How did we end up being ruled by the ignorant?

It always comes as something of a shock to us to see public policy being decided upon the basis of information that simply isn’t true. We expect a bit of political argy bargy, of course we do, for different people weight different outcomes, err, differently. Equity and efficiency, inequality and economic freedom, we might agree or disagree on those weights that different people place upon them but can still regard such opinions (for opinions they are and no more than that) as being valid. But that’s very different from our being told pure porkies, having supposed facts deployed, facts which just are not a reflection of reality. As the Original Tax Dodger in Chief himself pointed out, comment is free but facts are sacred.

And so it is that we come back to a favourite subject of ours, the relationship between the prevalence of obesity and the costs of it to the NHS.

Mr Stevens, who took up post last April, said: ‘Obesity is the new smoking, and it represents a slow-motion car crash in terms of avoidable illness and rising health care costs.

‘If as a nation we keep piling on the pounds around the waistline, we’ll be piling on the pounds in terms of future taxes needed just to keep the NHS afloat.’

The problem with this is that it simply is not true. Obesity does not cost the NHS money: on balance it saves it. This is something we’ve been pointing out for a number of years now. The source is here and the finding is:

Obesity is a major cause of morbidity and mortality and is associated with high medical expenditures. It has been suggested that obesity prevention could result in cost savings. The objective of this study was to estimate the annual and lifetime medical costs attributable to obesity, to compare those to similar costs attributable to smoking, and to discuss the implications for prevention.
….
Although effective obesity prevention leads to a decrease in costs of obesity-related diseases, this decrease is offset by cost increases due to diseases unrelated to obesity in life-years gained. Obesity prevention may be an important and cost-effective way of improving public health, but it is not a cure for increasing health expenditures.

When someone’s arteries explode at the age of 60 from that 15 cheeseburger a day habit then the NHS doesn’t have to pay for another 25 years’ worth of hip replacements. This saves the system money as a result of the shorter lifespan.

This is well known: and yet we have the CEO of the NHS telling us the opposite. And further, he’s demanding public action that he should know will make his financial problems worse, not better.

All of which leaves us with that essential question: how did we end up being ruled by the ignorant?

Why sign up generics manufacturers for a drug you’ve only just got patent and approval for?

More importantly, why would you sign up generics manufacturers to make a drug that you can charge $84,000 a course of treatment for? Which is exactly what Gilead, the makers of Sovaldi, the $84,000 a course treatment for Hepatitis C have just done:

Multinational American drug maker Gilead Sciences was set to join hands with at least five Indian generic pharmaceutical companies and allow them to manufacture and sell cheaper versions of its new hepatitis C medicines – sofosbuvir and ledipasvir – in 90 countries, four people in the know told Business Standard.

Clearly, someone is being either terribly clever here or terribly stupid. So which is it?

It is, of course, being clever. NICE has approved Sovaldi for use in the UK, the FDA has in the US. Gilead has some short number of years (usually, about ten) to squeeze that drug for the billion dollars or so it cost to develop. So, obviously, they’re going to charge what the market will bear. $84,000 looks like a lot, is a lot, but it’s about the same price as other current treatments and is markedly more effective. So, that’s the price they set.

But to then go and licence to generics manufacturers to sell in 90 odd countries looks most odd: won’t this undercut sales? No, no, it won’t: for the generics manufacturers only get the rights to sell in countries where there’s no way at all that anyone would pay $84,000 for a course of treatment. For yes, there are poor countries out there and poor countries, rightly, don’t try to spend that sort of money on treating one patient. They can save tens, hundreds, thousands of lives by spending the same amount on, say, a vaccination campaign.

Thus, at full market price there would be no sales: at generics prices there will be some and thus some revenue to Gilead.

But that then leads to, well, isn’t it unfair on us? We’ve got to stump up $84,000 a treatment and poor people pay a groat a pill. True, but why is this unfair? Aren’t we rich people supposed to be tendering to the ill and sick of the world?

Further, this isn’t particularly to do with the way that the patent system works. Imagine that all health care research was done by the state instead. It would still be us rich world people paying for all of that research from our taxes, wouldn’t it? On the simple grounds that poor people don’t have incomes to pay tax upon to fund medical research. So whatever the structure is the end result will be the same. We rich people will pay to get the drugs designed and through the approval process. The poor will then get them. Whether we pay in advance in taxation or later through the price of the patented drug doesn’t make much difference, does it?

And yes, for all that the NHS is The Wonder of the World and all the rest, we in the UK are indeed rich world people and that’s why we’re being charged this arm and a leg for this drug. And, given that we pay for the NHS through taxation it really makes absolutely no damn difference at all, what the patent or research structure is?

Dear Dr. Sarah Wollaston MP

I write this open letter to you in the hope that you have been grievously misquoted by the Daily Mail. For it would be painful to have to believe that a sitting MP, and a qualified doctor to boot, could be quite so ill-informed about food, prices and obesity. It is thus my hope that your words have been manipulated by the newspaper rather than that you actually believe any of this tosh.

For example, you are quoted as saying that:

‘There is a huge amount of personal responsibility. But it is now so serious we need to state to step in and take some measures.

‘The choice is you either do nothing and carry on saying it’s all down to personal choice and you continue to pick up a huge bill through the NHS.

‘We have to take out junk food calories and help to get people moving and more active.’

The problem there is that obesity does not cost the NHS anything at all. Indeed, the price to the NHS of obesity is negative. The reason being that the NHS is a system of lifetime health care and those who are obese die earlier. Yes it is true that they incur healthcare costs while alive and fat: but these are more than outweighed by the savings to the NHS when they are dead and buried and not requiring those longer years of health care.

This means that there are substantial private costs to people of being lardbuckets, entirely true, but it is not true to then say that there are public costs to their being so, as you well know.

‘One of the reasons why the most disadvantaged people are running into difficulties is partly because the healthy food is more expensive.

‘If you are struggling on a budget, you are much more likely to pick food on special offers. But all of the special offers tend to be on crisps, sweets and junk food.

That is also not true. Rice, beans, onions and tomatoes may not be a very interesting diet but it is still both healthier and vastly cheaper than any form of junk food calorie for calorie, whatever the BOGOF or discount that is being offered. This is something that we both know and so for the Mail to be quoting you as it did is obviously something you’ll want to correct.

And finally the paper seems to be making a good attempt at making you look like an idiot:

She warned voluntary agreements with big chains had not worked and regulation was now needed to force stores to offer discounts on fruit and vegetables.

This is price fixing and price fixing does not work. By definition price fixing does not work: clearly a Tory MP is well aware of this fact for the following obvious reason. If we fix prices below the market clearing price then we will have fewer suppliers willing to produce at that price. We will also have more people desiring to consume that good or service at that price: the result is instant shortages of those goods and or services. We need only to look at the provision of toilet paper in Venezuela, well reported recently, to see that. Similarly, if we fix prices above the market clearing price then we find that consumers desire to purchase less of these goods and services while producers will be squeezing every extra unit out they can. Leading, as the European Union showed us when they did it, to vast gluts in the form of butter mountains and wine lakes.

Price fixing thus leads to either dearth or glut unless we fix those prices at the market clearing price itself. In itself that has a problem for as you well know we don’t in fact have any other mechanism than the market itself to work out what that market clearing price is. But even if we did, again as is obvious to both of us, what’s the damn point of fixing prices where they would be anyway?

Quite clearly you’ll want to make sure that the Daily Mail corrects this terrible misrepresentation of what any sane or sensible person could possibly believe on this subject. My suggestion is that you start by calling 020 7938 6000 and ask for a certain Mr. Paul Dacre. He should be able to sort out matters for you.

Yours etc

Tim Worstall

It’s our dreadful colonialism that caused the South Sea Islanders to get fat

This just in: that appalling colonial thing we white folks did is what made the people of the South Pacific so dreadfully fat today:

Anthropologists Dr Amy McLennan and Professor Stanley Ulijaszek found that islanders lost many of their traditional food cultivation, preparation and preserving skills after settlers insisted that they learn western ways of eating.

They taught the locals to fry fish rather than eat it raw, and forced them to import unhealthy produce after co-opting farmland for mining.

“Under colonial rule, much changed in how food was sourced, grown and prepared and the social change was swift,” said lead author Dr McLennan

“What happened to the land also changed as colonial agriculture and mining industries expanded. There was an increase in family size meaning food was increasingly imported.”

It’s that last sentence that should have been a clue to our intrepid scientists. A change in diet, a change in the amount of food available (for that’s what imports manage) leads to a removal of the Malthusian limits on family size. They couldn’t have large families before because there wasn’t enough food to feed them. After that dreadful, hateful, arrival of the colonialists food supplies increased and it was possible to raise larger families.

Or to make the same statement another way: the colonialists improved the diets of those who lived on such islands. It might not be an improvement by the standards of the modern prodnoses but population does respond quite well to food availability in a subsistence economy. That population and family size did increase is proof perfect that the diet was “better”.

From the Annals of Rampant Stupidity

The latest bright idea is that apparently granny would like to scrabble in the dirt for a few potatoes the day after her hip replacement:

Even if hospital patients have always hated their food, whether it’s microwaved meals, over salted vegetables, or fresh fruit, there are still things we can learn from the past. One obvious change in food provision is the loss of the hospital garden. Until the nineteenth century many hospitals had outdoor space, part of the therapy for recuperating patients, a place for Apothecaries to grow healing herbs, and a site for kitchen gardens to feed the staff and patients. Outdoor space was lost in the nineteenth century as giant hospitals were built in crowded urban areas, and as convalescent and elderly patients were moved to homes and hospices elsewhere. There’s quite a trend for ‘urban farming’ in the twenty first century – perhaps that could extend to give hospitals back their gardens too?

The idea of a little herb garden where patients can convalesce in the sun amid the mint, rosemary and the butterflies they attract is obviously wonderful. The idea that anyone should be trying to grow bulk foods in an urban environment is simply ludicrous.

For we’ve invented this thing called “transport” as well as “economy of scale”.

Hospitals are, as they note, in urban settings. Because that’s where all the people are and it’s sensible to treat people near where they live, near where their families live so they can visit them. Excellent: but that means that land is expensive where hospitals are because that’s where all the people are. A few acres of urban land can be worth millions upon millions of pounds: using that to grow £50′s worth of vegetables is simply not sensible. What is sensible to to use that agricultural land 50 miles away, worth perhaps £5,000 an acre, to grow the same vegetables and then splash a fiver or so per tonne of food on the petrol to transport them. We thus use fewer resources to get to the same goal, feeding the sick, and this is a process that makes us richer as a whole.

It’s also true that agriculture is subject to the most enormous economies of scale. We can tell this: food grown in those 50 acre monocrops is markedly cheaper than food used to be when we all had our little 15 acres of the country to cultivate. This is true even if we don’t include the labour we used to perform “for free”. The urban poor would spend 80% of their income on food and rent in centuries gone by. Today the average is 10-15% on food.

The idea of feeding the sick from hospital gardens is simply bonkers: guess that’s why it’s being suggested in The Guardian.