Industrial food and medications from unregulated markets

Regulatory and litigation costs substantially increase the costs of manufactured products, including medications and manufactured food. The obvious solution is to transfer production to non-regulated markets. Emphases mine. (See also and also and the American Meat Industry is fighting traceability.)

McClatchy Washington Bureau | 05/31/2007 | China has cornered the global market for vitamins

SHIJIAZHUANG, China...

... In less than a decade, China has captured 90 percent of the U.S. market for vitamin C, driving almost everyone else out of business.

Chinese pharmaceutical companies also have taken over much of the world market in the production of antibiotics, analgesics, enzymes and primary amino acids. According to an industry group, China makes 70 percent of the world's penicillin, 50 percent of its aspirin and 35 percent of its acetaminophen (often sold under the brand name Tylenol), as well as the bulk of vitamins A, B12, C and E.

In the wake of a pet food scandal, in which adulterated wheat gluten from China led to the deaths of thousands of pets in North America, and other instances of food and toothpaste tampering, China's vitamin producers are reaching out to reassure U.S. consumers that their vitamins are safe.

Whether that's true isn't clear, however. Foreign food-safety experts say China's larger companies have reputations to protect. The question is how they maintain quality control.

In this pharmaceutical hub, a two-hour train ride south of Beijing, managers at what may be the world's largest vitamin C factory said they're constantly improving quality control to keep pace with the tenfold increase in production this decade.

"We used to only comply with domestic standards. Now we must comply with international standards," said Liu Lifeng, an aide to the general manager at the Weisheng Pharmaceutical Co. Ltd.

Food and drug safety inspectors drop in at the plant from time to time.

"The authorities come unexpectedly without telling us," added Tian Yumiao, the senior director of the quality control department of Weisheng.

But the inspectors aren't exactly neutral guardians of public health. They work for the city government, which is a part owner of the parent company of Weisheng Pharmaceutical. That kind of relationship between food and drug inspectors and China's booming agricultural and pharmaceutical industries is coming to the fore as an issue in the food safety debate. The local government in this thriving city of 2 million people would suffer if it did anything to hurt the growth of local vitamin and drug producers, and local officials might be reluctant to admit that a public safety issue had arisen....

... Since U.S. laws don't require food and drug sellers to label products with the country of origin of ingredients, it's impossible for consumers to know where food or supplements are coming from, not to mention what factory produced them. [jf: the American Meat Industry is fighting traceability. Europe requires traceability.]

Vitamins fall into an area in China that straddles the food industry, comprising some 2 million businesses that exported $2.5 billion worth of goods last year, and the drug industry, which has 5,000 companies. Cases of adulterated or mislabeled products have hit both food and drug companies.

Fake drugs to treat impotency and help with weight loss are legion in China. Some African nations complain of fake Chinese medicines hitting their pharmacy shelves. Shady small pharmaceutical firms have exported bogus anti-malaria medication to Southeast Asia, where the illness is prevalent, allowing sick people to grow sicker...

... "Cheap labor has given China Inc. its edge in manufacturing. But pharmaceutical laboratories, which aren't labor intensive, benefit from subsidized rates on water and energy consumption, and often-lax oversight of environmental rules.

China's entry into vitamin C involved ingenuity - and an unwitting assist from the U.S. Department of Justice. In the late 1970s and early 1980s, several big Chinese drug companies, working with the government-backed Chinese Academy of Sciences, devised a method to cut the normal five-step process for making vitamin C to a two-step fermentation process, leaving European, U.S. and Japanese firms a step behind.

The new method cut costs and gave China a manufacturing edge. It wasn't until 1997, when U.S. attorneys broke up what they said was a price-fixing cartel of European and Japanese producers, [jf: "said" is an understatement -- it was a major criminal cartel beyond a doubt] that the door swung wide open for the Chinese producers...

... then Weisheng and three other big vitamin C producers appeared to take cues from their shattered competitors. Critics say the Chinese companies practiced predatory pricing, undercutting the remaining producers, with an eye to cornering the world market and making an eventual killing.

"They formed the cartel in December 2001 when the prices were under $3 a kilogram...

Today, only one Western company still makes vitamin C - Dutch-based DSM - and as China monopolizes vitamin C production, prices have hit $6 a kilogram...

This is in line with an April 23/07 article in WaPO by a food ingredient management consultant. This story adds some important background. China's dominance in part arose from technological innovation, partly from criminal corruption in the European monopolies, and lastly from development of a predatory Chinese monopoly. Underlying it all, however, is the ability to evade the costs of regulation and litigation borne by European and American manufacturers.

The next step is clear. Contact your representative and tell them you want European-class traceability of products and ingredients to the factory level

There's on other interesting angle to this story. In the last few years a number of clinical trials of vitamin therapy have had surprisingly negative results in the experimental groups. Not just no effect, but a negative effect. I believe that's intrinsic to the biological activity of the vitamin, but our experience with production of pet food by non-litigated non-regulated markets suggests that we should at least review the data associated with those studies.

del.icio.us tags: globalization, economics, industrial food

Krugman: 2006 article on health care reform

Brad DeLong pulled a post from his archives about a Krugman and Wells 2006 essay on health care reform. It's a great summary. For example:

The Health Care Crisis and What to Do About It - The New York Review of Books

...Employer-based insurance is a peculiarly American institution. As Julius Richmond and Rashi Fein tell us in The Health Care Mess, the dominant role of such insurance is the result of historical accident rather than deliberate policy. World War II caused a labor shortage, but employers were subject to controls that prevented them from attracting workers by offering higher wages. Health benefits, however, weren't controlled, and so became a way for employers to compete for workers. Once employers began offering medical benefits, they also realized that it was a form of compensation workers valued highly because it protected them from risk. Moreover, the tax law favored employer-based insurance, because employers' contributions weren't considered part of workers' taxable income. Today, the value of the tax subsidy for employer-based insurance is estimated at around $150 billion a year....

Never fails. If you want to understand strange behavior, begin with the tax laws. The entire article is worth reading and tucking away for future reference.

In a similar vein DeLong joins the discussion about whether Hilary's plan was "right" after all (but see how a comment catches him out) and Gawande finishes his NYT series with an outline of the road ahead (emphases mine):

... This is what that road looks like. It is not single-payer. It instead follows the lead of European countries ranging from the Netherlands to Switzerland to Germany that provide universal coverage (and more doctors, hospitals and access to primary care) through multiple private insurers while spending less money than we do. The proposals all define basic benefits that insurers must offer without penalty for pre-existing conditions. They cover not just expensive sickness care, but also preventive care and cost-saving programs to give patients better control of chronic illnesses like diabetes and asthma.

We’d have a choice of competing private plans, and, with Edwards and Obama, a Medicare-like public option, too. An income-related federal subsidy or voucher would help individuals pay for that coverage. And the proposals also embrace what’s been called shared responsibility — requiring that individuals buy health insurance (at minimum for their children) and that employers bigger than 10 or 15 employees either provide health benefits or pay into a subsidy fund.

It is a coherent approach. And it seems to be our one politically viable approach, too. No question, proponents have crucial differences — like what the individual versus employer payments should be. And attacks are certain to label this as tax-and-spend liberalism and government-controlled health care. But these are not what will sabotage success.

Instead, the crucial matter is our reaction as a country when the attacks come. If we as consumers, health professionals and business leaders sit on our hands, unwilling to compromise and defend change, we will be doomed to our sliding global competitiveness and self-defeating system. Avoiding this will take extraordinary political leadership. So we should not even consider a candidate without a plan capable of producing agreement.

I studied the Clinton I plan reasonably carefully, and I spoke on it to community groups in my prior home of Escanaba, Michigan (in the UP!). I remember it as very clever, but paternalistically dishonest. We were told nobody would lose anything, but that didn't make sense. One man's 'adverse selection' is another man's bargain -- so eliminating adverse selection means some people lose out on their personal bargain. I suppose that's simply the way politics works -- the public has a limited appetite for the truth. Even so, it rankled. Maybe this time we should try the truth for a change.

I'm curious to see what we'll do. I'm with Gawande, who says elsewhere in his article:

.... whether as a doctor or as a citizen, I would take almost any system — from Medicare-for-all to a private insurance voucher system — over the one we now have. Job-based insurance is bleeding away the viability of American businesses — even doctors complain about the cost of insuring employees. And it has left large numbers of patients without adequate coverage when they need it. In the last two years, for example, 51 percent of Americans surveyed did not fill a prescription or visit a doctor for a known medical issue because of cost....

A commencement address, from Salon

Salon features a commencement address today:

Words in a time of war | Salon.com:

This commencement address was given to graduates of the Department of Rhetoric at Zellerbach Hall, University of California at Berkeley, on May 10, 2007...

It's a brief review of the conquest of Iraq with a recurring theme of the relationship of power to reality. It's worth reading, though there's nothing there we don't know. Even so, it's useful to cover the territory every few months.

Cringely retrospective

My favorite tech writer reflects on 10 years of opining for (!) PBS. It's a weird gig, but it works for me. A quote explains why:

... As a former member of that [fourth] estate I have to tell you how consistently I have been disappointed over the last decade, not just by how poorly the press understands technology, but how easily manipulated they are by the technology industry. My friends in the press are not stupid, but they have bosses, and those bosses have commercial agendas, while I just write what I think should be written...

Cringely is more talented than most, but his other great strength is PBS. He's somewhat removed from the commercial influences that have made most of the trade press worthless.

Thanks PBS! Thanks Cringely! Keep on writing ...

What do climate change deniers have to do with Philip Morris and DDT?

Crooked Timber connects the GOP's tobacco stalwards with global warming denialists and an allegedly planted story that DDT bans increased malaria deaths. CT reports "the DDT campaign was pitched to the tobacco industry as a diversionary attack on the World Health Organization which was playing a leading role in campaigns against smoking. The leading figure in the exercise was Roger Bate of the American Enterprise Institute and its front organization, Africans Fighting Malaria.".

It's a great post with a nice aside about the relationship of global warming denialists to Philip Morris. The only catch for me is that I thought it was true that the WHO turned away from DDT for emotional and political rather than technical reasons. DDT has relatively safe uses, though it is true that any circulation of DDT means that it will also be misused. The WHO does favor some DDT use nowadays.

Bate's mission to distract the WHO from an anti-smoking campaign would, of course, be all the more effective if he had a point....

Industrial food part XVI: your melamine update

I'm in the small minority group that thinks we have significant issues with our food chain. So I'll keep posting about interesting discoveries, such as the use of melamine (melamime is a common but incorrect variant spelling) by a US company as a "binder" in animal food:

Problem Pet Food Ingredient in US Feed:

...The announcement by the Food and Drug Administration was the first indication that a U.S. company had used melamine as an animal feed ingredient. Agency officials said that melamine and related compounds were used to bind feed for cattle, sheep and goats, or fish and shrimp.

...The FDA alerted feed manufacturers that ingredients containing melamine and related compounds were found in products made by Tembec BTLSR Inc. of Toledo, Ohio, and used by Uniscope Inc. of Johnstown, Colo.

Tembec makes two products, AquaBond and Aqua-Tec II, which it distributes for Uniscope. The products are used in fish feed.

Uniscope also makes a product for livestock feed called Xtra-Bond, and it uses ingredients produced by Tembec. The FDA advised feed manufacturers and others not to use the products and to contact the two manufacturers...

I'm sure Tembec and Uniscope are unique. (joke)

Meanwhile Wikipedia has assembled two good articles on melamine and on the 2007 pet food crisis. The researchers think there's something lethal in the toxic stew other than melamine and cyanuric acid, but they can't identify it. The melamine/cyanuric acid combo is still a suspect though:

... a study by USSR researchers in the 1980s suggested melamine cyanurate (a salt formed between melamine and cyanuric acid, commonly used as a fire retardant ...) could be more toxic than either melamine or cyanuric acid alone...

Fragments of information, presumably coming from pet centric community sites continue to show up in obscure publications. The Catoosa County news, for example, reports on relatively stringent measures taken in South Africa.

I continue to look for pet food manufacturers who make measurable safety claims. Eukanuba doesn't certify their food as melanine free, but they are marketing their advantages including buying Google AdWords (emphasis mine, I'm surprised they don't use farmed fish.)

...* Eukanuba dog and cat dry foods DO NOT include wheat gluten, corn gluten or rice protein concentrate..
* All Eukanuba dog and cat dry foods are manufactured in our own facilities in Nebraska, Ohio and North Carolina...

... Eukanuba dog and cat foods are made with our own exclusive formulas, unique recipes and high-quality ingredients.

* Eukanuba diets are natural with added vitamins and minerals and DO NOT contain fillers or artificial preservatives.
* All Eukanuba dog and cat dry foods are made with natural chicken, lamb or ocean fish.

Not perfect of course, but better than average. Our mongrel has been on Eukanuba for over a year, so we're lazily stayed with them rather than preparing our own food.

Lastly, the ASPCA continues to disappoint. This was their big chance to identify manufacturers with better practices, but they chose to play it safe with their donors. Shame.

NYT has made "permalinks" official - another good sign

The New York Times has quietly made "permalinks" official. There's been a semi-approved way to do this since an odd agreement with UserLand software in 2003, but now there's a "share" dropdown (in IE anyway) next to most articles. One option is the permalink. It's a bit awkward to get at, Aaron Swart's permalink bookmarklet is still faster. Nonetheless, it's remarkable and commendable. The NYT is indeed on the way back from the brink.

Air travel is for the strong alone

Last week my return flight from Denver was delayed by 6 hours. If it had been cancelled I'd have had to fly to Chicago, get a hotel, and look for a flight to MSP the next day. There were no seats from Denver to MSP for over a day.

This is now the rule. Underpaid junior analysts attempt to quantify the chaotic and airlines have increased overbook rates. I suspect academic mathematicians will ultimately show that the system is non-linear, and that the consequences of overbooking cannot be predicted within reasonable bounds.

Eventually a few people will die from the stress of travel, there will be litigation, and the airlines will reform.

Air travel is now for the strong alone. I do not encourage my elderly parents to fly.

Gasoline prices: refining or secular trend - the 11 year chart

I was wondering the other day, how much gasoline costs in Europe. It's about $3.40 a gallon in the Twin Cities, and over $5.00 a gallon in Canada, but what about in France or Germany? Have gas prices reached the "magic" $7.00 a gallon mark? I'd long imagined that was a price point that would change consumer choices about where to work and live, and what to drive.

Is the effect entirely due to refining capacity, as some suppose? If so, wouldn't the effect differ between the US and Europe?

Once upon a time this would have been a hard question to answer. Tonight Google gave me the answer within a minute of asking the question: Weekly Retail PrPemium Motor Gasoline Prices (Including Taxes) - DOE)

I've graphed [1] the results, click the image below to see a more readable graph (Europeans, of course, have far more taxation on gasoline, that's the big gap in the chart):



In 12/2001 the US price was $1.25 and the French price was $3.24.
In 5/2007 the US price was $3.28 and the French price was $6.72.

The French price has doubled (2.07x) in a bit more than 6 years and the US prices have more than doubled (2.6x). (I assume the numbers are not corrected for inflation.)

Lately the US prices have risen somewhat faster than the European, that fits with part of the price increase being a refining capacity issue. Overall though there's a reasonably clear trend, albeit with more than a few reversals. If we accept the trend then French gasoline will be $13.50 @ 2013 and $27 @ 2019. I wonder how close this is to the "tipping point" where the ROI on petroleum storage starts to become persuasive.

Without adjusting for income in any way, it's noteworthy that US gasoline is now as expensive as French gasoline @ 2001 and French gasoline today is nearing the "magic" $7/gallon mark. I've long assumed that consumers will only change their behavior substantively when gas passes $7/gallon. It will be interesting to watch what European consumers do now.

[1] I tried to do this without resorting to Excel, but, really, non-Microsoft spreadsheets on the Mac are mediocre and Google's Spreadsheet app is really only a handy list manager. Excel still rules with an iron fist.

Reason: climate change knowledge by taxonomy of denial

Bless the net that brings us this sophisticated knowledge resource (via DeLong):

Gristmill: The environmental news blog | Grist

Below is a complete listing of the articles in 'How to Talk to a Climate Skeptic,' a series by Coby Beck containing responses to the most common skeptical arguments on global warming. There are four separate taxonomies; arguments are divided by:

* Stages of Denial,
* Scientific Topics,
* Types of Argument, and
* Levels of Sophistication.

In the ancient world we had nothing like this. Magazines and newspapers were never organized as a resource, and books were long, expensive, slow to emerge, static and inefficient.

This is the sort of thing that provides hope for humanity's feeble powers of reasoning.

The comet that depopulated the Americas

Archeologists are seriously considering the theory that a cometary impact about 11,000 BCE depopulated much of the Americas (Economist.com). If true, one wonders what the Clovis people might have achieved but for that impact. Would they have "discovered" Europe?

Some animals survived, and perhaps a few humans. We should learn much more in the next year or two.

I wonder if the Chinese will start scanning space for incoming comets. Maybe this sort of thing is not so infrequent as once thought ...

American meat industry wants you to chew your melamine happily

Wouldn't you like to know where your food is coming from? The American Meat Institute (AMI) wants you to trust them ...

Country-of-origin labeling is anti-import, claims industry

... Calls to implement mandatory country-of-origin labeling (COOL) are irresponsible, because the legislation is an anti-import law and not a food safety program, according to an influential US meat industry body.

The origin and safety of imports, especially from China, is under increasing scrutiny following the discovery of the banned chemical melamine in pet food and feed destined for US livestock.

The American Meat Institute (AMI), in a letter sent last week to Rep. Rosa DeLauro and Sen. Herb Kohl, who both chair Agriculture subcommittees at the Food and Drug Administration (FDA), said that US meat and poultry is safe.

J Patrick Boyle, president and chief executive officer of the AMI, and letter author, said that it was well known that all imported meat and poultry products are subject to re-inspection and every box of product is recorded and accounted for by the US Department of Agriculture (USDA).

"Unfortunately, some groups have public policy positions supporting mandatory county-of-origin labeling for red meat that are solely for the purpose of erecting trade barriers, especially directed at Canada and Mexico - our two largest export markets for red meat

Ahh, don't you love these industry groups? Boyle, of course, is lying. Canada is not what we're worried about, and the public's concerns are not about import barriers.

I'll send a note to my representative and senator, maybe you should to. I want labeling on the food and the ingredients, though that might require putting a URL on the label.

Krugman on the resurrection of bin Laden

Credit to Paul for catching Bush's resurrection of the man who's name he'd forgotten:

Trust and Betrayal - New York Times

...To keep the war going, the administration has brought the original bogyman back out of the closet. At first, Mr. Bush said he would bring Osama bin Laden in, dead or alive. Within seven months after 9/11, however, he had lost interest: “I wouldn’t necessarily say he’s at the center of any command structure,” he said in March 2002. “I truly am not that concerned about him.”

In all of 2003, Mr. Bush, who had an unrelated war to sell, made public mention of the man behind 9/11 only seven times.

But Osama is back: last week Mr. Bush invoked his name 11 times in a single speech, warning that if we leave Iraq, Al Qaeda — which wasn’t there when we went in — will be the winner. And Democrats, still fearing that they will end up accused of being weak on terror and not supporting the troops, gave Mr. Bush another year’s war funding.

Democratic Party activists were furious, because polls show a public utterly disillusioned with Mr. Bush and anxious to see the war ended. But it’s not clear that the leadership was wrong to be cautious. The truth is that the nightmare of the Bush years won’t really be over until politicians are convinced that voters will punish, not reward, Bush-style fear-mongering. And that hasn’t happened yet.

Here’s the way it ought to be: When Rudy Giuliani says that Iran, which had nothing to do with 9/11, is part of a “movement” that “has already displayed more aggressive tendencies by coming here and killing us,” he should be treated as a lunatic.

When Mitt Romney says that a coalition of “Shia and Sunni and Hezbollah and Hamas and the Muslim Brotherhood and Al Qaeda” wants to “bring down the West,” he should be ridiculed for his ignorance.

And when John McCain says that Osama, who isn’t in Iraq, will “follow us home” if we leave, he should be laughed at.

But they aren’t, at least not yet. And until belligerent, uninformed posturing starts being treated with the contempt it deserves, men who know nothing of the cost of war will keep sending other people’s children to graves at Arlington.

I'm with the congressional leadership on this. The American public has performed very badly over the past few years; I share Krugman's suspicion that denial is still commonplace. There's far too much at stake hear to fail for principal alone. Remember the Nader.

I suspect bin Laden is dead. French intelligence thought so over a year ago, and he's too much of a megalomaniac to remain this silent. Zawahiri, alas, is probably still alive.

Bias in science: not the gender, the children?

We recently had the opportunity to chat with some young academic scientists. They love their work and their world, but it's very different from the professional trades and corporate worlds I've known. The differences may be most obvious to an ancient outsider like myself.

I was left with the dawning recognition that the debates about gender bias in science may, like most passionate debates, be talking around the elephant in the room. The baby elephant, that is.

That's not to exclude a direct bias against the XX chromosome, but even there I wonder if the bias isn't opportunistic. The modern life sciences have been brutally competitive for decades, and globalization is increasing that competition. Any opportunity to eliminate a rival may be used, and XX might come in handy.

Even so, what I read and hear suggests the direct bias is against distractions, and parenting is a major distraction -- especially for women. The productive lifespan of a scientist is as short as the major league baseball career, and it coincides with peak fertility periods. Competition is severe and resources are tight -- it's logical that parenting should be recognized as a fatal weakness.

If parenting could be outsourced completely I think science might accept that, but scientists are trained to be realists. They know mothers are prone to fall in love with their dependents, and thus to become distracted.

In this matter science seems to have rationally abandoned the pro-parenting bias that is common in other worlds, such as primary care medicine and even corporations. I work for a very typical large publicly traded company, and our divisional leader is a mother (though her children are grown of course). The distinction, I think, is that executive skills don't deteriorate as quickly as scientific skills. There's a potentially longer productive career, and there are a larger number of intermediate slots. A corporation will be "happy" to pay a "CEO-capable" mother a relative pittance to take a mid-level management position that's compatible with childcare. The most senior people of both genders, however, are not distracted by children. Their children are grown, or managed by a (female) spouse, or they are childless (often by choice).

If I'm right, and this may be a testable hypothesis, then the prospects for change are very limited. We would need to change the global competitive imperative, shift fertility into the 40s and 50s, or extend the lifespan of the brain to escape this emergent trap.

The Economist is doing day passes now ...

The Economist is now doing Salon-style day passes. I gave up on them last year after 20+ years of dedicated reading, but even in their dotage they still have a few excellent articles in each issue. The ads are quick to click through, so I'll be catching up a bit now.

I can't image their readership is suffering; they've been successfully targeting fans of the WSJ editorial page. I wonder why they're bothering...