Dubious Electoral Math

Daily Kos reprinted a piece from the subscription-only Wall Street Journal, describing each of the Democratic contenders' strategies for winning the primary. Some of them are entirely plausible - for example, the Clark campaign hopes that Dean will knock out Gephardt in Iowa and that Clark will win a strong second place standing in New Hampshire, after which "Mr. Clark would move to friendly territory in the South and Southwest." That's a reasonable scenario, given that Clark's passed Kerry in the NH polls.

Kerry's supposed winning strategy, on the other hand, seems a bit further afield.

A second-place finish in the Hawkeye State would propel the Massachusetts Democrat, they argue, to parity in New Hampshire --where he now trails Dr. Dean by 20 points -- and, more than Mr. Gephardt, he could compete financially and politically in the political landscape ahead. Dr. Dean has raised twice as much money as Mr. Kerry, and the senator has been forced to dip into his personal wealth to finance some of the campaign.

Okay: Kerry's not going to finish second in Iowa. Iowa is a Dean-Gephardt race. But even if he did take second place in Iowa, it's hard to see how that would help him close a 20-point gap in New Hampshire. A "surprisingly strong finish" (as the press likes to call it) primarily boosts candidates who aren't very well-known, because they get more attention from the media and the voters. People in New Hampshire know Kerry already.

Finally, as harsh as that bit is about "Dr. Dean has raised twice as much money as Mr. Kerry," it understates the amount of trouble Kerry's in. Yes, Kerry's 2003 donations ($22.5 million, not counting the $6 mil he borrowed from himself) were about half what Dean raised in 2003 ($40 million). But quarter by quarter, Dean's fundraising has been surging ahead and Kerry's has been falling. In the first quarter of 2003, Kerry was the top Democratic fundraiser, leading Dean $7.5 million to 2.9 million. By the fourth quarter, Dean raised $15.3 million to Kerry's 2.5 million. That's more than six times as much. The trend is what really counts.

Around the Blogs

Now, this is what TTLB's new weblog showcase is supposed to be about: bringing our attention to things like The Greater Nomadic Council's explanation of the relations between advertising and "cool."

In the Liberal Coalition this week: the Invisible Library has a lovely eulogy for Emperor Norton, who died 124 years ago today. Edwardpig has more examples of Bush contradicting himself, which will be ignored by a press obsessively tracking accusations of Democratic candidate inconsistencies. Echidne of the Snakes passes on marital advice from Dr. Laura, and does a nice job of demonstrating that neither gender is well-served by the wife-as-geisha ideal. Gotham City 13 reminds us to get our talking points straight: no matter how much it might seem otherwise, Howard Dean is the angry one. (Bonus: there's a cute dog pic right below the linked post!) Also, did you know that Howard Dean supporters are terrorists-in-waiting? Thanks to And Then... for reading that stuff so I don't have to.

Dohiyi Mir has some interesting news I hadn't heard: Vermont Public Radio reported a partially mitigating circumstance for Dean's closed Vermont records. Frankly, I have trouble getting excited about the whole sealed-records thing. It shouldn't be an issue past the primary, since Bush's Texas records are also inaccessible. Steve Gilliard has the most interesting take yet on that ridiculous Club for Growth ad. (Kudos to the Atlanta Journal-Constitution for finding an Iowan who works part-time as a body-piercer in Des Moines, moonlights at a coffee shop, and is utterly unamused by the Club for Growth ad.) And Lambert at Corrente is following up on the stunning lack of national attention to domestic terrorism. Finally, more people should listen to Pen-Elayne talk about why that godawful "S-factor" meme should just be buried right now.

Good stuff all around. Check it out.

Hot Time In The Old Town Tonight

As avowed liberals, we here at Respectful of Otters live lives of wild and irresponsible hedonism. Tonight being the first Wednesday of the month, we're off to

a revamping of the "political love-in" from the '60s, where pot-smoking hippies would use politics as a guise for picking up dates. Now, Dean -- having "liberated" the gays of the state of Vermont by legislating civil unions, much in the same way he might imagine that Lincoln "liberated" the slaves -- is out to "free" every sex-starved, party-deprived Democrat and give them what they really want: a good time.

Seriously, if you folks have never been to boozy sex parties organized by precinct, you should give the Dean Meetups a try. I know there's nothing like letter-writing and phone banking to put me in the mood.

Unkind people might point out that Rachel Marsden, author of this fantasy, should perhaps not lecture others about sexual ethics. But that's beside the point. Marsden seems to be trying to set herself up as the next Ann Coulter, only with poorer copy editing. Given her already-demonstrated grasp of invective, innuendo, and distortion, I think she'll go far.

The problem is that the Howard Dean gravy train seems to be sputtering toward the end of its track. One can only play "rotate-a-date" for so long, even if it is for a political cause. Looks like they're running out of beer keg money on the Dean campaign trail. They've dropped the fun, playful pretense and are now resorting to flat-out desperation.

On Dec. 28, Dean's campaign manager, Joe Trippi, sent out a mass mailing to every poor sap who happened to give the "Dean for America" folks his or her e-mail address: "We need to raise $1.5 million before midnight on December 31 so we can win Iowa. With just four days left to go, we're $1.2 million short. Please take action right now, because these are the most critical days our campaign has ever faced."

That column was published three days after the Dean campaign announced that the $1.5 million goal had been exceeded by $300K - pushing Dean over $15 million for the quarter, yet another Democratic fundraising record. Doesn't sound like they're running out of keg money to me.

Now, if you'll excuse me, I'm off to pack up the bong, lube, and voter registration pamphlets. I'm due at the Meetup in six hours.

(Via Sisyphus Shrugged and others.)

More From Our Friends at Abbott

After I posted about Abbott Pharmaceuticals raising the price of one of their AIDS drugs, my Significant Otter did some poking around at Abbott's financials. They're crying poverty to the people who are now expected to pay 400% more for ritonavir, but that's not what they're telling their investors:

In 2002, Abbott achieved record sales and net earnings of $17.7 billion and $3.2 billion, respectively, with diluted earnings per share of $2.06, excluding nonrecurring charges. Abbott also recorded its 316th consecutive quarterly dividend to be paid to shareholders since 1924. In addition, 2002 marked the 30th straight year Abbott's dividends have increased. The company's Pharmaceutical Products Group - which includes U.S. pharmaceuticals, specialty products and international sales of pharmaceutical, nutritional and hospital products - generated sales of nearly $10 billion.

A nice spreadsheet summary of their 2002 finances can be found here. Note that research and development expenses represented 8.8% of net sales. Their gross profit margin was 51.9%. The return on investment to their shareholders was 28.3%. Sure, that's a lower ROI than shareholders in the late nineties could expect. You can't expect to get a 43% ROI these days, any more than you can expect to pay less than $26 a day for ritonavir. Things are tough all over.

Thanks to the fine Significant Otter and his mighty research skills.

Increasingly Misnamed Sunday Baseball Blogging

So Pete Rose finally admitted that he bet on baseball.

Most fans don't seem to care: two-thirds say he should be allowed to work in professional baseball again. On the other hand, baseball writers generally don't seem impressed.

The pro-Rose argument seems to go something like this:

If Rose admits his sins and seeks help, why should he not be allowed into the Hall?

Drugs, alcohol, drinking and driving, even murders and spousal abuse are routine headlines amongst today's stars. Where does betting rank on that list of crimes? [...]

We do live in a forgiving society. Once Rose admits his sins, it is time to forgive and elect him to the Hall of Fame.

The thing is, a lot of these folks seem willing to skim over the "Pete Rose confesses and is sorry" part. He doesn't in fact seem to be particularly sorry, or particularly aware that his actions were wrong. Look at excerpts from his ABC News interview - the rationalizations are thick on the ground. He actually tries to claim that most players barely know that betting on baseball is against the rules. He minimizes the seriousness of his offense, as Jayson Stark notes:

He speaks of how he never bet against his own team, and how he never placed a bet from the clubhouse, and how he never used "inside" information, and how he would never, ever fix a game -- no matter how much money he could have made. [...] You'll find words like "mistake" and "stupid" and "wrong" in there -- many times, in fact. But here is the only context in which he uses the word, "sorry":

"I'm sure that I'm supposed to act all sorry or sad or guilty now that I've accepted that I've done something wrong," Rose writes in the book. "But you see, I'm just not built that way."

It doesn't matter whether or not Rose ever bet against his own team. A manager who bets on some games and not others is going to make different managing choices when money is on the line. He'll use his resources differently. He might, for example, be willing to blow out his bullpen to get a win, regardless of the effects on the next few games. Rose says his managing choices were never affected by bets - as if he can make that argument credibly. No one could, but it's particularly unconvincing coming from someone who has been lying to baseball fans for fourteen years.

So what about the drug-use analogy? Darryl Strawberry doesn't have a lifetime ban, despite his sordid history of cocaine addiction, repeated arrests, and solicitation charges. Is gambling really worse than being a cokehead?

Yes. For baseball, gambling is absolutely worse than being a cokehead. Cocaine use harms the player; gambling harms the game. If you're a baseball fan, ask yourself this: Suppose that it were widely known that managers and players sometimes bet on baseball games. Suppose that when your home team lost, you could never be quite sure that they hadn't thrown the game. Would you still watch?

We still watch now, knowing that some players use steroids. We still watch, knowing that some players use illegal drugs after the games or in the off-season. Because as long as everyone on the field is doing his utmost to win, the game itself is still exciting and emotionally engaging.

If gambling on baseball is tolerated, we don't have that anymore.

2,500 Florida doctors will see their malpractice insurance rates go up by 45% in 2004.

If you're a conservative commentator, you're thinking "See? This is why we need tort reform that includes caps on damages in malpractice suits. Lawsuits are pricing doctors right out of business - here's your proof." Which would be fine, except that Florida already passed exactly that kind of legislation in August. Insurance companies were supposed to figure their 2004 rates based on the new caps.

The insurance company's justification is distinctly fishy.

``When you think about how medical costs will rise in the future, it becomes apparent that the costs of providing medical care to a plaintiff years down the road are astronomical,'' MedPro spokesman John Novaria said. ``In order to meet those costs, we have to ask for higher premiums.''

Aren't we always being told that spiraling malpractice insurance rates are largely responsible for rising health care costs? So now the insurance companies are using the prospect of higher health care costs in the future to jack up providers' insurance rates...which will increase the costs of providing care...which will lead to higher future medical costs for patients...which will justify still-higher malpractice insurance rates, because costs are expected to continue to increase.

I'm dizzy.

*clearing dust from the lectern*

This is a little technical, but stay with me.

On December 4, Abbott Pharmaceuticals raised the price of the drug ritonavir from $1.71 to $8.57 per 100mg pill.

Not many people take ritonavir in a full-strength dose anymore, and lucky for them - at the new price, it adds up to $102.84 per day even before the other two drugs in the three-drug AIDS cocktail are figured in. Ritonavir's real value is in enhancing the effects of other protease inhibitors - it keeps them in the patient's system longer, which means that the patient can take smaller amounts less often.

For example: the stand-alone dose of saquinavir is three to six 200mg pills three times a day, or 1800-3600mg per day. Combined with a couple of ritonavir pills, the dose of saquinavir drops to two 200mg pills twice a day, or 800mg - and the midday dose is completely eliminated. This is valuable partly because it increases the likelihood that patients will take all their pills, and partly because lower doses decrease the risk of side effects. It's even valuable to Abbott, because suddenly everyone wants to have ritonavir prescribed as part of their regimen or bundled with the new drug they've just invented.

Abbott markets a drug called Kaletra, which is a combination protease inhibitor (PI) that includes ritonavir. As newer PIs are approved, Kaletra's market share has been dropping. Curiously, the price of Kaletra didn't go up when the price of ritonavir went up, even though ritonavir is an ingredient in Kaletra. But of course, the effective price of every other combination of ritonavir-plus-PI went up. Patients and their doctors have three choices: they can pay extra for ritonavir; they can go back to enormous unenhanced doses of non-Abbott PIs; or they can switch to Kaletra, which hasn't risen in price.

Abbott's defense explains that they give a lot of ritonavir away (which is true) and that they've agreed not to raise prices to state AIDS Drug Assistance Programs yet. They mention their research costs, the traditional defense for high AIDS drug prices. (They don't explain how it is that their research costs have increased for a drug that's been on the market for seven years.) But their primary argument seems to be that the market will bear higher prices.

At the new price of $8.57 per 100 mg, Norvir is most often the lowest cost component of a protease inhibitor-based regimen. For example, when you combine Norvir with a regimen based on newly approved therapies such as Reyataz (atazanavir) at $22.08 per day, Norvir continues to represent a fraction, typically one-fifth, of the daily cost of therapy.

Some of the new HIV drugs are very, very expensive. Insurance companies and state programs are paying for it, and they'll eventually assume the increased costs of ritonavir as well. Kaletra will claw back a little more of the combination-PI market share.

There will be much less incentive for other companies to continue research into new PIs that would need to be combined with ritonavir. Their manufacturing costs will increase dramatically, because they have to buy ritonavir from Abbott, so they'll have to either cut profit margins or pass increased costs on to customers who are increasingly unable to afford higher AIDS drug prices. For example, Boehringer Ingelheim's prospect tipranavir needs to be taken with ritonavir. The tipranavir/ritonavir combo was expected to be priced at $20,000 a year, but with the increased cost of ritonavir, the price would be around $29,000 a year. Assuming that there is a ceiling to what consumers are willing or able to pay - and there is; the current high cost of drugs has led to waiting lists and medication rationing in many states - tipranavir may now be priced right out of the market.

And the patients? They should just remember that larger drug company profits are their only hope for the future.