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As we watch President Trump tell the states they have to do more to find their own personal protective equipment for their health-care workers, governors lash back with demands for a national leader who will unlock the emergency powers of the federal government.

The response to the COVID-19 pandemic has exposed major weaknesses in the federalist system of public health governance, which divides powers among the federal, state and local governments, argues SHP’s Michelle Mello in this New England Journal of Medicine commentary.

The coronavirus, she writes, “is exactly the type of infectious disease for which federal public health powers and emergencies were conceived: it is highly transmissible, crosses borders efficiently, and threatens our national infrastructure and economy.”

“Strong, decisive national action is therefore imperative,” writes Mello, a professor of medicine and a professor of law, and Rebecca L. Haffajee, a policy researcher at the RAND Corporation. “Yet the federal response has been alarmingly slow to develop, fostering confusion about the nature of the virus and necessary steps to address it.”

The authors warn this “lack of interjurisdictional coordination has and will cost lives.”

Though states must respect constitutionally protected individual rights — such as due process, equal protection and freedom of travel and association — the Constitution puts primary responsibility for public health with the states, cities and counties. It gives them the right to exercise broad police powers to protect their citizens’ health during ordinary times.

In extraordinary times — like the one we’re experiencing now — states and the federal government can activate emergency powers to expand their abilities to act swiftly and protect human life and health. All 50 states and dozens of localities and the federal government have declared emergencies.

“The resulting executive powers are sweeping: they can range from halting business operations, to restricting freedom of movement, to limiting civil rights and liberties, to commandeering property,” Mello and Haffajee write in the NEJM Perspective.

This emergency legal framework has led to too few checks-and-balances on poor decisions—historically, in the direction of being overly aggressive, write the authors. They note a good example is when New Jersey’s governor ordered a nurse returning from Sierra Leone during the 2014 Ebola outbreak into quarantine, contrary to Centers for Disease Control and Prevention guidelines.

Too Little Too Late? 

“Today, we find ourselves in the opposite situation: the federal government has done too little,” the authors write. “Perhaps because of misleading early statements from federal officials about the gravity of the COVID-19 threat, public sentiment has weighed against taking steps that would impose hardships on families and businesses.”

The tumbling stock market and unprecedented 10 million unemployment claims last month also have created further pressure by the federal government to project a sense of calm.

“The resulting laconic federal response has meant that a precious opportunity to contain COVID-19 through swift, unified national action has been lost — a scenario that mirrors what occurred in Italy,” they write.

So the states had to pick up where the federal government fell short, the authors note. Many jurisdictions issued stay-at-home orders; others did not. As of March 31, more than a dozen governors had yet to issue statewide stay-at-home orders and eight had only ordered partial measures. Yet many jurisdictions turn a blind eye, they note, to noncompliance with social-distancing recommendations issued by the CDC, as evidenced by crowded beaches and children congregating in public parks.

“This is the dark side of federalism: it encourages a patchwork response to epidemics,” the authors write.

“A federal takeover of all public health orders would be out of step with our federalist structure,” the authors state, but there remain three good options:

  • “The White House must reverse its current trajectory toward prematurely weakening existing federal measures and the resolve of governors who are enforcing stay-at-home orders and school closures.” Trump said last week he wanted the United States “opened up and raring to go by Easter.” A few days later, he heeded the call of medical experts and extended social-distancing guidelines until the end of April, but public health experts believe the crisis will likely be with us longer.
  • Congress should “use its spending power to further encourage states to follow a uniform playbook for community mitigation that includes measures for effective enforcement of public health orders.” It could threaten to withhold some federal funds from states that do not comply.
  • “Congress could leverage its interstate-commerce powers to regular economic activities that affect the interstate spread” of COVID-19, such as restricting large businesses from traveling and operating across state lines in ways that expose workers to risk.

The White House could also make further use of the Defense Production Act (DPA) to direct private companies to produce badly needed ventilators and personal protective equipment for health-care workers, the authors write. Trump has ordered General Motors to manufacture ventilators and the $2 trillion stimulus package includes $1 billion for DPA projects.                                                                     

“Learning is difficult in the midst of an emergency, but one lesson from the COVID-19 epidemic is already clear: when epidemiologists warn that a pathogen has pandemic potential, the time to fly the flag of local freedom is over,” the authors conclude. “Yet national leadership in epidemic response works only if it is evidence-based. It is critical that the U.S. response to COVID-19 going forward be not only national, but rational.”

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Gi-Wook Shin
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There is a Korean expression that means “to become soaked by a drizzle without noticing.” This metaphor is a timely warning against the gradual decline of democratic norms. Though some of the changes underlying this global phenomenon are subtle, they are producing creeping, piecemeal erosions of democracy and pluralism. The signs of democratic backsliding are now emerging everywhere in South Korean society, and a failure to recognize and robustly counter their effects may create future costs that prove unbearable. 

My new article, “Korean Democracy Is Sinking Under the Guise of the Rule of Law,” published in the April 2020 issue of the South Korean magazine Shindonga (New East Asia, the oldest monthly in Korea), examines how the Moon administration is sinking into a democratic recession and considers its actions as a case study with lessons for averting broader, global trends in democratic decline.

In all corners of the world, we witness freely elected leaders gradually dismantle democratic institutional safeguards, fuse political polarization with chauvinistic populism, and focus on narrow interpretations of the national interest just as China and Russia expand their scope of influence via “sharp power,” subversive means.

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Chairman of the South Korean National Assembly Moon Hee-sang (second from the left of the chairman's seat) enacts a draft amendment to the election law amid vigorous resistance by members of the opposition –December 23, 2019. 
South Korea is no exception to these currents. A politics of extreme confrontation and polarizing rhetoric of "us" and "them" are becoming the country’s new normal. The Moon administration’s aggressive assertion of a Manichean logic of good and evil that justifies their vitriolic attacks on perceived opposition is evidenced in its campaign of “eradicating deep-rooted evils” from Korean society and politics.

As my analysis shows, this crusading mindset has insinuated itself into more concrete actions by the Moon government, such as the calculated blurring of the separation of powers through political interference in the courts, deliberate changes to longstanding election laws that damage the spirit of democracy, and the blatant use of double standards and ideological loyalty in the execution of national policies. Similar patterns are taking hold in populist governments the world over, and – perhaps most disconcertingly – they transpire not through the strong-arming of a military coup or violent political disruption but through the legal procedures and policies meant to keep such canker in check.

To overcome its wave of democratic recession South Korea must cast away political polarization and demonstrate a firm resolve to act in accordance with democratic norms. The upcoming April 15 legislative election must sound a clear alarm against all actors who damage these core principles, regardless of their party affiliation and irrespective of their ideology. 

Read the complete English translation of my article or the original Korean version here:

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Pro- and anti-Moon protests in Seocho-dong, South Korea – October 5, 2019. | Dong-a Ilbo, Shindonga
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Lindsay Krall
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In the budding days of the COVID-19 pandemic, President Trump idled his days away, launching random tweets about unrelated issues. One such issue was nuclear waste disposal: “Nevada, I hear you on Yucca Mountain…my Administration is committed to exploring innovative approaches – I’m confident we can get it done!”

After this particular proclamation, the nuclear expert community was left scratching its collective head. Does the president support Yucca Mountain as an eventual nuclear waste repository, or does he not? And, more puzzling, what “innovative approaches” for nuclear waste does he have in mind? Maybe he was thinking about the “waste eating” advanced reactors promoted by the US Energy Department and the private sector; maybe he was thinking about reprocessing spent nuclear fuel; or maybe he was thinking about deep boreholes for permanent waste storage.

 

Read the rest at the Bulletin

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In a Lawfare post earlier this year, I questioned the wisdom of referring to cyber operations as psychological operations. These campaigns are the bread and butter of U.S. Cyber Command’s operational activities. My interest in this question stemmed from two recent articles, one on NPR and one in the Washington Post. The former discussed past activities of U.S. Cyber Command and the latter discussed possible future activities. Taken together, both articles used terms such as “information warfare,” “information operations,” “psychological operations” and “influence operations” to describe these activities.

I closed that post with a promise to comment on the doctrinal and conceptual confusions within Defense Department policy regarding all of these concepts. This post makes good on that promise.

 

Read the rest at Lawfare Blog

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On Feb. 12, White House National Security Adviser Robert O’Brien announced that the U.S. government has “evidence that Huawei has the capability secretly to access sensitive and personal information in systems it maintains and sells around the world.” This represents the latest attempt by the Trump administration to support an argument that allied governments—and the businesses they oversee—should purge certain telecommunications networks of Huawei equipment. The position reflects the preferred approach in the United States, which is to issue outright bans against select companies (including Huawei) that meet an as-yet-unknown threshold of risk to national security.

 

Read the rest at Lawfare Blog

 

 

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Stanford e-Japan is an online course that teaches Japanese high school students about U.S. society and culture and U.S.–Japan relations. The course introduces students to both U.S. and Japanese perspectives on many historical and contemporary issues. It is offered biannually by the Stanford Program on International and Cross-Cultural Education (SPICE). Stanford e-Japan is currently supported by the Yanai Tadashi Foundation. The Fall 2019 cohort was the ninth group of students to complete Stanford e-Japan.


In Summer 2020, three of the top students of the Fall 2019 Stanford e-Japan distance-learning course will be honored at an event at Stanford University. The three Stanford e-Japan Day honorees—Ayano Hirose (Okayama Sozan High School), Chisaki Sano (Gunma Kokusai Academy), and Natsumi Shindo (Keio Girls Senior High School)—will be recognized by Stanford e-Japan Instructor Meiko Kotani for their coursework and exceptional research essays that focused respectively on “Three Basic Ways to Promote Cross-Cultural Understanding in Japanese Education,” “U.S.–Japan Relations: Economic Interdependence Seen in 7-Eleven Operations,” and “The U.S.–Japan Security Alliance: Its Preservation and the Responsibilities of Both Countries.”

Yuta Myojo (Rikkyo Ikebukuro High School) received an Honorable Mention for his coursework and research paper on “How Could Japanese Society Achieve Increased Biculturalism: From the Aspects of Education Reform and Self-Awareness.”

In the Fall 2019 session of Stanford e-Japan, students from the following schools successfully completed the course: Aiko Gakuen (Ehime), Gunma Kokusai Academy (Gunma), Hiroshima High School (Hiroshima), Hiroshima Prefectural Hiroshima Junior/Senior High School (Hiroshima), Hitachi First Senior High School (Ibaraki), Ichikawa Junior and Senior High School (Chiba), Keio Girls Senior High School (Tokyo), Keio Senior High School (Kanagawa), Mita International High School (Tokyo), Nishiyamato Gakuen High School (Nara), Okayama Prefecture Asahi Senior High School (Okayama), Okayama Sozan High School (Okayama), Rikkyo Ikebukuro High School (Tokyo), Ritsumeikan Uji High School (Kyoto), Sendai Shirayuri Gakuen (Miyagi), Senior High School at Otsuka, University of Tsukuba (Tokyo), Senior High School at Kyoto University (Kyoto), Shibuya Kyouiku Gakuen Shibuya Senior High School (Tokyo), Shibuya Makuhari Senior High School (Chiba), Shirayuri Gakuen Senior High School (Tokyo), Takada High School (Mie), Takatsuki Senior High School (Osaka), Tokyo City University Senior High School (Tokyo), Waseda University Senior High School (Tokyo), Yokohama Science Frontier High School (Kanagawa), and Zushi Kaisei High School (Kanagawa).

For more information about the Stanford e-Japan Program, please visit stanfordejapan.org.

To stay informed of news about Stanford e-Japan and SPICE’s other programs, join our email list and follow us on Facebook, Twitter, and Instagram.


SPICE offers separate online courses for U.S. high school students. For more information, please see the Reischauer Scholars Program (online course about Japan), Sejong Scholars Program (online course about Korea), and China Scholars Program (online course about China).


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Fall 2019 Stanford e-Japan honoree Ayano Hirose giving her final presentation at school. Courtesy of Ayano Hirose.
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The Trump administration’s proposal for trilateral arms control negotiations appears to be gaining little traction in Moscow and Beijing, and the era of traditional nuclear arms control may be coming to an end just as new challenges emerge. This is not to say that arms control should be an end in it itself. It provides a tool that, along with the right combination of deterrence and defense forces and proper doctrine, can enhance U.S. and allied security and promote stability.

Applying that tool will require overcoming a variety of challenges, not just regarding nuclear weapons but related issues, such as missile defense and conventional strike systems. Policymakers face some hard choices.

NUCLEAR ARMS

In August 2019, the United States withdrew from the 1987 Intermediate-range Nuclear Forces (INF) Treaty following Russia’s violation. (More broadly, Moscow’s selective compliance with arms control agreements poses a problem.) The 2010 New Strategic Arms Reduction Treaty (New START) remains as the sole agreement constraining U.S. and Russian nuclear weapons. New START expires in February 2021, but can be extended for up to five years.

For the United States, New START extension should be a no-brainer. Russia is in compliance with the treaty. Extension would continue limits on Russian strategic forces, as well as the flow of information on those forces provided by the treaty’s verification measures, until 2026. Extension would not require that the Pentagon change its strategic modernization plans, as those plans were designed to fit within New START’s limits.

Moscow has offered to extend New START, but the Trump administration has been reluctant. In 2017, U.S. officials said that, before considering the extension issue, they wanted to: 1) see if Russia met the New START limits, which took full effect in February 2018, and 2) complete the nuclear posture review, which was released the same month. Two years later, however, the administration still lacks a position on extension.

Instead, President Trump has set an unachievable objective — a trilateral negotiation with China and Russia covering all their nuclear arms. As I recently wrote in more detail, Chinese officials have repeatedly said no to such a negotiation, citing the large difference in nuclear weapons levels. The Trump administration thus far has offered nothing to entice Beijing to change its position.

Moreover, almost a year after the president set his goal, his administration has yet to offer a proposal — or even an outline — for what such a negotiation would seek to achieve. Neither Washington nor Moscow is ready to agree to have the same number of nuclear weapons as China, but it is unrealistic to think that Beijing would accept unequal limits.

Setting aside China, Russia is not ready to discuss all nuclear arms unless certain conditions are met (more on that below). The Obama administration sought a new negotiation after New START’s conclusion with the goal of including all U.S. and Russian nuclear weapons. That idea never gained traction in Moscow.

If New START expires in 2021, the United States and Russia likely would not launch major new build-ups, as both face real defense budget constraints. But their deployed strategic warhead levels could “creep up” above the number allowed by New START if the sides add warheads to intercontinental ballistic missiles (ICBMs) and/or submarine-launched ballistic missiles (SLBMs) that currently carry fewer warheads than their capacity. With the demise of New START’s verification regime, the sides would have little visibility into the other’s actions regarding adding warheads or total warhead numbers.

Some appear to believe that holding back on agreeing to the extension of New START and/or starting from scratch in a new negotiation might increase U.S. leverage to include all nuclear arms, including non-strategic nuclear weapons. That does not appear to be the case. It is more likely that the end of New START’s constraints on deployed strategic weapons would make bringing non-strategic or non-deployed nuclear weapons under control more difficult.

MISSILE DEFENSE

Russian conditions for discussing a broader agreement focus first on missile defense. Differences over missile defense pose a challenge for arms control.

Current U.S. missile defenses hardly constitute a threat to Russian ICBM and SLBM warhead numbers. Moscow, however, has long seemed to fear the potential of U.S. technology and prospective missile defenses. The United States and Russia came close in spring 2011 to an arrangement on a cooperative missile defense for Europe, but they failed to reach agreement, after which the Russian position on limiting missile defenses hardened. Moscow showed no interest in a 2013 U.S. proposal for an executive agreement on missile defense transparency, under which the sides would have exchanged information each year on their current missile defense numbers and prospective numbers looking out each year for 10 years.

Moscow appears to want legally-binding limits on missile defenses. However, the Trump administration’s 2019 missile defense posture review stressed that there should be no negotiated limits on missile defense. Missile defense has a strong constituency in the U.S. Senate, impeding the chance that a treaty limiting missile defenses would get the necessary two-thirds approval.

The missile defense issue will become more complex in coming years. As part of its ground-based mid-course defense, the U.S. military maintains 44 ground-based interceptors in Alaska and California capable of intercepting strategic ballistic missile warheads, with another 20 interceptors planned. In a separate program, the Pentagon is now developing a new variant of the SM-3 missile interceptor. Whereas current variants (the SM-3 IA and SM-3 IB) can engage intermediate-range ballistic missile warheads, the Pentagon intends to test the new SM-3 IIA variant against an ICBM warhead.

If the SM-3 IIA proves capable of intercepting strategic ballistic missile warheads, that will raise concern in Moscow (and Beijing) about the proliferation of those interceptors on U.S. warships, at Aegis Ashore sites in Romania and Poland, and elsewhere. Russia’s interest in limits on missile defenses would only intensify as would Moscow’s linkage of future nuclear arms reduction negotiations to a negotiation on missile defense.

LONG-RANGE PRECISION-GUIDED CONVENTIONAL STRIKE

Sea-launched cruise missiles (SLCMs) and air-launched cruise missiles (ALCMs) carrying conventional warheads have never been constrained by arms control agreements. As their precision has increased, Russian officials and experts have expressed concern that they could destroy targets that previously would have required a nuclear weapon and that the United States might consider a “conventional strategic” attack on Russia. It is unclear how realistic this concern is; would, for example, a conventionally-armed U.S. SLCM warhead be powerful enough to disable a hardened Russian ICBM silo?

Russian officials in 2011 began linking long-range precision-guided conventional strike systems to the issue of further nuclear arms cuts. The Pentagon has shown little enthusiasm for limits on these conventional systems, which are a key component of U.S. power projection capabilities. Russia may be starting to catch up, having demonstrated conventionally-armed ALCMs and SLCMs in Syria, but the U.S. military holds a significant numerical advantage.

As with missile defense, the situation with conventional strike may become even more complex. With the demise of the INF Treaty, the Pentagon is now developing or planning several conventionally-armed ground-launched missiles that would have been prohibited by the treaty. Two missiles — the Precision Strike Missile with a possible range of 700 kilometers and a ground-launched cruise missile with a range of 1,000 kilometers — almost certainly are being developed with European contingencies in mind. The Pentagon’s planned ballistic missile with a range of 3,000-4,000 kilometers is intended for the Asia-Pacific region, primarily as a counter to the large number of Chinese intermediate-range missiles (most of which are believed to be conventionally-armed).

Developing and deploying these U.S. missiles — along with Russia’s continued deployment of the 9M729 intermediate-range ground-launched cruise missile plus other missiles that Russia may develop and deploy as “counters” to new U.S. missiles — would further complicate the long-range precision-guide conventional strike picture. That, if in turn linked to nuclear arms control, would impede negotiation of a new agreement reducing and limiting nuclear weapons.

HYPERSONIC, CYBER, AND SPACE

Hypersonic weapons pose another complex factor for arms controllers. Both the United States and Russia (as well as China) are developing hypersonic weapons, including hypersonic glide vehicles to mount on ballistic missiles and hypersonic cruise missiles. Russia has deployed a small number of Avangard hypersonic glide vehicles atop ICBMs to enhance their ability to overcome U.S. missile defenses. Those fall under New START’s limits, but future hypersonic weapons, such as Russia’s Kinzhal air-launched ballistic missile, do not.

A negotiation to limit nuclear arms or long-range precision-guided conventional strike systems would have to take account of hypersonic weapons. That could be difficult, as the United States, Russia, and China appear to be focusing on different types of hypersonic systems.

Cyber and space domains can also have important effects on the nuclear arms relationship. Cyber raises concern about the possibility that a side’s nuclear command, control, and communication systems might be compromised in ways that would allow an intruder either to disrupt communications, including an authorized launch order, or to spoof the system with an unauthorized instruction. The cyber domain does not lend itself readily to traditional arms control-type arrangements.

As for space, Moscow has long advanced proposals to ban the weaponization or militarization of space. Washington has resisted those proposals, in part out of concern that they might affect the ability of the U.S. military to operate space-based assets for command and control, early warning, and intelligence, surveillance, and reconnaissance purposes. It is unclear whether more limited proposals, such as a ban on anti-satellite tests that generate orbital debris or a ban on deploying strike weapons in space, might be negotiable.

DIFFICULT TRADE-OFFS

Traditional nuclear arms control is in trouble. If the United States and Russia — and perhaps other countries in the future — wish to continue to use it as a tool to promote a more stable, secure, and transparent nuclear relationship, they will have to deal with challenges that did not arise or that they could agree to set aside during past negotiations.

Washington faces a fundamental choice: Is it prepared to countenance some constraints on missile defense and possibly long-range precision-guided conventional strike systems in order to get Russia to agree to further reduce and limit nuclear arms, including non-strategic nuclear weapons? Moscow faces something of the reverse choice: Will it hold to its insistence on limiting missile defenses and conventional strike systems even if that blocks a future nuclear arms agreement with the United States?

There remains the question of China, and Russia almost certainly would seek to include Britain and France. Would those third countries be willing to consider an approach other than a full negotiation with the United States and Russia, perhaps by offering a degree of transparency regarding their nuclear forces and committing unilaterally not to increase their nuclear weapons numbers so long as U.S. and Russian nuclear forces were reducing?

It would make sense for U.S. and Russian officials to conduct regular, intense bilateral strategic stability talks on the full range of issues — nuclear arms, missile defense, conventional strike systems, hypersonic weapons, third-country nuclear forces, cyber, and space — and their various interactions. Such discussions, if they go beyond mere recital of talking points, might allay some concerns the sides hold about the other while helping U.S. and Russian officials to decide whether specific negotiations might make sense.

None of these questions will be easy, and sorting them out will take time. That bolsters the already strong argument for extending New START. Doing so would give Washington and Moscow five more years to figure out what role, if any, arms control should play in managing their nuclear relationship with one another and, perhaps, with third countries.

 

Originally for Brookings

 

 

 

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Most Americans don’t realize there are silent brokers helping to fix the price of their prescription drugs — or that it’s a $100 billion annual business accounting for half of Big Pharma sales.

They’re called pharmacy benefit managers (PBMs), with CVS Caremark, Express Scripts and Optum RX dominating the market. Their chief function is to develop and maintain a list called the “formulary,” a list of drugs that will be covered by health-care plans. The formulary groups drugs into tiers with different levels of patient cost sharing.

They also pool volume across health plans to negotiate with drug manufacturers and retailers on prescription drug pricing. And PBMs reap rewards from rebates and fees that drug manufacturers pay them, as well as from a ‘pharmacy spread’ where PBMs bill health plans more than they reimburse pharmacies.  

All of this comes at a cost to patients.

“Patients typically only think about what they pay out-of-pocket at the pharmacy counter,” said Alex Chan, a PhD candidate in health economics at Stanford Health Policy. He and Kevin Schulman, a professor of medicine and professor of economics, by courtesy, at the Stanford Graduate School of Business, have just published a paper in JAMA Health Forum that examines these silent and powerful intermediaries.

“As PBMs leverage the formulary design to secure more and more rebates and fees from manufacturers, these drug manufacturers raise the list price in response,” Chan said. “The patients’ out-of-pocket cost at the counter would increase but at a less noticeable rate given that they co-pay are just a percentage of the list prices.”

Unless these rebates are passed along to consumers as reduced premiums, the net effect is an increase in premiums. Furthermore, if formulary design is used to help PBMs secure better rebates, PBMs may prioritize expensive drugs over more cost-effective drugs.

Transparency

These pharmacy benefit managers have come under scrutiny as health policy experts learn more about the scale of prescription drug rebates and other questionable practices used by these intermediaries in the prescription drug market. For example, PBMs can include “gag clauses” that prohibits pharmacists from telling customers about cheaper drug options.

They ask themselves: What is the underlying value of PBMs for both payers and patients?

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Chan and his co-author Kevin Schulman acknowledge that PBMs play an important role in many transactions of the U.S. economy.

“They create value by providing information on the quality and value of products and services and by providing negotiation leverage as they amass scale by aggregating smaller buyers (or sellers),” they write. “Consumers can be sure to share in this value under three conditions: when there is competition among intermediaries, when pricing is transparent, and when it is clearly defined who is negotiating on whose behalf.”

But when these conditions are not met, they add: “We can find that intermediaries can hold a powerful and self-serving position in a market.”

Chan and Schulman found that in the drug prescription market, there are significant concerns about the value of these PBMs:

  1. Rather than a market where there is competition among PBMs, consolidation has resulted in a situation in which the three largest PBMs have about 80% of market share. There are significant barriers to competition among PBMs. If a health system wants to switch PBMs, it requires a significant investment in a “request-for-proposal” process.
  2. Drug-specific rebates are kept confidential between PBMs and drug manufacturers, and health plans have little ability to clearly assess the cost-savings for their members or to gauge the appropriateness of the rebate passthroughs.
  3. Under the rebate model, the role of the PBM has evolved to serving as an agent of both the payer and the manufacturer. The interests of payers and manufacturers are often in conflict, especially with respect to expenditures.

"One of the largest criticisms of PBMs is the lack of transparency surrounding the structure and scale of payments from manufacturers to the PBM,” the authors write. “The current PBM business is shrouded in secrecy.”

Only the PBM knows the actual scope of payments from drug manufacturers, such as rebates and service fees. They note that in 2016, for 13 pharmaceutical companies, payments to PBMs and other intermediaries (such as wholesalers) were $100 billion — or 50% of gross sales.

 “Without transparency, a PBM might develop formularies that maximize payments to the PBM rather than maximize value to patients,” Chan and Schulman write.

Suspicion over just that led health insurance company Anthem to sue Express Scripts for $15 billion in 2016 for overpayments on drug pricing. In the end, Anthem cut ties with Express Scripts to develop its own PBM.

“The PBMs have grown out of sync with what we can reasonably expect to be a value-adding intermediary,” Chan said. “It is hard to really tell how much inefficiencies have been created due to this lack of transparency.”

Legal Solutions

The authors note that Congress has taken steps to shed light on PBMs through the Patient Right to Know Drug Prices Act and the Know the Lowest Price Act, both adopted in 2018. These laws outlaw PBMs gag clauses that forbid pharmacists from telling consumers that their price through a PBM was higher than the as price for the same product.

Chan said these laws are a move toward the direction of providing patients with more transparency about their options.

“An even more promising direction would be for legislation to make a stronger push towards public disclosure of rebates, discounts, and price concessions, along with lower barriers to entry to the PBM market,” he said.

 

 

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Alex Chan graduated with a PhD in 2023.

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Following the 1989 Loma Prieta earthquake, I recall being astounded that the iconic arches and pillars of Stanford University—though damaged—didn’t collapse or fall during the powerful earthquake. Wooden supports were inserted below the arches and remained for years while retrofitting took place. Since then, the arches and pillars have symbolized for me the stability and the security of the foundation of Stanford University. During yet another unstable time in 2020, this symbolism has once again taken on critical significance here and abroad.

In 1989, the World Wide Web was yet to be born, so obviously SPICE did not offer online classes to students in the United States, let alone to students abroad. SPICE’s first online course, the Reischauer Scholars Program, was launched in 2004. RSP Instructor Naomi Funahashi introduces topics related to Japan and U.S.–Japan relations to high school students in the United States. In 2015, SPICE launched Stanford e-Japan, an online course on U.S. society and culture and U.S.–Japan relations that Waka Takahashi Brown and Meiko Kotani offer to high school students in Japan. Since then, several other regional classes have been launched, including Stanford e-Kawasaki in 2019.

 

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Stanford e-Kawasaki is an online course for high school students in Kawasaki City that is jointly offered by Kawasaki City and SPICE. Stanford e-Kawasaki Instructor Maiko Tamagawa Bacha provides students with an introduction to diversity and entrepreneurship in the United States and equips students with substantive knowledge about U.S. culture and society that may have a significant impact on their future choice of study and career.

 

The inaugural Stanford e-Kawasaki course began in October 2019 and culminated this month with presentations of final research projects by students from Tachibana High School and Kawasaki High School, the two participating schools in the inaugural course. Leading scholars from Stanford University and Silicon Valley entrepreneurs—including Dr. Stephen Murphy-Shigematsu from Stanford and Silicon Valley entrepreneurs Sukemasa Kabayama, CEO and Co-Founder of Uplift, and Rika Nakazawa, VP Strategy and Business Development at Atheer—led online class discussions and not only encouraged students to critically think about diversity and entrepreneurship in the United States but also in Japan. These discussions helped students to conceptualize topics for their final research projects.

The research projects were varied and included a comparative analysis of college admissions in the United States and Japan, an examination of psychological issues affecting youth in the United States and Japan, and a discussion about whether a Silicon Valley-type ecosystem can be created in Japan. The students’ presentations were not only content rich and creative but also effectively engaged the audience, which included Vice Principal Akihiro Igarashi of Tachibana High School, Miyuki Kitamura of Kawasaki City, SPICE Instructors Carey Moncaster, Rylan Sekiguchi, and Kasumi Yamashita, Bacha, teachers from both high schools, and me. Bacha reflected, “Though my students were not able to make their presentations physically in front of audiences [as originally planned] due to the current COVID-19 pandemic, I was grateful to have had the chance to virtually observe all of the presentations from Colorado along with my colleagues in California, Hawai‘i, and Washington. I was especially impressed with my students’ demonstrated growth in their English-speaking abilities and confidence. Especially gratifying was to witness students asking each other questions.”

Vice Principal Igarashi noted, “I am deeply grateful for the opportunity given to the Tachibana High School students to join online class discussions led by leading scholars in the United States… As I watched them passionately delivering their final research presentations that they worked hard on, I could tell that they gained unique experiences which they cannot experience in regular school classes. By comparing Japan and the United States in their research projects, I am sure that they discovered new things about their own country, Japan… I believe from the bottom of my heart that the online classes and assignments given by this course will empower the youth of the future.”

While listening to the presentations, I was struck by how well the students engaged the audience. In my final comments, I commended their use of several effective presentation techniques, such as the following.

  • Emphasis on interdisciplinarity in their research
  • Incorporation of multiple perspectives
  • Voice projection
  • Use of images, including photos, drawings, statistics, and graphs
  • Signposting
  • Embedding questions for the audience in the presentation, e.g., Can we create a Silicon Valley in Japan?
  • Providing historical context
  • Definition of complex terms

In addition, for the first time since SPICE launched online courses, I felt a deep sense of satisfaction from knowing that we could bring some stability and security to the lives of students who could no longer physically go to school. The students gushed with enthusiasm despite their nervousness.

Mizuho Toyama, a Teacher of the English Department at Kawasaki High School noted, “We were so excited about our students’ online presentations this morning. What they did was tremendous and the experience they went through—I am sure—has become their priceless treasure… They learned not only English as a foreign language but also, more importantly, stepping out of their ‘comfort zone’ to seek advanced levels of learning. Raising cultural awareness with peers and also sharing thoughts without racial biases is an excellent source of learning. I am thankful for this program for encouraging students to be more openminded.”

Erica Oh, an American Assistant Language Teacher of English at Kawasaki High School, also commented on Bacha’s course. “Again, thank you and your staff, especially Maiko Tamagawa Bacha, for the awesome opportunity you have given our students to learn more and think outside their cultural box. It was an absolute delight for me to be able to witness their growth. I hope Stanford and Kawasaki stay in partnership and that this program continues.” For one of the online classrooms that focused on diversity, Bacha invited former Japan Exchange and Teaching (JET) Program Assistant Language Teachers—John Branderhorst, Jeffrey Fleischman, Ryan Moore, and Cerell Rivera—to share their perspectives. “Bringing Americans and Japanese together—albeit virtually—at a time like this is invaluable,” commented Bacha.  

Students who successfully completed the course will earn a Certificate of Completion from SPICE/Stanford University on March 26, 2020 during a virtual closing ceremony. Mayor Norihiko Fukuda will make opening comments. In addition to SPICE staff, others who will be in attendance are Hisashi Katsurayama from the Kawasaki Board of Education and Katsuyoshi Abe, Yoshitaka Tsuchihama, and Miyuki Kitamura of Kawasaki City, all of whom have been unwavering in their support of Stanford e-Kawasaki.

When SPICE launched its online courses, I never imagined that the SPICE instructors would be reaching many students whose school lives were disrupted by a pandemic. I feel indebted to FSI Director Dr. Michael McFaul and FSI Deputy Director Dr. Kathryn Stoner for their support during this unstable time and enabling SPICE to help add some stability and security to students’ lives.


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