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Terrific column in today’s Washington Post from Steven Pearlstein:
Three things are indisputably true about the pharmaceutical industry: Over the past decade, there has been significant cross-border consolidation, involving major pharmaceutical companies and promising biotech firms. Whatever operating efficiencies that consolidation may have generated, none of it was passed on to consumers in the form of lower prices. During the same period, there has been a steady decline in the number of important new drugs flowing from company research labs.
All of which ought to raise serious questions about why the government’s antitrust regulators should approve the latest industry mega-merger in which No. 2 Pfizer proposes to buy No. 11 Wyeth in a deal valued at $68 billion. The impetus for this merger couldn’t have been clearer: In 2011, the patent will expire on Pfizer’s blockbuster cholesterol-lowering drug, Lipitor, which now accounts for a quarter of the company’s revenue, and there is little in Pfizer’s development pipeline to replace it. Unable to stop the slide in its stock price by creating new drugs, Pfizer has concluded that the next best way to keep shareholders happy is through financial engineering…
It is an industry that, when all else fails, would always rather buy a rival than compete against it. Consider Ovation Pharmaceuticals of Deerfield, Ill. Back in August 2005, Ovation bought from Merck a drug called Indocin IV, which at the time was the only approved product to treat a life-threatening heart condition in prematurely born infants. Unfortunately for Ovation, Abbott Laboratories was in the process of winning approval from the Food and Drug Administration of a product that would compete with Indocin. So in January 2006, Ovation purchased the rights for the second drug, NeoProfen. According to a complaint filed in December by the FTC, Ovation then raised the price of Indocin by nearly 1,300 percent, from $36 per vial to nearly $500. When NeoProfen eventually hit the market, it was priced at roughly the same level.
(For the record, Ovation says it has done nothing wrong and that it priced its drugs appropriately.) Ovation is not some rogue drug company. Its slimy behavior reflects the way the industry thinks, the way it behaves and the way it prefers to “compete.” Which is why it is crucial for the government to bring closer scrutiny to industry mega-mergers…
The Pfizer-Wyeth deal offers a wonderful opportunity for a new administration in Washington to signal the end of the era of anything-goes mergers, and to apply the antitrust laws in creative new ways to innovative high-tech industries that are the key to America’s economic future.
More from Ken Silverstein:
Commentary — November 17, 2015, 6:41 pm
The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.
Flor Arely Sánchez had been in bed with a fever and pains throughout her body for three days when a July thunderstorm broke over the mountainside. She got nervous when bolts of light flashed in the sky. Lightning strikes the San Julián region of western El Salvador several times a year, and her neighbors fear storms more than they fear the march of diseases — first dengue, then chikungunya, now Zika. Flor worried about a lot of things, since she was pregnant.
Late in the afternoon, when the pains had somewhat eased, Flor thought she might go to a dammed-up bit of the river near her house to bathe. She is thirty-five and has lived in the same place all her life, where wrinkled hills are planted with corn, beans, and fruit trees. She took a towel and soap and walked out into the rain. Halfway to the river, the pains returned and overcame her. The next thing Flor remembers, she was in a room she didn’t recognize, unable to move. As she soon discovered, she was in a hospital, her ankle cuffed to the bed, and she was being investigated for abortion.
Average amount of time a child spends in Santa Claus’s lap at Macy’s (in seconds):
Beer does not cause beer bellies.
Following the arrest of at least 10 clowns in Kentucky and Alabama, Tennesseans were warned that clowns could be “predators” and Pennsylvanians were advised not to interact with what one police chief described as “knuckleheads with clown-like clothes on.”
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“Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'”