Olly Williamson (1932-2020)

The great student of transaction costs, Oliver (Olly) Williamson, has died.

Here's the Berkeley obit:
Nobel laureate Oliver Williamson, pioneer of organizational economics, dies at 87

"His multidisciplinary approach to analyzing organizational structures was unconventional in economics at the time—he described it as a melding of soft social science with abstract economic theory. He looked not only at formal firm structure but at culture and social norms. Prof. Ernesto Dal Bó, the Phillips Girgich Professor of Business, called Williamson’s work “a fountain of vocation-shaping epiphanies.”

“After reading his work, we could no longer think of markets, organizations, and legal or political institutions in the same way. And so we didn’t,” Dal Bó said. “His insights are now part of the common sense of social scientists.”
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He won the Nobel prize in economics in 2009: here's his autobiographical statement on the Nobel site. I was struck by this paragraph:

"Although I would not come to appreciate this last until later, there was a major difference between engineering and economics with respect to hypothetical ideals. Thus whereas assumptions of weightlessness or perfect gas laws or frictionlessness etc. served the purpose of simplification in engineering, these assumptions would give way to realities (in the form of friction, resistance, turbulence, and the like) as engineering applications were attempted. In economics, however, assumptions of frictionlessness (of which the standard assumption of zero transaction costs was one) often went unquestioned or, even worse, were invoked asymmetrically. Thus whereas markets were subject to “failures” for which corrective public policy measures were prescribed, there was no corresponding provision for failures in the public sector. A more symmetrical approach would be to recognize that positive transaction costs were the economic counterpart of friction and that all forms of organization experience such costs – albeit in variable degree (depending on the attributes of the transaction to be organized). I credit my engineering background with giving me a receptive attitude toward transaction costs, to include an interest in pinning down and working out the organizational ramifications of such costs."

Should emergency medical supplies go to the highest bidders? (That isn't necessarily what economists think...)

Should prices clear markets for emergency medical supplies? Many economists don't think so:

Prices of Medical Supplies

"About the European IGM Economic Experts Panel
This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format."

What makes a market transaction morally repugnant? by Leuker, Samartzidis, and Hertwig

Here's a new working paper on repugnance, from the Max Planck Institute for Human Development in Berlin.

What makes a market transaction morally repugnant?
Christina Leuker, Lasare Samartzidis, & Ralph Hertwig
April 23, 2020

Abstract: For many people, it is morally impermissible to put kidneys, jury duty exemptions, or permits for having children on the free market. All of these are examples of repugnant transactions—market transactions that third parties want to prevent. In two studies (N = 1,554), using respondents’ judgements of 51 different market transactions across 21 characteristics, we show that repugnance can be characterized along five higher-order dimensions: moral outrage, need for regulation, incommensurability, exploitation, and unknown risk. Repugnance toward the 51 market transactions was highly consistent across two samples. Our results can help identify mismatches between public sentiments and current regulations (selling carbon emissions is currently legal but considered repugnant), anticipate responses to novel markets that have not been publicly scrutinized (often arising from technological advances, such as markets for “designer babies”), and help design less repugnant markets (e.g., by making the risks involved in a transaction known to sellers).


And, in conclusion:

"Our studies have shown that perceived repugnance is quantifiable, and that market transactions can be profiled based on their underlying psychometric properties. The extent to which certain market transactions are considered repugnant is fairly stable across different respondent samples. Perhaps the most important finding from this research is that people’s judgments of a transaction’s repugnance can reflect a range of legitimate and important concerns. These concerns can be measured and possibly harnessed to predict how the public will perceive new, rapidly emerging transactions"

Blood and plasma: a brief history, from 1628

With all my discussion of convalescent plasma for Covid-19 this week*, here's a historical perspective on the technology and changes in medical practice since the discovery of blood circulation in 1628 that allows blood and plasma to be used in medicine.


A history of blood transfusion: a confluence of science—in peace, in war, and in the laboratory
by Kevin R. Loughlin
Hektoen International, Volume 12, Issue 2 – Spring 2020.

"Since 1628 when William Harvey discovered the circulation of blood, there had been hope that blood transfusion would be possible.
...
"After Harvey’s discovery, transfusion attempts began. In 1665 Richard Lower kept dogs alive by transfusing blood from other dogs.2 In 1667 French physician Jean Denys transfused nine ounces of blood from the carotid artery of a lamb into the vein of a young man. He continued the practice until the third patient so treated, died.3 Denys was sued by the wife of the deceased patient, who presumably died from a hemolytic reaction, but was exonerated. However, the French Parliament, the Royal Society, and the Catholic Church subsequently issued a general prohibition against transfusions.4

"It would not be until 1818 when transfusions were seriously considered again. A British obstetrician, James Blundell, performed a human blood transfusion in the setting of a postpartum hemorrhage.5 However, the debate over transfusions continued over the remainder of the nineteenth century. In 1849 C.H.F. Routh reviewed all the published transfusions to date and remarked in the Medical Times that of the 48 recorded cases, 18 had a fatal outcome and concluded that the mortality rate was unacceptably high.5 The next major advance in transfusion therapy would wait until the turn of the century.

"Karl Landsteiner was an Austrian physician and immunologist. While working at the University of Vienna, he became interested in blood serum work, specifically the factors that led to hemagglutination of red blood cells. This resulted in two landmark publications in 1900 and 1901 that described the evidence of blood groups that he named A, B, and C.6,7 These would later be modified to A, B, and O. Two years later, two of his colleagues, Alfred Von Decastelo and Adriano Sturli, would add a fourth blood type, AB.8,9 Landsteiner would be awarded the Nobel Prize in 1930 for his elucidation of the blood groups.

... in 1912, Doctor Roger Lee demonstrated that O blood could be given to a person of any blood type (universal donor) and that a person with AB blood could receive blood from any blood group (universal recipient).
...
"As blood transfusions became more widespread in medical practice, the concept of establishing blood banks became attractive. In the 1930s Bernard Fantus at Cook County Hospital20 and Carl W. Walter at Peter Bent Brigham Hospital started blood banks. In Boston, Walter’s efforts were viewed with such skepticism and disdain that his facility was relegated to a basement room at Harvard because some trustees thought the storage and use of blood was “immoral and unethical.”21 Fifteen years later he invented the plastic blood bag, which greatly facilitated transfusion therapy.21
...
"In 1940 Edwin Cohn developed ethanol fractionation, the process of breaking down plasma into component products. Albumin, gamma globulin, and fibrinogen were isolated to become available for clinical use.

"In 1944 dried plasma became available for the treatment of combat injuries. Component transfusion therapy became more widely used as the war progressed. The Red Cross concluded its World War II blood program in 1945 after 13 million pints had been collected.11

"In 1961 platelet concentrates became recognized for reducing mortality from hemorrhage in cancer patients. In 1964 plasmapheresis was introduced as a means of collecting plasma for fractionation. In 1971 Hepatitis B surface antigen (HbsAg) testing of donated blood began and in 1992 testing of donor blood for HIV-1 and HIV-2 antibodies commenced.
*************

*here's a recap of my earlier coronavirus posts relating to plasma this week:

Sunday, May 17, 2020

Cascades of convalescent plasma for Covid-19, and chains of exchanges, by Kominers, Pathak, Sönmez, and Ünver

Monday, May 18, 2020

Plasma and plasma products (such as antibodies) are a big business (and the U.S. dominates the international market)

Wednesday, May 20, 2020

Convalescent plasma collection and distribution

Convalescent plasma collection and distribution

Efforts to collect and distribute convalescent plasma from recovered Covid-19 patients are ramping up: there are lots of options.

I donate convalescent plasma at the Stanford Blood Center, in their program on
 CONVALESCENT PLASMA FROM RECOVERED COVID-19 PATIENTS
"This exciting initiative involves taking plasma donations from recovered COVID-19 patients and transfusing that plasma into critically ill COVID-19 patients in the hopes that the antibodies present in the donated plasma will help save the lives of the recipients."

Modern plasma collection is a one-arm process: the machine on my right in the photo alternates between taking blood and returning red blood cells through the same needle (in contrast to the old technology which had blood go out of a needle in one arm and red blood cells return through a needle in the other arm).

Collecting convalescent plasma is not regulated as a research activity, it is just ordinary plasma donation. However giving it to patients is done under FDA guidance, either as a research activity or as an emergency intervention for very ill patients:
Recommendations for Investigational COVID-19 Convalescent Plasma
"Because COVID-19 convalescent plasma has not yet been approved for use by FDA, it is regulated as an investigational product."

There are three FDA-approved pathways right now by which convalescent plasma can be administered to patients.
"Pathways for Use of Investigational COVID-19 Convalescent Plasma:
1. Clinical Trials,
2.  Expanded Access "for patients with serious or immediately life-threatening COVID-19 disease"
3. Single Patient Emergency"

Here is a consortium of nonprofit blood centers, there's likely one near you if you're reading this in the States:
America's Blood Centers (association of independent blood centers)

• ABC Resources on COVID-19 and Convalescent Plasma
• America’s Blood Centers Partners with BARDA to Expand Collection of Convalescent Plasma for COVID-19 Patients

Here's the American Red Cross effort: Plasma Donations from Recovered COVID-19 Patients

My impression is that the nonprofit blood centers don't pay donors, but are able to sell plasma to customers, including the commercial plasma industry, as part of the thriving domestic and international market in plasma. (I blogged Monday about U.S. plasma exports, all over the world, including especially countries in which compensating donors is repugnant.)
*****************
The for-profit plasma industry (which compensates plasma donors) is represented by The Plasma Protein Therapeutics Association (PPTA)
Here's an announcement about their plans for Covid-19 antibodies:

1. CoVIg-19 Plasma Alliance Builds Strong Momentum Through Expanded Membership and Clinical Trial Collaboration

"The CoVIg-19 Plasma Alliance, an unprecedented plasma industry collaboration recently established to accelerate the development of a plasma-derived hyperimmune globulin therapy for COVID-19, is rapidly building momentum. Its membership has expanded globally to include 10 plasma companies, and now also includes global organizations from outside the plasma industry who are providing vital support to encourage more people to donate plasma.

"In addition to those announced at its inception - Biotest, BPL, CSL Behring, LFB, Octapharma and Takeda - the Alliance welcomes new industry members ADMA Biologics, BioPharma Plasma, GC Pharma, and Sanquin. Together, these organizations will contribute specialist advisory expertise, technical guidance and/or in-kind support to contribute to the Alliance goal of accelerating development and distribution of a potential treatment option for COVID-19."

*******

Here's an NPR story: Market For Blood Plasma From COVID-19 Survivors Heats Up
May 11, 2020

"In Minnesota, a program coordinated by the Mayo Clinic has collected plasma from more than 12,000 COVID survivors for transfusion into more than 7,000 gravely ill patients, the result of a massive public appeal led by government leaders and nonprofit groups such as the Red Cross.

"Meanwhile, for-profit companies that typically pay $50 per donation of plasma used in other lifesaving therapies are advertising aggressively — and significantly bumping up their rates for COVID donors.

"In Utah, John and Melanie Haering, who contracted COVID-19 aboard the ill-fated Diamond Princess cruise ship, received gift cards worth $800 after making two donations apiece at a Takeda Pharmaceuticals' BioLife Plasma Services center. BioLife runs several of the more than 800 paid-plasma collection sites in the U.S., part of an industry that produces plasma protein therapies used to treat rare, chronic conditions such as hemophilia and in medical emergencies."

Surrogacy amidst the corona virus pandemic lockdowns

The coronavirus pandemic isn't only a story about disease, it's also a story about lockdowns, and restrictions on travel (among other things), especially international travel.  This is having a big, unintended effect on surrogacy markets, as surrogate pregnancies begun before the pandemic come to term. Here are two stories about the situation in the U.S. and in Ukraine.

The Guardian has the story about surrogacy in the U.S.:

Surrogates left holding the baby as coronavirus rules strand parents
The US surrogacy business is in turmoil, with parents overseas unable to pick up their baby and others unable to leave America

"Commercial surrogacy is legal in some US states, making it a hotspot for parents looking to have children through assisted reproduction. But the coronavirus travel ban has seen President Trump close the country’s borders to almost all international visitors, while a nationwide US passport office shutdown has made it impossible for parents who do manage to get into the country to obtain the necessary documentation to take their children home.

"As a result, babies are being born without their parents present at the birth (immigration authorities will only let parents in once the surrogate has given birth to the child). In at least one case, a mother flew from France to attend the birth of her child, only to be turned back by border control. Some parents aren’t being allowed in the country at all.

"Surrogates and surrogacy agencies are scrambling to look after babies themselves."
...
"The solution, Brisman says, is for the US immigration authorities to allow parents into the US to collect their children, and expedite the process by which they can leave the country. “I would like to see the government allow these people in quickly, and allow them home quickly,” she says. “We need expedited passports, birth certificates and visas for people whose babies are being born.”"
********

The NY Times has the story from the Ukraine:

100 Babies Stranded in Ukraine After Surrogate Births
Travel bans have prevented the babies’ parents from entering the country. One official says as many as 1,000 babies will be born before restrictions are lifted.

"Dozens of babies born into Ukraine’s booming surrogate motherhood business have become marooned in the country as their biological parents in the United States and other countries cannot travel to retrieve them after birth. For now, the agencies that arranged the surrogate births care for the babies.

"Authorities say that at least 100 babies are stranded already and that as many as 1,000 may be born before Ukraine’s travel ban for foreigners is lifted.

“We will do all we can to unite the children with their parents,” Albert Tochilovsky, director of BioTexCom, the largest provider of surrogacy services in Ukraine, said in a telephone interview.
...
"Ukraine does not tally statistics on surrogacy, but it may lead the world in the number of surrogate births for foreign biological parents, Mr. Tochilovsky said. His company alone is awaiting about 500 births. Fourteen companies offer the service in Ukraine.

"Ukraine is an outlier among nations, though not alone, in allowing foreigners to tap a broad range of reproductive health services, including buying eggs and arranging for surrogate mothers to bear children for a fee. The business has thrived largely because of poverty.

“The cheapest surrogacy in Europe is in Ukraine, the poorest country in Europe,” BioTexCom’s website explains. Surrogate mothers in Ukraine typically earn about $15,000.

"Some members of Parliament who have long opposed the business have renewed their calls for banning surrogacy services for foreigners now that the babies are stacking up without parents.

"Surrogacy is available in Ukraine only if a woman in a heterosexual partnership can demonstrate that she cannot bear children herself.
...
"The babies’ parents are now in the United States, Italy, Spain, the United Kingdom, China, France, Romania, Austria, Mexico and Portugal, the company said.

"Lyudmila Denisova, a human rights ombudsman for Ukraine’s Parliament, said the stranded babies underscore a pressing need for the country to bar foreigners from hiring Ukrainian women as surrogate mothers.

"A human rights official in the presidential administration, Nikolai Kuleba, has also demanded an end to the practice. “Ukraine is just turning into an online store for little ones,” he said."

Qingyun Wu defends his dissertation--remotely

Qingyun Wu successfully defended his dissertation at Stanford today, remotely, as we are all sheltering in place from the coronavirus pandemic.

He presented three papers, the screenshot above is from the third.

1. The lattice of envy-free matchings." Games and Economic Behavior 109 (2018): 201-211.
2 Entering Classes in the College Admissions Model." 
3 "Forbidden Transactions and Black Markets." 

Welcome to the club, Qingyun.

Plasma and plasma products (such as antibodies) are a big business (and the U.S. dominates the international market)

These days I'm thinking about corona virus covid-19 convalescent blood plasma, which I blogged about yesterday, and about which I hope to say more soon. But that has gotten me to think again about blood plasma generally, which is a source of many therapies, including antibodies, immunoglobulins, that defend against a large variety of diseases.

The U.S. is the Saudi Arabia of blood plasma and plasma products, with both a large domestic commercial market and annual exports valued in the billions of dollars. The reason is largely that it is legal in the U.S. to pay plasma donors, so there's ample supply through a big network of hundreds of  for-profit and nonprofit blood and plasma centers (the nonprofits mostly don't pay donors, I think). In many countries, paying their residents for plasma is repugnant and illegal. Fortunately for their citizens, they mostly don't also suffer from severe shortages of life-saving plasma medicines, because it can be bought from the U.S. (See e.g. my posts on Canada's plasma policies.)

Here are some relevant export figures. They make clear that the U.S. exports billions of dollars of plasma, and tens of billions of dollars of plasma products.

For those who would like to study these data, let me explain where they come from.  (They  include some things that aren't plasma products, and may miss some that are...) It's not so easy to find the U.S exports of exactly blood plasma and plasma products (I needed some help).

In Chapter 30 of the U.S. International Trade Commission (USITC) Harmonized Tariff Schedule (HTS),is the code:
HTS 3002: "Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products:
 Antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes"

That sounds good, but it includes (aside from plasma products) things that I don't want to include e.g. Malaria diagnostic test kits, and Fetal Bovine Serum.

On the other hand the subcategory 3002.12.00  is for "Antisera and other blood fractions" which includes sub-subcategories for things I do want to include:
3002.12.10 Human blood plasma.
3002.12.20 Normal human blood sera, whether or not freeze-dried
3002.12.30 Human immune blood sera

And then there are are codes 3002.13.00, 14.00, and 15.00 which cover the promising (very similar) categories in which most of the immunoglobulins are probably found, but maybe some other things too:

Immunological products, unmixed, not put up in measured doses or in forms or packings for retail sale
Immunological products, mixed, not put up in measured doses or in forms or packings for retail sale
and
 Immunological products, put up in measured doses or in forms or packings for retail sale.

The place to go to turn these numbers into export figures is dataweb.usitc.gov  (But getting data there isn't completely straightforward, and I got help from Julia Fabens.)  The table above shows that whole plasma itself has over $2 billion of annual exports from the U.S., and together with plasma products, including those involving antibodies (immunological products) there are almost $20 billion of exports from the U.S.

So, I'm guessing that soon, if clinical trials show that antibodies against covid-19, are useful, they will become readily available, commercially, in plasma and in pharmaceuticals.  A year ago, those human antibodies didn't exist, and so there was no way to use it to help patient zero or the next many thousands.  But now there's a lot of it, more each day, in the blood of recovered patients.  And there's a whole industry devoted to collecting it and purifying the antibodies into "immunological products." 

I hope human antibodies against covid-19 are clinically useful, to help mitigate and cure the disease if not to prevent it, because my sense is that a vaccine is (at least) many months away.

102,597,746 2,627,504 1,586,634	102,597,746	2,627,504	1,586,634