Our report is clear: Consolidation destroys scientific cultures that once celebrated creativity and transforms them into places that cater to the whims of shortsighted shareholders.
But our investigation also shows how we can chart a new path forward ⬇️https://t.co/1jxtK9J6rh
— Rep. Katie Porter (@RepKatiePorter) January 29, 2021
The report calls M&As “just the tip of the iceberg of pharmaceutical companies’ anti-competitive, profit-driven behaviors”:
Pharmaceutical companies often claim that lowering the prices of prescription drugs in the United States would devastate innovation. Yet, as prices have skyrocketed over the last few decades, these same companies’ investment in research and development have failed to match this same pace. Instead, they’ve dedicated more and more of their funds to enrich shareholders or to purchase other companies to eliminate competition.
“In 2018, the year that [former President] Donald Trump’s tax giveaway to the wealthy went into effect, 12 of the biggest pharmaceutical companies spent more money on stock buybacks than on research and development,” the report notes.
Some key findings from the report:
Big pharmaceutical companies are not responsible for most major breakthroughs in new drugs. Rather, innovation is driven in small firms, which are often spun off of taxpayer-funded academic research. These small labs are then purchased by giant firms after they’ve assumed the risk needed to develop a blockbuster drug;
Instead of producing lifesaving drugs for diseases with few or no cures, large pharmaceutical companies often focus on small, incremental changes to existing drugs in order to kill off generic threats to their government-granted monopoly patents; and
Mergers in the pharmaceutical industry have had an overall negative effect on innovation, taking what little competition existed in the industry and completely destroying it.
“Competition is central to capitalism,” Porter said in a press release introducing the report. “As our report shows, Big Pharma has little incentive to invest in new, critically needed drugs. Instead, pharmaceutical giants are free to devote their resources to acquiring smaller companies that might otherwise force them to compete.”
“Lives are on the line; it’s clear the federal government needs to reform how it evaluates healthcare mergers and patent abuses,” Porter added.
To that end, Porter’s report recommends the following actions:
Removing incentives that prioritize investors and Wall Street over patients;
Reevaluating the standards used by the Federal Trade Commission (FTC) for healthcare mergers;
Altering the presumption that most mergers and acquisitions are legal unless contested by an individual or group;
Lowering the cost of prescription drugs. Congress should pass legislation that reins in skyrocketing costs. This can begin with drug price negotiation legislation, such as the Elijah E. Cummings Lower Drug Costs Now Act, but must extend to include a larger class of drugs and cover all payers and the uninsured; and
Preventing anti-competitive abuses of the drug patenting system. Congress should pass legislation, such as the such as the Preserve Access to Affordable Generics and Biosimilars Act, the Affordable Prescriptions for Patients Through Promoting Competition Act, and the Stop STALLING Act, to stop abuses of the regulatory process.
“It’s time we reevaluate the standards for approving these mergers,” the report concludes. “It’s time we pass legislation to lower drug prices. And it’s time we rethink the structure of leadership at big pharmaceutical companies. Together, these strategies can help us bring more innovative, and critically needed, cures and treatments to market.”
More at the link, short article.
Porter might make a formidable presidential candidate, if she can keep a high profile with her reports and dogged determination. She reminds me of a certain other Senator who fights for the 99%, even though she is not as progressive. The MSM might find it harder to ignore and dismiss her.