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Leading drug companies including Teva, Pfizer, Novartis and Mylan conspired to inflate the prices of generic drugs by as much as 1,000 percent, according to a far-reaching lawsuit filed on Friday by 44 states.
The industrywide scheme affected the prices of more than 100 generic drugs, according to the complaint, including lamivudine-zidovudine, which treats H.I.V.; budesonide, an asthma medication; fenofibrate, which treats high cholesterol; amphetamine-dextroamphetamine for A.D.H.D.; oral antibiotics; blood thinners; cancer drugs; contraceptives; and antidepressants.
"We all know that prescription drugs can be expensive," Gurbir S. Grewal, the New Jersey attorney general, said in a statement. "Now we know that high drug prices have been driven in part by an illegal conspiracy among generic drug companies to inflate their prices."
In court documents, the state prosecutors lay out a brazen price-fixing scheme involving more than a dozen generic drug companies and just as many executives responsible for sales, marketing and pricing. The complaint alleges that the conspirators knew their efforts to thwart competition were illegal and that they therefore avoided written records by coordinating instead at industry meals, parties, golf outings and other networking events.
(Score: 2) by PiMuNu on Monday May 13 2019, @12:30PM (2 children)
I like your argument. The counter is:
Say there are two manufacturers who sell some product.
1. In the universe where only two manufacturers exist, your argument is correct.
2. In the universe where a third manufacturer will come into existence if it is possible to make the product more cheaply and still make a profit, then the price will tend to the minimum required to make a profit.
"Price fixing" means using unfair or coercive practices to stop the third manufacturer coming into existence (e.g. block distribution).
(Score: 3, Insightful) by isostatic on Monday May 13 2019, @12:48PM
It costs real capital to become that third manufacturer, and the established companies can push them out of business using various means (selling at a loss, poaching the knowlegable staff, sending the mafia round, etc)
Even if that third manufacturer has the capital and knowlege to come in to the market, they will simply settle for charging the full amount and taking 33% of the high price market rather than 100% of the low price market (or more likely 33% of the low price market)
(Score: 0) by Anonymous Coward on Monday May 13 2019, @02:51PM
In this particular case, "price fixing" means *coordination* between the existing vendors of generic drugs to avoid competition. It's not just the first two, it's *all* of them. And the result isn't just that more vendors rush in to take advantage of the arbitrage, the result is that people who may die slowly and painfully need to pony up or else.
There's nothing wrong with such activities. All that matters is the money.
Let's do the same for food, housing, clothes, education and everything else.
This bill should do the trick:
Proposed regulatory bill (S19111):
All vendors, regardless of product, service or other good will regularly communicate with other vendors in their industry to ensure that profit is maximized over all other concerns. All vendors *must* seek to maximize both production and prices. Not ensuring that such actions are taken will be punishable by the seizure of all assets and the revocation of work eligibility of all involved (including their families). All residents will be required to beat, rape, berate, spit upon and otherwise degrade/denigrate such folks until such time as they are publicly put to death.
Any entity that is found to prioritize anything other than profit (regardless of whether that entity is publicly traded or privately owned) will have its assets seized and all individuals (as well as their families) involved publicly put to death.
Non-profit organizations, public-benefit corporations and other organizations not predicated on profit will immediately have any charters revoked. Any individuals attempting to operate such organizations shall have their assets seized and be publicly put to death.