Mandatory arbitration ending?

After a years long study the Consumer Financial Protection Bureau has started the process to ban mandatory arbitration in certain fields. Arbitration sounds reasonable but, as I noted here, has been set up favor businesses and, as the CFPB notes, prevents class action suits:

A “class action” is a type of group lawsuit in which a few people, standing in for a much larger group, believe that they have been harmed by the same product or practice that violates the law. These group lawsuits allow consumers to band together to seek relief for harms that may be hidden from some consumers or are too small to be practical to sue over in an individual court case or arbitration.

This doesn’t mean that all arbitration will go away, just that both parties will have to agree to it. Let’s look at some of the reaction:

“Forcing consumers to hire expensive lawyers and go to trial rather than use a low-cost dispute resolution system harms the very low and middle income consumers the CFPB should be helping,” said Rep. Jeb Hensarling, R-Texas, who is chairman of the House Financial Services Committee.

Gee, there are at least two falsehoods in that short statement: consumers can still use arbitration, they just aren’t forced to; the current mandatory arbitration system is strongly stacked in the favor of businesses which hurts consumers. Good job Jeb.

Corporate government

Flint Michigan was having big enough problems that it was taken over by the state. The governor appointed a manager (well, a series of managers) and this is what you get:

For decades, the City of Flint bought its water from the Detroit Water and Sewerage Department, water that arrived “finished” — in other words, treated to make it safe for human consumption. In 2013, the city opted to join the Karegnondi Water Authority, along with Lapeer, Genesee and Sanilac counties, and in 2014, to pump water from the Flint River while the new system is under construction. Joining the KWA didn’t mandate the end of Flint’s relationship with DWSD — Genesee County, for example, has continued to purchase its water from Detroit, albeit at a premium, said county drain commissioner Jeff Wright.

In Flint, both decisions were made during the appointments of four different emergency managers, turnaround guys brought in by Snyder to fix Flint’s budget woes, and with the approval of the Michigan Department of Environmental Quality, which monitors water quality and treatment.

which leads to:

It was Hanna-Attisha who last week reported that the number of Flint children with elevated blood-lead levels — 5 micrograms per deciliter or more — jumped from 2.1% in the 20 months prior to Sept. 15, 2013, to 4.0% between January 1 and September 15 this year. In certain ZIP codes, the change was even more troubling, she said — jumping from 2.5% of the children tested to 6.3%.

Her findings, though originally dismissed by state environmental officials, helped prompt Genesee County to issue an emergency advisory to Flint residents, advising them to refrain from drinking city water unless it is filtered through a certified filtration device or had been tested and showed that it doesn’t contain elevated lead levels.

and it was expected if not planned for:

Because much of our infrastructure is composed of copper pipes with lead welds, systems like Detroit’s add anticorrosive agents to prevent lead from leaching into the water. River water is more difficult to treat than lake water, Wright says; its chemistry can change daily. Because the Flint River is shallow, compared with Lake Huron, its temperature is higher. All of this impacts the composition of the water, and what chemicals are required to make it potable and safe to pass through old pipes.

When Flint started pumping river water, the local plant either never employed corrosion control, or didn’t employ sufficient control. Remarks made Friday by Michigan Department of Environmental Quality chief Dan Wyant didn’t make that entirely clear, and Snyder’s spokesperson didn’t respond to an e-mail seeking clarification by the Free Press’ Friday deadline.

and of course there’s this:

And here’s the thing that seems to really gall some Flint residents: As the water quality has suffered, their bills have gone up, thanks to rate increases imposed first by Mayor Dayne Walling, and then built into the budget by Snyder’s emergency managers. A Genesee Circuit Court judge issued an injunction in August rolling back a 35% rate increase imposed by Walling in 2011.

Here’s what that led to:

Immediately, problems arose. Residents complained about water that was suddenly cloudy, odorous and tasted rancid. Test results showed levels of fecal coliform bacteria and, eventually, elevated levels of total trihalomethanes, chemical compounds which, according to the Environmental Protection Agency, can lead to liver or kidney issues for an individual who consumes water with high levels over a long period of time.

Almost immediately after Flint switched to the river, Walters said her household’s water was “coming in brown”. Whenever her four-year-old son Gavin would come in contact with the water, she said, “he would break out in this scaly, gross rash”.

It wasn’t just Gavin, however.

Soon, the family started losing their hair. The mother of four also got a rash on her right leg; despite her use of multiple creams and antibiotics, it hasn’t gone away.

Then, in February, she was informed by her pediatric doctor that Gavin had been diagnosed with lead poisoning. Low-level exposure could produce long-term health effects, including behavioral and learning disabilities. What’s more, there is no safe level of lead exposure, according to the Centers for Disease Control and Prevention.

But it saved some money.

Pope says it’s ok to discriminate against the religious

In general I like Pope Francis, he seems to really care about the poor and powerless. But he is a Pope:

On the other hand, in remarks to reporters on his flight out of the country Monday, Francis offered comments that appeared to support Davis’s position on same-sex marriage. Francis said government employees had the ‘‘human right’’ to say they cannot discharge duties that they believe go against their conscience. The response was given to a reporter who specifically mentioned issuing marriage licenses to gay couples as an example.

‘‘I can’t have in mind all cases that can exist about conscience objection,’’ the pope told reporters on the plane. ‘‘But, yes, I can say the conscientious objection is a right that is a part of every human right. It is a right.’’

So all of us who think organized religion is a problem are free to discriminate against people who follow an organized religion. Thanks for the confirmation Pope Francis.

Note: Of course, people like me would never actually do this because we believe in doing our job whatever our personal beliefs.

Water on Mars

It’s not obvious to me, but it seems this picture (Credit: NASA/JPL-Caltech/Univ. of Arizona):


shows there is flowing salt water on Mars:

Using an imaging spectrometer on MRO, researchers detected signatures of hydrated minerals on slopes where mysterious streaks are seen on the Red Planet. These darkish streaks appear to ebb and flow over time. They darken and appear to flow down steep slopes during warm seasons, and then fade in cooler seasons. They appear in several locations on Mars when temperatures are above minus 10 degrees Fahrenheit (minus 23 Celsius), and disappear at colder times.

I guess I should start looking into beachfront property there, it should be cheap.

Not a good week for Libertarians

Libertarians and others who are for little regulation for Free Markets didn’t have a good week. My last post looked at Martin Shkreli who increased the price of a drug about 5000% because he could and hey, it’s all about the money. The last few days we have been hearing about how Volkswagen didn’t play by the rules:

The trigger to the company’s market woes was last Friday’s revelation from the U.S.’s Environmental Protection Agency that VW rigged nearly half a million cars to defeat U.S. smog tests.

The company then admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit.

Today Stewart Parnell was convicted of being even worse:

Expert evidence at trial showed that tainted food led to a salmonella outbreak in 2009 with more than 700 reported cases of salmonella poisoning in 46 states.  According to the Centers for Disease Control and Prevention (CDC), based on epidemiological projections, that number translates to more than 22,000 total cases including nine deaths.  The court found that the evidence presented at trial linked Stewart and Michael Parnell’s conduct, and specifically PCA’s contaminated peanut products, to the victims’ illnesses.  The court also found that steps taken by the CDC to link reported illnesses to the specific strain of salmonella found in PCA products established that Stewart and Michael Parnell’s conduct was the proximate cause of the victims’ illnesses.

The government presented evidence at trial to establish that Stewart Parnell and Michael Parnell – with former PCA operations manager Samuel Lightsey, 50, and Daniel Kilgore, 46, both of Blakely – participated in several schemes by which they defrauded PCA customers and jeopardized the quality and purity of their peanut products.  Specifically, the government presented evidence that the defendants misled customers about the presence of salmonella in their products.  For example, the Parnells, Lightsey and Kilgore fabricated certificates of analysis (COAs) accompanying various shipments of peanut products.  COAs are documents that summarize laboratory results, including test results concerning the presence or absence of pathogens in food.  According to the evidence, on several occasions, the Parnells, Lightsey and Kilgore participated in a scheme to fabricate COAs that stated that the food at issue was free of pathogens when in fact there had been no testing of the food or tests had revealed the presence of pathogens.

All three of these cases show people who are willing to let people die so that they can make more money. Unfortunately, they are far from the only ones which is why we need government regulations.

Martin Shkreli: the new face of greed

Let’s look at Martin Shkreli:

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other rare disease drugs.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Thanks Martin, I’m sure you’ll make no money out of this. Of course this is far from the only example of drug prices skyrocketing for no reason:

Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.

In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon itself had acquired the drugs from another company in 2013 and had quintupled their prices

In fact:

Daraprim cost only about $1 per tablet several years ago, but went up sharply after CorePharma acquired it.

But Shkreli is a good place to start:

Turing isn’t focused on any particular therapeutic area, but rather on picking up bargain-priced assets that other pharma companies have shelved, Shkreli explains. “We look to buy dollar bills for 50 cents,” he says. “Our focus is to be opportunistic. Our favorite thing to do is to buy forgotten and orphaned assets from Big Pharma—any drug that’s had weak supply or weak support. Typically pharma is interested in divesting those, and often at a very low price.”


In the weeks before his ouster as the CEO of Retrophin(RTRXGet Report) , Martin Shkreli was buying relatively small amounts of the company’s shares on the open market and using his personal Twitter account to convince investors to do the same.

“Not selling $RTRX. The stock is very very cheap. The revenue generating assets alone are worth [greater than] $25/share,” Shkreli tweeted on Sept. 30, the day his departure from the embattled drug maker was announced.

But while talking up Retrophin’s prospects publicly and buying some of the stock, Shrekli was selling privately a much larger portion of his drug company holdings. Without public disclosure, Shkreli received almost $3 million in gross proceeds by selling “forward contracts” on his Retrophin stock in early September, according to a filing with the Securities & Exchange Commission made public Monday night.

he is:

If Shkreli acquires Biltricide from Bayer, he plans to raise the price of the drug to $100,000 for a single-day course of treatment, according to people briefed on Turing’s business plans. No other changes or improvements to the drug will be made by Turing. The extra revenue generated by Biltricide is expected to earn Turing a fast profit for its investors and help defray the cost of developing other, experimental drugs, sources said.


Back when Martin Shkreli was CEO of Retrophin, he managed to grab a few headlines by buying an old rare disease drug, Thiola, and raising the price 2000%

Republicans are partly responsible:

A pillar of the Democratic political program tumbled today when Republicans in the Senate blocked a proposal to allow Medicare to negotiate lower drug prices for millions of older Americans, a practice now forbidden by law.

Democrats could not muster the 60 votes needed to take up the legislation in the face of staunch opposition from Republicans, who said that private insurers and their agents, known as pharmacy benefit managers, were already negotiating large discounts for Medicare beneficiaries.

“Private competition works,” said Mr. Grassley, a principal author of the 2003 Medicare law. “The government has very little experience and a dismal track record figuring out what to pay for drugs.”

Mr. Shkreli thanks you Mr. Grassley. The citizens of the US, not so much:

The poll conducted by the Kaiser Family Foundation found that 87 percent of people surveyed want Medicare to have the authority to press drugmakers for greater discounts.

Here’s the argument against it:

Efforts to allow Medicare to negotiate drug prices have not been successful, due to opposition over government interference in the marketplace. Drug manufacturers say their prices reflect the billions of dollars they spend in research and development, both for treatments that are approved and the many more that fail.

Now that’s funny.

Obamacare works

The Census Bureau has a report out on the number of uninsured in the US in 2013 and 2014. Let’s see the conclusions:

The percentage of people without health insurance coverage decreased sharply between 2013 and 2014 by just under 3.0 percentage points, specifically, by 2.9 percentage points as measured by the CPS ASEC. The ACS measured a comparable decline. The CPS ASEC uninsured rate, which represents the percentage of the population who had no health insurance coverage during the entire year, changed from 13.3 percent in 2013 to 10.4 percent in 2014.

After several years of a relatively stable uninsured rate between 2008 and 2013, as measured by the ACS, the percentage of the population who were uninsured dropped between
2013 and 2014, marking the largest percentage-point decline in the uninsured rate during this period

Let’s put that in context:

In 2014, 10.4 percent of people (or 33.0 million) were uninsured for the entire calendar year. This was a decrease of 2.9 percentage points from 2013, when 13.3 percent (or 41.8 million) were uninsured for the entire calendar year.

Hmm, I wonder how widespread it was?

Between 2013 and 2014, every state and the District of Columbia experienced a decrease in their uninsured rate

People of all education levels experienced an increase in the rate of health insurance coverage between 2013 and 2014.

Between 2013 and 2014, health insurance coverage rates increased for each income category.

Between 2013 and 2014, the population living at every income-to-poverty ratio level experienced a decrease in their uninsured rate.

Between 2013 and 2014, all of the family status groups experienced an increase in health insurance coverage rates.

Between 2013 and 2014, health insurance coverage rates increased for all nativity groups.

Between 2013 and 2014, the overall rate of health insurance coverage increased for all race and Hispanic-origin groups.

The percentage of people without health insurance coverage dropped for every single age under 65 between 2013 and 2014

It sure does seem that it helped pretty much all groups of people. I wonder how the states that resisted it did:

Variation in both the uninsured rate and change in the uninsured rate by state may be related to whether the state expanded Medicaid eligibility in 2014 as part of the Affordable Care Act. In general, in 2014, the uninsured rate in states that expanded Medicaid eligibility was lower than in states that did not expand eligibility. In states that expanded Medicaid eligibility (“expansion states”), the uninsured rate in 2014 was 9.8 percent, compared with 13.5 percent in states that did not expand Medicaid eligibility (“nonexpansion states”).

The decrease in the uninsured rate was 3.4 percentage points in expansion states, compared with 2.3 percentage points in non-expansion states.

That’s good work there by the Republican governors–their states, on average, had a higher percent of residents without health insurance before the expansion AND their states decreased the rate of those without insurance less. If the non-expansion states had reduced the uninsured rate as much as the expansion states (and their reduction should have been larger since they started with a higher rated of uninsured) then that would mean the rate would have decreased by 3.4% overall which means about 1.5 million more Americans would have insurance.

Hey, that’s a great slogan for the Republicans–“we kept 1.5 million Americans from getting health insurance”.

On the other hand, maybe Republicans don’t want to trumpet this which may be why Obamacare has barely been mentioned in the first two Republican debates.

Previous Older Entries


Get every new post delivered to your Inbox.

Join 215 other followers

%d bloggers like this: