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Coronavirus update: Debt, jobless data show economic toll as Ohio's DeWine tests positive

Anjalee Khemlani
·Senior Reporter
·5 min read

New U.S. data on Thursday underscored how the coronavirus outbreak has impacted employment and consumer behavior — laying bare the stark economic toll that’s accompanied the rising human cost of a pandemic that’s claiming new victims daily.

The growing economic worries come at a time when Washington remains divided on a new stimulus package, even as the global count rises. COVID-19 diagnoses are closing in on 20 million worldwide, with more than 708,000 dead.

In the U.S., 4.8 million have been affected, with more than 158,000 deaths. Sun Belt states including Florida continue to be problematic, even as overall in the U.S. deaths appear to be plateauing.

Yet underscoring how the disease has impacted a broad swath of the public, Ohio Governor Mike Dewine released a statement on Thursday saying he had tested positive for COVID-19 ahead of an in-person meeting with President Donald Trump, but was showing no symptoms.

Even as national figures appear to show infection rates leveling off, Howard Forman, a Yale University professor and public health/economics expert, estimates the U.S. toll is on track to add to its death toll by early next month.

The shutdowns that forced citizens to stay indoors and out of their jobs have had a material economic impact. Data showing that new unemployment claims topped 1 million converged with figures from the New York Fed on Thursday, which showed U.S. household debts dropped for the first time in six years during the second quarter — new proof of how the COVID-19 crisis is undermining consumer spending.

Simultaneously, some low-income households have fallen behind on debt, especially student debt, according to a study by the Brookings Institute this week.

The authors found that “the proportion of individuals who reported that their households were behind on student loan payments as a result of COVID-19 was over three times as large among those who lost their job or income due to COVID-19 (26%) when compared to those that did not lose their job due or income to COVID-19 (8%).”

Rising infections have amplified the furious debate over what to do about the school year. Concerns about children returning to classrooms are being addressed with a variety of strategies, including distance learning and staggered attendance days. Yet how likely children are to transmitting the virus is still unclear.

Cases are popping up all across the country. (Graphic: David Foster/Yahoo Finance)
Cases are popping up all across the country. (Graphic: David Foster/Yahoo Finance)

U.S. drug manufacturing

Trump is expected to sign an executive order on drug manufacturing in the U.S., in a bid to shift the country’s reliance away from foreign production. The issue is one his advisor Peter Navarro has been championing for some time.

The debate has highlighted the growing strategic role of pharmaceutical and manufacturing companies in the fight against COVID-19. The federal government has provided federal funding for Phlow Corporation and Eastman Kodak (KODK)— the latter of which is a loan. Kodak has come under scrutiny both by the Securities Exchange Commission as well as Congress after suspicious stock activity prior to the announcement of the loan.

The focus has been to address the U.S. Food and Drug Administration’s (FDA) drug shortage list, which has been ongoing since before the pandemic.

“This is a challenge that we’ve lost over 20 years, it’s an industrial base that has been lost over time, not overnight,” Phlow CEO Dr. Eric Edwards told Yahoo Finance in a recent interview.

“It’s been a race to the bottom, in this country, for a lot of these categories of essential medicines so the only way for you to bring back that supply chain and industrial base and to be competitive is to disrupt that model. We have a third-world pricing and distribution system that results in drug shortages of our most essential medicines. It’s broken.”

The timing of the focus on U.S. domestic production comes at a time when overall drug pricing, especially for generics, has been stabilizing, and the pharmaceutical industry is shifting towards more genetics-based therapeutics.

Advanced therapeutics have been a sticking point among employers as they face rising costs for health care coverage. The industry claims therapies actually lower the overall cost of treating a disease in traditional ways through hospitalizations.

But the uptick of those types of treatments will not yet outweigh the volume of existing treatments, according to Larry Taber, vice president of Life Sciences at — another company focused on the FDA’s shortage list.

“There is a big shift to more advanced therapeutics and new manners of treatment that, maybe some day, may eliminate some of the need for some of the oral and injectable times of treatments — but those days are far away,” Taber told Yahoo Finance.

“We’re going to have decades yet of medicine that are delivered and prescribed in the same way they are today,” he added.

Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem

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