Saturday, August 15, 2020

Where Is Harry?

As the dangers of a war approach in 1941, Harry Truman, then US Senator from Missouri, proposed creation of a committee to oversee the defense expenditures being made by the federal government. Although at first viewed skeptically by President Franklin Roosevelt, the Senate Special Committee to Investigate the National Defense Program was soon uncovering a variety of unsavory abuses: shoddy camp construction, bad planning and sloppy administration in allocation of vital raw materials, willful misconduct in production of ships and planes, and divided loyalties among dollar-a-year men put in charge of elements of the defense effort while keeping financial ties to their corporations.   

Quickly labelled the “Truman Committee” it would continue to function throughout the war and save billions in defense spending. Truman remained chair until nominated as FDR’s running mate in 1944.

Based on recent news coming out of Washington concerning the pharmaceutical industry’s response to the coronavirus pandemic, the country would benefit from another Harry Truman. Maybe everybody is chomping at the bit to know more about the FBI scheming to elect Hillary Clinton in 2016, but it just might be that how the drug barons are taking advantage of the health crisis and why our government has planned so poorly for a pandemic would be more relevant to the nation’s future.

Let’s look at the planning issue first.

Given the persistent occurrence of major health threats over the past fifty years---AID, HiNi flu, SARS, MERS, etc.---more attention to being prepared for a major pandemic could have been expected. Instead, Congress and administrations under both parties were asleep at the switch.

As early as 2009 the New York Times was reporting that outsourcing of drugs was a cause for concern. Critical ingredients for most antibiotics were being produced primarily in China and India as well as most generic drugs. Applications related to generic drugs mentioned nearly 1200 pharmaceutical plants, but only 13 percent were in the US. Forty-three percent were in China and 39 percent were in India.

Despite the inadequacy of domestic supply, appropriate additions to the Strategic National Stockpile were not made, nor did the federal government insist that hospitals take steps to create a reasonable reserve of PPE. Faced with using over and over the same N95 mask for multiple shifts, a Charleston nurse declared, “Our lives are disposable.”

The Trump administration has attempted to prompt American companies to bring production back to the US, but with little success. America’s for-profit health care industry considers the bottom line above all else.

In another planning miscue, apparently no one gave any thought to how to deal with the economic fallout from a pandemic. The country’s unemployment insurance system is premised on the idea that a quick infusion of money into the pockets of consumers will remedy any economic downturn and workers can expect to be back on the job in short order. But when a health threat is responsible for the economic downturn, the situation is different. Normal economic activity, either on the part of workers or consumers, is not restored until the health threat is gone. With unemployed workers numbering over 30 million, finding a well-paying full-time job to replace unemployment benefits, much less to match earlier earnings, will be nigh impossible

Dealing with the current pandemic is similar to preparing for war. The difference is there is no one you can negotiate a truce or peace treaty with. Only by finding a vaccine to wipe out the virus can the pandemic be ended, but this effort has opened the door to abuse and even criminality normally identified with war.

The Trump administration initiated Operation Warp Speed (OWS) in April with $10 billion provided by Congress to accelerate the process of producing an effective vaccine. At first they announced 14 companies would participate in the program. Since then, the federal government has expanded its funding activities to include several other biotech entities with associated missions. Corporate management has not hesitated to take advantage of the speculation surrounding the chosen companies.

For example, Vaxart, a San Francisco-based outfit with no track record in vaccine development and only 15 employees, announced in late June that its vaccine had been selected for preliminary funding by OWS and its shares began to soar. By the time the New York Times reported in late July that Vaxart had not been selected for funding in the last round at OWS, the hedge fund that owns much of the company had collected nearly $200 million in stock profits.

One of the core companies in OWS, Moderna, also has the distinction of not having brought a vaccine to market. Apparently, it is making some progress in its effort to produce an effective vaccine, but insiders at Moderna have not waited to take their profits, cashing in nearly $250 million since January.   

In late July, the Wall Street Journal reported that Kodak, not known as a drug company, had won a $765 million government loan to assist in expediting domestic production of drugs to treat several medical conditions and to reduce US reliance on foreign countries such as China and India. The loan was to be the first of its kind provided under the Defense Production Act, but two weeks later the loan was on hold. Bloomberg reported that questions arose about purchases of additional shares by Kodak board members shortly before the loan announcement.

The litany of abuses by greedy corporate managers and their financial enablers goes on. Just as in wartime, during this pandemic we need the vigilant attention of government officials committed to the public interest ready to protect the public treasury.

Where is our Harry Truman?