Day: May 11, 2018

On Yaji Mountain in southern China, they are checking in the sows a thousand head per floor in high-rise “hog hotels.”

Privately owned agricultural company Guangxi Yangxiang Co Ltd is running two seven-floor sow breeding operations, and is putting up four more, including one with as many as 13 floors that will be the world’s tallest building of its kind.

Hog farms of two or three floors have been tried in Europe.

Some are still operating, others have been abandoned, but few new ones have been built in recent years, because of management difficulties and public resistance to large, intensive farms.

Now, as China pushes ahead with industrialization of the world’s largest hog herd, part of a 30-year effort to modernize its farm sector and create wealth in rural areas, companies are experimenting with high-rise housing for pigs despite the costs.

The “hotels” show how far some breeders are willing to go as China overhauls its farming model.

“There are big advantages to a high-rise building,” said Xu Jiajing, manager of Yangxiang’s mountain-top farm.

“It saves energy and resources. The land area is not that much but you can raise a lot of pigs.”

Companies like Yangxiang are pumping more money into the buildings — about 30 percent more than on single-story modern farms — even as hog prices in China hold at an eight-year low.

For some, the investments are too risky. Besides low prices that have smaller operations culling sows or rethinking expansion plans, there is worry about diseases spreading through such intensive operations.

But success for high-rise pig farms in China could have implications across densely populated, land-scarce Asia, as well as for equipment suppliers.

“We see an increasing demand for two- or three-level buildings,” said Peter van Issum, managing director of Microfan, a Dutch supplier that designed Yangxiang’s ventilation system.

Microfan also supplied a three-story breeding operation, Daedeok JongDon GGP Farm, in South Korea.

“The higher ones are still an exception, but the future might change rapidly,” van Issum said.

High-rise hogs

Yaji Mountain seems an unlikely location for a huge breeding farm. Up a narrow road, away from villages, massive concrete pig buildings overlook a valley of dense forest that Yangxiang plans to develop as a tourist attraction.

The site, however, is relatively close to Guigang, a city with a river port and waterway connections to the Pearl River Delta, one of the world’s most densely populated regions.

While Beijing is encouraging more livestock production in China’s grain basket in the northeast, many worry that farms there will struggle to get fresh pork safely to big cities thousands of miles away.

That has helped push some farm investments to southern provinces like Guangxi and Fujian, where land is hilly but much closer to many of China’s biggest cities.

Yangxiang will house 30,000 sows on its 11-hectare site by year-end, producing as many as 840,000 piglets annually. That will likely make it the biggest, most-intensive breeding farm globally. A more typical large breeding farm in northern China would have 8,000 sows on around 13 hectares.

In Fujian province, Shenzhen Jinxinnong Technology Co Ltd also plans to invest 150 million yuan ($24 million) in two five-story sow farms in Nanping. Two other companies are building high-rise hog farms in Fujian as well, according to an equipment firm involved in the projects.

Thai livestock-to-retail conglomerate CP Foods is also building four six-story pig units with local firm Zhejiang Huatong Meat Products Co in Yiwu, a Chinese city near the large populations around Shanghai.

High-tech complexity

Yangxiang spent 16,000 yuan per sow on its new farm, about 500 million yuan total, not including the cost of the pigs.

Building upward means higher costs and greater complexity, such as for piping feed into buildings, said Xue Shiwei, vice chief operations officer at Pipestone Livestock Technology Consultancy, a Chinese unit of a U.S. farm management company.

“It would save on land but increase the complexity of the structure, and costs for concrete or steel would be higher,” he said.

Health concerns also raise costs, because the risk of rampant disease — an ever-present problem in China’s livestock sector — is higher with more animals under one roof.

Even two-story farms in Europe have sparked worries that pigs will receive less care, said Irene Camerlink, an animal welfare expert at the University of Veterinary Medicine in Vienna who has worked with Chinese farms.

Any outbreak of disease could lead to extensive culling, she said.

Farm manager Xu said Yangxiang reduces the risk of disease by managing each floor separately, with staff working on the same floor every day. New sows are introduced to a building on the top floor, and are then moved by elevator to an assigned level, where they remain.

The ventilation system is designed to prevent air from circulating between floors or to other buildings. Air enters through ground channels and passes through ventilation ducts on each level. The ducts are connected to a central exhaust on the roof, with powerful extraction fans pulling the air through filters and pushing it out of 15-meter high chimneys.

A waste treatment plant is still under construction on Yaji Mountain to handle the site’s manure. After treatment, the liquid will be sprayed on the surrounding forest, and solids sold to nearby farms as organic fertilizer.

The project’s additional equipment — much of it imported — to reduce disease, environmental impact and labor costs, significantly increased Yangxiang’s spending, the company said.

But after testing other models, Yangxiang concluded the multistory building was best. Others are less convinced.

“We need time to see if this model is do-able,” said Xue of the farm management firm, adding that he would not encourage clients to opt for “hog hotels.”

“There will be many new, competing ideas [about how to raise pigs in China],” Xue said, including high-rise farms. Eventually, “a suitable model will emerge.”
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Before taking office, President Donald Trump railed against the pharmaceutical industry and accused it of “getting away with murder.”

The populist rhetoric appears to be giving way to a more nuanced strategy focused on making the pharmaceutical market more open and competitive, with the aim of lowering costs for consumers.

It’s an approach that could avoid a direct confrontation with the powerful pharmaceutical lobby, but it could also underwhelm Americans seeking relief from escalating prescription costs.

On Friday, Trump is scheduled to give his first speech on an overarching plan to lower drug prices. Administration officials previewing the speech Thursday touted it as the most comprehensive plan to tackle prescription drug costs that any president has ever proposed, but offered few specifics.

Officials said the plan would increase competition, create incentives for drugmakers to lower initial prices and slash federal rules that make it harder for private insurers to negotiate lower prices. The result would be lower pharmacy costs for patients — a key Trump campaign promise.

The plan will not include giving the federal Medicare program power to directly negotiate prices with drugmakers, they noted. Trump campaigned on the idea, which is vigorously opposed by the pharmaceutical industry.

Public outrage over drug costs has been growing for years, because Americans are being squeezed in a number of ways: New medicines for cancer and other life-threatening diseases often launch with prices exceeding $100,000 per year. Drugs for common ailments like diabetes and asthma routinely see price hikes around 10 percent annually. Meanwhile some companies have been buying up once-cheap older drugs and hiking prices by 1,000 percent or more.

Since entering the White House, Trump has backed away from reforms directly targeting drugmakers and staffed his administration with appointees who have deep ties to the industry, including his health secretary, Alex Azar, a former top executive at Eli Lilly.

Still, administration officials ratcheted up the rhetoric ahead of Trump’s speech. Azar promised bold action. FDA Commissioner Scott Gottlieb — another Trump appointee with industry connections — hinted at a plan to “dismantle” the convoluted system of discounts and rebates between drugmakers and health care middlemen.

On Thursday, administration officials also vowed to address foreign governments that rely on U.S. medicines but pay drastically lower prices due to government controls. The U.S. accounts for 70 percent of the world’s brand-name drug profits, according to a White House report released earlier this year.

Here are some of the drivers of U.S. prescription drug prices, proposals for reducing the costs and what’s at stake:

Lack of regulation

Drugmakers generally can charge as much as the market will bear because the U.S. government doesn’t regulate medicine prices, unlike most other countries.

Medicare is the largest purchaser of prescription drugs in the nation, covering 60 million seniors and Americans with disabilities, but it is barred by law from directly negotiating lower prices with drugmakers. Democrats have long favored giving Medicare that power, but Republicans traditionally oppose the idea.

The powerful pharmaceutical lobby has repeatedly fended off proposals that could lower prices, such as Medicare negotiations or importing drugs from countries that regulate pricing.

With no direct government price regulation, the primary check on prices comes from buyers in bulk — such as insurance companies and pharmacy benefit managers, which handle prescription coverage for insurers, employers and other big clients.

But because there are so many players in the fragmented system, the discounts achieved in the U.S. are generally far more modest than those in other countries.

The result is that the U.S. spends more on medicines than any other nation. In 2015, the U.S. spent $1,162 per person on pharmaceuticals, according to the Organization for Economic Cooperation and Development. That compares with $756 for Canada and $497 for the United Kingdom, both of which have government measures to control drug prices.

Lack of transparency

The U.S. system for pricing drugs is notoriously complex, so much that the “real” price for most medicines isn’t clear. Critics contend that this lack of transparency limits competition and drives prices higher.

Pharmaceutical companies often launch their drugs with high initial prices. But they argue list prices are merely a starting point for negotiations because they give substantial rebates and discounts to pharmacy benefit managers. Those price concessions are almost never disclosed and it’s unclear what portion actually flows back to consumers.

FDA Commissioner Scott Gottlieb and others say the lack of transparency in the current system creates perverse incentives in which drugmakers and other health care companies benefit from rising prices — at the expense of patients.

Trump officials have suggested requiring Medicare pharmacy benefit managers to share rebate payments with patients. Another proposal would do away with rebates altogether to encourage more upfront discounts in Medicare.

But the benefit managers and insurers say that they use rebates to lower health care premiums overall and that doing away with them would drive up costs.

Patents and anti-competitive tactics

Patents last longer in the U.S. than most countries, typically giving companies a dozen years of competition-free marketing after a drug launches. Most drugmakers increase their prices annually during this monopoly period, and until recently double-digit price hikes were the norm.

Drugmakers also have developed a number of techniques to block competitors from launching lower-cost generic drugs. Companies often tweak drug formulations to extend their patents. In other cases, companies directly pay would-be competitors to stay off the market in so-called “pay-to-delay” deals.

Gottlieb has promised a crackdown on some of these techniques used to “game the system.” He’s highlighted a practice in which drugmakers use tightly controlled distribution systems to prevent rival manufacturers from purchasing their drug. This effectively blocks the development of generic versions because generic drugmakers must test their products against the original medicine before they can win FDA approval.

Public perception

A majority of Americans say bringing down prescription drug prices should be a “top priority” for Trump and Congress, according to recent polling by the Kaiser Family Foundation.

And experts who study drug pricing say it’s encouraging that the discussion around the issue has moved from outrage to sophisticated reforms. But some warn there is no guarantee that unraveling the current pricing-setting bureaucracy will lead to lower prices, because it all starts with drugmakers’ prices.

“Until we get closer to policy solutions that address the ability of drug manufacturers to set whatever price they want and increase prices year after year we may only be scratching the surface of this problem,” said Juliette Cubanski, a health care expert with the nonpartisan Kaiser Family Foundation.

Dan Mendelson, a health care consultant, said: “If they don’t address the cost that patients see at the pharmacy counter it’s not going to be seen as responsive.”

 
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The World Health Organization said Friday it is preparing for “the worst case scenario” for an Ebola outbreak in the Democratic Republic of Congo.

WHO said Thursday that between April 4 and May 5, twenty-seven cases of fever with hemorrhagic signs, including 17 deaths, were reported in the DRC’s Bikoro district.  WHO says two of the cases tested positive for the Ebola virus.

The DRC Ministry of Public Health has requested WHO’s support in coordinating the international and NGO response to the health crisis.

The full extent of the outbreak is not yet known, according to WHO, and the location presents “significant logistical challenges.”  The affected area is remote with limited communication and poor transportation infrastructure.

Ebola, named for the Congolese river near where it was first identified in 1976, begins with a sudden fever, aching muscles, diarrhea and vomiting. It is a hemorrhagic fever, marked by spontaneous bleeding from internal organs and, in most cases, death. It can be transmitted by close contact with infected animals or people, usually through blood or other bodily fluids.

People can contract the virus through direct contact with victims’ bodies at funerals. Caretakers, nurses and doctors treating Ebola patients also are at high risk.

WHO says the outbreak in Bikoro is the ninth outbreak of Ebola in the DRC since it first emerged in 1976. 
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Two weeks of climate talks organized by the United Nations ended Thursday as countries failed to resolve differences about implementing the Paris climate accord.

The negotiations will resume in Bangkok in September, where an extra week’s meeting has now been scheduled.

The pact’s 197 signatories have set a December deadline to agree on the precise rules that countries have to stick to under the Paris agreement.

The lack of progress threatens to unravel three years’ worth of work to complete the Paris agreement, a landmark deal reached in 2015 that set a goal to limit fossil-fuel pollution in all nations for the first time and keep global warming below 2 degrees Celsius by the end of the century.

Overall progress at the meeting in Bonn was very slow, with some countries such as China looking to renegotiate aspects of the Paris deal.

Patricia Espinosa, head of the U.N. agency that oversees climate talks, described the package being negotiated as “highly technical and complex.” It aims to ensure that the efforts countries claim they’re making in the fight against global warming can be verified and compared.

The administration of President Barack Obama was widely credited with helping to bring together the diverging interests of rich and poor countries in the drive to secure the Paris deal. His successor, President Donald Trump, withdrew the U.S. from the accord in June 2017. His administration has attacked climate science, saying it questions whether human activity is behind climate change, and is focused on boosting the fossil fuel industry.
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