February 10, 2007
Lobbyist connections: Not just for vaccine orders!

I'm sure you'll be as shocked as I was to learn that Governor Perry's harebrained scheme to sell off the Texas Lottery comes complete with its own cozy lobbyist connections, just like the HPV vaccine order did.

Former U.S. Sen. Phil Gramm, a friend of Perry's, is handling discussions for the proposed lottery sale, a spokesman for Gramm's company acknowledged.

Gramm is vice chairman of UBS Investment Bank, which has been advising the governor on the proposed privatization of the state lottery. Gramm was a federally registered lobbyist for UBS last year.

Ray Sullivan, a lobbyist registered with the investment firm in Texas, worked as a spokesman for Perry several years ago. Sullivan is now in business with Michael Toomey, Perry's former chief of staff.

Toomey said he does not represent clients with lottery-related interests, and he added that Sullivan does not work on lottery-related issues for UBS.

Phil Gramm! Man, some of these guys are like cockroaches. You just can't get rid of 'em. And yes, that would be the same Mike Toomey as in the HPV vaccine deal, too. He does get around, does he not? Maybe it's time for a Six Degrees Of Mike Toomey game.

A spokesman for the governor dismissed suggestions that Perry's personal friends might profit from a future sale.

"There have not been any agreements signed. Just conversations," spokesman Ted Royer said.

Yeah, we've heard that before. Hell, someone could probably write a script to auto-generate those statements. Why bother waking up one of Perry's spokespeople? Just click the link and you'll get your very own indignant dismissal of the very idea that there could possibly have been any favors, special considerations, quid pro quo, or what have you. Hell, given how much of their time must be tied up with this sort of thing, the 'bot could probably take the place of at least one such spokesperson. Now that's what I'd call gaining efficiency!

I see also that Perry appears to have listened to the actual experts about his plan, because the asking price has gone up.

Initially, he said he thought the state could get $14 billion from the sale, but he later raised that estimate to $20 billion. At $14 billion, he said the state could raise $300 million more each year through interest generated by a sale than by keeping the monopoly. That's assuming a 9 percent return on the state's investment.

At $20 billion, you'd need only a five percent return to do better than the $1 billion the Lottery generates now. That's a much more attainable figure, but it still brings us back to a basic question: Why would anyone with $20 billion lying around want to spend it on the Lottery when investing it in something else - like, say, whatever the State of Texas would do with it - can get a better bang for the buck? And if they think they can make up the difference by just managing the Lottery better, why not just contract with them to do so and split the marginal gain? Again, that's a less risky proposition, and it leaves a public good in the ownership of the public. Makes too much sense, I guess.

UPDATE: Burka makes a good point:

Nothing generates more money for less effort than the percentage big financial institutions make from handling transactions of this type.


Posted by Charles Kuffner on February 10, 2007 to Jackpot!

Is it time to yet open impeachment proceedings against Perry? Or ask the Travis DA to open a criminal investigation?

Posted by: d on February 10, 2007 8:41 PM

In medical cost vs. benefit modeling (which strongly informs national medical public policy making and far too strongly informs the medical policies of HMOs), the most critical component is a value called "cost per life year gained."

If the cost per life year gained is under $50,000, that is generally considered a decent investment by US medical policy makers. If "cost per life year" gained is over $100,000, that is generally considered a wasteful medical policy because that money could surely be put to much better use elsewhere. Yes, this is cruel and heartless to some degree, but wide scale medical cost allocations do need to be made and, more relevantly, are continually made using these cost plus risk vs. benefit analyses. Think HMOs. Now consider why pap smears, blood tests and urine tests aren't recommended every month for everyone. Testing monthly could definitely save more than a few lives, and there is no measurable associated medical risk. But the cost would be astronomical versus the benefit over the entire US population when comparing these monthly tests to other therapies, procedures and medicines.

Now on to GARDASIL. By the time you pay doctors a small fee to inventory and deliver GARDASIL in three doses, you are talking about paying about $500 for this vaccine. And because even in the best case scenario GARDASIL can confer protection against only 70% of cervical cancer cases, GARDASIL cannot ever obsolete the HPV screening test that today is a major component of most US women's annually recommended pap smears. These tests screen for 36 nasty strains of HPV, while GARDASIL confers protection against just four strains of HPV.

Now let's consider GARDASIL's best case scenario at the moment -- about $500 per vaccine, 100% lifetime protection against all four HPV strains (we currently have no evidence for any protection over five years), and no risk of any medical complications for any subset of the population (Merck's GARADSIL studies were too small and short to make this determination for adults, these studies used potentially dangerous alum injections as their "placebo control" and GARDASIL was hardly even tested on little kids). Now, using these best case scenario assumptions for GARDASIL, let's compare the projected situation of a woman who gets a yearly HPV screening test starting at age 18 to a woman who gets a yearly HPV screening test starting at age 18 plus the three GARDASIL injections at age 11 to 12. Even if you include all of the potential medical cost savings from the projected reduction in genital wart and HPV dysplasia removal procedures and expensive cervical cancer procedures, medicines and therapies plus all of the indirect medical costs associated with all these ailments and net all of these savings against GARDASIL's costs, the best case numbers for these analyses come out to well over $200,000 per life year gained -- no matter how far the hopeful pro-GARDASIL assumptions that underpin these projections are tweaked in GARDASIL's favor.

Several studies have been done, and they have been published in several prestigious medical journals:


None of these studies even so much as consider a strategy of GARDASIL plus a regimen of annual HPV screenings starting at age 18 to be worth mentioning (except to note how ridiculously expensive this would be compared to other currently recommended life extending procedures, medicines and therapies) because the cost per life year gained is simply far too high. What these studies instead show is that a regimen of GARDASIL plus delayed (to age 22, 25 or 28) biennial or triennial HPV screening tests may -- depending on what hopeful assumptions about GARDASIL's long term efficacy and risks are used -- hopefully result in a modest cost per life year savings compared to annual HPV screening tests starting at age 18.

If you don't believe me about this, just ask any responsible OB-GYN or medical model expert. Now, why do I think all of this is problematic?

1) Nobody is coming clean (except to the small segment of the US population that understands medical modeling) that the push for widespread mandatory HPV vaccination is based on assuming that we can use the partial protection against cervical cancer that these vaccines hopefully confer for hopefully a long, long time period to back off from recommending annual HPV screening tests starting at age 18 -- in order to save money, not lives.

2) Even in the best case scenario, the net effect is to give billions in tax dollars to Merck so HMOs and PPOs can save billions on HPV screening tests in the future.

3) These studies don't consider any potential costs associated with any potential GARDASIL risks. Even the slightest direct or indirect medical costs associated with any potential GARDASIL risks increase the cost per life year gained TREMENDOUSLY and can even easily change the entire analysis to cost per life year lost. Remember that unlike most medicines and therapies, vaccines are administered to a huge number of otherwise healthy people -- and, at least in this case, 99.99% of whom would never contract cervical cancer even without its protection.

4) These studies don't take in account the fact that better and more regular HPV screening tests have reduced the US cervical cancer rate by about 25% a decade over the last three decades and that there is no reason to believe that this trend would not continue in the future, especially if we used a small portion of the money we are planning on spending on GARDASIL to promote free annual HPV screening tests for all low income uninsured US women.

5) The studies assume that any constant cervical cancer death rate (rather than the downward trending cervical cancer death rate we have today) that results in a reduced cost per life year gained equates to sound medical public policy.

As I said before, if any of you don't believe me about this, please simply ask your OB-GYN how the $500 cost of GARDASIL can be justified on a cost per life year gained basis if we don't delay the onset of HPV screening tests and back off from annual HPV screening tests to biennial or triennial HPV screening tests.

The recommendations are already in: http://tinyurl.com/33p9q6

The USPSTF strongly recommends ... beginning screening within 3 years of onset of sexual activity or age 21 (whichever comes first) and screening at least every 3 years ...

Posted by: mhatrw on February 11, 2007 2:19 AM

Forgive me for asking a stupid question, but why should there be discussions with Gramm or anybody else about sale of the lottery until the Legislature actually authorizes it? It's ok for Gramm to waste his time on it - who cares how he gets paid, or if. But spending tax dollars on staff time for a "what if" discussion seems pointless right now.

Posted by: Dennis on February 11, 2007 5:57 AM