There were several news stories on the 3.0 percent jump in retail sales the Commerce Department reported for January that took this as evidence that the economy was still very strong. In fact, since the January rise followed two months where reported sales fell sharply, the picture is far more ambiguous.
Reported sales fell by more than 1.0 percent in both November and December. As a result, reported sales in January were just 0.7 percent higher than those reported in October. Since these are nominal sales, it means that real retail sales have been close to flat over the last three months.
Likely, nominal sales did not really fall by more than 1.0 percent in November and December and then jumped by 3.0 percent in January. This is more likely an issue of seasonal adjustments for holiday shopping. Seasonal adjustments are always difficult, but post-pandemic shopping patterns make it harder for the Commerce Department to distinguish between sales changes reflected growth or weakness, as opposed to normal seasonal patterns.
In any case, when we get large changes like the 3.0 percent jump in sales reported in January, it is important to look back over the recent past to put them in context. No one looking at retail sales over the past three months can be concerned that they are growing too rapidly, even if the January jump, taken in isolation, might imply that.
There were several news stories on the 3.0 percent jump in retail sales the Commerce Department reported for January that took this as evidence that the economy was still very strong. In fact, since the January rise followed two months where reported sales fell sharply, the picture is far more ambiguous.
Reported sales fell by more than 1.0 percent in both November and December. As a result, reported sales in January were just 0.7 percent higher than those reported in October. Since these are nominal sales, it means that real retail sales have been close to flat over the last three months.
Likely, nominal sales did not really fall by more than 1.0 percent in November and December and then jumped by 3.0 percent in January. This is more likely an issue of seasonal adjustments for holiday shopping. Seasonal adjustments are always difficult, but post-pandemic shopping patterns make it harder for the Commerce Department to distinguish between sales changes reflected growth or weakness, as opposed to normal seasonal patterns.
In any case, when we get large changes like the 3.0 percent jump in sales reported in January, it is important to look back over the recent past to put them in context. No one looking at retail sales over the past three months can be concerned that they are growing too rapidly, even if the January jump, taken in isolation, might imply that.
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According to news reports, Moderna is considering a price in the range of $110 to $130 for shots of its Covid booster. People may recall that we paid Moderna close to $450 million to develop its Covid vaccine. We then paid another $450 million for the clinical trials that were needed to determine its effectiveness.
Moderna has already made a good return on our tax dollars, selling the initial set of shots at around $20 a piece. According to Forbes, the company’s soaring stock price had already produced five billionaires by the summer of 2021.
Who knows how many Moderna billionaires we will have if the company gets away with charging $110-$130 for its new booster. Of course, this money will come out of the pockets of the rest of us, or at least those of us who are not prevented from getting boosters by these high prices.
Fortunately, there is an alternative if the Biden administration is prepared to challenge Moderna and drug companies more generally on their monopoly pricing. Peter Hotez and Elena Bottazzi, two highly respected researchers at Baylor University and Texas Children’s Hospital, developed a simple to produce, 100 percent open-source Covid vaccine. It uses well-established technologies that are not complicated (unlike mRNA). Their vaccine has been widely used in India and Indonesia, with over 100 million people getting the vaccine to date.
If we want to see the vaccine used here it would need to be approved by the Food and Drug Administration (FDA). In principle, the FDA could rely on the clinical trials used to gain approval in India, but it indicated that they want U.S. trials. (In fairness, India’s trials are probably lower quality.)[1]
However, the government could fund a trial of Hotez-Bottazzi vaccine (Corbevax) with pots of money left over from Operation Warp Speed, or alternatively from the budgets of National Institutes of Health or other agencies like Biomedical Advanced Research and Development Authority (BARDA). With tens of billions of dollars of government money going to support biomedical research each year, the ten million or so needed for a clinical trial of Corbevax would be a drop in the bucket.
The arithmetic on this is incredible. Shots of Corbevax cost less than $2 a piece in India. If it costs two and a half times as much in the U.S., that still puts it a $5 a shot. That implies savings of more than $100 a shot. That means that if we get 100,000 people to take the Corbevax booster, rather than the Modern-Pfizer ones (Pfizer is planning to also charge over $100 for its booster), we’ve covered the cost of the trials. If we get 1 million to take Corbevax, we’ve covered the cost ten times over, and if 10 million people get the Corbevax booster, we will have saved one hundred times the cost of the clinical trial.
There is also the advantage that, since at least some of the reason for vacine hesitancy is fears of mRNA vaccines. We may get some vaccine hesitant people to take Corbevax, who wouldn’t take the mRNA vaccines.
It is understandable that the pharmaceutical industry would be very unhappy if the Biden administration were to put up the money for a clinical trial of Corbevax. Not only would FDA approval seriously cut into the gold mine they were anticipating from selling boosters at more than $100 a shot, it would also be a dangerous example for the industry.
It would show that it is possible to develop effective vaccines without relying on government-granted patent monopolies. (Hotez and Bottazzi supported their research on small grants from the government and private foundations.) And, it would be a great reminder that vaccines (and drugs) are cheap. It is rare that it is actually expensive to manufacture and distribute a drug or vaccine. Drugs are expensive because we give companies patent monopolies, or other forms of protection.
If we pay for the research up front, we don’t have to gouge patients to recover development costs. And, we don’t give drug companies an enormous incentive to lie, cheat, and steal to maximize the value of their patent monopolies.
The Biden administration has a great opportunity to hugely advance public health, and set an incredibly important example, by putting up the money for a clinical trial of Corbevax. Bernie Sanders, as chair of the Senate Health Committee, can also get on the case. He has been critical of Moderna for charging outrageous prices for a vaccine developed with taxpayer money.
Sanders’ anger is quite justified. But rather than just haranguing the company into lowering its price, we can take away its ability to get away with charging $130 a shot by giving them some competition. Competition is great for capitalism, even if it may not be good for individual capitalists.
[1] It seems as though the pharmaceutical industry may also be working to slow the use of Corbevax outside of the United States. Hotez and Bottazzi have been unable to get the World Health Organization (WHO) to move on their request for pre-qualification, which they submitted back in June. They have been given no reason for the delay. This matters hugely for developing countries, because their health agencies are reluctant to approve a vaccine that the WHO has not pre-qualified.
According to news reports, Moderna is considering a price in the range of $110 to $130 for shots of its Covid booster. People may recall that we paid Moderna close to $450 million to develop its Covid vaccine. We then paid another $450 million for the clinical trials that were needed to determine its effectiveness.
Moderna has already made a good return on our tax dollars, selling the initial set of shots at around $20 a piece. According to Forbes, the company’s soaring stock price had already produced five billionaires by the summer of 2021.
Who knows how many Moderna billionaires we will have if the company gets away with charging $110-$130 for its new booster. Of course, this money will come out of the pockets of the rest of us, or at least those of us who are not prevented from getting boosters by these high prices.
Fortunately, there is an alternative if the Biden administration is prepared to challenge Moderna and drug companies more generally on their monopoly pricing. Peter Hotez and Elena Bottazzi, two highly respected researchers at Baylor University and Texas Children’s Hospital, developed a simple to produce, 100 percent open-source Covid vaccine. It uses well-established technologies that are not complicated (unlike mRNA). Their vaccine has been widely used in India and Indonesia, with over 100 million people getting the vaccine to date.
If we want to see the vaccine used here it would need to be approved by the Food and Drug Administration (FDA). In principle, the FDA could rely on the clinical trials used to gain approval in India, but it indicated that they want U.S. trials. (In fairness, India’s trials are probably lower quality.)[1]
However, the government could fund a trial of Hotez-Bottazzi vaccine (Corbevax) with pots of money left over from Operation Warp Speed, or alternatively from the budgets of National Institutes of Health or other agencies like Biomedical Advanced Research and Development Authority (BARDA). With tens of billions of dollars of government money going to support biomedical research each year, the ten million or so needed for a clinical trial of Corbevax would be a drop in the bucket.
The arithmetic on this is incredible. Shots of Corbevax cost less than $2 a piece in India. If it costs two and a half times as much in the U.S., that still puts it a $5 a shot. That implies savings of more than $100 a shot. That means that if we get 100,000 people to take the Corbevax booster, rather than the Modern-Pfizer ones (Pfizer is planning to also charge over $100 for its booster), we’ve covered the cost of the trials. If we get 1 million to take Corbevax, we’ve covered the cost ten times over, and if 10 million people get the Corbevax booster, we will have saved one hundred times the cost of the clinical trial.
There is also the advantage that, since at least some of the reason for vacine hesitancy is fears of mRNA vaccines. We may get some vaccine hesitant people to take Corbevax, who wouldn’t take the mRNA vaccines.
It is understandable that the pharmaceutical industry would be very unhappy if the Biden administration were to put up the money for a clinical trial of Corbevax. Not only would FDA approval seriously cut into the gold mine they were anticipating from selling boosters at more than $100 a shot, it would also be a dangerous example for the industry.
It would show that it is possible to develop effective vaccines without relying on government-granted patent monopolies. (Hotez and Bottazzi supported their research on small grants from the government and private foundations.) And, it would be a great reminder that vaccines (and drugs) are cheap. It is rare that it is actually expensive to manufacture and distribute a drug or vaccine. Drugs are expensive because we give companies patent monopolies, or other forms of protection.
If we pay for the research up front, we don’t have to gouge patients to recover development costs. And, we don’t give drug companies an enormous incentive to lie, cheat, and steal to maximize the value of their patent monopolies.
The Biden administration has a great opportunity to hugely advance public health, and set an incredibly important example, by putting up the money for a clinical trial of Corbevax. Bernie Sanders, as chair of the Senate Health Committee, can also get on the case. He has been critical of Moderna for charging outrageous prices for a vaccine developed with taxpayer money.
Sanders’ anger is quite justified. But rather than just haranguing the company into lowering its price, we can take away its ability to get away with charging $130 a shot by giving them some competition. Competition is great for capitalism, even if it may not be good for individual capitalists.
[1] It seems as though the pharmaceutical industry may also be working to slow the use of Corbevax outside of the United States. Hotez and Bottazzi have been unable to get the World Health Organization (WHO) to move on their request for pre-qualification, which they submitted back in June. They have been given no reason for the delay. This matters hugely for developing countries, because their health agencies are reluctant to approve a vaccine that the WHO has not pre-qualified.
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• Economic Crisis and RecoveryCrisis económica y recuperaciónEconomic GrowthEl DesarolloInequalityLa DesigualdadUnited StatesEE. UU.
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Okay, that’s not exactly what the NYT told us. A piece, headlined “The Medicine is a Miracle, but only if You Can Afford It,” told readers how patients struggle to pay for drugs that sell for tens, or even hundreds, of thousands a dollars a year. The piece describes people taking out GoFundMe pages or seeking out foundations that would pay for treatments that can improve their health and/or save their lives.
While the piece tells us that drug companies invest lots of money in developing these drugs or treatments, it neglects to mention that the we could eliminate this problem if we simply paid for the research up front. This would mean having the government pick up the tab for the research, as it already does with over $50 billion a year of funding to the National Institutes of Health, and then having all new drugs and treatments available as cheap generics. In that situation, we would not be forcing people with serious illnesses to run around begging for money to get effective treatments.
Okay, that’s not exactly what the NYT told us. A piece, headlined “The Medicine is a Miracle, but only if You Can Afford It,” told readers how patients struggle to pay for drugs that sell for tens, or even hundreds, of thousands a dollars a year. The piece describes people taking out GoFundMe pages or seeking out foundations that would pay for treatments that can improve their health and/or save their lives.
While the piece tells us that drug companies invest lots of money in developing these drugs or treatments, it neglects to mention that the we could eliminate this problem if we simply paid for the research up front. This would mean having the government pick up the tab for the research, as it already does with over $50 billion a year of funding to the National Institutes of Health, and then having all new drugs and treatments available as cheap generics. In that situation, we would not be forcing people with serious illnesses to run around begging for money to get effective treatments.
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• HealthcareIntellectual PropertyPropiedad IntelectualUnited StatesEE. UU.
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• Affordable Care ActHealth and Social ProgramsLos Programas Sociales y de SaludHealthcareSocial SecurityUnited StatesEE. UU.
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In the last year or so there have been many people who complained about China’s “vaccine nationalism.” This generally meant the country refused to approve the U.S. mRNA vaccines. The claim was that our mRNA vaccines were far superior to China’s old-fashioned dead virus vaccines. The argument went that the country needed to maintain its zero Covid policy, otherwise, the pandemic would devastate its unprotected population.
Well, we have now gotten the opportunity to test that claim. There is little doubt that the abrupt ending of pandemic restrictions led to much death and suffering in China. The government is not being open about the pandemic toll, but even the high-end estimates put the number of deaths at around 1 million.
That is a terrible number of lives lost, but the official count in the U.S. is over 1.1 million deaths. The number of Covid-related excess deaths that were not recorded would push this figure at least 200,000 higher. With four times the population, if China were to be similarly hard-hit it would be seeing well over 5 million deaths.
The current omicron strain is less fatal than the original alpha and delta strains, but plenty of people, including vaccinated people, have died from the omicron strain. Clearly the Chinese vaccines have done a reasonably job protecting China’s population.
We didn’t need this gigantic test to know that China’s vaccines were effective. We actually had some good data from studies that compared the effectiveness of China’s vaccines with the mRNA vaccines. While one study found that the Chinese vaccines were somewhat less effective, they still would prevent the overwhelming majority of the population from getting seriously ill from the disease. The other study found that with a booster shot, one of the Chinese vaccines was actually trivially more effective in preventing death in older people.
The major issue with China was not that it lacked an effective vaccine, its biggest problem in coping with the opening of the country was its failure to get much of its elderly population fully vaccinated and boosted. It’s not clear that President Xi gave a damn about the advice he was getting from our elite policy types, but their complaint that vaccine nationalism was keeping him from buying our mRNA vaccines was nonsense.
If they wanted to give useful advice to Xi, they would have harped on his failure to get China’s elderly population fully vaccinated. This is something that could have in principle been remedied fairly quickly. The idea of quickly shipping over billions of doses of Pfizer or Moderna’s vaccines was the sort of thing that would be laughed at anywhere other than the pages of the Washington Post.
Furthermore, the obsession with mRNA vaccines is incredibly silly. There are a number of non-mRNA vaccines that have been widely administered to billions of people around the world, providing protection that is comparable to the mRNA vaccines. Most notable in this category is the Oxford-AstraZeneca vaccine, which was widely used in Europe. Our elite policy types have not felt the need to denounce European countries for vaccine nationalism for their failure to ensure that their populations received a mRNA vaccine.
The fact is that we have done a horrible job dealing with the pandemic. Our policy was always more focused on making Moderna billionaires than protecting people here and around the world from the pandemic. If saving lives had been the focus of policy we would have worked together with researchers around the world (including China), pooling technology and allowing anyone anywhere in the world to produce any vaccines that were determined to be effective. Not only would more rapid dispersion of vaccines, along with tests and treatments, have saved lives in developing countries, by slowing the spread it may have prevented the development of new strains of the pandemic that led to massive waves of infections here.
And, just to be clear, this is not a question of relying on the market rather than government. In spite of what we hear from the policy types who dominate public debate, government-granted patent monopolies, and related forms of intellectual property, are not the free market. These are policies that we have chosen for promoting innovation, they do not amount to leaving things to the market, even if their beneficiaries would like us to believe otherwise.
In the last year or so there have been many people who complained about China’s “vaccine nationalism.” This generally meant the country refused to approve the U.S. mRNA vaccines. The claim was that our mRNA vaccines were far superior to China’s old-fashioned dead virus vaccines. The argument went that the country needed to maintain its zero Covid policy, otherwise, the pandemic would devastate its unprotected population.
Well, we have now gotten the opportunity to test that claim. There is little doubt that the abrupt ending of pandemic restrictions led to much death and suffering in China. The government is not being open about the pandemic toll, but even the high-end estimates put the number of deaths at around 1 million.
That is a terrible number of lives lost, but the official count in the U.S. is over 1.1 million deaths. The number of Covid-related excess deaths that were not recorded would push this figure at least 200,000 higher. With four times the population, if China were to be similarly hard-hit it would be seeing well over 5 million deaths.
The current omicron strain is less fatal than the original alpha and delta strains, but plenty of people, including vaccinated people, have died from the omicron strain. Clearly the Chinese vaccines have done a reasonably job protecting China’s population.
We didn’t need this gigantic test to know that China’s vaccines were effective. We actually had some good data from studies that compared the effectiveness of China’s vaccines with the mRNA vaccines. While one study found that the Chinese vaccines were somewhat less effective, they still would prevent the overwhelming majority of the population from getting seriously ill from the disease. The other study found that with a booster shot, one of the Chinese vaccines was actually trivially more effective in preventing death in older people.
The major issue with China was not that it lacked an effective vaccine, its biggest problem in coping with the opening of the country was its failure to get much of its elderly population fully vaccinated and boosted. It’s not clear that President Xi gave a damn about the advice he was getting from our elite policy types, but their complaint that vaccine nationalism was keeping him from buying our mRNA vaccines was nonsense.
If they wanted to give useful advice to Xi, they would have harped on his failure to get China’s elderly population fully vaccinated. This is something that could have in principle been remedied fairly quickly. The idea of quickly shipping over billions of doses of Pfizer or Moderna’s vaccines was the sort of thing that would be laughed at anywhere other than the pages of the Washington Post.
Furthermore, the obsession with mRNA vaccines is incredibly silly. There are a number of non-mRNA vaccines that have been widely administered to billions of people around the world, providing protection that is comparable to the mRNA vaccines. Most notable in this category is the Oxford-AstraZeneca vaccine, which was widely used in Europe. Our elite policy types have not felt the need to denounce European countries for vaccine nationalism for their failure to ensure that their populations received a mRNA vaccine.
The fact is that we have done a horrible job dealing with the pandemic. Our policy was always more focused on making Moderna billionaires than protecting people here and around the world from the pandemic. If saving lives had been the focus of policy we would have worked together with researchers around the world (including China), pooling technology and allowing anyone anywhere in the world to produce any vaccines that were determined to be effective. Not only would more rapid dispersion of vaccines, along with tests and treatments, have saved lives in developing countries, by slowing the spread it may have prevented the development of new strains of the pandemic that led to massive waves of infections here.
And, just to be clear, this is not a question of relying on the market rather than government. In spite of what we hear from the policy types who dominate public debate, government-granted patent monopolies, and related forms of intellectual property, are not the free market. These are policies that we have chosen for promoting innovation, they do not amount to leaving things to the market, even if their beneficiaries would like us to believe otherwise.
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• Economic Crisis and RecoveryCrisis económica y recuperaciónEconomic GrowthEl DesarolloJobsTrabajosUnited StatesEE. UU.
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Maybe you have some idea, but I sure as hell don’t. I was struck by seeing this number in a column on why the birth rate in South Korea has declined so much. While it is a very interesting column, this sentence left me scratching my head:
Over 16 years, 280 trillion won ($210 billion) has been poured into programs encouraging procreation, such as a monthly allowance for parents of newborns.
I suspect I have more knowledge of Korea’s economy than most NYT readers, but offhand I really had no idea of how large a commitment this spending is. I had to go to the IMF’s website and find that Korea’s GDP over the last sixteen years has been $22.9 trillion, which puts this spending at a bit more than 0.9 percent of GDP.
This would be the equivalent of around $2 trillion in spending in the United States, which is a pretty sizable commitment. It would have been useful if the NYT had insisted that the number be expressed as a share of GDP or personal income or some measure that would be meaningful to a substantial portion of its readers.
As it is, I doubt that almost any NYT reader had much sense of whether this money was a big or small commitment. Presumably, the intent was to convey information to readers. This figure did not.
Maybe you have some idea, but I sure as hell don’t. I was struck by seeing this number in a column on why the birth rate in South Korea has declined so much. While it is a very interesting column, this sentence left me scratching my head:
Over 16 years, 280 trillion won ($210 billion) has been poured into programs encouraging procreation, such as a monthly allowance for parents of newborns.
I suspect I have more knowledge of Korea’s economy than most NYT readers, but offhand I really had no idea of how large a commitment this spending is. I had to go to the IMF’s website and find that Korea’s GDP over the last sixteen years has been $22.9 trillion, which puts this spending at a bit more than 0.9 percent of GDP.
This would be the equivalent of around $2 trillion in spending in the United States, which is a pretty sizable commitment. It would have been useful if the NYT had insisted that the number be expressed as a share of GDP or personal income or some measure that would be meaningful to a substantial portion of its readers.
As it is, I doubt that almost any NYT reader had much sense of whether this money was a big or small commitment. Presumably, the intent was to convey information to readers. This figure did not.
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