For all its faults, the pharmaceutical industry remains one area in which the United States is still a competitive world leader. But without drastic changes in the way the FDA regulates the industry, this advantage may not last.
Back in the early 1980s I worked for one of the major airlines, a company you have probably heard of, even though it hasn’t flown in over a decade. This was shortly after President Jimmy Carter had deregulated the airline industry. My employer, a pioneer in commercial flight, had grown accustomed to doing business in a certain way and lacked the foresight and skill to adapt to the new environment. Prior to deregulation, airlines needed to have lots of lawyers, whose main job it was to lobby the federal government to get and keep valuable landing slots at major airports. Once you had those, you could count on a steady stream of profits, since the Civil Aeronautics Board limited competition on most routes, thus ensuring high load factors, and also set fares the airlines were allowed to charge. Overnight, things changed 180 degrees, and airlines had to pay attention to things like customer service and efficiency. My employer failed to make the cut.
We may be seeing the opposite phenomenon in the pharmaceutical industry. According to a recent report by KPMG, industry returns on R&D spending have fallen from 18% in 1990 to 10% in 2010, and annual growth in R&D spending has slowed from an average 10% between 1999 and 2006 to just 1% since 2007. Pharmaceutical companies may be turning to lawyers and the regulators to make up the difference. [click to continue…]
I met Taymor Kamrany in 2003, just over a year after the U.S.-led invasion of Afghanistan had ousted the Taliban. We were both in Kabul, working on a USAID program to improve the environment for business and help government institutions rebuild their capacity to support a market economy. It was not an easy task. I was working with the management and staff of the Export Department of the Ministry of Commerce. Apart from the Head, a man in his fifties who had worked in the ministry throughout all the upheavals of the previous 30 years, no one in the Department could speak any foreign language. Though Afghanistan had once a thriving export economy – until the civil war of the 1990s, it was the world’s largest exporter of raisins, which were the most delicious I have ever eaten – its productive capacity was largely destroyed, its fields strewn with landmines, its best and brightest long ago departed. I was there for just a month, but in spite of these daunting challenges facing the country, I sensed a lot of optimism among both Afghans and foreigners.
Taymor, an Afghan-American, born in Afghanistan and relocated with his family to the U.S. when he was a small child, was bright, ambitious, idealistic, and very American in demeanor and outlook. Apart from speaking Dari, the main language of Kabul and the northern part of the country, and having some relatives he visited from time to time, he seemed to be little more at home there than I did. After we had each left Afghanistan, I learned that he had entered an MBA program at the University of Southern California, and still later that he was working for one of the Big 4 consulting firms. Then we more or less lost touch. But most people never prune their e-mail address books, so a while ago I received a broadcast e-mail from Taymor, linking to an article he wrote, which is published on the web site of the Middle East Institute, entitled Afghanistan 2002-2012: A Decade of Progress and Hope. No question mark. [click to continue…]
I recently joined a new frequent flyer program, which is not something I expected to do. I am already a member of several, covering each of the three major airline alliances, and I thought I was pretty well set. But as I sat in the departure lounge in Lomé, the capital of the West African nation of Togo, waiting to board a flight to Abidjan, Ivory Coast, a pretty young lady in company livery invited me to join the ASky Club. ASky is a new, mostly private, airline that serves a substantial West and Central African route network, operating Boeing 737 and Bombardier Dash-8 aircraft. It is affiliated with Ethiopian Airlines, which offers connections to North and South America, Europe, and Asia. [click to continue…]
About 10 days ago I sat at breakfast in Lomé, the capital of Togo, a sliver of a country in West Africa, watching French TV news of the capture, and what turned out to be false reports of the liberation, of seven French tourists in northern Cameroon by the Nigerian radical Islamist group Boko Haram. It was hard not to feel concerned about the future of this part of the world. Lomé is a good 800 miles as the crow flies from where this most recent drama occurred – and a similar distance from northern Mali, where fierce fighting continues for control of the city of Gao – and I was in far more danger there from motorcycles going the wrong way down one-way streets than from terrorist kidnappers. But the fairly recent emergence of economic dynamism in much of Africa after decades of stagnation due to poor governance and political and ethnic strife remains fragile, and these developments highlight the risk. [click to continue…]
I am not a great fan of Jeffrey Sachs, the former Harvard development economist now Director of Columbia University’s Earth Institute, whose main claim to fame is having administered shock liberalization to the Bolivian and Russian economies in the 1980s and 1990s, respectively. Though his prescriptions did put an end to Bolivia’s hyperinflation, neither Bolivia nor Russia is a paragon of economic dynamism, and the main beneficiaries of his Russian experiment were the soon-to-be oligarchs who snapped up state-owned companies at a fraction of their real value. Nevertheless, Sachs, writing in yesterday’s Financial Times, has neatly identified the culprit in the U.S. fiscal sequester, which went into effect at noon today. It is not the Tea Party, nor even the House Republican leadership, but Obama himself, counterintuitive as that may appear. [click to continue…]