Economists are weird. People are having trouble feeding their families. Yet the obvious solution – reduce the tax burden on their food – is treated as a crime against theory, and a form of tax relief that only wealthy people and landlords deserve. Taking GST off fruit and vegetables is also said to pose an intolerable administrative burden which – paradoxically – the likes of Brad Olsen think is quite OK when we’re talking about the administrative burden of targeting a pittance of benefit relief, under strict conditions. Somehow, the economists think it is harder to define a food category than it is to respond to a glaring social need.
Basically, economists have trained themselves to see problems where none exist, while ignoring the problems right under their noses because…. Neo-liberal orthodoxy tells them so. Talk about living in a hermit kingdom. Taking GST off all food – and not simply off fruit and vegetables — is something that Australia has done for years and years, without any apparent administrative problems or intolerable costs at the digital checkout. GST off food is now a complete non-issue politically in Australia, among centre-left and centre-right parties alike.
How can it be that the same neo-liberal economists who crashed ahead in the 1980s without any concern about the social and economic cost are now so timid when it comes to a capital gains tax, or to taking GST off healthy food? Ask yourself – who benefitted from the Rogernomics blitzkrieg in the 1980s, and who stands to benefit from a CGT and from taking GST off healthy food? The answer says a lot about which sector of society that mainstream economics exists to serve.
The Act Party and Big Pharma
As the boomers sail off into their sunset years, their health needs are already multiplying, and projections for their Alzheimer’s care alone are alarming. Yet the demographic realities converging on our stressed public health system also happen to provide a raft of golden profit opportunities for Big Pharma. So many old people, so many expensive new drug treatments, so many boomers who demand only the best for themselves.
Among the key barriers to Big Pharma being able to capitalize on boomer health needs are those killjoys at Pharmac, whose jobs include putting restraints on the government’s spending on drugs. Pharmac does so by evaluating the new treatments on a strict cost to health outcomes basis, in order that its limited budget can provide the maximum health benefits to as many New Zealanders as possible. Regularly, this requires making some hard calls. Should Pharmac buy the latest, expensive treatments for conditions that may seriously affect relatively few people – or should it ensure that treatments that give relief to more people remain available, and affordable? Can we expect to be able to afford the same array of drug treatments available in a far wealthier country like Australia? The answers can involve life and death decisions.
There’s a reason why drug companies are among the most profitable forms of capitalism. Big Pharma pushes hard to recoup its research/trialling costs, which (only partially) explain (a) the sky-high prices it charges for new drugs, and (b) the industry’s opposition to the use of cheaper, generic alternatives. Help may be on the way for the pharmaceutical industry. The most spectacular new entrant on the ACT Party list – vaulting into the number four slot – is Todd Stephenson, a lawyer who has spent the last 17 years of his life working for the huge Vertex drug company in Australia.
As Steppenson put it in a recent interview with Michael Laws: “I’m hoping I can contribute what I’ve learned in the corporate world to delivering some change for New Zealanders.” On its website, the ACT Party treats the reform of Pharmac as its number one priority in public health, and it is promising an independent review of Pharmac’s functions, top to bottom. ACT is vowing to “improve mote access to new, more advanced drugs that better balance budgets with personal and social good.” Right. And to that end, ACT promises to pursue a “productivity focus on patient care.”
As usual, ACT has not costed this policy, so voters have no way of figuring out how ACT – or the public – can afford significantly more of those costly new drugs, while maintaining the subsidies on all of the existing array of drug treatments as well. Nor is there any explanation of what exactly “a productivity focus on patient care” means in practice, but it sounds chilling.
Surely, public health carers have trimmed the health system to the bone over the past decade, in search of better productivity gains in patient care. Surely, ACT can’t be suggesting that patient care should be rationed on the basis of socio- economic productivity, can it? Let’s all hope that in order to make Big Pharma’s fanciest new biologics drugs available in New Zealand, ACT isn’t intending to make the masses pay more in prescription charges in order to keep their relatively unproductive bodies and souls together?
The unfortunate reality is that a low taxing society like New Zealand simply doesn’t have the revenue to afford everything that finds its way onto the wishlist of new treatments that Big Pharma is holding out as a carrot to the general public – sometimes at prices that exceed the actual health advances they these treatments have to offer, compared to earlier, or generic variants.
Listing the priorities
Todd Stephenson is not merely the highest ranked newcomer on the Act Party list – he is also one of the few among ACT’s top 15 candidates with even a nodding acquaintance with public health. A former ACT Party staffer before pursuing a lucrative career in the pharmaceutical industry, Stephenson bought a new house in Queenstown last year and will be residing there. As he told Laws, he was approached by former ACT party president Catheribe Isaac to stand for ACT because he had “some skills that could contribute to policy change in New Zealand.”
Hmm. What skills, and what changes to health policy? At least the current Health Minister Ayesha Verall has credentialled skills in medicine, and has working experience in public health. Stephenson’s “skills” are in helping to extract maximum profits for Vertex from the public purse, as in – for example – this kind of situation:
Lacking access to an effective-yet-costly cystic fibrosis (CF) therapy from Vertex Pharmaceuticals, patients and activists in four countries are attempting to take matters into their own hands.
[A] coalition of CF patients and their families, helmed by Vertex Save Us and U.K.-based patient advocacy group Just Treatment, petitioned governments in South Africa, Brazil, India and Ukraine to either revoke or suspend Vertex patents surrounding the company’s Trikafta…. Even in countries where the drug is available, like the U.S., Trikafta’s cost before discounts is prohibitively expensive, clocking in at roughly $US326,000 per patient per year,
That was in February, 2023. No doubt, Trikafta is a helpful drug for the patients able to afford it, within the 40 countries where supply and re-imbursement agreements with Vertex are in place. Yet if Stephenson’s corporate experience is relevant to the “policy changes” that ACT has in mind for Pharmac, surely those intended policy changes should be being spelled out well in advance of Election Day Given that Pharmac is required to work within a limited budget, what cuts and what trade-offs does Stephenson/ACT have in mind to make those pricey new drugs available here? Does ACT still expect Pharmac to be just as vigorous in future in its pursuit of the cheaper, generic options that Big Pharma resents so deeply?
Laws and profits
Stephenson is a lawyer. The language surrounding the critiques of Pharmac’s operations is packed with words that sound innocent – more transparency, greater timeliness, more contestable decisions etc …. But which can also carry a ton of legal freight. To be clear: in the recent past, Big Pharma’s main local lobbyist told Werewolf that the industry’s beef with Pharmac is not so much about the low prices that the agency negotiates, but with the limited range of drugs that it approves, and eventually makes available.
On the other hand, Pharmac’s defenders argue that the agency’s legendary thriftiness means that New Zealand is less likely to fund “me too” medicines that have virtually the same mechanisms of action ( and therapeutic outcomes) as those already available. Pharmac also negotiates cheaper prices and pays less for the same drugs than Australia. As a result of these savings, New Zealand can afford to stay in the market for some (but not all) of Big Pharma’s new medicines.
What the drug companies have long wanted to do is to make all of the decision points along the evaluation/approval /pricing/subsidy/ availability pathway much more “transparent” and open to legal challenge. If that happened, there would be a risk of a major blowout in the Health budget. Inevitably, more money would have to be spent by the government on a wider array of drugs (good, bad, and indifferent) because the grounds for rejection would be exposed to challenge in court, with all of the real and peripheral chilling effects on decision-making this would entail. Ironically, this greater degree of “transparency” would increase costs, including legal costs. and in some cases, would postpone availability until after the courtroom dust had settled. Lawyers, not patients, would be the winners.
There are other legal tools by which Pharmac could be leveraged into buying more of Big Pharma’s expensive new products, at a higher price eg the term of patent exclusivity, if extended by legal pressure, would limit the ability of Pharmac to pursue the cheaper generic medicines that have similar efficacy profiles as the branded product.
In sum, New Zealanders have reason for concern about the nature of the promised “policy changes” likely to flow from Stephenson’s 17 years of service to Big Pharma in Australia. Let’s hope it doesn’t mean that taxpayers will be subsidising lots of pricey new treatments for niche conditions that will be ultimately affordable only to the wealthy who can afford the part charges – and before the full cost/benefit picture has been established by our own health authorities, and from results garnered from elsewhere in the world.
Sinead Forever
Sinead O’Connor burned so brightly, and held nothing back… But this didn’t make yesterday’s news any less shocking, or sad. There are artists for whom fans feel compassion in equal parts to admiration of their talent. O’Connor was blessed with unique skills as a singer, songwriter, producer and social activist, yet these accomplishments were inseparable from the raw stuff of her life, which was always on display whether she wanted it to be out there, or not. Her mental health problems (arising mainly from bipolarity) became tabloid fodder, as well as testing at times, the protective feelings of those who admired her, and cared about her.
Her scathing sense of humour about all of this and more, was a big part of why her audience hung in there with her, to the end. Here’s “Queen of Denmark” from a bad time in her life, but dead funny regardless:
I wanted to change the world
But I could not even change my underwear
And when the shit got really really out of hand
I had it all the way up to my hairline
Which keeps receding like my self-confidence
As if I ever had any of that stuff anyway
I hope I didn’t destroy your celebration
Or your Bat Mitzvah, birthday party or your Christmas….
And a live version of a song from early on, to do with her social activism:
And always, there was the Church. In this song from late in her career, she didn’t attack the Catholic Church head-on so much as try to re-imagine what a truly life-giving Church might offer her. The video’s opening rejection/destruction of the past images of her career feels particularly moving, this week. I mean…“Nothing Compares to U” was great, but it wasn’t the sum total of Sinead O’Connor’s achievements, by any means.