20 Comments
founding

As always,Thanks Matt for an in-depth analysis of the pharmaceutical industry. It is no coincidence that all the concentration in the industry was fueled in the 80’s when the Regan GOP mob started the 40+ years march to destroy the American economy. I would make a wild guess that most other nations that pay significantly less for prescription medicines than America never let the middle man take control. This has also been a major obstacle in the agricultural industry where the farmers are little more that sharecroppers to big AG and the middlemen.

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Don't forget Clinton going all in to seal the deal on neoliberal economics. NAFTA was just the most visible thing his administration did to wreck the economy for decades to come.

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They all are “all in” on neoliberalism ( extreme libertarianism). D and r today serve neoliberalism.

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That is not quite fair. Their version of libertarianism thinks the little people have too much personal freedom.

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Just like trump, Biden, bushes, Obama, etc. Clinton’s are scumbags, for sure, but so is every potus, for generations. It’s naive to single out the douchebag Clinton’s

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founding

As far as I can tell, the Biden administration has significantly departed from neoliberalism in their approach to antitrust. That’s a big theme of this very newsletter! I largely agree with your statement, up until lumping Biden in with his recent predecessors. Lots of issues with him and his administration, to be sure, but again, it seems to me they’ve made a meaningful change in their approach to antitrust, and I think we should give credit where it’s due.

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Having what was just a feeling be verified and explained by your reporting has enriched my understanding of these monopolistic entities immensely. Thank you!

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Fascinating report. BigPharma is just another way of saying hedge fund. So American. So on brand.

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May 20, 2023Liked by Matt Stoller

Bristol Myers Squibb acquired Celegene- for a bunch of Oncology drugs. I have brought this up before but CROs like IQVIA & ICONPLC are the companies who run the trials for all of the Pharmaceuticals. I manage several trials for BMS & Eli Lilly as a senior statistician. I think there are a lot of mergers going on here as well. ICON acquired PRA. IQVIA which was originally Quintiles also consolidated. & is now the largest CRO in t bye world. I think this is just one more factor in this whole story. Apologies if bringing this up is irritating 😊.

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author

Not irritating at all, very useful. The FTC forced a divestment of a key drug to Amgen as part of the shitty Celgene settlement. A disaster all around.

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Good, educational piece, Matt, and an easy read. Thank you

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Interesting. Would this restructuring cut down on these types of commends "Pfizer CEO calls US drug price plan 'negotiation with a gun to your head'" http://www.reuters.com/business/healthcare-pharmaceuticals/pfizer-pouring-covid-profits-into-cancer-battle-ceo-bourla-says-2023-05-11/

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Abbvie which acquired humira from a European developer is a case in point. Regeneron just defeated Amgen's patent challenge to its competitor to repatha

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founding

Agreed. I know I always beat on the Repuks, but clearly Clinton and democrats also have added to America's problem. Clinton was the worst. His signing of the law reducing the Glass-Steagall Banking Act of 1933 that separated commercial banking from investment banking, gave the banking industry what they had wanted for 50+ years. Hard to call Clinton a democrat!

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Thanks, Matt... I live in Portugal. We pay modest prices for prescription drugs that are the same quality, sometimes the same brands, as the ones you have access to in the US. Clearly, the American health system is something Europeans do not envy... the inability of the US to do anything to fix pharmaceutical greed, not to mention gun laws, never fails to amaze and depress.

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Thanks for teaching me something new! As a pharmacist/pharmacy owner, the hijacking of our industry is tragic and I am so impressed with your analysis. Thanks!

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Off topic. First time writing a comment. Known about Stoller for years and just joined the substack with a one year's subscription.

Regular readers here probably know the economist Michael Hudson. In his recent interview on US bank failures, his interviewer noted

"BEN NORTON: Yeah, very well said. And I’ve mentioned, we both have mentioned a few times here, Wall Street on Parade, the amazing financial blog by Pam Martens and Russ Martens.

I highly recommend everyone checking out their website. I’ve invited them on before, but unfortunately they don’t do interviews.

But Michael, they published another article that discussed the $247 trillion in derivatives that 25 U.S. banks are exposed to.

And they speculated that one of the reasons, in March, that these large banks, 11 big banks in the U.S., deposited $30 billion in First Republic Bank was to try to save it. ....."

https://michael-hudson.com/2023/05/the-hard-iron-financial-fist/

Michael Hudson's latest book is reviewed by Pepe Escobar

https://michael-hudson.com/2023/05/pepe-escobars-review-of-the-collapse-of-antiquity/

Hudson's main focus is debt. US debt puts it on the path of total financial collapse.

I have a copy of Matt's book "Goliath" but have not read it and looked in the index and did not find the name Michael Hudson. Hudson is frequently featured on Naked Capitalism.

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Unfortunately, Stoller has dismissed my several attempts at bringing Dr. Hudson’s amazing depth and diversity of knowledge into the conversation. I can not think of a single author that has the breadth of complex understanding on all topics economic, trade, systems.

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Oh, and the well sourced historical reference he brings... hitherto unseen.

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Matt--Your comments on Sorokin’s AA/B6 decision are spot on.

Extremely strong finding that airline “alliances” like these violate the Sherman Act, and that the defendant’s claim that eliminating competition between them will help them better compete with Delta had no basis in the law (“with a disease (a lack of competition), and then err again by prescribing the disease itself as the cure.” P.82).

Meticulously trashed every claim of pro-consumer benefits as nonsensical and/or wholly unsubstantiated and/or not the result of the alliance. Correctly argued that every semi-legitimate benefit could have been produced by arms-length agreements that didn’t have these anti-competitive effects.

Had this legal/factual thinking been applied in the past, absolutely none of the major airline consolidation of the past 20 years would have taken place. Very happy to see the well-deserved attacks on the Compass Lexecon consultants who presented similarly bogus/corrupt analysis supporting almost all of those previous consolidation cases.

FYI news came out about a potentially bigger DOJ airline action—challenging the Korean Air/Asiana merger. See https://www.politico.com/news/2023/05/18/doj-lawsuit-korean-airline-merger-00097547

Bigger because the anti-competitive impacts of consolidation in international markets are larger and much harder to counteract than in domestic US markets.

As the Politico piece suggests there may be jurisdictional and “diplomatic” claims that could be used to sidestep the DOJ challenge here. The most effective thing DOJ could do would be to announce that any merger would immediately invalidate the antitrust immunity they have (Korean with Delta; Asiana with United). A merger would invalidate the (specious) pro-competitive claims originally used to grant antitrust immunity, would mitigate some of the anti-competitive impacts in the Korea-US market, and couldn’t be blocked by jurisdictional and “diplomatic” claims. DOJ could still make the larger claims, but leading with the termination of the existing antitrust immunity would make the message stronger and clearer.

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