FDA approval

vitamins

Sekrit Reform Agenda: Untangling Government: Medical Deregulation

I have been researching issues of dysfunctional government and over-regulation for the next book, which won’t be done for months. But now is a good time to discuss some of the results that bear on the new administration’s agenda.

Trump rode a popular wave of anger at being lied to and cheated by the DC pols and bureaucrats who have been in the pockets of special interests — oligopolic corporations, unions, and regulated industries — for several decades now. The fog of disinformation funded by government PR and interlocking media conglomerates obscured how regular people were being shafted to fund ever-increasing costs for medical care, education, housing, and cable TV, special interests that had captured their regulators to increase profits at the expense of middle-class families. Proximate causes of voter anger: the lies of Obamacare and the intentional subversion of the law and welfare systems to support a large population of illegal immigrants intended to tip the electoral balance against citizens who were born in the US or entered legally. The government cheerleaders denigrated blue-collar and less degreed workers, while promising and failing to deliver good jobs. “College for everyone” policies meant college degrees came to be required for all good jobs, and meanwhile failed public schools graduated students unprepared for even low-level college work, then stuck the dropouts with nondischargeable student loan debts. College tuitions rose far faster than inflation while an elite class of academics and administrators took home fat paychecks and enjoyed job security and benefits unavailable to most taxpayers — meanwhile abusing nontenured adjuncts to do the actual teaching for poverty-level pay. Lives have been destroyed by the promises of the social engineers, and the people finally stopped buying the propaganda.

Trump is not beholden to the usual billionaire donors and subsidy-seeking industries. His administration is the first opportunity in decades to seriously overhaul the regulatory structure that has crippled US competitiveness. Real structural reform could unleash a wave of growth and new jobs and lower costs of housing, allowing people to move to where the jobs are and start rebuilding families and lives that have stagnated since 2008’s Great Recession began.

I’m going to propose an agenda of radical reform that not only would create a business boom, but a freedom dividend. The elitists have tried micromanaging normal people by regulating the most trivial details of daily life (for example, incandescent bulb and plastic shopping bag bans) and opposing all new housing, pipelines, and industrial development. They should be told to mind their own business.

Radical reform agendas affecting multiple sectors have a problem getting accepted. One can try to build a coalition to get people to accept the parts they don’t like for the sake of others they do, but you run the risk of notifying the entrenched interests that you’re threatening their monopoly profits. Those special interests will join together to fund propaganda to frighten the population into halting the reforms. This was Arnold Schwarzenegger’s downfall in California; he took on the entrenched power of public employee unions — nurses, prison guards, and civil servants — who funded a massive PR campaign against his reforms and halted them at the ballot box. Schwarzenegger gave up, convinced the interests he had challenged were too powerful to curb. So perhaps the reform agenda should be secret — picking off the interests one by one with as little fanfare as possible, so the people wake up one day to discover they are richer and more free than before. Announcing that you intend to fire millions of paper-pushers so they can go to work in real jobs that actually add value might possibly be a bad idea… even those paper-pushers might be better off in the long run working in more dynamic industries, but it is hard to convince someone to voluntarily undergo wrenching change for some long-term good.

So slow and steady change, with due regard for transitional measures to smooth the way. But smash the system, gently, and let people choose freely how to live and create. The status quo is no longer sustainable, and change rolled out before the inevitable collapse of the debt-based economy will perhaps forestall the worst scenarios.

One of the downfalls of the Democratic-Progressive machine was the failure of the Rube Goldberg ACA / Obamacare health insurance scheme they believed would cement their electoral dominance by creating more dependent citizens. Passed in a hurry when they were about to lose their lock on the Senate, the law was a Frankenstein monster of parts assembled by special interest groups and progressive policy wonks, famously cheered on by MIT Prof. Jonathan Gruber, who admitted the proponents had intentionally obscured its true nature: to greatly raise the cost of insurance for healthy middle-class families so that poorer, sicker people could get subsidies without revealing the huge hidden tax increase involved. Repeated lies were used to pass it, including Politifact’s Lie of the Year for 2013, Obama’s “If you like your health care plan, you can keep it,” plus the promise of $2500 per family yearly savings.



But the current death spiral of the ACA individual insurance market is far worse than the planned hidden tax and subsidy scheme. Through its poorly-designed rules of payment for coverage, the scheme allowed and encouraged gaming — clever consumers discovered they could sign up and pay for one month, then get lots of expensive healthcare services for three months before being cut off for nonpayment. And the loopholes allowing enrollment outside normal time windows were so easy to bypass that many people dropped coverage, returning to pay only when they had a major medical expense upcoming. Because of the high prices — which were barely affordable even with subsidies, and many times the cost of similar pre-ACA policies for those who were not subsidized — many or most of those eligible chose not to buy in, leaving the sickest and poorest to drive up average medical spending for the risk pool.

As a result, the trumpeted increase in coverage was entirely due to expanded Medicaid, which is free and worth every penny. The Oregon study which showed that Medicaid coverage did nothing to increase health or decrease death rates for newly-covered people was ignored, and the claims that new Medicaid coverage would save thousands of lives every year and decrease ER usage among the poor turned out to be false — ER usage rose as poor people continued to prefer no-appointments, no-payment access to ERs over Medicaid clinics with long waits for appointments. Meanwhile, the 20 million people who had paid for their own insurance before the ACA have been soaked, and there are now only 10 million people enrolled in the new individual ACA plans. So while proponents continually claim success in that more people are “insured,” the deteriorating quality of the coverage and the reduced participation by the young and healthy who were supposed to pay the bills mean that it is becoming both a financial and a healthcare disaster.

What happens when a significant number of voters have supposed facts drummed into them by political leaders, but discover they were all lies, and many middle-class voters are being soaked for insurance that covers less and costs much more, reduces choice in providers, and limits travel because they can’t get coverage outside their area of residence? They begin to doubt the word of the “experts” of the government propaganda machine on every other subject, and they yearn for honesty.

Passed to satisfy all major special interest groups, the ACA appeared likely to increase profits for health insurance and drug companies, which is why they supported it. It has not worked out that way, with the companies generally losing $billions on individual health insurance plans. Progressives are now calling for a public option which would somehow undercut the pricing of private insurance companies, many of which are nonprofits, while doing the same work the government way — we can see how well that might work by how patients are treated by the VA.

But the failure of the ACA has created a climate for real reform because the old mostly-functional system is now smashed to pieces and there is less to lose from drastic change. The ACA, ruled constitutional by the Supreme Court, established that the Federal government could regulate and interfere with the healthcare markets of every state. Under the expanded Commerce Clause powers now established as precedent, nothing stops Congress from seizing direct control of medical professional licensing. The balkanized 50-state regulation of care is part of the inefficiency of the system — it should go. In practice there is no evidence that doctors licensed by one state become hazards to care in a different state, and the complex schemes that restrict supply and raise costs for medical certifications need to be streamlined and unified. Irish doctors who go through a four-year program are just as good as doctors trained in the US’s standard eight-year program, which costs hundreds of thousands of dollars more. Services which can be provided by technicians in cheap clinics like those popping up in drugstores nationwide should be expanded; for example, checking for suspicious skin growths to screen for cancer can now be done by AI-based optical scanners at very low cost. Standard tests and treatments for colds, flu, STDs, skin fungus, and impacted earwax don’t require a doctor’s knowledge. State laws requiring doctor supervision of even routine care do little to improve care but a lot to restrict availability and raise prices.

Medicaid is both expensive to taxpayers and provides delayed and substandard care. An expanded system of clinics for the poor is a much better way of spending public money on low-income patients. Hospital ERs need to be free of the requirement to treat non-emergency patients, and free to pass them off to public clinics who can more cost-effectively treat the less urgent problems they bring in.

Requiring prescriptions for drugs raises costs and reduces availability for everyone, even wealthy people — having to see your doctor several times a year to renew routine prescriptions for birth control, blood pressure, cholesterol, and other common medications adds to costs with minimal benefits. Doctors have to waste time jumping through insurance company hoops intentionally imposed to reduce drug costs, and vast amounts of time and money are spent needlessly.

There are some medications which need to be controlled to prevent overuse. Antibiotics, for example, gradually lose their effectiveness as organisms build up resistance, and so having some authority limit their use to cases of real need is cost-effective. But most standard medicines should be free for sale over the counter — only antibiotics and highly addictive drugs need to be controlled. This would cut out layers of cost and reduce prices and the cost in time and trouble to patients and doctors. OTC birth control costs the system much, much less than Obamacare’s “free” birth control pills.

Many newly-approved treatments are startlingly expensive. One reason for this is a hidebound FDA, which requires massive double-blind controlled studies for approval. For each drug that is approved, many more fail, so the billions spent have to come from somewhere, and that means very high list prices for patented treatments. The focus on approvals can make or break billion-dollar companies, and so the FDA deciders are subject to influence-peddling campaigns and barely-hidden bribery, making their decisions less transparent and more political than is decent. Meanwhile, foreign countries control prices and reap the benefits of new treatments while not footing much of the development cost. It’s only because the US government enforces this setup that the market works this way; removing bans on imports and equalizing world prices for medications would force the pharmacy companies to price more rationally and fight the price-controlling developed countries that are free-riding on US research costs.

So setting up a commission to investigate modernizing FDA approvals, freeing up provision of most medical services and licensing, and allowing US sales of any drug approved by reputable agencies abroad would be a good start. Drug companies will fight this since it means they have to find another way to charge the costs of research more broadly to the rest of the developed world while selling at marginal cost to poorer patients wherever located, but the current situation is not sustainable — just as the US no longer dominates the world economy and can no longer afford to pay the lion’s share of defense costs for its allies, medical research and drug approval costs have to be more widely shared. And the paternalistic control of what adult citizens choose to eat, drink, smoke, and take as drugs needs to end. It is vastly wasteful and costly to freedom.

All insurance is a bad deal in that it costs more than the services one might expect on average to get in return; the overhead of the insurance company, claims managers, and payment systems has to be built into the price. Thus insurance for small expenses one could easily afford to pay is a bad deal; extended warranties for appliances, phones, and travel insurance are overpriced. Most people who bought their own insurance pre-ACA had catastrophic coverage, which kept premiums down by having high deductibles. But these policies got them access to the insurance company-negotiated prices, which is important because hospital list prices have been set artificially high in response to the Medicare reimbursement system. Bare-bones policies covered the truly unaffordable costs of serious medical treatments, which is the correct use of insurance. Now many people who had catastrophic coverage can’t get it at the formerly reasonable prices since even unsubsidized policies must conform to ACA rules.

So the first relief for ACA problems is to end regulation of policy benefits so individuals can buy what they actually need in coverage. If medical screening is allowed, setting up a national subsidized high-risk pool for poorer people with pre-existing conditions can help solve that problem, or regulations could require anyone with continuous coverage to be accepted, as they did before the ACA in most states — only a few people would find themselves uncovered and needing a subsidized high-risk pool. Most of the damaging gaming of ACA policies comes from those who stop paying in until they have an expensive need, and requiring continuous coverage limits that problem.

Subsidies for lower-income people are problematic in many ways. One is the benefits cliff, which penalizes someone who increases their income many times the increase, punishing efforts to better their lives. Another is the high cost to taxpayers — the costs have been less in total than expected because ACA policies have been much less popular than expected, but higher per covered person. Getting medical costs down overall through deregulation and heightened interstate competition and economies of scale will help, and making any subsidy required be available through income-tax credits eliminates the need for the costly and mostly failed state and national marketplace web sites, easier dreamed of and promised than executed by government contractors. Those have cost $billions but have proven unsustainable even when they work. Let insurance companies sell directly, let any aggregator compete to sell policies, and get the government out of health insurance provision entirely.

The FDA was once focused on policing the marketplace for food and drugs — its predecessor started under the Pure Food and Drug Act of 1906, and the emphasis was on preventing fraud. Focused on dangerously adulterated food and false claims of efficacy for medical treatments, proper manufacturing and labeling were effective at reducing problems, with the Prohibition-like bans on some drugs and detailed regulation of what chemicals a citizen could buy coming later. Most of the damage caused by quacks and adulterated foods and drugs could be prevented by emphasizing consumer information and labeling instead of prohibition — making sure what is sold is what it is labeled as being and preventing unsupported claims of efficacy are really all that is required, and the growth of FDA regulation beyond that is retarding progress and increasing costs to consumers with very little benefit. Patients with their doctor’s guidance ultimately choose what is needed and useful in medical care, and the FDA has forced them to smuggle in lifesaving medications from abroad and set up a system that prices treatments far above affordable costs. No one who is facing a life-threatening illness to should be kept from trying promising treatments the FDA is too slow to approve. And advanced countries like Britain allow pharmacies to sell, for example, codeine (similar to heroin!!) with acetaminophen tablets for the asking — with little additional risk, though they have been criticized for not warning enough against the dangers of overuse of acetaminophen (Tylenol).

And the FDA is legally prevented from halting the advertisement of and wasted money on homeopathic medicines, which do nothing but can harm people by delaying treatment with real medication. They are also barred from halting supplement sales, and liver toxins like valerian root are still sold freely without appropriate warning labels. Consumers are lead to believe authorities have made the world safe for them, and do not investigate and are not sufficiently skeptical of claims made.

The Hoover Institution’s studies of medical reform are in line with what I’m suggesting, though less radical. I’m particularly bored by HSAs and schemes to jigger tax credits when the underlying problem is that costs are just too damn high, but those incremental improvements would be worthwhile.

[next installment: Sekrit Plan for media conglomerates and cable TV companies, now one and the same]

 


Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


For more reading goodness:

Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Who Killed Prince?: Update – Buprenorphine Implant Approved by FDA
FDA Wants More Lung Cancer
No More Elections or Campaigns: Liquid Democracy
Death by HR Introduction: HR Pushes Damaging Regulations Into the Enterprise
Death by HR: Thiel, Trump, Palantir: Regulation as Partisan Weapon
Update on: Who Killed Prince? Restrictions on Buprenorphine
California Dream Choo-Choo Lives On: Bay Bridge Lessons Ignored
Public Schools in Poor Districts: For Control Not Education
The VA Scandals: Death by Bureaucracy

Who Killed Prince?: Update – Buprenorphine Implant Approved by FDA

FDA Approves Titan Implant - photo: Titan

FDA Approves Titan Implant – photo: Titan

The FDA has finally approved Titan Pharmaceutical’s buprenorphine implant after years of unnecessary delay, letting doctors have another useful weapon in treating opioid addiction. The background is here:
Who Killed Prince? Restrictions on Buprenorphine.

The implant provides a smooth low level of buprenorphine sufficient to relieve opioid cravings, but not enough to degrade mental functions; patients on the implant testify that, unlike opioids or pill forms of buprenorphine, it makes them feel normal so they can function in their daily lives.

The Reuters story mentions the neo-Puritan objections:

The first-ever implant to fight addiction to opioids, a class of drugs that includes prescription painkillers and heroin, was approved by the U.S. Food and Drug Administration on Thursday. The matchstick-sized implant, developed by Titan Pharmaceuticals Inc and privately owned Braeburn Pharmaceuticals, is by design less susceptible to abuse or the illicit resale that plagues existing oral therapies. Fewer than half of the estimated 2.2 million Americans who need treatment for opioid abuse are receiving help, according to the U.S. Centers for Human and Health Services (HHS).

Currently, two drugs are predominantly used to treat opioid addiction — methadone, which is dispensed only in government-endorsed clinics, and the less-addictive buprenorphine, which exists as a pill or strip of film. While effective, a pill or film may be lost, forgotten or stolen. Evidence suggests that the use of these medicines as part of the overall treatment program are more effective than short-term detoxification programs aimed at abstinence, the FDA said on Thursday….

“I intend to make this the most successful implant that’s ever been marketed … and I think it’s absolutely possible given the unmet need,” Braeburn Chief Executive Behshad Sheldon said in an interview ahead of the FDA decision.

However, some doctors are concerned that the implant may incentivise patients to rely solely on medication, and ignore the lifestyle changes they need to make.

This is the neo-Puritan impulse — if you lack the ability to get off entirely, you should just suffer and die because you don’t deserve a normal life. Addiction is not a “lifestyle choice,” it’s an addiction, and those prone to addiction are generally going to be addicted to something, or many things — the goal of treatment should be to move the addict to habits which don’t interfere with leading a productive and satisfying life. I am, for example, addicted to coffee, working out, eating well, and getting a good night’s sleep…

Since it’s an implant, if it isn’t replaced after six months the patient will taper off the drug fairly slowly, and it might well be easy enough to go off it completely as a result. But even if viewed as permanent maintenance, it is much better for the patient and society than allowing the peaks and valleys of opioid addiction to wreck the patient’s life and possibly kill them.

We are also seeing these perfectionists in the current effort to outlaw vaping, which is one of the best ways to get smokers off the much more damaging cigarette smoking habit — see FDA Wants More Lung Cancer.

The implant has a bright future now. Too bad tens of thousands of people died without treatment in the three years the FDA delayed it. The Reuters story continues:

Braeburn estimated the U.S. market for opioid addiction treatments at about $2 billion, excluding methadone and Vivitrol, Alkermes Plc’s treatment for the prevention of relapse after opioid detoxification.

CEO Sheldon declined to specify a price for the implant on Thursday, but said it would be substantially cheaper than Vivitrol. “We are hoping that our first patient will have received the implant by the first day of summer or June 21,” she added.

The market for long-acting therapies such as Probuphine could be even larger if attempts to raise the limit on the number of opioid addicts a doctor can treat are successful. Under the current law, a doctor can treat only 30 opioid addicts within a year of obtaining a waiver, rising to a maximum 100 after procurement of a second waiver. The Congress and the HHS are working toward increasing this limit. Of particular interest is a proposal that exempts from the patient limit any treatment directly administered by a physician, such as an implant or injection.

UPDATED 2 JUNE 2016:

The preliminary autopsy report has been released showing cause of death as an overdose of Fentanyl, an opioid stronger than morphine or heroin. The report is minimal and gives no hint of what investigators might have found or what legal actions Prince’s doctors may face.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Update on: Who Killed Prince? Restrictions on Buprenorphine
Death by HR: EEOC Incompetence and the Coming Idiocracy
Regulation Strangling Innovation: Planes, Trains, and Hyperloop
Captain America and Progressive Infantilization
The Great Progressive Stagnation vs. Dynamism
FDA Wants More Lung Cancer
Corrupt Feedback Loops: Public Employee Unions
Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech<a
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegration Experience
The VA Scandals: Death by Bureaucracy

FDA Wants More Lung Cancer

E-Cigarette - FDA Vaping Rules

E-Cigarette – FDA Vaping Rules

The post Bootleggers and Baptists touched on the corrupt bargain now bringing together a coalition to suppress vaping (close to harmless) as a substitute for cigarettes (cause of most lung cancer deaths.)

The FDA has announced their plan to regulate vaping (and cigars, etc.), which seems designed to drive all vaping products off the market — except those provided by Big Tobacco companies. As usual with the FDA, the process for getting approval will be lengthy and costly, when a simple filing of ingredients (and prohibition of dangerous ones) would be cheap and quick. Only the largest companies will be able to afford the approval process.

The New York Times story:

WASHINGTON — The Food and Drug Administration made final sweeping new rules that for the first time extend federal regulatory authority to e-cigarettes, popular nicotine delivery devices that have grown into a multibillion-dollar business with virtually no federal oversight or protections for American consumers.

The 499-page regulatory road map has broad implications for public health, the tobacco industry and the nation’s 40 million smokers. The new regulations would ban the sale of e-cigarettes to Americans under 18 and would require that many people buying them show photo identification to prove their age, measures already mandated in a number of states.

The long-awaited regulations shift the terms of the intense public debate over e-cigarettes, which deliver nicotine without the harmful tar and chemicals that cause cancer. The devices were introduced about a decade ago and have exploded in popularity. There are an estimated 9 million adult e-cigarette users in the United States.

But they have sharply divided American public health experts. The central question is whether they help people stop smoking — or whether they are a gateway to traditional cigarettes, especially for younger people. Health experts in Britain have decided they are effective in helping people quit, and have urged smokers there to switch to them. American experts have been more cautious, warning that they may eventually result in young people moving from vaping to smoking traditional cigarettes.

The answer is important because smoking is still the largest cause of preventable death, with over 480,000 tobacco-related deaths each year in the United States.

The regulations, which will take effect in 90 days, establish oversight of what has been a market free-for-all of products, including vials of liquid nicotine of varying quality and unknown provenance. Finalizing them has taken years. They stem from a major tobacco-control law Congress passed in 2009 and were first proposed in draft form in 2014….

Perhaps the biggest change is a requirement that producers of cigars and e-cigarettes register with the F.D.A., provide the agency with a detailed accounting of their products’ ingredients, and disclose their manufacturing processes and scientific data. Producers will be subject to F.D.A. inspections and will not be able to market their products as “light” or “mild,” unless the F.D.A. allowed them to. Companies will be prohibited from giving out free samples….

The American Vaping Association, a trade group for the industry, seemed to take that view, arguing in a statement on Thursday that the agency had gone too far. “This is not regulation — it is prohibition,” the group said in a statement. It said the process for submitting an application, in terms of number of hours spent, would exceed a million dollars.

But federal health officials countered that the industry will have ample time to respond to the rules. Companies with products on the market now, including vape shops that mix their own liquids, will have two years to submit an application to the F.D.A. for approval of a product. It can stay on the market for another year while the agency reviews the application.

As for the cost, officials and advocates said it was too soon to tell, but added that there was broad agreement — including in federal statute — that the industry needed to be regulated, not unlike the food industry, for example, and that these rules were a thoughtful way to accomplish that. Mr. Zeller. said that until now the industry had been the “wild, wild West.”

…The rules also impose regulations on all tobacco cigars, a tougher move than originally anticipated as the agency was pondering excluding so-called premium cigars….

“At last, the Food and Drug Administration will have basic authority to make science-based decisions that will protect our nation’s youth and the public health from all tobacco products, including e-cigarettes, cigars and hookah,” Harold P. Wimmer, president of the American Lung Association, said in a statement.

The F.D.A. announcement followed a ruling by Europe’s highest court on Wednesday upholding the right of the European Union to place restrictions on the sale of electronic cigarettes. Europe’s rules are to take effect this month.

So based on so-far-unfounded speculation that vaping will induce kids to smoke regular cigarettes, regulators who purport to care about the millions of deaths due to lung cancer will, in effect, make it more difficult and expensive to quit cigarette smoking by using the much-less-harmful e-cigarettes.

I don’t vape and I suspect vaping has some minor negative health effects, but relatively speaking they’ve already been shown to be minimal. Yet the knee-jerk reaction is to clamp down on something these regulators don’t do or know much about, because it *resembles* cigarette smoking and those poor weak-minded citizens need to be protected. I’m sure it’s just a coincidence that vaping threatens tax revenues and the business models of both Big Pharma and Big Tobacco, and the approvals process is designed to suit Big Tobacco while shutting out small companies.

From the Bootleggers and Baptists post:

Tobacco: Vaping equipment, or e-cigs, provide the appearance of cigarettes and a dose of the nicotine smokers crave in a delivery format (evaporated carrier with nicotine and flavoring) that is much less harmful to smoker’s lungs. Many experts recommended smokers switch to e-cigs immediately, since harm to their health would be much reduced. But e-cigs threaten both the makers of the highly-regulated and taxed legacy cigarettes and the makers of smoking cessation products like nicotine gum and patches — often the same companies! So paid “medical authorities” and lobbyists began to work hard to promote the view that the new and untested e-cigs were just as hazardous — if not more hazardous, since their long-term effects were unknown! — than traditional cigarettes. Cato’s Regulation put out a good paper on the Bootleggers-and-Baptists pattern in this new propaganda war:

Now consider the situation with electronic cigarettes (e-cigs) and their incumbent competitors: tobacco companies that produce and sell traditional cigarettes and drug companies that produce nicotine replacement therapies (NRTs). The U.S. cigarette market has been regulated, one way or another, since colonial times. Along the way, federal regulation—coupled most recently with the state attorneys general Master Settlement Agreement (MSA, about which we say more later)—effectively cartelized the industry, bringing increased profits to the industry and higher cigarette prices and reduced cigarette consumption throughout the nation. Falling cigarette consumption gladdened the hearts of health advocates, who fought for the elimination of tobacco products, while higher industry profits brought joy to tobacco company owners.

This happy Bootlegger/Baptist equilibrium is now threatened by the exploding sales of e-cigs, a new technology for delivering nicotine to all who want it without simultaneously bringing the harmful combustion-induced chemicals associated with burned tobacco. Today, there are many e-cig producers and numerous small shops selling e-cigs and customized nicotine-dispensing products. It is a rapidly evolving market that has been relatively open to new entrants and innovation in product design. Given the quick growth in e-cig use (much of which comes at the expense of cigarette sales), previous political deals that stabilized tobacco industry profits are at risk. The major tobacco companies are understandably not sitting idle. They, too, have entered the e-cig marketplace and are responding in other ways to the new competition.

The major pharmaceutical companies have not been idle either. The makers of smoking cessation products, including NRTs such as the nicotine patch and nicotine gum, are major players in the politics of tobacco and nicotine. The producers of traditional nicotine delivery devices and NRTs are at work trying to stop the disruptive e-cig producers. These Bootleggers are joined by health advocates (Baptists) who raise questions about unknown potentially harmful effects that may be associated with e-cig use. Both groups—cigarette and NRT producers on the one hand, and health advocates on the other—would like to stop new e-cig producers or severely crimp their ability to compete.

Lawfare between the tobacco industry and state attorneys general was settled in 1998 with the MSA (Master Settlement Agreement), which set the payments due to the states to compensate them for the additional Medicare and Medicaid costs states would bear because of tobacco products. The agreement was carefully designed to send money to the states while protecting the incumbent manufacturers from competition, allowing them to raise prices more than required to pay the fines.

Again from Cato’s paper:

The heart of the MSA was the promised payment of $206 billion by the four participating cigarette companies to the participating states. Those payments would be tax deductible and the costs would be paid by consumers in the form of higher cigarette prices. (Because cigarette consumption is highly price inelastic, the cost of the price increase was largely borne by consumers rather than producers.) The MSA presented state legislatures with a simple choice: either accept the MSA, in which case they would be able to spend their state’s share of the billions of dollars raised from smokers, or reject the proposed statute and their states’ smokers would still pay the higher prices necessary to fund the deal but they would lose their claim on the money. Not surprisingly, every state legislature took the money.

Responsibility for the payments was allocated among the cigarette companies in proportion to their current market share, thereby reducing the incentive for the participating cigarette companies to engage in price competition to increase their respective market shares. The structure of the MSA thus provided a powerful incentive for each company to be satisfied with the status quo.

The MSA also attempted to protect the major cigarette companies from new competition. At the time of the agreement, the four participating cigarette companies accounted for about 99 percent of domestic cigarette sales. Increasing cigarette prices to pay for the settlement risked a loss of market share to marginal competitors or new entrants. Therefore the MSA provided that for every percent of market share over 2 percent lost by a participating cigarette manufacturer, the manufacturer would be allowed to reduce its payments to the states by 3 percent, unless each participating state enacted a statute to prevent price competition from non-participating manufacturers (which each state did). The statutes require nonparticipating cigarette producers to make payments equal to or greater than what they would owe had they been participants in the agreement, to eliminate any cost advantage.

The MSA also included restrictions on cigarette marketing practices agreed to by the participating producers. The advertising limits were portrayed as a public health measure because they reduced advertising that could influence young adults and teens. The limits also reinforced the anticompetitive nature of the MSA by making it more costly for new brands or entrants to secure market share through promotional efforts.

The MSA’s cartel-reinforcing provisions sufficiently suppressed competition to enable cigarette companies to take advantage of the price inelasticity of cigarette demand and obtain record profits. This made it possible for the major cigarette manufacturers to increase prices by more than was necessary to make the mandated MSA payments.

Having made a deal to get big money for states and attorneys while protecting the companies from competition and raising prices more than enough to make the addicted smokers themselves pay the full cost of the settlement, many of the states decided to grab their money immediately by selling municipal (federal tax-free) bonds backed by the MSA payments expected. California alone issued at least $16.8 billion in such bonds, proceeds being used for both immediate expenses and long-term capital improvements. Legislators appear to have forgotten that the supposed purpose of the payments was to cover smoking-related expenses of future medical care for the state’s population, and instead chose to spend the money immediately on unrelated matters while leaving the burden of those health expenses with future taxpayers.

In some cases, however, the bonds are backed by secondary pledges of state or local revenues, which creates what some see as a perverse incentive to support the tobacco industry, on whom they are now dependent for future payments against this debt.

Tobacco revenue has fallen more quickly than projected when the securities were created, leading to technical defaults in some states. Some analysts predict that many of the bonds will default entirely. Many of the longer-term bonds have been downgraded to junk ratings. More recently, financial analysts began raising concerns that the rapid growth of the electronic cigarette market is accelerating the decline of $97 billion outstanding in tobacco bonds…. Lawmakers in several states proposed measures to tax e-cigarettes like traditional tobacco products to offset the decline in TMSA revenue. They anticipate that taxing or banning e-cigarettes would be beneficial to the sale of combustible cigarettes. — Wikipedia on “Tobacco Master Settlement Agreement”

Vested interests, including tobacco companies and the states, now actively seek to suppress e-cigs or at least tax them enough to make up for any lost revenue as they are adopted. This means they are actively working to keep smokers addicted to the most hazardous form of nicotine consumption, with its resultant cancers and other diseases. The original Baptist goal of helping smokers quit the habit to avoid cancer and early death has long since been forgotten.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. Here’s the condensed version; view the entire review here.

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


More reading on other topics:

Jane Jacobs’ Monstrous Hybrids: Guardians vs Commerce
The Great Progressive Stagnation vs. Dynamism
Death by HR: How Affirmative Action is Crippling America
Death by HR: The End of Merit in Civil Service
Corrupt Feedback Loops: Public Employee Unions
Death by HR: History and Practice of Affirmative Action and the EEOC
Civil Service: Woodrow Wilson’s Progressive Dream
Bootleggers and Baptists
Corrupt Feedback Loops: Justice Dept. Extortion
Corrupt Feedback Loops, Goldman Sachs: More Justice Dept. Extortion
Death by HR: The Birth and Evolution of the HR Department
Death by HR: The Simple Model of Project Labor
Levellers and Redistributionists: The Feudal Underpinnings of Socialism
Sons of Liberty vs. National Front
Trump World: Looking Backward
Minimum Wage: The Parable of the Ladder
Selective Outrage
Culture Wars: Co-Existence Through Limited Government
Social Justice Warriors, Jihadists, and Neo-Nazis: Constructed Identities
Tuitions Inflated, Product Degraded, Student Debts Unsustainable
The Morality of Glamour

On Affirmative Action and Social Policy:

Affirmative Action: Chinese, Indian-Origin Citizens in Malaysia Oppressed
Affirmative Action: Caste Reservation in India
Diversity Hires: Pressure on High Tech
Title IX Totalitarianism is Gender-Neutral
Public Schools in Poor Districts: For Control Not Education
Real-Life “Hunger Games”: Soft Oppression Destroys the Poor
The Social Decay of Black Neighborhoods (And Yours!)
Child Welfare Ideas: Every Child Gets a Government Guardian!
“Income Inequality” Propaganda is Just Disguised Materialism

The greatest hits from SubstrateWars.com (Science Fiction topics):

Fear is the Mindkiller
Mirror Neurons and Irene Gallo
YA Dystopias vs Heinlein et al: Social Justice Warriors Strike Again
Selective Outrage
Sons of Liberty vs. National Front
“Tomorrowland”: Tragic Misfire
The Death of “Wired”: Hugo Awards Edition
Hugos, Sad Puppies 3, and Direct Knowledge
Selective Outrage and Angry Tribes
Men of Honor vs Victim Culture
SFF, Hugos, Curating the Best
“Why Aren’t There More Women Futurists?”
Science Fiction Fandom and SJW warfare

More reading on the military:

US Military: From No Standing Armies to Permanent Global Power
US Military: The Desegregation Experience
The VA Scandals: Death by Bureaucracy