I promised yesterday I would prove that my concerns about how Citizens United would be used were not hypothetical. Today I will talk about where it is showing up, US v. Philip Morris USA, Inc., et.al., See DCCA opinion

    This was a civil RICO case filed by the United States in 1999 against several tobacco companies and two of their non-profit organizations, the Council for Tobacco Research and the Tobacco Institute. The lawsuit accused these entities of engaging in a conspiracy, taking place over a period of approximately 50 years, to mislead the public about a number of issues related to smoking including: the potential health consequences of smoking; the dangers of environmental smoke (second-hand smoke); whether nicotine was an addictive substance; whether the tobacco companies were manipulating nicotine content; whether the tobacco companies were intentionally targeting youth in their advertising and promotional efforts; whether they were intentionally marketing cigarettes as "light" or "low tar" to imply health benefits (or less detriment) the companies knew did not exist because of a phenomenon known as "compensation," and other claims.

The case went to trial in 2004 and lasted for about 9 months. In 2006 D.C. District Court Judge Kessler, issued an opinion with findings of fact and conclusions of law that ran about 1700 pages. The evidence buried in these pages is unequivocally damning.

Several years later, in 2009 the D.C. Circuit Court affirmed most of these findings in the per curiam opinion above. The defendants (and the government) filed petitions for cert. The petitions of the parties are available here. Whether the Supreme Court will agree to hear the case is unknown, but with the government seeking review as well it may do so. And issues of commercial speech and the First Amendment are raised through out the case. Indeed, the amicus brief filed by the Washington Legal Foundation and the National Association of Manufacturers explicitly says this case offers the Court the opportunity to answer the question that it left open in Nike v. Kasky, writing "This Court has recently reaffirmed that the speech of corporate actors may be entitled to full First Amendment Protection" (Page 19 of the brief which you can view here citing yes, Citizens United).

The 5th case down in the Table of Authorities is Citizens United and it is cited twice in the argument. The brief argues the lower court ignored that much of the misleading speech took place in the form of editorials, op-eds, press releases and the like and involved issues of "public concern" and thus was fully protected speech. Mind you these press releases, so-called informational pamphlets (some sent to school children purporting to educate them about the "debate"), came from a group of defendants who the record amply demonstrates did meet together with their public relations and law firms to come up with a strategy to manufacture a debate that really didn't exists since their problem was that there was scientific consensus on the basic facts about the health risks of smoking and that these facts would be very damaging to future business. Their strategy is succinctly captured in the phrase found in some internal documents and widely reported on since, "Doubt is our product." It is important to be clear on what they are asking for; they are asking for constitutional protection for the manufacture of a phony debate, to obfuscate rather than to clarify information about a product for which there is no safe level of use.

This seems an appropriate juncture to raise Justice Jackson's admonition that "the Constitution is not a suicide pact." It seems like the government ought to be able to regulate a potentially lethal product, and that regulation of advertising and marketing is a necessary part of such appropriate regulation in the public interest. Such a regulation has recently been passed in the form of the  Family Smoking Prevention and Tobacco Control Act, Pub. L. 111-31, 123 Stat. 1776 (2009). The Act permits the FDA to regulate tobacco products and includes very strict limitations on permissible forms of advertising and promotion.

    But a group of tobacco companies is attacking this statute in a District Court in Western Kentucky (much forum shopping there?) on the grounds (among others) that it violates the First Amendment. The companies even wanted to claim First Amendment protection for marketing practices like giving out free samples! The district court denied most these claims, but nevertheless found that some of the statute's regulation of color and trade dress did violate the First Amendment. The opinion is here It was issued before Citizens United came down. But taken together with the arguments raised by the Washington Legal Foundation in the Philip Morris RICO case, I think we can expect Citizens United may well be used in the future in this case as well. Only time will tell. I would worry about giving them ideas, but the connection between Citizens United and commercial speech protection claims is clearly already out there amongst firms litigating these issues. 

Later I will post some other aspects of the Philip Morris case which may be of interest to Glom readers, in particular whether a corporations can commit conspiracies or have specific intent.

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The final tally on the Patient Protection and Affordable Care Act:

• 219 Democrats voted in favor.
• 178 Republicans and 34 Democrats voted against

Of the 34 Democrats who sided with Republicans, most (not all) were in Republican leaning districts. 

The Tea Party was out in force in Madison, yesterday, but to no avail. In the immediate wake of the vote, a number of my friends' Facebook status updates touched on health care. While some of them yearned for change in November, many others had the following flavor:

O beautiful for patriot dream--That sees beyond the years; Thine alabaster cities gleam--Undimmed by human tears! America! America! God shed his grace on thee; Till nobler men keep once again Thy whiter jubilee! I am extraordinarily proud to be an American on this Historic Day.

What is it about the health care debate that produces such division and such emotion? Before answering that question, I offer some thoughts on what the health care debate is not about:

• This is not a populist story about the people triumphing over big corporations. After all, some of the scariest corporate bogeymen -- hospitals, health insurance companies, and drugs companies -- will be among the primary beneficiaries of the bill.
• This is not just an extension of the abortion debate, though that accounts for a great deal of emotion on the margins of the debate.
• This is not primarily about President Obama. Health care has been a divisive issue for as long as I can remember, which (thankfully) is much longer than Obama has been President.
• This is not primarily about government spending. The Congressional Budget Office estimates that the new bill will reduce the federal budget deficit by $138 billion from 2010 to 2019. Count me among the skeptics. (Here, too.) In the end, however, the cost of this bill is not the main issue here.
• Perhaps most surprising, this is not primarily about health care. Many of the tens of millions of uninsured Americans who will now get health insurance are people in good health, and even for those who are sick, the question of access remains. As noted by one perceptive commentator, "There will be no new access to health care if we do not have physicians to provide it." Some people are arguing that the bill will help control health care spending, but you can count me among the skeptics about that, too. I don't know whether this bill will improve health care in the United States. I hope that it does, but I do not believe the debate over health care was motivated primarily by the merits.

With all of the references to "partisan politics" in the press, you might be tempted to think that the Democrats and Republicans were just itching for a fight about anything, and health care was handy. But the wellspring of partisanship is a fundamental conflict of identities. Democrats view themselves as protectors of the weak and oppressed and describe passage of the bill as moral imperative. Meanwhile, Republicans believe that the quickest way to expanding the numbers of the weak and oppressed is to create a new government entitlement program, so they focus on the loss of freedom and responsibility that is said to accompany any expansion of the federal government. Both sides exaggerate, of course -- Ralph Nader is right in calling the bill a "major political symbol wrapped around a shredded substance" -- but organizations do that when their identities are at stake.

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So begins an article that mainly focuses on the following facts:  (1) donating one's own plasma in return for being compensated (for one's time) is legal in the U.S.; (2) mostly people who need the money donate plasma (other people donate blood for free or don't donate any blood product); (3) companies who use plasma to create helpful and pricey medical products know this and so locate plasma collection centers near poor people, including near the U.S.-Mexico border; (4) because of the economic downturn, more people are donating plasma for compensation. 

However, nowhere in the article is there any suggestion that because companies compensate plasma donors, the plasma supply is unsafe.  There is a comparison with free blood donations:  one argument for not compensating blood donors is that we don't want them to lie about their medical history to donate -- so the blood received is theoretically cleaner than if we induced people to donate blood.  However, plasma donations are screened more carefully (which blood centers apparently don't have the manpower to do) and seem to be able to be "cleaned."  The only other connection of the facts to the headline is these two sentences, which stand alone: 

Away from the border as well, many plasma collection centers have historically been located in areas of extreme poverty, some with high drug abuse. That troubles some people, who say it might contaminate the plasma supply or the health of people who sell their plasma.

The "some people" could not be reached for comment.  Also, it's not just the poor drug users who may be tainting the blood supply.   The author, without quoting anyone or citing anything, states "One issue is whether novel pathogens that perhaps are found in Mexico but not in the United States might enter the plasma supply. "  The words "perhaps" and "might" appear here more than in a first-year law school exam.

What seems to bother the author is not the state of safety in the plasma supply, which the author spends almost no time investigating.  What bothers the author is that people can sell their plasma for money, which repels him.  Even though plasma regenerates, he hates it.  I'm sure he feels sorry for Jo March when she cuts her hair off to earn desparately needed money for her family and would have preferred that Jo and her sisters starve with their long hair intact.  However, the plasma donors seem happy that this option is available to them.  That author suggests that donating plasma may in fact be harmful to the donors, again without any type of factual support: 

Some Americans have been giving plasma this way as often as twice a week for decades, with no apparent ill effects. But there have not been many studies devised to detect long-term effects.

Another thing that seems to bother the author is that the companies that purchase the plasma make a lot of money from turning it into medical products. We are told that a $30 donation can create $300 worth of medicine. We are supposed to be shocked that donors don't share in more of the revenue, even though we have no idea what the cost is to turn ordinary plasma into life-saving medicine. But, companies that do this are becoming successful, having IPOs, and enriching venture capital funds. So, there's obviously a problem here.  The author also seems upset that because plasma-related products are so expensive, sometimes insurance companies balk at paying for them, even though they are useful.  And making it illegal to compensate plasma donors will surely help that problem.

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Anyone who is interested in behavioral psychology has to be fascinated by the consequences of The United States Preventive Services Task Force reporting this week that women should not get annual mammograms until age 50, instead of its earlier recommendation of age 40.  I turned 40 last December and so have had one test; I feel a little like my sister did when Texas raised the drinking age from 18 to 21 when she was 19.

The Task Force reports that cost-benefit analysis dictate less screening for women age 40-50 because the modest benefits are outweighed by the harms of false positives, which result in anxiety and further testing.  The report states that mammograms save 1 in 1,904 women in the 40-50 age group and 1 in 1,339 women in the 50-59 age group.  From the report:

The 6 models produced consistent rankings of screening strategies. Screening biennially maintained an average of 81% (range across strategies and models, 67% to 99%) of the benefit of annual screening with almost half the number of false-positive results. Screening biennially from ages 50 to 69 years achieved a median 16.5% (range, 15% to 23%) reduction in breast cancer deaths versus no screening. Initiating biennial screening at age 40 years (vs. 50 years) reduced mortality by an additional 3% (range, 1% to 6%), consumed more resources, and yielded more false-positive results. Biennial screening after age 69 years yielded some additional mortality reduction in all models, but overdiagnosis increased most substantially at older ages.

Cost-benefit analysis necessarily puts monetary values on intanglible benefits, but I do wonder what the cost value for anxiety is.  The Task Force may have simply considered the costs of additional testing, but it seems to emphasize the unnecessary anxiety as well.  From what I hear from my friends, the report has created a lot of anxiety!  Women are now anxious that they will be living with undetected cancer.  That has to be put into the equation as well, I guess.

So much that we are told in the way of cancer prevention is reversed periodically, as this op-ed by Gail Collins points out.  Should women believe that mammograms are now not necessary?  Should they wait another few years to see if the Task Force reverses itself again?  This part of the report, which explains the choice of modeling as a methodology, makes me wonder:

Randomized trials of mammography (2–4) have demonstrated reduc-tions in breast cancer mortality associated with screening from ages 50 to 74 years.Trial results for women aged 40 to 49 years and women aged 74 years or older were not conclusive, and the trials (4, 5) had some problems with design, conduct, and interpretation. However, it is not feasible to conduct additional trials to get more precise estimates of the mortality benefits from extending screening to women younger than 50 years or older than 74 years or to test different screening schedules.

I will leave it to the real scientists to discuss the modeling methodology.

And some are skeptical that this government-appointed Task Force is already rationing health care in case the government becomes the primary purchaser of health care.

Of course, anecdote doesn't help scientific proof, but it does enter into how much anxiety this reversal causes.  Women who knew someone that caught cancer early with a mammogram thinks the report is bad.  Women who knew someone who died from cancer that went undetected with mammograms simply shrugs.  No one likes to get a mammogram, but it's not horrible.  Women are generally risk-averse and used to going to see doctors on an annual basis, so they generally do what experts tell them to do to avoid things like cancer, death, etc.  If a Task Force came out and said that colonoscopy was useless, people everywhere would cheer.

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A few weeks ago, I posted an unbalanced, but funny, video on health care from the right. Here is one from the left. The woman with the Wisconsin accent made me chuckle, but the guy who speaks of his fear of living in a "communist gulag like Canada" put me over the edge.

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This is obviously not an honest attempt at exploring the tradeoffs between buying health insurance and paying other costs of living, but it's pretty funny ...

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I have been thinking about Christine's assertion in her insightful post on Obama's unsatisfactory pitch for health care reform: "Hey, no one likes the health care system. We all want a better system."

While I suppose it's true that we all want a better system, I am starting to recoil at the notion that we should all dislike the health care system. During the past few months, our family has had myriad health care events, including routine checkups, radiology, physical therapy, surgery, and hospice care. We have always received timely treatment, and we have been satisfied with the quality of that treatment. As you would expect, our satisfaction varies with the treatment provider -- some are excellent and others not so much -- but I would say the same about service in restaurants, car dealerships, and grocery stores.

Maybe our treatment costs too much. I am told that the U.S. system is expensive, but I don't feel personally burdened by health costs. Yes, a good chunk of my paycheck goes towards my insurance, but we consume a great deal of medical care, so that seems like rough justice to me. Another chunk goes toward government health insurance that currently benefits people outside of my family (Medicare, Medicaid), and I am ok with that, too.

My general sense of satisfaction with the health care system doesn't seem to depend on where I live. We have lived in umpteen states from Delaware to Oregon and from Wisconsin to Louisiana and had roughly the same experiences everywhere. Sure, I would love to get uniformly better treatment at a lower cost, but none of the current reform proposals are headed in that direction. The last time I heard anything about improving the quality of my medical care was weeks ago, and the big selling point on costs has been that the federal government will not increase the amount I pay for health care. (Now, you can even scratch that selling point.)

If you are still reading, you are probably thinking something along these lines: "Of course you are happy with your health care. You make enough money that you can live in a nice community and pay for good insurance."

You would be right to say all of that, but that is precisely the point. People in the middle class tend to be more or less satisfied with their own health care. We aren't much interested in the claim that health care reform "may start us down a treacherous path toward government-encouraged euthanasia." And this is not about federally funded abortion, at least not yet, or about big, scary government limiting our freedom to be fat and addicted to tobacco. It's about the fact that Congress and the President want to add 45 million people to the ranks of the insured -- most of whom are employed and young, for what it's worth -- without impairing our access (where are the extra doctors coming from?) and without increasing our costs. Oh, right, ignore that bit about the costs.

In short, the problem with health care reform is that reformers have not made a case that health care reform will do anything other than make my life worse. Apparently, the Democrats agree with my diagnosis:

With Republicans making headway by casting the legislation as a costly government takeover, Democrats have decided they must answer the question on the minds of those now insured: “What’s in it for me?”

Will they succeed in convincing us of the need for reform? I think they have a good chance of convincing us that the regulation of health insurance companies needs to be tweaked. Beyond that, this is a tough sell. Then the issue will become whether the Democrats want to push something more ambitious through over the objection of Republicans (and Blue Dogs?). It's hard to imagine a more thrilling prospect for Republicans who want to regain control of Congress.

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Two disclaimers:  (1) we rarely talk politics here at the Glom and (2) I voted for Obama.  That being said, Obama lost me last week.  (I think he also "jumped the shark" with the "come over for a beer" invitation, but I guess that's for another day.)

Obama lost me in his fifth press conference on health care reform.  Hey, no one likes the health care system.  We all want a better system.  It very well may be that a national health care system, while imperfect, would be better.  But the argument that Obama made, which I'm sure was vetted by lots of people before he said it (because I've watched The West Wing), completely made me want to filibuster.  I saw the headline last week, and I had meant to look at it later.  When I looked for it today, I realized that many other people had the same reaction.  President Obama:  your tonsillectomy example scares me to death.

OK, in case you don't know what I'm talking about.  Obama was trying to make an argument that in our current system, if doctors know that a more expensive, but unnecessary treatment is paid for my insurance of Medicare/Medicaid, then that's the treatment option that is suggested.  I have no idea if this is true, and I'm not sure of a good way to empirically test it.  My own experience is that my doctors are usually very cost-conscious and give me several options, but that's an "N" of 1.  So, Obama says, "So if they're looking and -- and you come in and you've got a bad sore throat, or your child has a bad sore throat, or has repeated sore throats, the doctor may look at the reimbursement system and say to himself, "You know what? I make a lot more money if I take this kid's tonsils out."  Unstated here is that under the Obama plan, your kid doesn't get his tonsils out.

AAAARRGGGHHH!  Someone needs to take the president aside and explain to him that yes, a large portion of the voting, taxpaying public fears medical overcharging.  This may be a problem, and if it is, then a new system should not have incentives to overcharge.  But another large portion of the public fears undertreatment.  Some people lie in bed worrying that they'll get cancer and it will bankrupt their family.  Other people lie in bed worrying that they have cancer, but their doctor won't order the right test that will catch it in time.  And nationalized health care really scares the second group of people because it conjures up nightmarish scenarios of waiting lists and rationing.  If the second group is going to buy in to health care reform, then you have to allay their fears, not confirm them.

As a parent, I am quite familiar with the near-continuous string of ear infections and the near-continuous string of strep throat diagnoses.  Maybe Obama has never taken the baby in for its umpteenth ear infection, hoping that someone will put in tubes and maybe someone in your house will get a full night's sleep, and then been told that his insurer requires him to go through another round of amoxicillin, which seems to be as effective as liquid Flinstone vitamins.  We have been very lucky in having great doctors that moved as quickly as possible, given standard protocols.  What drives fear into my heart is that one of my children will have strep four or five times in one season, missing 8 days of school (and that goes for me, too), but a tonsillectomy is out of the question because the federal government says no.

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“Of course.”

According to Peggy Noonan, that may not be the biggest hurdle for health care legislation. She thinks that public opinion is turning against President Obama on health care, in part because we fear for our freedom:

Only a generation ago such criticisms would have been considered rude and unacceptable. But they are part of the ugly, chafing price of having the government in something: Suddenly it can make big and very personal demands on you. Those who live in a way that isn’t sufficiently healthy “cost us money” and “drive up premiums.” ...

Under a national health-care plan we might be hearing that a lot. You don’t exercise, you smoke, you drink, you eat too much, and “the rest of us have to pay for it.”

It is a new opportunity for new class professionals (an old phrase that should make a comeback) to shame others, which appears to be one of their hobbies....

Noonan thinks this "might be an unarticulated public fear," so she is going to articulate it.

I suspect that the reason it hasn't been articulated is that most people aren't as smart as Peggy Noonan and don't think about heath care in such highfalutin terms. For most people, health care is about cost and access, end of story. Policy makers and venture capitalists might worry about innovation. But that's as far as it goes for most of us, though I suspect that will be enough to stop Congress and the President this time.

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Prepare yourself to hear this term a lot over the next few years. It's been around since the early 1970s, but the Obama Administration is preparing to tackle health care, and the "medical-industrial complex" or MIC is its target. Paul Krugman's column yesterday described an initial step in the process: "Six major industry players ... have sent a letter to President Obama sketching out a plan to control health care costs."

That's the easy part, even though it won't seem so easy. The hard part is Krugman's stake in the ground:

Actually, "public insurance ... as an alternative to private insurers" sounds a lot better than nationalizing the whole system, though I assume someone will place nationalization on the table when the public debate gets going in earnest. Frankly, nationalization doesn't have legs in the U.S. Single-payer systems destroy two attributes of our current system that rich folks value too highly: access and innovation.

As a result, the debate in this country will center on some sort of hybrid solution. We just saw the Obama Administration employ public-private partnerships in addressing the banking crisis, and we will undoubtedly see an emphasis on public-private solutions to the health care crisis. At the heart of the Obama Administration's proposal will be some sort of "guarantee" of universal coverage, and the debate will revolve around the costs associated with provided that guarantee. We'll talk more about that when the time comes because once that debate gets going, it will be all consuming. For the time being, however, Krugman is positively giddy:

The fact that the medical-industrial complex is trying to shape health care reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential health care to all its citizens.

And serious cost control would change everything, not just for health care, but for America’s fiscal future. As Mr. Orszag has emphasized, rising health care costs are the main reason long-run budget projections look so grim. Slow the rate at which those costs rise, and the future will look far brighter.

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Earlier this year, I did a short post on universal health care, quoting a friend who is the CEO of a large hospital: "many of you think you want universal health care, but the cost of universal health care is a cost you are unwilling to pay: access and innovation."

This topic also arose during my recent trip to Europe, where several of the participants in the Fulbright program were strong advocates of universal health care. Then I noticed Fred Wilson's recent negative review of Sicko: "But the premise behind the movie is spot on. Why does the US resist universal health care when countries like Canada and the UK have shown that it works? I have no idea but I think this coming election will see universal health care be a vote getter, big time."

This sort of unqualified enthusiasm for universal health care is something I have heard only from people who have never lived it. Fred received some pushback in the comments, and apparently he decided to do some field research: he had dinner with three Canadians:

I asked them if they liked their health care system. They all said yes, very much, particularly for the day to day needs and common procedures like childbirth. However, they also told me the system breaks down when you get really sick. There's just not enough money for treating terminal diseases and so they "just let you die".

Fred also traded emails with a Canadian doctor, who wrote: "part of the reason the US is so innovative is because your system is designed for it.  as a VC, i think a single payer system would kill your VC friends in health/biotech."

Remember the key words: access and innovation.

Not that those concepts resolve the debate or provide solid guidance about how to proceed. But they are worth remembering when people start rhapsodizing universal health care.

Finally, I agree with Fred that health care is going to be a huge issue in the upcoming presidential campaign, especially if Hillary Clinton and Mitt Romney are the two major candidates. Note that both of those candidates favor some system the achieves universal coverage. (Strangely, Rudy does not list health care among the top ten campaign issues on his website.)

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You probably thought you knew how to cough and sneeze.  Cover your mouth/ nose with your hand or a tissue, right?  Wrong, wrong, wrong.  A friend at the School of Public Health here at Emory pointed me to a public health video encouraging proper coughing and sneezing technique in accordance with infection control guidelines from the CDC.  The basic advice:  sneeze or cough into your sleeve.  Watch the hilarious video, which demonstrates the various ways of accomplishing this with different types of apparel, and in which contestants compete to get it right.

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A recent New Yorker issue carries a fascinating piece on water--the politics, economics, and culture affecting the provision of clean drinking water around the world.  Besides being substantively interesting, the piece contains a number of great statistoids, some detailed below.

The diamond-water paradox (as Adam Smith referred to it) is that although water is essential for life, and diamonds are valued mostly for aesthetic reasons, the price of water has always been far lower than the price of diamonds.  In general, people simply resist having to pay for water.  Only within the last twenty years, for example, has New York City even required water meters.  So water is overused, and shortages result. 

Why don't people want to pay for water?  One explanation is that we generally don't think of water as being used up when it's consumed.  Unlike oil, which is gone forever once it's used, water "never actually disappears:  when water leaves one place, it simply goes somewhere else.  Water that dinosaurs drank is still consumed by humans, and the amount of freshwater on earth has not changed significantly for millions of years."

For developing countries, water shortages are especially problematic.  Increasing urbanization and middle-class prosperity cause people to eat more meat, and meat is enormously more water intensive to produce than agricultural products.  It takes  1000 tons of water to produce a ton of grain, but 15,000 tons to produce a ton of cow.  Great statistoid:  one hamburger requires 1300 gallons of water to produce!  For a steak, it's double that.

Other great statistoids in the piece:

[A] standard cup of coffee require[s] a hundred and forty litres of water, most of which is used to grow the coffee plant.  This means that it takes more than a thousand drops of water to make one drop of coffee.

On the same amount of land that Chinese farmers grow four thousand kilograms of rice each year, Indians grow no more than sixteen hundred, and they use ten times more water to do it than is necessary.

For a large rural and agrarian population like India's, there is strong political pressure to supply water cheaply to farmers.  But that skews farmers' decisions about what crops to plant.  Rice is quite a popular crop, but it's also the most water intensive.  Add in the government's price guarantees, and farmers have no incentive to grow anything else or use less water.  Without rational pricing of water, needy areas do without.  The article goes on to discuss competition for groundwater among farmers sharing the same aquifer. They race to dig deeper and deeper wells to suck out as much water as they can and sell it in times of need--the paradigmatic common pool problem. 

Solutions?  The "hard" path includes more dams, but their ecological costs and toll in human disruption have made them unpopular.  The Three Gorges Dam, for instance, is predicted to provide one-ninth of China's electricity needs when it is fully operational, but 1.2 million people will have been displaced, and 200,000 acres of farmland and forests submerged.  Moreover, sixty percent of the world's largest rivers are already dammed. There is even talk of dismantling existing dams.  The soft path involves simply using less water, which at least in the US has surprisingly been the trend since 1980.  Per capita water consumption since then has fallen by twenty-five percent, driven largely by higher energy costs, environmental laws, and conservation (think lo-flow toilets).  How this all works out on a global basis is up for grabs.

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Don't miss this public health message (click on the pic):

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Four years ago, almost to the day, we had a dustup with Bayer over our too-small ciprofloxacin stockpile.  The mail-borne anthrax attacks on the Senate, NBC News, and elsewhere drove the surge for more cipro.  This past Friday, stories by both the Associated Press and the Financial Times show that a similar, far graver donnybrook may be upon us ... this time, over Roche's exclusive license to make tamiflu (i.e., oseltamivir), a therapy that may help fight avian flu.  Stephen Gordon urges the U.S. government to push forward to make tamiflu now, and pay Roche later.  Tyler Cowen urges a very different approach, focused on inducing Roche to act much faster to boost tamiflu output.  Neither, however, mentions the cipro flap of four years ago.  The deal we struck with Bayer for our cipro stockpile makes a helpful point for today.

Cowen quite rightly warns against expropriating Roche's tamiflu production rights, and the premium those rights bring.  He focuses on dynamic efficiency:  "If we confiscate property rights this time around, there won't be a Tamiflu, or its equivalent, next time."

Respecting Roche's property rights does not, however, entail paying whatever price Roche demands, no matter how high.  A credible threat to trigger our compulsory license rights under TRIPS provides us with important bargaining leverage, and using it will not, I think, prevent there being a tamiflu, or its equivalent, next time.

With cipro, we bargained hard with Bayer and extracted a 46% discount, from $1.77 to $0.95 per pill.  Today, Roche sells tamiflu in the U.S. for $60 per treatment course.  My guess is that we can get a deep discount and still provide Roche a healthy return, so that it (and others) will continue to develop powerful antivirals and other drugs.  If we need to rattle the expropriation saber in our talks with Roche, so be it.

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