SIGN IN to access Harper’s Magazine
1. Sign in to Customer Care using your account number or postal address.
2. Select Email/Password Information.
3. Enter your new information and click on Save My Changes.
Subscribers can find additional help here. Not a subscriber? Subscribe today!
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:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
Chance that a movie script copyrighted in the U.S. before 1925 was written by a woman:
Cari Beauchamp, Without Lying Down: Frances Marion and the Powerful Women of Early Hollywood, Charles Scribner's Sons (N.Y.C.)
Engineers funded by the United States military were working on electrical brain implants that will enable the creation of remote-controlled sharks.
Malaysian police were seeking fifteen people who appeared in an online video of the Malaysia-International Nude Sports Games 2014 Extravaganza, and Spanish police fined six Swiss tourists conducting an orgy in the back of a moving van for not wearing their seatbelts.
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
“I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.”