You're listening to the Bloomberg Opinion podcast. Catch us Saturdays at one and seven pm Eastern on Bloomberg dot Com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
Welcome to Bloomberg Opinion I Amy Morris. This week we look at medicine, from generic drugs to legalizing marijuana, mental health to physical wellness. We'll talk with Jonathan Bernstein, who makes the argument that legalizing marijuana would be good policy for President Biden. And we're learning more about useless decongestants and they're not the only over the counter products that don't work as advertised. And we'll hear more about stress
from the pandemic and how it continues to linger. Now we begin with generic drugs and how they may be too cheap for their own good. More than ninety percent of prescriptions in the US are filled with generic drugs. These cheaper alternatives to branded medications have expanded access to care for millions of Americans and saved the healthcare system hundreds of billions of dollars each year. While the prices of branded drugs have skyrocketed in recent years, generics prices
have been falling steadily, So what's the downside? Well, earlier this year, Senate Majority Leader Chuck Schumer called the current drug manufacturing system broken, citing a national shortage of nearly three hundred critical drugs.
From cancer drugs to everyday generics that deal with things like ADHD and asthma and even common infections. They're out of stock. Our doctors and our patients are near panic.
Okay, so let's talk about this now. Bloomberg Opinion editor Rachel Rosenthal joins us. Now, Rachel, how can prices for in demand products fall too low? It seems like there would be no downside.
It would sound like that, but as ever, in the healthcare market, the laws of supply and demand don't exactly meet up. So what you've got in the generic space, which has been a great boon to patients and providers in healthcare systems, which I mean generics have saved the US healthcare system hundreds of billions of dollars, as you've mentioned, you know, but when you've got prices that fall too low, you end up with companies that go out of business,
and you think, like, well, how is that possible? You know, here, I am like, if I'm desperate for medication, I'd be willing to spend more. But the consumer doesn't necessarily have a lot of buying power. When you get to the prescription drug market, there are lots of intermediaries that buy on behalf of us sitting here as employees of Bloomberg, if you're an employee in many other places. And so what they do is they sort of aggregate their buying power.
And because of that, because they have these massive amounts of buying power that is sort of aggregated among other buyers as well, they can become gatekeepers too, are access to prescription drugs, and so they can push prices where they want them to go, which is down and without that sort of floor that would be sort of driven by a competitive market. And these are often expressed in sort of contract terms that we don't see, you know, at the pharmacy counter, and we just wonder why why
did this company go out of business? And it can really, it can be really hard for a lot of these generics manufacturers to pay their rise in costs of labor among a number of other inputs. And you know, this is this is all sort of boiled down to we have an artificially suppressed access to generic drugs.
So I want to understand this middleman issue. Then you have this drug middleman who was able to influence the retail market by aggregating the contracts with pharmaceutical companies.
So what they do, and you know, the way you can think about it, or the easiest way, and this will be an oversimplification if you look at any of these sort of drug supply chain float charts, which I don't necessarily recommend, if you think about it, there's there's a generics manufacturer supplier. They need to get their product to a pharmacy counter, you know, and where you and I go pick up our prescriptions. In between, there's a wholesale distributor, so they pick up, you know, those palettes
of pills and they bring them to the pharmacy. That's really hard to get around, that wholesale distributor and middleman. So you know, for their services, you know, the church fees.
That all makes sense, you know, But what happens what's been happening recently in the retail drug market, the pharmacies and the wholesale distributors have been joining joining forces effectively, and they've become sort of what's called retail buying groups for lack of a better term, and they have because they you can't get your pill to the counter without these guys. Then they become very very powerful and determining prices.
How much responsibility then, does the drug manufacture are bear in this?
It's really important to distinguish between generic drugs and branded drugs. So branded drugs almost by definition have no rival, you know, and so they what we see in the in the branded drug space is the conversation that has overtaken the public sector, the public sphere, and conversations in Congress about staggering.
All we hear about is usually staggering the high drug prices and how damaging they can be, and that that's really because there's no competition there, you know, very little competition,
direct competition in the generic space. You know, it's it's quite different, you know, because of the Hatchwaksmann Act, which was passed nineteen eighty four, You've got the very definition was generic drugs will are equivalent to each other and to the branded drug and so you get what is up happening is once a patent expires, you get this rush to get into that for to be that first generics maker to be able to compete, you know, and so and if you are the first one, then you
get one hundred and eighty days of exclusivity. So that's a huge I mean, that's why, that's why this whole game keeps going because it can be very lucrative in those first six months. So what you end up with is very different from the branded space. You've got one. In the generic space, you have many, many, many competitors, and that that sort of drives the prices lower.
Now, you mentioned the Hatch Waxman Act that was back in the mid eighties. Correct, just for our audience, just a background. What does that act to do?
Sure, so that was really like the basis of the generic drugs, the generic drug market as it exists today. And you know it was I think it was designed to both protect you know, to protect innovation, so to make it to give incentives for branded drug companies to
in that. I mean, you know, there's a tremendous amount of R and D that goes into you know, many men and we've heard these statistics many many failures before one successful drugs, and so I think part of this was designed to sort of protect that incentive to innovate and invest heavily, uh, you know, and then you know, I think the there are certain guide posts to when generics can enter in the market, and then you know, there's certain exclusivity windows, as I mentioned before, and I
think sort of the the founding principle of patch Waxmen was that, as I mentioned earlier, that generic drugs are all equal to each other, and that if I take generic from manufacturer A, it is chemically the same as generic Manufacturer B is the same as branded drug you know X, you know, and so I think as as patients as people who take medicine, there have been many many reports that that might not necessarily be true because you know, the active ingredients can or the accipients or
you know, the different parts of the medication that are supposed to do different things can can interact with your body differently, you know. And I think people have heard a lot about this, as there are increasing numbers of shortages, efforts at pharmacies to sort of substitute has not always
been smooth. But that sort of explains that that sort of principle has sort of been a double edged sort of like that generics are all equal to each other, because it does make it very difficult to discriminate between when you're a patient, particularly and you go to the county, you know, and you go to your fill your prescription to say, oh, you know, I don't want this generic, you know, from this company, but I'd prefer the generic from that company.
And we are talking with Bloomberg Opinion editor Rachel Rosenthal about how some generic drugs may be too cheap for their own good, some unintended consequences, if you will, Rachel, how do these drug discount programs like Medicaid or other insurance programs impact this?
So I think, you know, what we've been discussing so far is sort of the fundamental economics, and then there are certain policies kind of exacerbate all this stuff, you know, And so I think it would be a struggle to say that, you know, all of this comes down to, you know, the rapacious middle men. But I think that as as you mentioned, there's Medicaid policies, the three forty B discount program that sort of add another layer of dysfunction on all this and all these sort of wacky economics.
And so, for example, in the Medicaid program, there's an inflation penal of what I would call a penalty, I guess they would call it.
Others would call it a.
Policy whereby if the price of the drug acceleers faster than inflation, they get sort of an added discount they have to rebate to pay a rebate back to Medicaid. And so you might say, well, well, if prices are falling, how would it be rising faster than inflation, Which is the question I asked. And the explanation is, so if you're thinking about a drug that is pennies, you know, one penny can look like you know, change can look
like a big change. That's one problem. The other problem is because of these contract terms that I discussed previously, the you know, there's these buyers can drop out really quickly, leaving manufacturers holding the bag. So there's a really brisk rotation of buyers that come in come out, and that creates a lot of variability in the prices depending on
the advocause. It's an average price. So when big, big, big buyers are dropping in and out from quarter to quarter, you know, there there the price that you're seeing may made spike and then fall, and then spike and then fall and if you're sort of penalized by an average, it doesn't it's not really accurate. So you've got the structure of these policies that are it was sort of really designed for a branded drug market that has been sort of applied, i would say, mistakenly to the generics market.
Bloomberg Opinion editor Rachel Rosenthal, and coming up, we're going to take a look at a proposal to legalize marijuana on the federal level and what that could mean politically for the Biden administration. You're listening to Bloomberg Opinion.
You're listening to the Bloomberg Opinion podcast counts Saturdays at one and seven pm Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
You're listening to Bloomberg Opinion. I may Mee Morris. President Biden may be looking to boost his reelection hopes and his sinking poll numbers. And there's one policy position that is popular with voters and could help unite Democrats. It is legalizing recreational use of marijuana. Let's bring in Bloomberg Opinion columnist Jonathan Bernstein, who covers politics, and Jonathan, you're talking about in your column recreational marijuana not medicinal, which
kind of surprised me. How could this help?
Legalization right now is a very popular idea. Twenty four states have now made recreational marijuana legal, and when you do polls, there was a Gallup poll out this month and it was around seventy percent support legalizing recreational marijuana. So it's not a fringe position anymore. For those who might be in states don't have this and you know, may not realize, it's no longer a fringe position. It's
a mainstream, popular position. And the truth is that especially among Democrats, but it's about fifty to fifty among Republicans. And the truth is that Joe Biden has been behind public opinion on this, and I think with good reason.
But I think it's also time now for him to promptly switch now.
It seems like there would be a risk of some division on this issue because it has already been handled by those states that want to legalize it. Why bother with something that could be this touchy.
It's seventy percent, so yes, they're thirty percent to oppose it, but it's a popular position. Generally, you want popular positions. On top of that, it's popular among Biden's in Biden's party party, particularly popular among some of the strong Democratic groups that he's had some problems with recently, young people,
black people, and those populations. I've been looking for to have some signature thing that they feel like Biden's doing for them because they don't feel like the economy's working for them at other things. And you know, in politics, it's always a good idea, you know, everything else aside to find something that unites your party and splits the other party. And that's something that legal marijuana does now.
So you know, up to this point where support was growing, but it wasn't at this level, my feeling was that there's no reason for Biden to get involved because as long as public opinion is moving his way, all that president involvement tends to do is polarize things. And so instead of support growing among Republicans, which is what's been happening, Republicans would tend to move against it if the president was for it. But now it's sort of reached that
stage where it sort of doesn't matter anymore. It's so overwhelmingly popular that it's unlikely. And the other thing that I think it has going forward is that because it's been in so many different states, you can see that the policy as it rolls out doesn't generate backlash. It doesn't, you know, people don't regret it. Especially there aren't any states that have legalized and then said, oh my god,
this isn't working, we need to go back. Biden has made some small moves to change it, but he hasn't really sort of come out full scale, Yeah, we support this, and it's probably time.
To do that now. Historically speaking, you compare this in your column to the public push that then Vice President Biden gave President Obama on the issue of me marriage equality. How was this similar?
Well as an issue, it sort of had the similar sense that it used to be very unpopular, it became more popular, the president got behind the curve on it, It became almost universally popular among Democrats and split the other party, and then eventually Barack Obama got on board. In fact, what I suggested in the column might be a nice way of doing this is if the vice president Vice President Harris was to simply answer the question
what should the administration policy be? Which is what happened ten years ago to Biden gave a public push to Obama. And at that point, given the Democratic Party was one hundred percent favor of matter equality and Obama was way behind the curve, Obama didn't have much choice but to finally accept that that was where things were going, and he made his own policy change. And so, you know, Harris could do that at this point, could do it. She could you know, say well, yeah, you know, yes,
I think we should legalize. And that might be a way to push Biden, who would be flip flopping. Politicians don't like to flip flop. That might be a way to push him to do it. And it also might help Harris a little bit to show that she has some foubt within the administration.
Well, let's talk about that. The vice president's position on marijuana is a complicated one anyway, Remember she has a history as a prosecutor judicial reform, that sort of thing. Would she be the voice that would come out, you.
Know, presumably she's in favor of Demographically these are Democrats, right, So Democratic Party is again something like ninety percent in favor of it. So my guess is that Harris in her gut probably supports it, but forget about that. Politically, if Harris wants to be president, she wants to take the positions of the Democratic Party, and of course every vice president eventually wants to be president. So you know, I think that politically it's it's a smart place for
her to be. And you know, if somebody wants to throw back to her, throw it back at her that while she put people in jail years ago as a prosecutor, that's a conversation she's going to have to have at some point. She had it a little bit when she ran for president. If she ever wants to run for president, for the nomination, she's going to have to go through this. So why not get ahead of it now?
And we are talking to Bloomberg opinion columnist Jonathan Bernstein, who says a push to legalize recreational use of marijuana that actually helped Democrats win the White House in twenty twenty four. It also seems, though, Jonathan, that it might be better to get a coherent message together with the administration on the strength of the economy. We've been hearing how the economic numbers are very good, people are spending more, but consumer sentiment is just rock bottom and there's a
disconnect there. Maybe that should be like, that sounds something safer, right, that sounds like a safer thing for them to tackle.
Well, there's no.
Question that is going to have to push the economy, and if people do not change their minds about the economy over the next year, he's in grave danger. Talking on marijuana could generate some positives for a few days, it might linger with some of the groups who care about this the most. You know, this is one of the great puzzles of US politicians right now, is where what's the reason for the perception gap and will it continue going forward?
And we could talk about that, but.
Yes, that's you know, whether that's a question of presidential messaging or something about the economy or how things work, and you know, generally it's a complicated topic.
Your column lays out a really good argument for the administration to embrace this policy and move forward on it. Do you feel like it's not likely to happen and why?
That's a good question. It wouldn't surprise me at all if it happens.
I do think that it's something that you know, again, this isn't a fringe thing anymore. This is Ohio, you know, and other states that are lean Republican or are swing states. It's a majority issue, and politicians they don't like flip lobbing. They do like getting on the side of a popular issue. So would it surprised me. It would not surprise me a lot either way, because those are the sort of
two dynamics going going into it. I don't think that they are afraid of taking a huge backlash, but it is, you know, with things going on in the world and with the economy, as you suggest, talking about something that's not necessarily considered that important might not be where they
want to spend their time. Again, that's one of the reasons why I thought it was sort of fun to think about, Well, what if Harris forces the issue, because if it really comes down to having to talk about it, I don't think that Joe Biden wants to be there, you know, defending a minority view within the party.
If it becomes something that people are talking about.
All right, Jonathan, we're going to leave it there. Thank you so much for taking the time.
Thank you.
Jonathan Bernstein is a Bloomberg opinion columnist who covers politics and coming up is that decongestin not quite working for you. There's a reason. Don't forget. We're available as a podcast on Apple, Spotify or your favorite podcast platform. This is Bloomberg Opinion.
You're listening to the Bloomberg Opinion podcast. Catch us Saturdays at one and seven pm Eastern on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
This is Bloomberg Opinion. I Amy Morrison. We are deep into cold and flu season. You've probably already made at least one trip to the farm to find relief. I know I have, But buyer beware. Over the counter oral decongestants are not all they're said to be. Bloomberg Opinion columnist Faith Lamb cover Science and his host of the Follow the Science podcast and joins us. Now let's start fae with PE. We've seen those two letters on pharmacy shelves,
on different boxes and containers for quite a while. What is PE.
It's something called phenol epron, and it's actually the dominant drug for decongestants. It's the dominant ingredient and it came to be dominant after several others were removed from the market for different reasons once it actually worked pretty well. The phenol epron has been in the news recently because a couple of pharmacists did a deep investigation and found that it really does not work.
And so they've all been pulled. Is that right?
They are working on that, I see, But at least we it's been made public now that these drugs don't work. The thing that I think was particularly deceptive is that there's a there's a drug called sudafed pe, and there was a sudafed actually did work really well, and then it was taken off the market because if you remember the series Breaking Bad, people were using it to make crystal meth, and so it got it got actually got taken off the shelves. But it is available if you
go to the pharmacist and ask for it. It's just hidden away so that it would be harder for the drug the illegal meth cooks to get it. But then this suit of fed pe is actually a completely different drug. It's not the same thing at all, and in fact it it doesn't seem to work.
See. Okay, I'm glad you explained that. Because I take zertech and sometimes Zirtec d D being a decongestant. I assumed, and this is on me, that sudo fed pe was just like an additive to classic sudo fed. What you're saying is it's not even sudafed.
No, it's a completely different thing. If you want the real Suita fed, you're supposed to ask the pharmacist. But people just don't know that. You know, I've talked. I talked to someone who was in the drug industry and he said, well, you know, you can get the real stuff if you just ask, but but people haven't. You know, those two people call these sort of decoy medicines now
on the shelves. And you know, they had a good reason for pulling the pseudofed from the shelves because there was a problem with the manufacturer of this this dangerous illegal drug. But the problem was then there was all of this deceptive marketing so that people thought they were getting the same thing when they were getting something that
was in fact grandfathered in. It just hadn't really been thoroughly tested for efficacy because a lot of over the counter drugs were already on the market before FDA started requiring that things be tested for efficacy.
Wait say that again.
Oh yeah, So you know, and the battle days before there was an FDA, you know, anybody could sell anything, and people sold terrible toxic things. And the initial directive of the FDA was to that drugs be safe, that they not harm people. And then by the nineteen sixties,
FDA was also requiring efficacy. But there were a whole slew of drugs already on the shelves that hadn't been tested for efficacy, and so FDA had to deal with that, and they dealt with that by sort of grouping drugs into these categories and then they would try to determine whether the categories were sort of generally effective, so they didn't really go back and test every individual drug that's
on the shelves. So that's why some things on the drug store shelves have been tested for efficacy if they're relatively recent arrivals. But that there are a lot of old drugs that we're grandfathered in and haven't been thoroughly tested.
So are there other drugs or products out there besides pseudo fed and other decongestants that are being sold as being effective but they're not not really?
Uh yeah, yeah, I think a lot of I talked to the two pharmacists, pharmacy professors who really spearheaded the effort to look into these decongestants, and they said, oh, yeah, there are other things that have also been grandfathered in, often things with fairly vague claims that I think they mentioned some drugs for gastro intestinal problems and anything that's
marketed as homeopathic. Usually the claims are pretty vague. But those none of those are actually approved by FDA for efficacy, and supplements also are only very loosely regulated.
And we are talking with Bloomberg Opinion colonist Faith Lamb about ineffective drugs on our pharmacy shelves, and you were talking about the role that the FDA is playing and how that role has evolved over the past few decades. So what is the FDA doing now? Is it just a matter of screening them. I know that there are some that are going to remain on the shelves because they've been grandfathered in, but that's not sustainable.
Yeah, No, I think that because these pharmacy professors, you know, called attention to the fact that there were already a number of studies that were really damning about these these decongestions that have been dominating the market. That there were some controlled trials where people took the real SUITO fed and got a lot of relief, and they took these
drugs and it was no better than placebo. So, you know, it may take a while, but I think these are going to eventually get pulled from the shelves, and the CBS chain has already started getting rid of some of them. So some of the pharmacies are are already kind of trying to be ahead of the curve because the consumers have now heard that these things don't work as advertised.
What did happen to the pseudoaphedrin or the phenol propanolamine? We've heard all of the I mean I remember hearing that growing up, that these are the two drugs that you really need if you want to get some congestion real relief. Where'd they go?
Well?
Right, So one of them was was and it was also an ingredient in some weight loss drugs. There was one called dexatrim. Yeah, they were in higher doses in those drugs, but they those drugs were associated with stroke and so even though there was no evidence that the doses in the cold remedies would cause a stroke. Nobody really wants to take a cold remedy that is even you know, as any connection with stroke, So that I think that was that was smart they got rid of that.
And then the sudofied was taken off the shelves and people can still get it if they ask the pharmacist for it, but there was a certain amount of red tape you have to go through to get it because it was it was taken off the shelves because of the its use in making illegal crystal meth. Right that was in the early episodes of Breaking Bad. You know, they would go to these pharmacies and try to get sudofed and so that had they had to do something
to keep the the meth cooks from getting it. So you don't only have to ask the pharmacist for it, but you have to register and put your name in just so that there can be some tracking so that you're not getting you know, different boxes from different pharmacies and building up collection to cook your crystal meth. But you can, you can get it, It's just I think
most consumers don't know that. And because the sudafed pe looks so much and sounds so much like the old drug that people assume it's going to be the same thing, and it's not so.
Now that we are well into the cold and flu season and people sound congested and are congested and are dealing with head colds. Present company accepted, how is that the way we have to get relief? We actually have to go to the pharmacist and say, hey, I'm help me out here.
You know, I think it's actually a good idea, because you know, I talked to these two pharmacy professors. They were great, and they said, you know, that's what we're here for. We may look like we're busy and where we're stressed, but our job is to help people navigate what's on the shelves and that people should not hesitate when they're not feeling well to ask the pharmacist to
recommend something. And if you're really congested and miserable, then getting the drug that's behind the counter might be the right answer, or it might be just to rest it out, you know, but I think people would rather not take a drug that's not going to help them.
That is terrific stuff. Thank you for doing all of that. Legwork. Fay, we appreciate it.
Thank you.
You're listening to Bloomberg Opinion. I'm Amy Morris. The COVID pandemic may be over. The impact lingers not just when and where to wear masks, are scheduling your booster shots, but the universal stress that we are all collectively feeling. Bloomberg Opinion columnist Lisa Jarvis covers biotech, healthcare, and the pharmaceutical industry, and she joins us. Now, Lisa, talk to us about the level of stress. How intense is this If we look.
At it as the general average level of stress we're feeling, that hasn't necessarily changed over time. But what has changed is that a growing proportion of Americans are feeling the highest level of stress. The American Psychological Association does a survey every year. It sounds kind of silly, but it's
a stress survey to gauge where we're all at. And they found at this point, twenty four percent of adults, so nearly a quarter of us, are rating their stress at an eight or higher out of ten, so eight, nine or ten out of ten, and that's increasing. You know, obviously we've all gone through the pandemic, but there's just been this relentless kind of pressure that at some point we run out of resources to deal with it. And I think we're seeing that in the data.
But where is this coming from. I thought the pandemic was pretty much over well, I think not for.
Everyone, but I think it's parents. A lot of parents are continuing to feel a lot of stress, but a lot of people are citing the economy as a source of their stress. I think seventy percent cited the economy as really being one of the reasons that they're feeling a lot of pressure these days. And that's significantly higher than pre pandemic. And it's just kind of layering on top again. You know, you have a period of relentless kind of fear, uncertainty, social, social isolation, and it's hard.
You know, at this point, we're not just coming out of that from our base point. We need to get back up to our base point of where we are managing our stress.
Is it worse for kids or the elderly who's feeling this?
You know what's interesting is it to really younger adults, people in the eighteen to forty four range, And so, you know, on some levels, I asked the folks who ran the surveytion. I think of it as there's just more awareness and so people are feeling more open about talking about it, and I think their feeling was you know, yes, that's part of it, but it's not all of it.
And I think it's a combination again of parents just not when it comes to that population having the time to ever get back to their baseline pre pandemic, and then now feeling other you know, kind of layers of stress that are adding on top of that.
And that's why the stress didn't abate as the pandemic receded, because their feeling stresses from other areas and their nerves are already kind of raw from the pandemic. Is that what I'm interpreting, Yeah.
That's exactly it.
There's just kind of this you know, I think if you think about the amount of resources we have to deal with, you know, kind of what life is throwing at us. It's finite, and some of us naturally have more than others too, and so when those get depleted, it can be hard.
To get back to that base level. And then you know, when you add more stress on top of that, we know that kind of chronic pressure really makes it hard to recover back to that base level. So that seems to be what's going on. People are just continuing to struggle, So.
What's the solution. Is there any guidance for us?
It sounds so squishy, but some of it. One psychologist I talked to I really kind of liked this was to have someone stop. She asked her her patients to stop and do like a self assessment and ask themselves, where's the fire? You know, is there something really immediately stressful going on that is an emergency? If not, like take a breath and try to take things down a notch and like ground yourself. I think some other advice, because some of it has to come with just everything
we're seeing in the news. Turn off and sometimes the news if it's too much, Get what you need to know for your to make decisions for yourself and your family, and then just try to get out of some of your maybe social isolation that ruts we all got into during the pandemic.
Bloomberg Opinion columnist Lisa Jarvis covers biotech, healthcare, and the pharmaceutical industry and that does it. For this week's Bloomberg Opinion. We are produced by Eric Molow, and you can find all of these columns on the Bloomberg terminal. We're also available as a podcast on Apple, Spotify, or your favorite podcast platform. Stay with us. Today's top stories and global business headlines are just ahead. I maybe Morris send. This is Bloomberg.