Category: Public Choice

Ramaswamy Avowed That the F.D.A. “Erects Unnecessary Barriers to Innovation”

The New York Times article quoted below worried that if Vivek Ramaswamy succeeded in “slashing regulation” of drugs, his own drug development firm would have benefitted. Maybe so, but that misses the main point–all the rest of us also would have benefitted by medical entrepreneurs being allowed to create more and quicker cures. Presumably The New York Times was relieved when Ramaswamy resigned from DOGE, but I was discouraged.

I was in favor of Elon Musk’s push to reduce the number of federal employees. But I was even more in favor of Vivek Ramaswamy’s push to deregulate innovative entrepreneurs.

[By the way, isn’t it predictable that The New York Times delights in highlighting Roivant’s one failure, but gives only passing scant mention to its six successes?]

(p. A10) Vivek Ramaswamy is the less famous and less wealthy half of the duo of billionaires that President-elect Donald J. Trump has designated to slash government costs.

. . .

At 39, he is one of the world’s youngest billionaires, having made his fortune in the pharmaceutical industry.  . . .

Mr. Ramaswamy, who owns a stake currently valued at nearly $600 million in a biotechnology company he started, has called for changes at the Food and Drug Administration that would speed up drug approvals.

. . .

Since being named to jointly lead DOGE, Mr. Ramaswamy had until recently been posting on Mr. Musk’s social media site X, hinting about where he may look to make changes in the government.

He called for slashing regulation, not just cutting government spending. He pointed to federal workers focused on diversity as potential targets for “mass firings.”

And he has been taking aim at the F.D.A. “My #1 issue with FDA is that it erects unnecessary barriers to innovation,” he wrote on X. He criticized the agency’s general requirement that drugmakers conduct two successful major studies to win approval rather than one.

Mr. Ramaswamy founded his biotechnology company, Roivant Sciences, in 2014, betting that he could find hidden gems whose potential had been overlooked by large drugmakers. The idea was to hunt for experimental medications languishing within large pharmaceutical companies, buy them for cheap and spin out a web of subsidiaries to bring them to market.

The venture is best known for a spectacular failure.

In 2015, Mr. Ramaswamy whipped up hype and investment around one of his finds, a potential treatment for Alzheimer’s disease being developed by one of his subsidiaries, Axovant. Two years later, a clinical trial showed that it did not work, erasing more than $1.3 billion in Axovant’s stock value in a single day.

Mr. Ramaswamy personally lost money on paper on the failure, but thanks to the savvy way he had structured his web of companies he and Roivant weathered the storm. Six products have won F.D.A. approval, and today Roivant has a market valuation of $8 billion.

Mr. Ramaswamy sold some of his Roivant stock to take a large payout in 2020, reporting nearly $175 million in capital gains on his tax return that year. But he is still one of the company’s largest shareholders.

If Mr. Ramaswamy recommends changes that speed up drug approvals through DOGE, that could be good news for Roivant, which is developing drugs that might come up for approval during Mr. Trump’s second term. The faster it can get medicines onto the market, the more valuable the company — and Mr. Ramaswamy’s stake in it — stands to become.

For the full story see:

Rebecca Robbins, Maureen Farrell and Jonathan Weisman. “From Ramaswamy’s High-Profile Perch, a Web of Potential Conflicts.” The New York Times (Thursday, January 16, 2025): A10.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 15, 2025, and has the title “Ramaswamy Has a High-Profile Perch and a Raft of Potential Conflicts.”)

Healthcare Innovations Can Be Effective AND Cheap

Many are resigned to accept our current mess of a healthcare system because they fear that if the system was changed into a fully free market system they would not be able to afford anything approaching their current level of healthcare. But they do not understand what would change. If patients paid for their own healthcare there would be competition to provide cheaper healthcare services to the many. Henry Ford got rich finding ways to make cars better and cheaper. Bill Gates got rich mainly by making adequate operating systems cheaper.

If we made healthcare a free market, then healthcare would find its Henry Ford and Bill Gates. If patients directly paid for healthcare, then healtcare services would be more consumer oriented–for instance the value of patients’ time would be respected. Medical entrepreneurs would compete to bring us more cures and cheaper cures.

The problem is not that we are “fixated on profits” as is suggested in the last paragraph quoted below. The problem is that our non-market healthcare system creates perverse incentives and perverse regulatory constraints, so that simple frugal innovations are not rewarded.

[Below I first quote a few passages from The New York Times obituary of Cash, and then from The Wall Street Journal obituary of Cash.]

(p. A21) Richard A. Cash, who as a young public-health researcher in South Asia in the late 1960s showed that a simple cocktail of salt, sugar and clean water could check the ravages of cholera and other diarrhea-inducing diseases, an innovation that has saved an estimated 50 million lives, died on Oct. 22 at his home in Cambridge, Mass. He was 83.

. . .

Dr. Cash, the son of a doctor, arrived in East Pakistan, today Bangladesh, in 1967 as part of a project through the U.S. Public Health Service. There he worked with another young American doctor, David Nalin, to respond to a cholera outbreak outside the capital, Dhaka.

The two had already been researching a simple oral rehydration therapy and knew of other, previous efforts, all of which had failed. But they believed that the therapy held promise, especially in the face of mounting deaths.

They realized that a main problem was volume: Past efforts had resulted in too little or too much hydration. Dr. Cash and Dr. Nalin conceived a trial in which they carefully measured the amount of liquid lost and replaced it with the same amount, mixed with salt and sugar to facilitate absorption.

They divided 29 patients into three groups, with one group receiving an IV drip, another an oral treatment through a tube, and the third an oral treatment by drinking from a cup.

Other doctors and nurses found their experiment bizarre and tried to stop them. But Dr. Cash and Dr. Nalin persisted, splitting the work between them in two 12-hour shifts, to ensure the integrity of the trial.

The results were definitive: Only three of the tubed patients — and only two who drank the solution — needed additional IV treatment.

. . .

“We’re enamored by high technology,” he said at the Council on Foreign Relations. “And we’re not in love with low-tech. Low-tech is always seen in our eyes as second-class. Why would you do this, when you could do that? And I would argue just the opposite.”

For the full obituary from The New York Times that is quoted above, see:

Clay Risen. “Richard A. Cash, 83, Who Saved Millions From Dehydration, Dies.” The New York Times (Monday, November 4, 2024): A21.

(Note: ellipses added.)

(Note: the online version of the obituary has the date Nov. 2, 2024, and has the title “Richard A. Cash, Who Saved Millions From Dehydration, Dies at 83.”)

(p. C6) Half a liter of water, plus a pinch of salt and a fistful of sugar. As scientific insights go, it can’t compare to the intricate equations developed to split the atom or map the planets’ paths. But its simplicity was crucial to its monumental impact.

That simple solution—the cornerstone of Oral Rehydration Therapy, or ORT—has proved extraordinary in staving off and reversing the devastating consequences of dehydration caused by cholera and other diarrheal diseases, saving tens of millions of lives since its development nearly six decades ago. In 1978, an editorial in the Lancet called ORT “potentially the most important medical advance of the century.”

. . .

Cash saw this ethos of simplicity and accessibility as instructive for a western medical system that’s infatuated with high-tech solutions, dismissive of low-tech ones and fixated on profits—and where, consequently, an overnight stay in the hospital for dehydration can result in a four-figure bill. “A solution that can’t be applied,” he told Harvard Magazine, “is really no solution at all.”

For the full obituary from The Wall Street Journal that is quoted immediately above, see:

Jon Mooallem. “A Doctor Whose Simple Treatment Prevented Millions Of Cholera Deaths.” The Wall Street Journal (Saturday, Nov. 9, 2024): C6.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date November 7, 2024, and has the title “Richard Cash, Whose Rehydration Therapy Saved Millions of Lives, Dies at 83.”)

Libertarians Salute Trump for Keeping His Promise to Pardon Free Trade Innovator Ross Ulbricht

Libertarians believe that governments should stay out of voluntary exchanges between consenting adults. So when Ross Urlbricht set up Silk Road as a platform for exchange that excluded governments, he became a libertarian hero. (For an extensive account see Bilton 2017.) When Ulbricht was given a disproportionately severe sentence, he became a martyred libertarian hero.

Libertarians are conflicted about Donald Trump. They like his courage and perseverance, but don’t like his name-calling and bullying. They like his deregulation and downsized bureaucracies, but don’t like his tariffs and industrial policy.

Trump promised that if elected, he would pardon Ross Ulbricht. On the first full day of his second term, The Donald kept his promise. Libertarians like that–a lot!

Michael Milken was an entrepreneurial finance innovator whose RICO conviction, instigated by Rudy Giuliani in his New York City prosecutor days, was a travesty of justice. (See: Kornbluth 1992; (an aside in) Milken 2023, and Sandler 2023.) The second Bush could and should have pardoned Milken, but did not. Trump late in his first term did, putting justice ahead of political correctness.

Not many people care about Ulbricht and Milken, but those who do care, care–inclining them to keep open minds on Donald Trump.

For The New York Times‘s snidely dismissive view of the Ulbricht pardon see:

David Yaffe-Bellany and Ryan Mac. “Pardon Is Won By Leveraging Trump’s Needs.” The New York Times (Fri., January 24, 2025): A1 & A15.

(Note: the online version of the article has the date January 22, 2025, and has the title “How Trump Was Persuaded to Pardon an Online Drug Kingpin.”)

The best known account of Ulbricht’s Silk Road is:

Bilton, Nick. American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road. New York: Portfolio, 2017.

The books on Milken mentioned in my comments are:

Kornbluth, Jesse. Highly Confident: The Crime and Punishment of Michael Milken. New York: William Morrow & Co., 1992.

Milken, Michael. Faster Cures: Accelerating the Future of Health. New York: William Morrow, 2023.

Sandler, Richard V. Witness to a Prosecution: The Myth of Michael Milken. ForbesBooks: Charleston, South Carolina, 2023.

Warren Buffett Said Obamacare Is “Two Thousand Pages of Nonsense”

Our health system is a mess. The latest major effort to “fix” it was Obamacare (the so-called “Affordable Health Act”)–two thousand pages cobbled together by lobbyists, deep state staffers, and legislative log-rolling that resulted in high costs, opaque rules, perverse incentives, and unintended consequences.

(p. A15) Medicare doles out reimbursements for services that may or may not be real, helpful to the recipient, or reasonably priced. It’s very hard to know. Congress doesn’t want doctors and hospitals back home closely policed. Result: Medicare controls spending, perversely, with blanket low reimbursement rates for necessary and unnecessary services alike.

. . .

. . . government programs are born in chaos—with congressional horse trading and payoffs to appease interest groups. That’s why government programs make so little organizational sense. Remember when we had to pass Obamacare to find out what was in it? (“Two thousand pages of nonsense,” said Warren Buffett at the time. “The problem is incentives.”)

For the full commentary see:

Holman W. Jenkins, Jr. “Business World; Elon Musk’s Useful Experiment.” The Wall Street Journal (Wednesday, Feb. 12, 2025): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date February 11, 2025, and has the title “Business World; DOGE Is Elon Musk’s Useful Experiment.” In both the online and print versions, the phrase “born in chaos” appears in italics for emphasis.)

Keep Raging at “the Dying of the Light”

I still remember as an undergraduate at Wabash College reading in our intro psychology textbook of an experiment in which a dog was put in a box. Every time the dog tried to leap out of the box, he received an electric shock. Eventually the electric current was turned off. But the dog never again tried to leap. Are we like the dog, too discouraged by past constraints, so that we are resigned to accept the Biblical limit of “three score and 10” (Psalm 90:10)?

But there is a paradox. Kloc cites an article claiming a very high market value for expanded lifespans. But then where are the voters urgently demanding that medical entrepreneurs be unbound? Where are the citizens demanding that regulators stop mandating Phase 3 clinical trials? Citizens with a sense of urgency can make a difference–see the Act-Up movement in the early years of AIDs. When will they?

(p. 1) The longevity industry is coming off perhaps its best run on record. The expected span of an American life has increased by about three decades since 1900 — to around 78 as of 2023. But for many people, even 78 years just won’t do.

The Methuselah Foundation, a biomedical charity, for example, wants to “make 90 the new 50,” and scientists at one biotechnology firm have argued that, unencumbered by disease, the body could potentially make it all the way to age 150. Even more optimistic estimates put the number closer to 1,000.

​​Whatever the maximum human life span may be, people appear increasingly determined to find it — in particular men, who are more inclined to favor radically extending life, maybe even indefinitely. Last year, nearly 6,000 studies of longevity made their way onto PubMed, a database of biomedical and life sciences papers; that’s almost five times as many as two decades ago.

Along with the creation of dozens of popular podcasts and a sizable supplement industry, that zeal has led to efforts to preserve organs, search out life-extending diets and even try to reverse aging itself.

. . .

(p. 24) Researchers at Harvard and Oxford recently tried to gauge that interest in the marketplace today. They estimated that the total value of any scientific breakthrough that added another decade to global life expectancy would be worth $367 trillion.

For the full story see:

Joe Kloc. “Gilgamesh, Ponce and the Quest to Live Forever.” The New York Times, First Section (Sunday, January 19, 2025): 1 & 24.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 18, 2025, and has the title “The Centuries-Old, Incredibly Male Quest to Live Forever.”)

When Kloc mentions estimates of possible human lifespan “closer to 1,000” he links to a Scientific American interview with João Pedro de Magalhães, professor of biogerontology at England’s University of Birmingham. João Pedro de Magalhães believes that in principle humans could live to 1,000:

Gifford, Bill. “How Old Can Humans Get?” Scientific American (July 31, 2023). Available from https://www.scientificamerican.com/article/how-old-can-humans-get/.

When Kloc says that some “even try to reverse aging itself” he links to:

Poganik, Jesse R., Bohan Zhang, Gurpreet S. Baht, Alexander Tyshkovskiy, Amy Deik, Csaba Kerepesi, Sun Hee Yim, Ake T. Lu, Amin Haghani, Tong Gong, Anna M. Hedman, Ellika Andolf, Göran Pershagen, Catarina Almqvist, Clary B. Clish, Steve Horvath, James P. White, and Vadim N. Gladyshev. “Biological Age Is Increased by Stress and Restored Upon Recovery.” Cell Metabolism 35, no. 5 (2023): 807-20.

Kloc also links to estimates of the economic value of extending lifespans by one year, and by a decade, as given in:

Scott, Andrew J., Martin Ellison, and David A. Sinclair. “The Economic Value of Targeting Aging.” Nature Aging 1, no. 7 (July 2021): 616-23.

“Rage, rage against the dying of the light” is a line from Dylan Thomas’s poem “Do Not Go Gentle Into That Good Night.”

Democratic New York Department of Environmental Conservation Raids Home, Seizing and Killing P’Nut, Internet-Famous Orphan Pet Squirrel

(p. A15) . . . P’Nut was an internet-famous squirrel who was seized and euthanized by New York State wildlife agents last week . . .

. . .

. . . Elon Musk lionized the rodent as a Jedi martyr — more powerful in death than in life.

“RIP Peanut,” read a post on a Trump campaign’s official TikTok account on Sunday [Nov. 3, 2024]. “Needlessly murdered by Democrat bureaucrats in New York.”

. . .

P’Nut’s journey from cowboy-hat-wearing Instagram cutie to conservative lightning rod began on Oct. 30 [2024]. That was when New York State Department of Environmental Conservation officers, responding to what the agency said were anonymous complaints, arrived at the home of his owner, Mark Longo, in Pine City in Chemung County. In New York State, it is illegal to house animals considered wildlife without a special permit; Mr. Longo has said he was in the process of applying for one.

D.E.C. agents seized the squirrel, which Mr. Longo had cared for ever since its mother was hit by a car seven years ago. Agents also apprehended Fred the raccoon. At some point, the squirrel bit a person involved with the investigation, according to a statement put out by the agency, leading its officers to swiftly euthanize both animals to test for rabies.

In tearful online posts, Mr. Longo and his wife, Daniela, railed against tax dollars being spent to kill the animals they considered pets.

. . .

In Macon, Ga., Marjorie Taylor Greene, the Georgia congresswoman, spoke at a Trump rally and compared Peanut’s fate to that of Laken Riley, a local woman who was killed by a Venezuelan man who had once lived in New York. She blamed Democrats in New York City, which is 200 miles from Pine City, for euthanizing P’Nut.

“Democrats in New York City went in and raided a home to kill a squirrel,” Ms. Greene said. “Yet it was the same State of New York that let the criminal illegal alien go that came to Georgia that murdered our very own Laken Riley.”

. . .

. . . the animals’ owner, Mr. Longo, 34, considers himself apolitical. He is not registered with any political party and said he has never voted in his life.

. . .

He has spent the past days grieving, he said, and when he found a stray almond that Peanut had sneaked into his pocket, he burst into tears. He was just grateful, he said, “that somebody is giving P’Nut a voice.”

“I don’t care if it was the blue side or the red side,” he added. “Somebody on this planet is fighting for my animals.”

For the full story see:

Sarah Maslin Nir. “Death of a Pet Squirrel Is a G.O.P. Rallying Cry.” The New York Times (Wednesday, November 6, 2024): A15.

(Note: ellipses, bracketed date, and bracketed year, added.)

(Note: the online version of the story has the date Nov. 4, 2024, and has the title “How the Death of a Celebrity Squirrel Became a Republican Rallying Cry.”)

Government Sugar Quotas Increase Demand for Harder-to-Metabolize Corn Syrup, Making Americans Fatter

For decades on the last day of every micro principles class I discussed the causes and effects of U.S. government sugar quotas. Government sugar quotas reduce the quantity of sugar that can be imported into the U.S., increasing the price of sugar. If the price of one substitute (sugar) rises, the demand for the other substitute (corn syrup) increases. As a result Americans consume more corn syrup which is harder to metabolize and easier to overconsume. Government sugar quota regulation thus increases obesity, and obesity-related diseases such as diabetes, heart disease, and cancer.

(p. D5) To clarify the effects of our high-sugar diet, I consulted an expert, Kimber L. Stanhope, a researcher in nutritional biology at the University of California, Davis, whose work is free of industry support and funded primarily by the National Institutes of Health. In a comprehensive 34-page review of research published in Critical Reviews in Clinical Laboratory Sciences in 2016, she linked consumption of added sugar to metabolic disease — cardiovascular disease, Type 2 diabetes and nonalcoholic fatty liver disease — as well as high blood levels of uric acid, a risk factor for kidney stones and gout.

In studies done in her lab among young adults consuming their normal diets, the risk for developing heart disease and kidney stones rose in direct proportion to the amount of high-fructose corn syrup they consumed.

. . .

“Fructose and glucose are not metabolized the same way in the human body,” which can account for the adverse effects of fructose, Dr. Stanhope said. Glucose is metabolized in cells throughout the body and used for energy. Fructose is metabolized in the liver, resulting in fat production and raising the risk of heart and fatty-liver disease. In addition, she explained, “fructose doesn’t stimulate the satiety-promoting substance leptin,” prompting some people to overconsume it, especially in soft drinks containing high-fructose corn syrup, and other tempting foods as well.

For the full story see:

Jane E. Brody. “The Sharp Bite of a Sweet Tooth.” The New York Times (Tuesday, July 23, 2019 [sic]): D5.

(Note: ellipsis added.)

(Note: the online version of the story has the date July 22, 2019 [sic], and has the title “The Downside of Having a Sweet Tooth.”)

The review article on the effect of sugar consumption on metabolism and obesity, mentioned above, is:

Stanhope, Kimber L. “Sugar Consumption, Metabolic Disease and Obesity: The State of the Controversy.” Critical Reviews in Clinical Laboratory Sciences 53, no. 1 (2016): 52-67.

Rationality-Defender Stigler Saw Voting as Irrational, but Did It Anyway

Nobel Prize winner George Stigler contributed to the Public Choice literature and was a staunch defender of rationality. One example would be his paper with Gary Becker, “De Gustibus Non Est Disputandum.” One popular, much discussed conclusion of some public choice theorists is that it is irrational to vote. The argument goes that the marginal effect of one vote is almost always miniscule, so the expected benefit to the voter is equally miniscule. On the other hand, the time and effort it takes to vote are always more than miniscule. So the expected costs of voting exceed the expected benefits. Ergo it is irrational to vote. When I was a graduate student, taking courses in philosophy and economics, and for a couple of years as a post-doctoral fellow, I frequently stopped by the office of the Journal of Political Economy where Stigler was an editor. I believe it was there that I heard Stigler, definitely on an election day, say “Here I go to do something irrational.”

Stigler is well-known for his humorous biting comments. These could be tough on others. But this story shows that they also could be directed at himself.

I do not know if anyone has fully solved the paradox of the irrationality of voting. I guess you would have to say something about how the effects of all good people ceasing to vote would be far from marginal and far from good.

I once mentioned to distinguished Public Choice theorist Dwight Lee that a positive result of the personal benefits of voting being miniscule to a voter, is that the voter was freed from voting their personal narrow self-interest, and could vote their conscience about what served the general good. (Maybe something like what Rawls hoped for behind his “veil of ignorance” in A Theory of Justice.) I believe that Dwight told me that he already published a paper that expressed this positive result, but I never took the time to look for that paper.

Milton Friedman Bubbled with Energy as He Grabbed His Sunday New York Times

During my first year in graduate school at the University of Chicago, I lived in a dorm for graduate students that had been built with money from John D. Rockefeller. It was next to a several story apartment tower that I had heard was built by Milton Friedman who owned and lived in the top apartment. On Sunday mornings, on more than one occasion, I remember Friedman used to bounce down the hallway of International House and go up to the mail counter, which always had a pile of The Sunday New York Times for sale. He would buy one, and bounce back down the hallway. Friedman was curious, energetic, optimistic, and engaged in the broad world of policy. A libertarian who wants to move the intellectual consensus, benefits from reading The New York Times.

$700 Million Deployed for Harris by an “Elusive” Expert on Randomized Clinical-Trials

“The biggest super PAC in American politics” (p. 1) is spending $700 million on ads to elect Harris, more than the combined expenditures of both the official campaign of Harris and the official campaign of Trump (p. 1). “Leading the group” (p. 19) is an “elusive” PhD named Chauncy McLean, who has “ascended in the party by displaying encyclopedic knowledge of randomized controlled-trials” (p. 19). If Harris wins will that be more due to her overwhelming advantage in funding or more due to the methods used to spend the funds? (Or will the results depend more on how much Americans remember the record of Trump compared to how much they remember the record of Biden-Harris?)

For the full story see:

Theodore Schleifer and Shane Goldmacher. “Super PAC Places $700 Million Bet On Harris’s Bid.” The New York Times, First Section (Sunday, October 20, 2024): 1 & 19.