Confirmed cases of Covid-19, the disease caused by the new coronavirus SARS-CoV-2, have been identified in more than half of U.S. states. Globally, the number of coronavirus cases exceeds 100,000. “The New York experience to date suggests,” writes Zinberg, “that the disruptions this new virus causes—particularly to the availability of medical care, for any condition—may be more dangerous than the illness that it causes.”
Brian Anderson: Welcome back to the 10 Blocks Podcast. This is Brian Anderson, the editor of City Journal. Coming up on today's show, I'll be joined by Dr. Joel Zinberg to discuss what everybody's been talking about lately, the infectious disease spreading around the world that we're all calling the Coronavirus. Dr. Zinberg is an Associate Clinical Professor of Surgery at the Mount Sinai Hospital here in New York and he was until recently general counsel and senior economist at the Council of Economic Advisers, where he specialized in health policy. He's been a regular contributor to City Journal for several years now, and we're excited to have him on the podcast, though I wish it were under better circumstances. We'll take a quick break and we'll be back with Joel Zinberg.
Hello again, everyone. This is Brian Anderson, the editor of City Journal. Joining me in the studio today is Dr. Joel Zinberg. He's an Associate Clinical Professor of Surgery at the Mount Sinai Hospital in New York and he's written a couple of dozen essays or pieces for City Journal over the years. His most recent writings for us are about the Coronavirus outbreak. We're grateful that he could join us in the studio to give us some clarity about the current situation. Joel, thanks again for joining us.
Joel Zinberg: You're very welcome.
Brian Anderson: First, it seems that we're getting, of course, updates on this story every hour or so. We're recording this, and listeners should understand this, on Tuesday, March 10th, and we'll be releasing the episode tomorrow, on the 11th. What's your assessment of the latest situation with the virus outbreak as you understand it in the United States?
Joel Zinberg: The virus that you're referring to, this new Coronavirus, emanated from China back in December. It's related to two other Coronaviruses that previously had jumped from animals to humans. Those were SARS and MERS. It seems to be an easily transmissible virus. It spread rapidly in China and now has spread to over 100 places around the world, including the United States.
What we've found is that about 80% or more of the people who are infected with the virus have mild symptoms, but unfortunately there are people who do have severe symptoms. The illness that results, which is known as Covid-19, can actually result in a small number of cases in death. That's particularly the case for a population of vulnerable individuals who are the elderly, people with underlying medical conditions like heart disease, lung disease, diabetes.
The problem both here and around the world is how to limit the health effects of Covid-19, how do we mitigate the disruption to the healthcare system, and how do mitigate the disruption to the economic system both here and around the world? The good news is that in China, where the original infections occurred, the rate of new infections is going down. The same is true in South Korea, which until recently was the second most common site of infections. Their rate of infection is going down. The bad news is that in Italy and Iran, the rate of infections is going up rapidly. We're seeing a little bit of that in Western Europe as well, in France, Germany and Spain. The real question is, how do we stop that spread?
Brian Anderson: Right.
Joel Zinberg: The good news now, in this country at least, is that we have solved the problem of the testing kits. They are now much more available so we can identify new cases, we can isolate them, we can utilize the various public health measures like quarantines, social distancing, isolation, people can utilize personal hygiene, and hopefully that will greatly mitigate the impact that Coronavirus has here.
Brian Anderson: Now, to talk about the testing for a minute, there's been a lot of confusion about the diagnostic testing question. The CDC received a lot of criticism in the press last week for its slow rollout of the test kits, and now the FDA has announced it would allow private labs to begin making their own tests for the disease, which seems a very good idea. Could you explain a little bit about what happened there, and what role is testing really playing in the crisis going forward if it's really spreading so fast?
Joel Zinberg: Testing is key because at the moment, particularly in this country where testing has not been available, we really don't have a handle on how many people are actually infected. To some extent, that's true around the world. Even in Korea, which has the most aggressive testing program and has tested over 100,000 people, you're talking about a population of 50 million people. You really don't know how many people have actually been infected, but the testing is key because it identifies the individuals who need to be isolated and you break that chain of transmission.
It's a little bit complex what happened here in this country, and it has to do with some relatively arcane areas of FDA law, but basically the FDA has always asserted that it has jurisdiction to regulate what are called laboratory developed tests. These are tests developed in private laboratories, to be used in the private laboratories for a variety of testing purposes, except that the FDA has exercised what they call enforcement discretion and they almost never would regulate those tests. In this instance, when the public health emergency was declared by Secretary Azar, the FDA decided it was going to exercise discretion and it initially limited the availability of tests for Covid-19 to the CDC developed test. The problem was that that CDC developed test had some difficulties with the reagents that made it an unreliable test, so even though those were distributed around the country, they could not be used.
The good news of course now is that, as you pointed out, the FDA has relented. It's opened this up to private manufacturers. It's opened it up to private laboratories. The FDA and CDC report that they've shipped over a million test kits around the country, both to public and private laboratories, and millions more are on the way, and private labs are also developing tests.
Brian Anderson: We can expect the numbers of people being tested to start growing very rapidly.
Joel Zinberg: We can expect the number of people being tested to grow rapidly, and probably you can expect the number of people who are counted as confirmed cases to grow rapidly. That could reflect two things. It could reflect that the actual numbers of people being infected are growing, and it could also just reflect that you are finding the people who are already infected.
Brian Anderson: Right. The situation in Italy seems very, very grave. You've had basically a lockdown of movement throughout the country. My sense of that, and I'm no expert, is that it's really been a kind of denial of service attack on the hospitals, that emergency rooms got overwhelmed and that that's quickly gotten out of control. What is your sense about the situation there, and are we in for the same kind of overwhelming of our hospitals in the United States?
Joel Zinberg: The situation in Italy, to some extent, is mimicking what happened in China, where hospitals were overwhelmed. In addition, hospitals were unprepared to take various infection control measures so that some of the people who were infected first were hospital and medical personnel. You had sort of a two pronged attack. You had an overwhelming demand for medical services and then you had a decrease in the supply of people able to provide it.
That, to some extent, has happened in Italy, but I think Italy is more just a question of overwhelming demand and hospitals that were not prepared to take care of those patients. What I mean by prepared is they weren't prepared to have isolation facilities so that these patients would have a place to go where they wouldn't infect other people. They weren't prepared in that what are called universal precautions were taken with everyone. People were exposed, and as a result, you have a system that's sort of teetering on the edge in Italy.
Brian Anderson: Your sense of hospitals here in the United States, we've had at least time to be thinking about this, and presumably they're taking aggressive steps to address some of these issues.
Joel Zinberg: Some more than others. I mean, one of the hotspots in this country is a nursing home near Seattle in Washington state. That's a good example of where precautions were not taken. Those are people who are in the vulnerable population I referred to before. They're elderly, they have a lot of underlying medical problems, and they weren't isolated from one another. As a result, you have a lot of people infected in this one spot and you have a lot of deaths unfortunately in that one spot, but hospitals are increasingly taking action to prepare for what we hope is not an onslaught of these patients, but they are taking actions.
One thing that I have suggested is that we be prepared to advise people to stay at home when they are ill, and that we provide the resources that local public health authorities can actually go and screen people who are in the more severe category at home. If they find that they are indeed infected and need medical attention, they can alert the transportation people, the ambulance crews, the emergency rooms, so that they know in advance this is a likely Covid-19 patient. They can take precautions. In addition, hospitals are starting to try to find ways to screen patients in advance of exposing them to everyone else sitting in the waiting room.
Brian Anderson: Right. One question that seems very important but also I've seen a lot of different answers to is what the fatality rate is of the new virus. What is your best sense of that right now, according to the evidence?
Joel Zinberg: The evidence unfortunately is a moving target. We do know that there are, as I mentioned earlier, these vulnerable populations, and far and away they are the people who are going to suffer severe illness and death. The most recent study out of China, and this was of hospitalized patients, was that there was a 1.4% case fatality rate.
Brian Anderson: This was beyond Hubei province? Was this all of China?
Joel Zinberg: Well, they had studied ... They had a big database, but then they actually narrowed it down to ... It was primarily in Hubei province, but that is clearly too high. We know it's too high. We know that from the Korean experience where they have done the most extensive testing in the world, that they have a 0.7% fatality rate. Even that is likely high because they cannot test all of the 50 million people in Korea. Even though they've tested more than anyone else in the world, they've tested over 100,000 people, they undoubtedly are missing the many people, or really the majority of people who have Covid-19 illness who have mild symptoms. There's probably a real under-count there, which means when you start to get over time a more accurate count, the denominator, in your case fatality rate, goes up, meaning your case fatality rate goes down. This is sort of commonly what happens in an epidemic situation.
For example, the swine flu pandemic that hit in 2009, the initial case fatality rate estimates were over 1%, but as time went on and the dust settled, it turned out that you ended up having a case fatality rate of 0.02%. That's what I expect is going to happen here. Actually, Dr. Anthony Fauci, in a New England Journal article recently said he expects it's going to decline. It may decline as much as down to a 0.1%, which is what we typically see in the seasonal flu.
Brian Anderson: There's been a lot of comparisons with the flu, which we tend to just take for granted, which we probably shouldn't. I guess many of the things that we would do to prepare for or to fight this virus also work against a flu infection, keeping your distance, washing your hands, but what is your sense of the comparisons that are being made between those two things?
Joel Zinberg: Well, yeah, as you know, the President has made that comparison and suggested that influenza, commonly known as the flu, has been the more serious problem. Basically he's right. I mean, at The Council of Economic Advisers we issued a report this past fall talking about the potential medical and economic impact both of what's called seasonal flu and possible pandemic flu.
Just to digress a little bit, I mean, influenza is a different virus than Coronavirus, but it's a virus that's endemic. It's around the world constantly. Every year it mutates a little bit so that there's a new flu season. We prepare a vaccine. Then every once in a while it mutates a lot so you have a relatively new virus that can spread easily and has more severe side effects. That's when we call a pandemic. That's happened four times in the last century, so probability of about 4%. Excuse me. Those two circumstances, both the seasonal flu and pandemic flu, we know infects millions of people every year in this country. We know it can kill up to 50,000 or more people a year in this country. We know over 360,000 people get hospitalized every year, and you have deaths, including children.
For example, this year with the flu, there've already been about 34 million people who've been sickened, about 20,000 people or more have died, 350,000 people have been hospitalized. To put it in the context of the Coronavirus, it's a more pressing problem. Some of the same things that are being done for Coronavirus would be effective with the flu, but the flu you have one big advantage that you don't have with Coronavirus, is that there is a vaccine prepared every year. That takes into account those small changes from year to year that I refer to. The major problem we have is that less than half the people in the country actually get vaccinated. You have the peculiar circumstance that there's a near panic about Coronavirus, yet for something that we know can be a far more deadly disease, people are not availing themselves of the best preventive measure there is.
Brian Anderson: One of the very important pieces you did for us, now a couple of weeks ago when this was just getting underway, noted that the Coronavirus is not only going to hurt people directly, but indirectly through potentially reducing our supply of basic pharmaceuticals and medical supplies ranging from antibiotics to gloves and masks, things like that, and that this has a lot to do with a certain kind of dependency that's emerged on the Chinese market and India. Could you explain a little bit what the problem is there and how severe it is?
Joel Zinberg: This is really part of the globalization of the supply chain. It's not confined to pharmaceutical products, but it is particularly important when we deal with pharmaceutical products. What people don't realize is that when you have a drug, even if it says it's made in the United States, the various chemical components that go into that drug, things that are called the active pharmaceutical ingredients, APIs, those may be manufactured elsewhere. Overwhelmingly over the last few years, we've had a shift in the manufacturer of these APIs as well as some of the finished drugs overseas, particularly to China and to India.
For example, generic drugs, which now encompass 90% of the drugs that we utilize, are overwhelmingly made overseas. Even though India, which is a bigger producer than China, they rely for 80% of their APIs on China. The problem is when you have a disruption of production in a country like China, because of this natural catastrophe, this Coronavirus spread, it raises concern that this will interfere with the supply chain and deprive us of medicines. It also raises the obvious national security concern, that in times of international strife a foreign country could also decide to cut off the supply. Thus far, the FDA has only reported one drug shortage based on disruption of API production in China, but there have been reports from the World Health Organization and others of global disruptions of what are called personal protective equipment, the things like masks and gloves. That's partly because they're in high demand and people are buying them up. It's also because of the supply problems, that the Chinese production has been disrupted.
The other aspect that I did raise in my article was that this also creates a problem with quality, because there already have been quality concerns over overseas production. It's difficult for the FDA to inspect and regulate the folks overseas. Now because of various travel restrictions, the FDA has suspended inspections of Chinese drug and device factories.
Brian Anderson: What do you do to address this problem? It does seem to have a very profound national security implication. In a crisis like this, you would want access and availability to these kind of crucial pieces of equipment and drug components.
Joel Zinberg: Well, it's an important question that the administration I know is actively considering at the moment. You can consider the jargon that surrounds this area is what are called push and pull incentives. You can do something to increase the production here, increase the supply by encouraging manufacturers to start producing these APIs and drugs here, or you can do what's called a pull, where you raise the prices. That should stimulate production here. It's not clear yet what's going to be pursued or what's the best mechanism to do that. There's really no short term fix. We're unfortunately, in the short term, dependent on these foreign suppliers.
I might add that there's an interesting tension here between our concern with the high price of drugs, which has pushed us to use generic drugs which are cheaper. This administration and the FDA has really pushed generic approvals very strongly so that we have now record numbers of generic approvals. It's very clear when the more generics on the market, the prices go down, but on the other hand, one of the ways that that's been accomplished is by shipping these overseas to cheaper production.
Brian Anderson: Right.
Joel Zinberg: We have a tension between these concerns about supply and our goal of trying to lower drug prices.
Brian Anderson: You have a background in economics as well. What's your sense of what the range of economic scenarios are coming out of this?
Joel Zinberg: That unfortunately is, at the moment, an area of speculation.
Brian Anderson: Right.
Joel Zinberg: Because it's unclear how much the Chinese economy has been disrupted. We know it's been disrupted. We also know that it came on the heels of a period in which Chinese factories are normally idled because of the Lunar New Year. It's unclear how much disruption has occurred and how quickly the Chinese will be able to make up those supply disruptions. We do know, obviously, that the stock market is fearing uncertainty. That's reflected in the large drops in values that we've seen on the stock market. I think most people are predicting that at least for this corridor we will lose some GDP growth, but hopefully that we will rebound in the following quarter.
Brian Anderson: Thanks very much. Don't forget to check out Joel Zinberg's work on our website, www.city-journal.org. We'll link to his author page and his recent writings in the podcast description. You can follow City Journal on Twitter @CityJournal, and Instagram at @CityJournal_MI. As always, if you like what you've heard on the podcast, please leave us a rating on iTunes. Thanks for listening and thanks very much Dr. Zinberg for joining us.
Joel Zinberg: Oh, you're very welcome.