticipating that Mr Reagan would run for president in the future.

When Mr Reagan left the governorship after two terms in January 1974, he was anticipating a run for the GOP nomination in 1976. What he did not anticipate was that only seven months after Mr Reagan left office, Mr Nixon resigned, and Mr Reagan would be facing an incumbent president (Gerald Ford) in a spirited primary campaign that was won by Mr Ford. Jimmy Carter won the general election. Mr Reagan had four more years to hone his message and further develop his campaign skills.

The first two years of his presidency introduced far-reaching policy changes. Reagan had struck a deal with his closest allies. As long as the powers that be supported his desires for immigration reform and higher spending on defense, Mr Reagan would support the party line on lower taxes for the wealthy and a reduction in government spending–the centerpiece of the Reagan campaign.

Secretary of the Treasury David Stockman wrote in his book that Mr Reagan would sit at meetings with his eyes closed, listening to the proceedings as he planned his pitch to the American public–a skill at which “the Great Communicator” was a master. He was apitch man, not a policy wonk.

A favorite of example mine was his claiming that he was recently in line at a grocery store where he was standing in line behind a woman who paid for liquor with food stamps! (Such a fiction created an impactful image that superceded the illogic of it being decades since he had been in line at a grocery store.)

His strategy for selling the public on immigration reform was equally brilliant. His objective in allowing large influxes of poor immigrants was to create competition for low-end jobs and housing. But, he sold it on humanitarian grounds. “Family reunification” was his preferred approach. It was a brilliant ploy–and the immigration policy has remained largely unchanged since then.

Migration Policy: Australia

19 June 2018

On a map, Australia looks very isolated. But, the world’s fourth most populated country (Indonesia) is but a short distance to the north. They have had their own refugee crisis for years–and the mechanics are very similar to what is faced by the Greeks and Italians.

People smugglers put migrants on flimsy boats and take them to international waters, and abandon them–assuming that Australian ships will bring them ashore.

Handling the matter has been a controversy for Australia since the year 2010 when Kevin Rudd was prime minister. Australia made arrangements with both Indonesia and the tiny island nation of Nauru to build detention centers. It was made absolutely clear that boat people would be refused entry into Australia. (Most of the boat people have made their way from Iran and Afghanistan to Indonesia to attempt asylum in Australia.)

Today, the boats have stopped. No one is dying at sea trying to get to Australia.  Word has spread that life on Manus and Nauru is worse than it is where they are. Admittedly, the conditions are draconian in both places. Suicides, riots and psychological stress–especially among children–have occurred at high levels.

The majority of the migrants have been resettled in the USA in exchange for Australia taking in migrants that had illegally entered the USA. (No Somalis or Iranians have been allowed in the USA.) Many in Australia were shocked that Australia turned down New Zealand’s offer to take some of the migrants. But, I agree with the refusal. Relocating the migrants to other countries would encourage the smugglers and lead to more deaths.

The Mike on Politics and Social Issues

Immigration Policy
The Pharmaceutical Business in the USA
Why New Zealand Is Better Than Uruguay