Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities. The U.S. healthcare system was not planned; it is largely accidental.
For those wondering if Hillary Clinton's feud with the pharmaceutical industry in general, and with Turing Pharma's Martin Shkreli in particular, is over we just got the answer: it is only just getting started. Moments ago Reuters reported that Clinton has sent a letter to the FTC for recommendations on "changing laws to prevent anticompetitive practices", with a focus on Turing which has become a poster child for all that is wrong with the US specialty pharma industry, and the pharmaceutical industry in general.
"There are so many fault lines that the nation seems consumed by a conflict of all against all... there is an inevitable “revolution” coming because our politics, culture, education, economics and even philanthropy are so polarized that the country can no longer resolve its differences."
Back on September 28, when the specialty biotech drug scandal was just getting started and leading to a biotech bear market, Valeant stock suddenly plunged $50 leading to massive losses for its top holder Bill Ackman when it was revealed that House democrats had requested a Valeant subpoena. To be sure, the company promptly made it clear that an official subpoena had not actually been sent, just that some politicians were demanding one. That changed overnight when Valeant issued a press release providing an "update regarding government inquiries", in which we learn that the subpoena is now official.
"We simply exhausted the productivity benefits of prior innovations. In the late 19th century, hugely important 'general purpose' technologies, like electricity and the internal combustion engine, were invented."
Despite 'promises' of lower healthcare costs (from President Obama) and 'promises' of a comfortable retirement (if only you invest all your savings in stocks), Bloomberg reports the average 65-year-old couple retiring this year will face health-care costs of $245,000 in the years ahead, up 11% from 2014.
Late last week, after looking at Valeant soaring default risk as measured by the price of its blowing out CDS, soaring to over 30% even as its stock prices was surging, we wondered - does someone know something? It appears someone may have known that this weekend, the same Andrew Pollack whose NYT article exposing Turing's 5000% price increase resulted in Hillary Clinton promising to cap specialty biotech prices if elected, has come back for round two and after taking aim at Shkreli and Turing, much to the chagrin of Bill Ackman, Pollack is now taking aim at the biggest culprit: Valeant Pharmaceutcals.
Between the demographic time bomb about to go off- that is, the growth of the elderly population far exceeding the growth of the working age population by several orders of magnitude - and then the weak economy, the huge expansion of entitlements under the health care law, and the dramatic increases of the costs of those entitlements, including for labor, what could possibly go wrong?
The system is a machine in which each gear serves the whole. So go ahead and try to "reform" the system by extracting whatever gear you don't approve of: the Deep State components, the Security State organs, the Federal Reserve, cartels/monopolies enforced by the State, the suppression of democracy, crony capitalism, whatever. The system is interdependent. Each subsystem needs the others to function.
"In the Twitter-storm furor over Turing’s recent one-drug price gouge attempt, the media has overlooked the reality that Martin Shkreli was created by the system. Shkreli is merely a rogue trying to play the gambit that Valeant has perfected." And there you have it: boost the prices of dozens of drugs in the span of 1-3 years anywhere between 100% and 800% and nobody notices (thank you insurance companies). But hike the price of one drug by 5,500% and suddenly all of America thinks you are satan incarnate.
No risk, no gain. But risk can deliver staggering, crushing losses if it isn't limited or hedged. Times are going to get harder going forward, for all the reasons that are already visible in today's headlines. So what can we do to make our own lives easier as times get tougher? Here are three suggested strategies...
One of the more remarkable characteristics of American life is our passive acceptance of systems that are so obviously completely insane. Yes, I refer to our healthcare system, a.k.a. sickcare because in America sickness is profitable and health is not, and healthcare profiteering that would be the envy of pirates and warlords everywhere is the norm.
As WaPo reports, "Hillary Clinton is proposing a $250 monthly cap on the amount patients with chronic and serious medical problems would have to pay out of pocket for prescription drugs as a way to reduce the effect of skyrocketing drug prices on consumers." "Nobody in America should have to choose between buying the medicine they need and paying rent," Clinton says.