The Latest U.S. Shortage: Generic Drugs

Happy Wednesday! First they turned Winnie the Pooh into a gory slasher film, now they want to reimagine Bambi as a “vicious killing machine that lurks in the wilderness.” We must prevent our childhoods from lapsing into the public domain at all costs.

Quick Hits: Today’s Top Stories

• Chinese public health officials and state-run media organizations have begun to adjust their COVID-19 messaging after widespread protests over pandemic restrictions erupted across the country in recent days, emphasizing data showing the Omicron variant is less severe than earlier strains. Local officials in Zhengzhou—home of one of Apple’s largest manufacturing facilities—also ended a strict five-day lockdown of the city on Tuesday. At the same time, Chinese Communist Party security officials escalated their crackdown on demonstrations yesterday, tapping into their surveillance capabilities to track down protesters and deter future demonstrations. Protests reportedly planned for Shenzhen, Beijing, and Shanghai on Monday and Tuesday were canceled. 
• The Senate voted 61-36 on Tuesday to advance the bipartisan Respect for Marriage Act, which—if passed by the House and signed into law by President Joe Biden as expected—would repeal the 1996 Defense of Marriage Act and provide federal protections for same-sex and interracial couples in the unlikely event that the Supreme Court revisits and overturns its 2015 ruling in Obergefell v. Hodges or 1967 ruling in Loving v. Virginia. Social conservative groups have expressed concerns the legislation would infringe on Americans’ religious liberty, but 12 Republicans—including Sens. Susan Collins, Joni Ernst, Mitt Romney, and Thom Tillis—voted in favor of it after the Senate adopted a bipartisan amendment that clarified nonprofit religious organizations would not be required to “provide services, accommodations, advantages, facilities, goods, or privileges for the solemnization or celebration of a marriage” and affirmed that “diverse beliefs about the role of gender in marriage are held by reasonable and sincere people based on decent and honorable religious or philosophical premises.” 
• After Qatari leaders previously maintained that just three workers died on the job while constructing World Cup sites over the last decade, Hassan Al-Thawadi—the Qatari official responsible for the World Cup—told Piers Morgan in a TV interview the government now estimates “between 400 and 500” deaths can be attributed to the mass development project. Independent estimates from The Guardian and Amnesty International put the figure well into the thousands, though their data applies to all migrant workers in Qatar since 2010, not just migrant workers constructing World Cup sites.
• Secretary of State Antony Blinken announced a new $53 million energy security package for Ukraine on Tuesday, tapping into previously approved congressional aid to send Ukraine transformers, circuit breakers, surge arresters, and disconnectors after Russian airstrikes have wreaked havoc on the country’s electrical infrastructure in recent weeks.
• New York City Mayor Eric Adams issued an order Tuesday expanding law enforcement officers’ authority to take mentally ill New Yorkers into custody and bring them to a psychiatric hospital for an evaluation—with or without their consent. Officers were already allowed to apprehend and evaluate individuals behaving “in a manner likely to result in serious harm to self or others,” but Adams’ order will extend that power to anyone who “appears to have a mental illness and cannot support their basic human needs” to an extent that causes them harm. “A common misunderstanding persists that we cannot provide involuntary assistance unless the person is violent, suicidal, or presenting a risk of imminent harm,” Adams said. “This myth must be put to rest.”
• A jury in Washington, D.C., found Stewart Rhodes—founder of the anti-government paramilitary group the Oath Keepers—guilty of seditious conspiracy on Tuesday for his role in the effort to block the peaceful transfer of power on and before January 6, 2021. The verdict represents the first successful application of the Civil War-era charge in decades, and both Rhodes and one of his co-defendants, Kelly Meggs, face up to 20 years in prison. Rhodes’ lawyers said their client plans to appeal, noting he was acquitted on other charges prosecutors brought against him.
• U.S. single-family home prices fell 1 percent from August to September, according to the S&P CoreLogic Case-Shiller National Home Price Index—the measure’s third consecutive month of decline. The index—which operates on a two-month lag—was still up 10.7 percent year-over-year in September, down from a 12.9 percent annual rate in August. 
• The U.S. men’s national soccer team advanced to the knockout stage of the World Cup on Tuesday after defeating Iran 1-0 to finish second in their group. The team’s next game will come against the Netherlands on Saturday.

Pharmaceutical Supply Chain Déjà Vu

In the spring and early summer, it was baby formula. Now a new set of shortages is vexing American medical providers and their patients: Dozens of commonly-prescribed generic drugs, including amoxicillin and other antibiotics as well as antivirals, are in sudden high demand, and supply hasn’t been able to keep up.

Communities across the country are experiencing a “tripledemic” right now as the flu, COVID-19, and RSV rip through schools and families. As we wrote to you last week, we’re likely seeing the effects years of isolation and masking had on children’s immune systems and natural rates of infection:

Pandemic safety measures suppressed the spread of RSV, leading to rock-bottom case counts in 2020. Now the virus is making up for lost time, reaching children who didn’t catch it in the last couple of years. “We are also seeing two or three-year-olds that actually have fairly severe RSV because they weren’t exposed to it when they were younger,” Dr. Tina Tan—vice president of the Infectious Diseases Society of America and a pediatrics professor at Northwestern University’s Feinberg School of Medicine—told The Dispatch. “Pediatric hospitals especially are completely overwhelmed.”

The same dynamics are at play with the flu. And when it comes to treatments or therapeutics, shortages are likely compounded by doctors’ tendency to over-prescribe antibiotics.

Drugs like amoxicillin are supposed to be used against bacterial infections, not viral ones like COVID-19, flu, and RSV. But sometimes a viral infection weakening the immune system can open the door for secondary bacterial infections, leading many doctors to prescribe antibiotics in such cases anyway, just in case. While this may make medical sense at the level of the individual patient, the cumulative effects of such prophylactic prescriptions puts strain on the overall market, making it harder for the patients who most need the drugs to get them and multiplying opportunities for drug-resistant strains of bacteria to emerge.

Today’s shortages are causing frustration and anxiety for providers and patients alike, naturally leading to questions about potential policy solutions. What can be done?

One option, advocated by Sen. Marco Rubio (R-FL) in Newsweek on Monday, is to reverse the “offshoring” of critical pharmaceutical supply chains and emphasize domestic drug production instead.

But as this year’s baby formula shortage reminded us, domestic supply chains are als0 susceptible to disruption. And even in cases where onshoring production might lead to more reliable supply in times of crisis, any added security would come at the cost of higher prices for consumers.

In some cases, that cost might be worth it. As with microchips, the U.S. doesn’t want our supply of critical drugs to be vulnerable to Chinese meddling.

“One of the great ironies of the U.S. drug market is that we have both the highest name-brand drug prices but also some generic prices that are arguably too low,” said Benedic Ippolito, a health economist at the American Enterprise Institute.

“It’s not inherently crazy,” Ippolito said of onshoring production for the sake of reliable supply. “But you really want to be in a position where you’re quite sure that this is worth doing, and that this really is a problem.”

But policymakers often lack the knowledge to be “quite sure.” Pharmaceutical supply chains are opaque: Company secrets are closely held, and transparency is not always welcome.

Foreign policy concerns around China in particular have led to some calls for greater transparency—but other than a provision in the CARES Act instructing the National Academies to issue a recently released report on supply chain resilience, not much has actually been done.

In the long term, says Capitolism author Scott Lincicome, improvements to stockpiling and inventory could be useful. Lincicome points to Switzerland as an example of a country that has implemented successful public-private partnerships around stockpiling food and medicine. And in the short term, Ippolito notes that patients and providers could look for “imperfect but reasonable substitutes.”

Lincicome is characteristically confident that the market will sort things out, pointing out that while the knock-on effects of the pandemic may be unique, drug shortages on the whole are not uncommon: The FDA keeps an up-to-date list that “fluctuates and changes a good bit,” he said. “It’s not like this doesn’t happen. It just rarely bubbles up to the political level.”

“To the Biden administration’s credit—I’m not sure exactly why—they’ve been pretty quiet on this one,” unlike with baby formula, he said. “Quite frankly, I think continuing to promise that we’re going to let the market do the market’s thing is probably the best thing.”

Worth Your Time

• The Biden administration has good reason to exercise caution in their response to the protests in China, Hal Brands argues in a piece for Bloomberg, but that strategy won’t work forever. “In the early 1970s, Richard Nixon soft-pedaled the awful nature of the Soviet system when the U.S. was closing in on critical arms-control deals,” he writes. “[But] by the mid-1970s, a human rights-conscious Congress was forcing [Gerald] Ford to make an issue of Moscow’s treatment of dissidents and Jewish emigres. Critics, including future president Ronald Reagan, argued that spotlighting the crimes of the Soviet regime was both a moral and a strategic necessity. Although the differences between the Soviet Union and Xi’s China are many, Biden could soon find himself in a similar spot.” Over the long term, Brands argues, “there is a powerful strategic argument for putting issues of human rights and domestic governance near the center of U.S. policy: Doing so underscores the fundamental moral asymmetry between those governments that respect the basic freedoms of their citizens and those that don’t. Reagan eventually brought this insight to the presidency, when he used a pointed human rights campaign to help delegitimize the Soviet system, though he also occasionally muted that criticism to do business with the Kremlin’s rulers.”
• For more on the “friendship recession” we noted earlier this week, check out Derek Thompson’s latest Plain English podcast with economist Bryce Ward. Is aloneness the same as loneliness? Do different types of people need different amounts of social interaction? Why are Americans spending so much more time by themselves than they used to? “Mostly they’re watching TV, which probably means watching TV and looking at their phone or the internet,” Ward says, citing the Census Bureau’s American Time Use Survey. “We’re exercising more alone a little bit, we’re shopping more alone, so we’re not going to the mall with our friends or whatever. But the bulk of it is, we’re taking advantage of the fact that I can stream and sit alone in a corner of my house and not have to fight with my wife about what to watch.”
• In a lighter article for the Wall Street Journal, Michael Phillips reports out a Hallmark-esque tale with an Eastern twist. After spending three decades as a computer network administrator in Canada, Mohamed Isaaq—fed up with the stressors of his day-to-day routine—uprooted his life, returning home to Somaliland to become a camel herder like 15 generations of Isaaqs before him. After educating himself on the industry through books and documentaries, he now owns 78 camels, makes about $150 a day selling their milk (before expenses), and is loving his life. “Mr. Isaaq is 53 years old, but looks much younger than his camel-herding peers, who have spent lifetimes in the bush,” Phillips writes. “He worries about sunburn, and his nickname—most Somali men have them—is Mawlid, which means Babyface. He herds in a Ralph Lauren polo shirt and New Balance sneakers, simultaneously propping sunglasses and reading glasses atop his head.”

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

• Is Twitter about to get booted from the App Store? Should we boycott Apple over its recent actions in China? Is corporate activism starting to ebb? And most importantly: How awesome is it that Team USA is advancing to the next round of the World Cup? David, Declan, and Andrew discussed all this and more on last night’s edition of Dispatch Live (🔒). Members who missed the conversation can catch a rerun—either video or audio-only—by clicking here.
• In a jam-packed Uphill, Haley dives into the latest drama surrounding Kevin McCarthy’s quest for the speakership and Price takes a look at what’s next for the January 6 committee. Plus: Why the Biden administration is taking a different, more muted approach to the protests in China than many lawmakers. The American government “must be extremely deliberate in deciding when to speak up and when to stay silent,” one China expert said. “We can harm even when we think we’re helping.”
• Nick expands on this debate in his latest Boiling Frogs (🔒). “America’s diplomat-in-chief sometimes has good reason not to speak truths that the opposition party is free to acknowledge openly,” he writes. “Still, I see the arguments for speaking out.”
• By hampering Chinese citizens’ ability to communicate and coordinate protests, Apple may have committed a sin David considers egregious enough to justify a boycott. “American companies should not be doubling down on their relationship with the People’s Republic,” he writes in yesterday’s French Press (🔒). “And when American companies bow to Chinese censors and to Chinese demands, then American citizens should respond.”
• In this week’s edition of The Sweep (🔒), Sarah provides a behind-the-scenes look at what aspiring Republican presidential candidates are doing right now. From assembling a campaign team, to preparing exploratory committees, to courting donors, the shadow campaign for the 2024 GOP nomination is well underway.
• AEI’s Michael Rubin drops by The Remnant today for a conversation with Jonah about all things foreign policy. How should America respond to challenges posed by China, Russia, and the Middle East? What’s at stake for the West in Taiwan and Ukraine? And should we be optimistic about liberalism in China and Iran?
• On today’s episode of The Dispatch Podcast, David speaks with Fred Kagan of the Critical Threats Project about the tentative alliance between Russia and Iran as Vladimir Putin seeks to turn the tide of his war in Ukraine.
• On the site today, Jonah considers what Rep. Kevin McCarthy will have to do to hoist the speaker’s gavel, Andrew Biggs writes about the looming problem of Social Security’s insolvency and why Congress won’t address it, and Jonathan Chew digs into Arizona Republicans’ ongoing recriminations over supposed voting irregularities in Maricopa County this year.

Let Us Know

Do you think the Biden administration’s cautious response to the demonstrations in China is wise? Or should the White House be more open about its support for protesters because China is going to blame the U.S. anyway? Does the president’s rhetoric even matter in moments like these?