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[00:00:03]

Hello and welcome to the intelligence on Economist Radio, I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. A lawsuit filed by America's Department of Justice against Wal-Mart is just the latest salvo in a growing war on the country's opioid crisis. But retailers are just one link in the drug supply chain, and a settlement of any size won't solve the deeper problem. And the odds are that you weren't able to take all of your annual leave last year, our management columnist looks at the problems raised by all that carried over time off for those lucky enough to carry it over in the first place.

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But first. Yesterday, Britain's prime minister, Boris Johnson announced another overall national lockdown for England after a dramatic rise in covid cases. Our hospitals are under more pressure from covid than any time since the start of the pandemic. It's the latest attempt to keep the coronavirus under control. After a new strain thought to be 50 to 70 percent more transmissible has swept through Britain. It's clear that we need to do more together to bring this new variant under control while our vaccines are rolled out.

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And it's not the only variant. We will all have heard that there is a new variant of covid-19 that is now well established in South Africa. Our scientists briefed another new strain has also been identified in South Africa after the cases surged there, leading to further restrictions, including curfews and a curb on the sale of alcohol. In fact, it appears that it may be more contagious than the virus that drove the first wave of infections. Viruses are expected to change over time, and now policies and perhaps even vaccines will have to change with them.

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Mutations happen in all living. Things are the driving force of evolution. Geoff Carr is The Economist's science editor.

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They happen at random and then the ones which are successful, selected for and spread through a population. And that seems to be happening at the moment with covid-19. The two new variants of the virus have appeared recently, but these two have started spreading quite fast.

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And so why is it these two variants then are in the news if they happen all the time?

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What's special about these two mutations, these two variants, the one in Britain can be traced back to September one in South Africa, can be traced back to October. And what is interesting is that although the British version has 17 mutations which cause changes in its proteins and the South Africa one has three, they have one mutation in common. And this is a mutation in a protein called spike. It's a particular change in a particular amino acid as the components of proteins are called.

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And Spike is the protein by which the virus attaches itself to its target cell. So it is also known that this particular place in the protein is very important to the attachment and that if you make the swap in this component, it increases the strength of the attachment. So it seems likely that this mutation is causing the virus to become more infectious.

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So so it's a set of mutations that has made two different variants in possibly a common way more transmissible. But are they inherently more dangerous? As far as we can tell, they're not more dangerous by evolutionary theory, you would expect a disease causing organism like this to succeed if it becomes a more transmissible and less dangerous, because if it becomes less dangerous, its host will live longer and it will be able to transmit more widely. So variants that are favoured by natural selection are those which are more easily spread, which this one appears to be.

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It appears to be about 50 percent more contagious than the normal variants.

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But as far as we know, it's not more dangerous and it stands to reason than if it gets around more efficiently than the let's call it the original version of the virus. Then then these variants will eventually dominate. Yes, you would expect them to. They haven't met yet, so we don't know which one of them is likely to be successful. But you would expect one of them to become a dominant part of the viral population. Yes. And the one that seems to have started in Britain has been found in, I believe, 20 other countries.

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The one that started in South Africa has been found in a few. So it's possible that that could be contained in South Africa. But I think it's unlikely.

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And what does that say then about the attempt to stop all this with a vaccine, given that the vaccines that we have have been designed for a very slightly different virus?

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The answer, of course, is that at the moment we don't know. But it would be a coincidence if any of these mutations made the viruses that have them more resistant to the vaccine or to the immune changes that the vaccine causes. Because if these variants had emerged when people had been routinely vaccinated, then you would expect that they would be the vaccine. But because there are very few people vaccinated so far and when the virus has appeared, there were none.

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If there was resistance to the vaccine, it's a coincidence. And given that the vaccines raise multiple antibody responses and also things called t cell responses, the chances that either of these variants are resistant to the vaccine are low. They're not zero, but they're low.

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But nevertheless, if if not, perhaps these mutations, then in future mutations that we might expect could interfere with vaccines. I mean, what's what's to be done if that's the case?

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You're absolutely right that future mutations which got around the vaccines would spread. That's how natural selection works. What's interesting about some of the new vaccines is that they are made in a way which would make them very easy to treat. And it would be a matter of days to design a new version which would be able to tackle a variant virus. Of course, it would then have to be tested and approved. So it would be introduced immediately. But if there was a variant virus, we know how to deal with it and deal with it in fairly short order.

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So in that regard, the real worry here about these variants is simply the number of infections and deaths that will come before people are vaccinated. This isn't a new front in the war, really.

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It's not exactly a new front. It's a resurgence and it can be contained. But in the meantime, more people will die. And as precautions are taken, yes, because these variants are more contagious, you're more likely to catch them if you're exposed and more people will catch them, which increases the risk they'll pass the body. That number goes significantly over one.

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And because these mutations will keep happening and and that some that that create different problems will just keep arising. I suppose the watchword here is surveillance.

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Absolutely. Yes. You have to be realistic about evolution. You have to be realistic about natural selection. Viruses in particular mutate all the time. So there's a constant generation of slightly different versions, most of which go nowhere, obviously, some of which are as good as the existing one. But a few of them, as we're seeing at the moment, are better, better in evolutionary terms. And they will spread. They will replace the existing ones.

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So that's how evolution works. But it looks as though we now have the tools to be able to track the process. Some countries are better than others. And as it happens, Britain and South Africa are both quite good as it which may be why these pilots have been noticed here, but it is necessary to keep surveillance for the new birds. Thank you very much for your time, Jeff. Thank you, Jason. Between June of twenty, nineteen and May of twenty twenty, about 80000 Americans died from drug overdoses, most of them involving opioids.

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This is the worst drugs related death toll in American history. And a stark reminder that covid-19 isn't the only health crisis ravaging the country as the opioid epidemic continues to grow. There's also been a marked uptick in the number of cases being filed against the companies that supply these addictive painkillers. And now, in what could be a landmark case, America's Department of Justice has set its sights on the country's biggest retailer.

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The DOJ is accusing Wal-Mart, or rather, the 5000 pharmacies that Wal-Mart runs within its supermarkets are fueling the opioid epidemic.

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Gwendolyn von Brito writes about business for The Economist by filling out prescriptions without vetting the patients properly.

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And what evidence does the Department of Justice have to to back up these allegations?

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So the Department of Justice produced one hundred sixty page complaint and they listed 20 examples of doctors who were flagged by Wal-Mart's own pharmacists as acting suspiciously, for instance, prescribing dangerously large quantities of an opioid to a single patient or a patients, even turning up, slurring his words and showing signs of drug abuse. In each case, the DOJ says that even though the pharmacies hearts like these doctors to Wal-Mart's compliance team, nothing was done. And so hundreds and indeed thousands of potentially dodgy prescriptions were filled by the pharmacists.

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Wal-Mart also until 2000 18, was the operator of distribution centers and shipped thirty seven point five million orders of controlled substances, but reported only 204 as suspicious, whereas a smaller distributor called McKesson shipped far fewer of these orders that reported thirteen thousand are suspicious. So Wal-Mart seems to have clearly turned a blind eye on on a high number of dodgy orders because they wanted to get more customers to spend more time in the stores. So they wanted pharmacists to fill these prescriptions quickly.

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And they're also getting a cut of whatever drugs they sell in their pharmacies. And how has Wal-Mart responded to to the allegations, to the lawsuit?

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Wal-Mart responded very aggressively. They sued the DOJ even before the DOJ sued Wal-Mart. That's highly unusual. And they say they are being used as a scapegoat and they blame the opioid crisis on the federal government's own weak enforcement. And they also say it's not the pharmacists role to second guess doctors prescriptions. It's the doctor's role. And the regulators of the doctors are in charge to basically police that these prescriptions are properly and actually needed for pain medication rather than to fuel a drug habit.

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And so Wal-Mart's argument is the problem doesn't lie with them, but with the supply chain before them, with the doctors making dodgy prescriptions, the doctors are licensed by the government's own drug enforcement agency. It's a sense of not being able to pin this down to a single culprit.

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There's not a single culprit, as you say. There's a whole supply chain. And of course, it does start in some ways with the doctors who prescribe sometimes criminally large quantities of opioids to their patients. So I do think Wal-Mart has a point, but it doesn't mean that they should have just continued because they do have by law, they are required to flag or to signal dodgy prescriptions and they didn't do that. So I think both the DEA and Wal-Mart are not blameless.

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So when will this this suit make it to court? So it's not yet known when the suit will make it to court. And there is a possibility that the DOJ suit will join those so-called multi district litigation, which is a huge lawsuit or a combination of two thousand lawsuits overseen by a judge in Ohio. But they may just proceed on their own and possibly sometime this year it'll go to court.

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And on the basis of the allegations that the DOJ made last month, what what's at stake for Wal-Mart if they were to lose?

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Well, as the DOJ says in its complaint, the fines for each unlawful prescription suit could be sixty seven thousand six hundred twenty seven dollars and fifteen thousand six hundred ninety one for each suspicious order not reported. And given that they've filled thousands upon thousands of potentially dodgy prescriptions, it could be very, very expensive even. Behemoths like Wal-Mart. But, of course, you know, the question is how this lawsuit will go. And I think what's much more likely is that they'll find a settlement that will be expensive for Wal-Mart, but not that expensive.

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And where does this fit in with the broader litigation going on around the opioid crisis?

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So there is a complex web of litigation in the works. But of course, all these lawsuits are a symptom of the disease, and the disease has really become worse this past year in 2020, because, of course, social isolation and people's despair increased with the covid-19 pandemic. So there were even more susceptible to addiction and the costs that come with opioid addiction, everything first responders, orphaned children, I mean, you name it, these are individual tragedies on an unimaginable scale.

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And so the money needed to to help is huge and some suspense will be huge. We already got a little bit of an inkling of what's to come by. Purdue Pharma pleading guilty and settling for eight billion dollars with the Department of Justice in October. And Johnson and Johnson, another maker of drugs, settled for twenty six billion dollars a year. So that just to give you an idea of the scale of payments to come and even these billions and billions of dollars won't be enough to really compensate for the harm caused.

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Vanderlyn, thank you very much for joining us. It's been a pleasure. Jason. Holidays are great, whether it's sipping a cocktail on a Sunkist beach or putting your feet up in line of fire. Well, actually, holidays were great last year. Many of us found our holidays mostly consisted of sitting in the same room we spent the past few months working in and that we took our allocated leave at all. 20-20 was a year which really put work and morale to the test.

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Philip Coggan writes Bartleby The Economist's column on work and management.

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One of the ways it did so was that many employees weren't able to enjoy a normal holiday either. They couldn't get away because they were too busy or there was nowhere to go away, too. The upshot is that people have unused holiday, which they're hoping to carry forward into twenty twenty one.

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And are you in that camp yourself? Yes. Fortunately, The Economist is a very benign employer and allows us to carry two weeks over from one year to the next. And that indeed is what I've done.

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And what's the problem with not taking your allocated holiday?

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Plenty of people might say, well, it's a bit of a first world problem not having a holiday. But for many workers who've been working at home, that's a particular problem in that you've been stuck inside the same four walls for the last nine months or so and just having some sort of break is extremely appealing.

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And so what is going to happen with all of the unused leave?

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It depends on the country and indeed in America. It depends on the individual state. So some countries and states have and use it or lose it rule whereby you have to use up all your leave either by the end of the year or by the end of the first quarter or by the end of the first half of the following year. Countries including Britain and Denmark have adjusted their rules to allow people to carry more of it forward in Britain. Virtually all your annual leave, it seems, can be carried forward over the next couple of years.

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But still, you need usually to agree that with the employer in advance, you can't have employers suddenly finding that many of their staff have disappeared for July and August. This is going to be the difficult thing. Probably the more vital the worker you are, the more difficult it has been to get away during 2020 because you were the staff covering the core functions of the company. And you've got this balance between making sure you have enough staff and making sure workers get the holidays that they seek.

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So how to strike that balance then? It's very difficult and different employers will take a different approach. Now for the economists to lose their management columnist for a few weeks is not going to be a great hardship either for the editors or the readers. But it's all clearly going to be much more difficult if, you know, you're the the supervisor at the semiconductor factory or you're the key client relationship manager with your top customer. And this is where managers are going to really have their jobs cut out, finding alternative arrangements.

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You know, even if the workers are willing to keep going in 2021, you know, it may not be on their top form if they haven't had a proper break for 12 months or so. So it's in the interests of both employers and employees to work this out.

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Well, and when the restrictions in the lockdown's go and it's something like back to normal, there's going to be an ungodly rush to holiday spots, right? Absolutely.

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The gathering rush for the airports now, the summer, which is traditionally where a lot of people go on holiday, will easily be the most difficult period. So employers may well have to think about letting people carry over more, leave it to 2022, never mind 2021 if they want to get to that hump of the summer. Thanks for your time, Philip. Thank you, Jason. That's all for this episode of the intelligence, if you like us, give us a rating on Apple podcast and you can subscribe to the economist at The Economist dot com intelligence offer.

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The link is in the show notes. See you back here tomorrow.