Month: July 2022

Question #1: Do you know what the following acronyms stand for?

• MRA
• FDA
• EMA
• GMP

For the record, they are: Mutual Recognition Agreement, Food & Drug Administration, European Medicines Agency, and Good Manufacturing Practices.

Question #2: If you didn't recognize all four of these acronyms, did you nonetheless have a strong opinion about whether the United States should automatically accept European approvals of European pharmaceutical facilities instead of always requiring its own?

Hmmm. Readers of this blog will probably not be surprised to learn that just because they haven't heard of something, that doesn't mean nobody is doing something about it. Various agencies, because they are not staffed with idiots, have been aware of this issue for more than two decades and have been working on it the entire time. And guess what? We do have a reciprocity agreement regarding pharmaceutical facility inspections with the EU (and Britain). Here's the history:

1998: First attempt at an agreement.

2001: Attempt fails. Everyone gives up for a while.

2012: Congress passes a law allowing the FDA to try again.

2014: Negotiations begin, mainly between the FDA and the EMA, but also with every national regulatory authority in the EU.

2017: An MRA is agreed to. The plan is to implement it for most ordinary facilities by July 2019; for veterinary facilities (which are under the authority of the USDA) at a later date; and for facilities that manufacture vaccines and plasma-derived pharmaceuticals by July 2022.

2019: The MRA is implemented as planned after the FDA reaches agreement with Slovakia, the last of the EU countries to gain US approval. By the end of 2020, agreement is reached in principle for veterinary facilities but is not implemented.

2020: The COVID-19 pandemic puts negotiations on hold. Both the FDA and the EMA are putting every spare resource to work on COVID.

July 2022: Because of the pandemic delay, there is still no MRA today for either veterinary facilities or vaccine factories. Without this, it is not legal for the FDA to accept the results of an EMA inspection for something like the monkeypox vaccine. It must verify GMP itself.

This is the basic timeline and it doesn't seem unreasonable to me. In 2017 there was no special reason to hold up the main MRA for vaccines, so they didn't. Then, when COVID hit, the vaccine MRA was put on the back burner in order to expedite cooperation on COVID. That's also reasonable. The downside of all this is that when the monkeypox outbreak hit us earlier this year, there was no MRA in place for vaccine facilities.

The cost-benefit on these decisions is sky high. On the benefit side we have an MRA in place for nearly all human medicines. On the cost side we have a short delay in approval for a single vaccine aimed at a disease that's extremely mild. Monkeypox needs to be dealt with, but it's simply not a high priority compared to a killer like COVID.

Would any of you have done things differently given the resources available to you?

POSTSCRIPT: Whenever there's a panic over something like this, it spawns a widespread sentiment that (a) Agency X is moving too slowly, (b) they obviously aren't taking this seriously, (c) this is an emergency and they should ignore the rules, and (d) WHAT THE HELL IS GOING ON WITH THESE STUPID BUREAUCRATS AND THEIR STUPID RULES???

My advice: STFU unless you really, genuinely know what you're talking about.¹ The rules might or might not make sense, but they aren't stupid. And if we routinely cave in to Twitter mobs and discard them whenever public pressure gets heavy, someday we will pay a big price. And I wonder who will get the blame?

¹This does not include generic knowledge about the deficiencies and regulatory capture of Agency X. I'm talking about the nuts and bolts here.

I spent so much time mucking around with this chart that I'm no longer quite sure what I was looking for in the first place:

What it shows is that since 2012 the number of housing units per adult has declined by about 1% and the number of rental units per adult has increased by about 3%. In other words, the changes over time have been minuscule.

But rent has been steadily increasing the entire time regardless of whether the housing supply was going up a little or down a little. Adjusted for inflation, rent is now more than 40% higher than it was a decade ago. In the previous decade, housing supply also moved up and down slightly and rent stayed dead flat the entire time.

That seems odd, doesn't it? Shouldn't rent be a little more responsive to changes in housing supply?

When we were in Paris the opera house became a bit of a joke. It was something both of us wanted to see, and it was only about ten minutes from our apartment, but for some reason we kept missing it. Finally, a couple of days before we left, we made it over on a rainy day.

And we got lucky. A sign outside said the main auditorium was closed for rehearsals, but about five minutes after we went in rehearsals were apparently over. It's a pretty magnificent theater, so I'm glad we got to see it.

I have four pictures of the opera house for you today. From top to bottom:

• The auditorium.
• The main staircase.
• A side room used (I assume) for milling around during intermissions.
• A view from the balcony looking out on Avenue de l'Opera.

All except the last one are massive panoramas that were stitched together in Photoshop.

Bloomberg reports that supply chain problems are visibly easing:

Supply strains, while still afflicting many consumers and businesses, are becoming more mundane than menacing like they were six months ago, especially in the U.S. Snarls have eased since their pandemic peaks and some are already adding less inflationary pressure.

....But the gradual end of the pandemic-driven supply crunch might give way to another potential headache: a slump in consumer demand that throws economic growth into reverse and leads to an ugly inventory pileup.

“Pressures in the global goods sectors, which have been a central driver of inflation, may finally be easing,” Citi economists led by Nathan Sheets wrote in a research note this month. “The bad news is that this looks to be occurring on the back of a slowing in the global consumer’s demand for goods, especially discretionary goods, and thus may also signal rising recession risks.”

Here's another bit of evidence:

The peak for world shipping rates was in July 2021. pic.twitter.com/Iz9vUKkQn0

— Hedgeye (@Hedgeye) July 18, 2022

Let's not ruin this by overreacting to the past, OK?

I got bored, so I made a chart:

I was curious about how core inflation was doing here vs. other big countries in Europe. Unfortunately, the Europeans don't seem to produce seasonally adjusted figures, which means the raw monthly numbers are so volatile that you can't make any sense of them. It's just a bunch of huge spikes up and down. So I took a 3-month moving average instead, in order to produce lines that are more readable and show medium-term trends a little better.

UPDATE: The chart originally had two measures of US inflation, but I was badgered into adding a third. It's a rough¹ estimate of core HICP, which is the European measure of inflation. This is the one to use if you want to apply a similar methodology to all countries. It doesn't change our story much, though.

¹It's rough because the BLS doesn't publish its real estimate of core HICP. Instead I'm using an approximation suggested by Jason Furman: core CPI minus housing.

As you can see, there was a period earlier this year in which the US had higher core inflation than any of these other countries. But that's no longer the case. Our core inflation rate is cooling off while the core inflation rate in Europe is skyrocketing. Right now we have just about the lowest core inflation rate around and it's declining.

I used the core inflation rate because European countries might be more sensitive to increases in food and fuel, and I wanted the comparison to be fair. Also, core inflation says more about the underlying health of a country's economy than headline inflation.

POSTSCRIPT: Going a little beyond just raw data, my interpretation of these figures is that the US inflation rate is going down because the boost from the stimulus bill has worn off. That isn't happening in Europe because there was no stimulus to begin with.

I know this isn't a joking matter, but . . .

That's my kind of report: everyone is to blame.

But wait: 400 law enforcement officers? 400? What in the everlasting fuck was going on down in Uvalde?

The US may be suffering through high inflation, but so is everyone else. And our overall economy looks pretty good. The rest of the world sure thinks so, anyway:

That's the exchange rate of the dollar against a broad basket of other currencies, and it's been going nowhere but up for the last year and a half. This is an indication that nearly everyone on the planet is betting that the United States is the best positioned economy in the world right now.

Monkeypox reporting has been atrocious. Alternatively, I've lost the ability to use Google and am now all alone in the universe. I'll let you decide.

The question I have on my mind is whether the CDC has responded to monkeypox with an effective testing regime. According to the bulk of the news media, along with LGBT activists everywhere, the answer is a very loud no. The problem is that testing has been tightly constrained by the CDC's insistence on having it done through federal labs, which bury doctors in stupid paperwork and have limited capacity anyway. Only recently have they begun to authorize commercial labs to perform monkeypox testing, something that should have been done long ago. It's COVID-19 all over again. Has the CDC learned nothing?

I have my doubts about that. Even if you think poorly of the CDC, they aren't full-on morons. If they had a good alternative they wouldn't mindlessly repeat the exact same testing strategy that got them in so much trouble two years ago.

But how do I find out? The first obvious bit of data I'd like is the number of monkeypox tests that have been performed weekly since the first case was discovered. I can find that nowhere.

The second bit of data that would be useful is the number of monkeypox tests performed in Europe, which would provide some clue about whether we're doing significantly worse than our peers. But I can find that nowhere.

The third bit of data is an explanation from the CDC about why they do things the way they do. Is it because they're stupid? Is it because there's value in being super careful in the early testing stages of a disease outbreak? Or is it because there's inherently limited testing capacity for any new disease outbreak and it takes time for commercial labs to ramp up? I can find an answer to this nowhere.

The fourth bit of data I'd like to get—please stay with me here—is how valuable testing is in the first place. After all, monkeypox is not like COVID. If you have a bunch of new lesions on your body, you probably have monkeypox. No test needed, really. Nor is there anything much you can do about it except isolate and wait for it to go away.

I'll acknowledge up front that I'm inclined to think the CDC may have problems but is not literally filled with idiots. But you never know! Answers to these basic questions would help me figure it out, but I did quite a bit of searching last night and literally came up with nothing. AITI?

A few days ago the New York Post reported that the FDA had delayed its inspection of a monkeypox vaccine facility in Denmark. As a result, the US was unable to import vaccine doses made in the new facility, and this in turn was laying waste to an entire generation of Americans. Here's a followup from AP:

Thousands more doses of monkeypox vaccine are expected to soon begin shipping to the U.S. after federal health officials said they had completed an inspection of the overseas plant where they were manufactured.

....The U.S. government has purchased more than 1.1 million completed doses of the vaccine produced by Bavarian Nordic in Denmark....An FDA spokeswoman said late Wednesday that regulators “expedited and completed an inspection of the company’s plant.”

“We do not expect any delay in vaccine availability due to this process,” she said in an emailed statement.

The FDA announced this on Wednesday and the Associated Press shipped its piece on Thursday. The Post, as near as I can tell, has not bothered to take note. In fact, virtually no one seems to have taken note.

This is an all-too-common news cycle. An initial piece generates panic and is shared all over social media. A day later—or maybe two or three—we learn that, in fact, everything is fine, but this barely rates a blip in the news. For the rest of time, then, the entire country vaguely remembers some kind of heinous debacle but has no idea how it actually turned out. Rinse and repeat.

Here is Hilbert looking entranced by . . .

Charlie, of course. Charlie was chasing a moth around and Hilbert was pondering whether to join him. Sometimes he does, but this time he just watched.