Relevant and even prescient commentary on news, politics and the economy.

Plastic: Part of the Problem . . . Part of the Solution – Part 4: Efficient Use of Recyclates

The problem of plastic waste seems insurmountable. The good news is plastic recycling is on the rise and that is good for the circular economy. In parts 1, 2 and 3, we delved into the role of the waste management and recycling industry and how material sorting technologies can help. Part 4 is all about the increased use of recyclates as an essential part of properly closing the plastic cycle.

The plastics industry is facing a great many challenges. Harvesting recyclates from waste is only worthwhile if the plastic has been properly sorted and does not contain any metal, and if the products made from the secondary raw material are similar in quality to those made from new plastic.

Manufacturing recyclates from plastic waste is the first step. But in order to fully close the plastic cycle, more recyclates need to be used in the manufacturing of new products. This is a lucrative business for plastics processors, as recyclates are cheaper than new materials.

With material costs in the plastics industry accounting for 40% to 80% of total expense, depending on the segment, using recycled materials can significantly increase profitability. In addition, the secondary raw material in its ultra-pure state has practically the same characteristics as new plastic.

Yet there are still a number reservations in the industry when it comes to recyclates. The quality of the input material is particularly important in this regard. Recyclates must be free from any contamination to protect processes and machines from damage and ensure that the final products meet high standards of quality.

Survey on the Use of Recyclates by Processers on the Leap

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Plastic: Part of the Problem . . . Part of the Solution – Part 3: Sorting Technology

As I mentioned, this 4 part presentation is being done by Sesotec GmbH, a company which manufactures recycling equipment. Even so the information given by Sesotec is to the point on the topic of pollution by man made packaging and products which can be sued again and again and in some cases up to 8 times. Fair warning as the pitch comes with regards to Sesotec’s abilities.

Around 70 years after the first plastic product hit the market, a world without plastic waste now seems like a distant vision. It’s time for a new perspective on this supposed waste. In the third instalment of our series, we focus on how we must all manage how we deal with plastics in future, and the role materials sorting technologies and contaminant detection systems play in recycling.

Each year, Europeans generate 25 million tonnes of plastic waste. At a global level, 78 million tonnes of plastic waste is created annually. The world has to respond to this global problem together, as recycling rates everywhere have been at a low level so far: 30% in Europe, 25% in China, and just 9% in the USA (Plastikmüll-Statistik 2017). A large portion of the supposed waste is still incinerated, or ends up in landfills and the environment, which harbors risks for our water, air, and food chain.

To achieve a Circular Economy, it’s important that all players contribute to this task: from product design and manufacture on the part of the plastics industry, along with conscious use and avoidance of plastics as well as waste separation on the part of consumers, followed by proper recycling and sorting by the waste and recycling sector, all the way up to conversion into high-quality secondary raw materials and their use in the manufacture of new products.

Past the leap, how a Circular Economy will work.

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Plastic: Part of the Problem . . . Part of the Solution – Part 2: the European Union’s Solution

As you can read for yourself, this is the second part  of the series. This part will introduce the EU’s proposed solution to plastic waste material of which Sesotec is to be a part of the solution. Since I am using Sesotec’s information, I will be stating their name as owner’s of this information from time to time.

Some 70 years after the first plastic products hit the market, a world without plastic waste still appears far off. We need a different approach to dealing with what many consider to be rubbish – and we need it fast. In this multi-part series, we will take a look at the role that the waste management and recycling industry can play in the process. Part I took us to China. Now it is time to take a look at Europe.

China is no longer taking on the world’s plastic waste, and our oceans could soon be home to more pieces of plastic than fish. The time to act is now.

There are many ways to reduce plastic waste. Banning their use is one of them. A great deal of plastic packaging is, in fact, unnecessary. Yet it also offers benefits in certain areas, such a hygiene and shelf life, making a complete ban rather unrealistic.

Another approach is to avoid plastic in many situations and to practise “plastic fasting”. Still, even that will not work everywhere, especially in the industrial sector. It is therefore essential to find an alternative solution – one that is also reflected in the EU’s plastics strategy: a circular economy.

The European Union presented its plastics strategy on 16 January 2018. Under the strategy, all plastic packaging must be either reusable or recyclable at low cost by 2030. One of the EU’s goals in its plastics strategy is to stop marine litter. The long-term goal must be to avoid marine plastic waste entirely. However, creating a circular economy and recognising the value of a material that is widely considered to be refuse will be essential to achieving this aim.

The overall EU strategy is based specifically on four basic tenets:

  • manufacturing recyclable products
  • optimising the separation and collection of plastic waste
  • increasing recycling capacities
  • reusing recyclates in production

Past the leap, the EU’s Commitment

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SECURE Act Up for Consideration in the Senate – A Rehash

I covered the House SECURE Act and the Senate RESA version last July. The House RESA Act is up for consideration in the Senate now. It does not look like it is going to make it due to the impeachment process going on and a potential trial in the Senate. There is also a small matter of a budget needing to be passed. It was to be considered under an unanimous consent vote; however, three Republican Senators (Mike Lee of Utah [unidentified reason], Ted Cruz of Texas (529 Accounts), and Pat Toomey of Pennsylvania [Gold Star tax exemption]) put holds on the bill (reasons in parenthesis). Then there is McConnell, who will not bring it to the floor for a vote.

Congress has been working on a much-needed improvement for “Middle Class” savings and growth over the span of employment in order  to boost retirement resource for citizens who can afford to save. Both the Senate and the House versions have been sitting since July. Whata surprise, heh?

Dueling bills to restructure IRAs and 401ks appear to be redundant; but, there are differences.  Better known as the “Setting Every Community Up for Retirement Act” (SECURE Act) H.R.1994 and the Senate has the “Retirement Enhancements and Savings Act” S.792 (RESA) version. Both bills were passed with bipartisan support. Both bills for the Middle Class had pluses and rather big negatives also. It appears the House RESA Act is going forward for a vote.

The RESA Act is mostly for the masses who may be able to save some money for retirement in spite of stagnant wages. No worries for the for the rich in income (unless something has changed since I last looked at this).  A major outcome of the Trump tax bill were tax breaks for the wealthy and corporations. Besides much of the resulting income increases going to 1% of the household taxpayers, the same 1% were given the ability to shelter large amounts of income in gifts to their heirs. It is a great time to be rich in income and have the ability to shelter it by making gifts of it to your heirs’ tax free! Keep in mind, seven or so years out and those income tax cuts will disappear for the middle income brackets. Somebody has to pay for the overall breaks otherwise their tax relief will sunset as they were passed under reconciliation in the Senate.

A little history (past the leap) on why Congress did something which will help those who can afford to save presently, penalize those bequeathed whatever is left over after death, and pay for the IRA and 401k break.

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Plastic: Part of the Problem . . . Part of the Solution – Part 1 (of 4): A Global Problem

Introduction: I am still on the mailing lists of quite a few resin and plastics companies. This particular presentation is from Sesotec GmbH (“company with limited liability”). Sesotec was an exhibitor at the K trade fair in Düsseldorf and now is reflecting on an exciting and positive trade fair appearance (for them) with its topic of a “Circular Plastics Economy.” This is part 1 of a 4 part presentation which I believe to be done in an exemplary manner and worthy of repeating.  Having cost modeled plastic parts at SY and Yazaki NA and purchased resins for Marquardt, Flex, and Stoneridge, I enjoyed the presentation.

This is why I thought this was worthy of presentation  at Angry Bear: “The K trade fair is held every three years and is an optimal opportunity to learn about current topics in the industry and to exchange information about these topics.

Marc Setzen, CEO of Sesotec GmbH: ‘We are more than satisfied with the results of the trade fair. With concern to the focal topic of the K trade fair, the Circular Economy not only is a technical challenge but also requires a change of the way people think. The attitude of plastics being throwaway products must be abandoned and people must become aware of the fact plastics being valuable reusable materials. Our machines and systems only are one component in the material cycle; but nevertheless, they make an essential contribution because they ensure the high quality of secondary raw materials made from recyclate and guarantee that the cycle really works.'”

This fits with what we must change to and be doing today.

Some 70 years after the first plastic products hit the market, the vision of a world without plastic waste still appears far off. Yet this substance – a plague once it becomes waste – is an extremely attractive material. What we need is a different approach to dealing with plastic waste. In this multi-part series, we will take a look at the role that the waste management and recycling industry can play in the process. Part 1 takes us to a variety of destinations, including China.

The production of plastic has increased dramatically around the world in recent decades and currently stands at 200 times the amount manufactured by factories back in 1950. Europe is responsible for one-quarter of the world’s plastic consumption, mainly due to packaging that lands in the rubbish bin after being used for only a short time. Plastic is also used in construction (20%), vehicles (8.6%) and electronics (5.7%).

After the leap, how China and the EU are increasing the pressure . . .

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Mankiw’s Ideal Democrat (Bloomberg Alert)

Mankiw’s Ideal Democrat (Bloomberg Alert)

Greg Mankiw has always been a Never Trumper:

I just came back from city hall, where I switched my voter registration from Republican to unenrolled (aka independent). Two reasons: First, the Republican Party has largely become the Party of Trump. Too many Republicans in Congress are willing, in the interest of protecting their jobs, to overlook Trump’s misdeeds (just as too many Democrats were for Clinton during his impeachment). I have no interest in associating myself with that behavior. Maybe someday, the party will return to having honorable leaders like Bush, McCain, and Romney. Until then, count me out. Second, in Massachusetts, unenrolled voters can vote in either primary. The Democratic Party is at a crossroads, where it has to choose either a center-left candidate (Biden, Buttigieg, Klobuchar, Yang) or a far-left populist (Warren, Sanders) as their nominee for president. I intend to help them choose the former. The latter propose to move the country too far in the direction of heavy-handed state control. And in doing so, they tempt those in the center and center-right to hold their noses and vote for Trump’s reelection.

In a way I get this and a lot of other centrist Republicans are saying similar things. Enter Michael Bloomberg:

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S&P 500 BY PRESIDENTIAL TERMS

With the presidential election still a year away, Wall Street is starting its normal analysis that if a democrat is elected it will cause a devastating stock market crash.  One would think that after all these years of such claims being proven dead wrong that the street would finally give up on it. In the post WWII era from Truman to Obama it is 70 years and each party has had bad candidates in office for half that time.  Truman was only President for seven years and five months so the Democrats only had 35.4 years in office while the Republicans had 36 years in office.  Over these years the average annual S&P 500 gains was 15.9% for Democrats and 6.6% for Republicans. If you look at the actual returns, you would think if anything; Wall Street analyst would be warning about the dangers of a Republican President for the stock market.

Because the chart is already so cluttered I left Truman and Ike off.  But it seem so obvious that the record shows that it is Republican Presidents that investors should fear.  Just to clearly show that stock market gains have been more that double under Democrats versus Republicans I’ve also presented the data in a table.

 

 

 

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Another Look at Drug Pricing, Costs, and Why

Median total costs Table for the most common prescriptions of each of the 49 high-volume brand-name drugs from 2012 through 2017 as detailed in JAMA Network Open’s “Trends in Prices of Popular Brand-Name Prescription Drugs in the United States” 2019.”

A Bit of A Summary: This particular table relates back to a post I wrote; Does Trump Read JAMA Network Open? which reviewed the latest JAMA findings (Trends in Prices of Popular Brand-Name Prescription Drugs in the United States) on pharmaceutical price increases from 2012 to 2017. It is another in a series of articles which have looked at the rising prices of pharmaceuticals. The World Health Organization (2018) findings reflected on R & D costs for cancer drugs and the amount of time needed to recoup those costs (median of 3 years for $750 million) with an average return of $14. 50 for every $1 invested in R & D for cancer drugs.  For the maximum estimated risk-adjusted cost of R&D (US$2.827 BN), the time to cost recovery was 5 years (range: 2 years; 10 years, n=56).

Click on the JAMA Table: Median Total Cost of Top-Selling Brand-Name Drugs 2012 – 2917 to enlarge and again to magnify if needed.

Taken “From the Trends in Prices of Popular Brand-Name Prescription Drugs in the United States” findings, substantial cost increases among these drugs was near universal, with a 76% median cost increase from January 2012 through December 2017, and almost all drugs (48 [98%]) displaying regular annual or biannual price increases. Of the 36 drugs available since 2012, 28 (78%) have seen an increase in insurer and out-of-pocket costs by more than 50%, and 16 (44%) have more than doubled in price. Insulins (ie, Novolog, Humalog, and Lantus) and tumor necrosis factor inhibitors (ie, Humira and Enbrel) demonstrated highly correlated price increases, coinciding with some of the largest increase in drug costs. Relative price changes did not differ between drugs that entered the market in the past 3 to 6 years (2012 – 2017)  and those having been on the market longer (number of drugs, 13 vs 36; median, 29% increase from January 2015 through December 2017; P = .81) nor between drugs with or without a Food and Drug Administration – approved therapeutic equivalent (number of drugs, 17 vs 32; median, 79% vs 73%; P = .21). Changes in prices paid were highly correlated with third-party estimates of changes in drug net prices (ρ = 0.55; P = 3.8 × 10−5), suggesting that the current rebate system, which incentivizes high list prices and greater reliance on rebates, increases overall costs.

The ICER Report (Unsupported Price Increase Report) compared the percentage increases in the  Wholesale Acquisition Cost (WAC – second Column)  to the increase in the Medical Care Consumer Price Index (CPI) over the same period and excluded those drugs with a WAC increase less than 7.32% or two times the increase in Medical Care CPI over the same period. The medical care CPI is one of eight major components of the CPI recorded and reported by the US Bureau of Labor Statistics .

CPI for Medical consists of medical care services (professional services, hospital and related services, and health insurance) and medical care commodities (medical drugs, equipment, and supplies). ICER using overall Medical CPI and not a lone services or commodity related one or subcomponent(s) of either or each was to reflect increases in drug prices relative to inflation in the overall price of medical care. The 77 drugs shown in the ICER Table 2.2 had an increase in Wholesale Acquisition Cost (WAC) greater than 7.32% over  the two-year period (4th quarter 2016 – 4th quarter 2018). The remaining 23 drugs were excluded from further analysis even though they may have been greater than one times CPI.

The ICER Table 2.3 depicting 9 drugs of the 77 shows  the percentage change in net price (Column 3) over the two-year period from the fourth quarter of 2016 to the fourth quarter of 2018, and the and the increase in drug spending during calendar years 2017 and 2018 and the 4th column depicts net revenue after discounts, rebates, concessions to wholesalers and distributors, and patient assistance programs same as Table 2.2 in the report. Only the ICER Table 2.3 is shown here (JAMA chart above).

The first seven drugs under assessment did not display evidence meeting the criteria accepted evidence grading system called GRADE. As a result, the seven are reported as having price increases “unsupported by new clinical evidence.” GRADE is a method used by systematic reviewers and guideline developers to assess the quality of evidence and decide whether to recommend and intervention.  GRADE differs from other appraisal tools for three reasons: (i) because it separates quality of evidence and strength of recommendation, (ii) the quality of evidence assessed for each outcome, and (iii) observational studies can be ‘upgraded’ if they meet certain criteria.

So What Does All of This Mean?

Other reports recognize similar. Healthcare costs are increasing at a much higher rate than inflation, enough so, JAMA is reporting patented pharmaceutical price increases to be 50% to 100% between 2007 and 2014, as are the generic versions, and those introduced during 2007 and 2014 have seen similar sizeable increase. The exhibited JAMA report details the increases.

The ICER report goes a bit further and establishes a benchmark of increase at twice Medical CPI and whether a price increase greater than the benchmark can be justified by the result of significant value brought to the market to account for the increase. At greater than a generous twice Medical CPI, the top nine drugs exceeded this benchmark and after investigation,  did not bring significant value to the market place following the 4 significant values claimed by pharmaceutical companies. This analysis was completed on  9 of 77 drugs having price increases greater than twice Medical CPI. Seven of the nine drugs were shown to have price increases for which additional value could not be substantiated. The remaining two had evidence of clinical value which could not be examined at this time. Then there is the balance of the 77 drugs which have had price increases greater also. Legit or not?

Remember, the ICER is the organization which justifies pricing for many of the new drugs coming to the market place.

The World Health Organization Report reviews the costs of R & D for Cancer Drugs which pharmaceutical companies blame as a the major factor for higher prices over the life of their patents. The WHO document reports the R & D costs are recouped in a median 3 to 5 years for R & D investments of $750 million to $2.8 Bn. Drug patents are significantly long than the recovery. Rent taking . . .

This is just pharma alone and I did not look at hospitals, clinics or hospital supplies. Briefly, “Health Affairs – Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007–14″ reports  inpatient care at hospital prices grew 42 percent, while physician prices grew 18 percent. Similarly, for hospital-based outpatient care, hospital prices grew 25 percent while physician prices grew 6 percent. Both this report and Kocher and Berwick’s “While Considering Medicare For All: Policies For Making Health Care In The United States Better: Health Affairs” point to increases in hospital care as the leading cause of increased healthcare insurance premiums.

The emphasis by politicians has been on the pricing of drugs without looking at the supply chain and the PBM’s influence on it; without looking at the costs of R & D, the return from sales revenue and how quickly those costs are recovered; and without looking at the exclusivity granted drugs through patents that allow the ability to increase pricing without a returning benefit clinically, socially, to the system, and most of all to the patient. The emphasis by government should be a review of drug costs to establish a fair market value/price. I do not see a foundation being established for the setting of pricing.

 

Trends in Prices of Popular Brand-Name Prescription Drugs in the United States, JAMA Network Open, Nathan E. Wineinger; Yunyue Zhang; Eric J. Topol, May 2019

Unsupported Price Increase Report, Institute for Clinical and Economic Review; David M. Rind, Foluso Agboola, Varun M. Kumar, Eric Borrelli, Steven D. Pearson; October 2019

Technical Report, Pricing of cancer medicines and its impacts; World Health Organization; 2019

While Considering Medicare For All: Policies For Making Health Care In The United States Better; Health Affairs; Kocher and Berwick; 2019

Health Affairs – Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007–14;” Health Affairs; Zack Cooper, Stuart Craig, Martin Gaynor, Nir J. Harish, Harlan M. Krumholz, and John Van Reenen; 2019

Run75441 (Bill H)

 

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DC Circuit grants Postal Watchdog’s challenge to PRC’s approval of rate hike on Forever stamps

An introduction to Save the Post Office and Steve Hutkins. I am not quite sure how I got to Steve; but, I do remember chatting with Mark Jamison who also wrote at Save the Post Office and posting his words up at Angry Bear (Asking the Wrong Questions: Reflections on Amazon, the Post Office, and the Greater Good earlier this year. Mark and I still exchange emails and I owe him a trip out to western North Carolina. Steve is the blog owner, a Prof. of Literature teaching “place studies” at the Gallatin School of New York University. Prof. Steve Hutkins has been writing about the Post Office for at least a decade and the attempts of government, UPS, Fedex, etc. to close it down or limit its operations.

“Save The Post Office” has been writing about the last 5 cent increase in First-Class mail earlier this year.

Back in January 2019, the Postal Service raised the price of a First-Class stamp from 50 to 55 cents. Postal watchdog Douglas Carlson filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit (aka the DC Circuit) challenging the Postal Regulatory Commission’s decision to approve this rate hike.

Carlson argued that in approving the rate hike on Forever stamps the Commission had failed to consider the statutory pricing factors and objectives in the Postal Accountability and Enhancement Act (PAEA) and the public comments questioning this increase. He also argued that the Commission did not reasonably explain its decision. Therefore, he claimed, the Commission’s decision was arbitrary and capricious.

Today the court issued a ruling granting Carlson’s petition and vacating the PRC’s approval of the rate increase on First Class postage. (The court’s opinion is here; the order vacating the PRC ruling is here.)

It’s not clear what will happen next. The PRC could file a petition for a hearing en banc, meaning that it will ask the entire DC Circuit to review the case, as opposed to the three-judge panel that issued today’s ruling. Apparently anticipating such a possibility, the DC Circuit today also issued an order “that the Clerk withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”

If such a petition is not granted, the PRC could even appeal to the Supreme Court. (After the DC Circuit ruled against UPS on an unrelated case involving postal rates, UPS took both of those steps, to no avail.)

In the meantime, we don’t know what impacts today’s ruling will have on the rate hike, which has been in effect since January.

Under the PAEA, the Postal Service has the right to request its next inflation-based rate increase this fall, with an effective date in January 2020. How the next increase will interact with today’s court decision is also unclear.

Past the leap is the section of a court determination that reviews the main issues in the case:

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Georgetown University Report Finds Number of Uninsured Children Now at Highest Levels –

Since Major Provisions of Affordable Care Act Took Effect

Key Findings:

  • The number of uninsured children in the United States increased by more than 400,000 between 2016 and 2018 bringing the total to over 4 million uninsured children in the nation.
  • These coverage losses are widespread with 15 states showing statistically significant increases in the number and/or rate of uninsured children (Alabama, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Missouri, Montana, North Carolina, Ohio, Tennessee, Texas, Utah, West Virginia), and only one state (North Dakota) moving in the right direction.
  • Loss of coverage is most pronounced for white children and Latino children (some of which may fall into both categories), young children under age 6, and children in low- and moderate- income families who earn between 138 percent and 250 percent of poverty.
  • States not expanding Medicaid to parents and other adults under the Affordable Care Act have seen increases in their rate of uninsured children three times as large as states that have expanded Medicaid.

Causes of Decreased Coverage

The Georgetown Health Policy Institute (full report) details in its report the following factors have contributed to the erosion in children’s health coverage: efforts to repeal the Affordable Care Act and cut Medicaid; an intentional delay by the Republican administration to fund the Children’s Health Insurance Program (2017); the elimination of the individual mandate penalty (2019); cuts to enrollment outreach and advertising pre-ACA enrollment; inadequate oversight by the federal government of state Medicaid programs which create more red tape barriers; and an administration enacted, climate of fear of deportation and intentional confusion for immigrant families discouraging them from enrolling eligible children in Medicaid or CHIP (2016).

The Republican party has made it a goal to repeal the ACA as passed by Barack Obama and Democrats early on in its administration. Under President Trump, the Republicans have done everything possible to deny healthcare coverage to legal immigrants and their families, the poor, and those who are marginalized. The full report includes a series of charts which pictorially represents the issues briefly cited here. It also includes a state by state analysis of the uninsured. It should come as no surprise, the South has 52% of the total uninsured children with Texas have 21.5% of the total uninsured children in the nation.

The Number of Uninsured Children Is On the Rise,” October 2019, Georgetown Health Policy Institute, Joan Alker and Lauren Roygardner

Families looking for information on how to enroll their children in Medicaid or CHIP should call 877-KIDS-NOW or visit insurekidsnow.gov

Run75441 (Bill H)

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