Atlas Shrugged: The Mocking

Monday, September 7, 2009

Bowing To Mammon

As long as libertarians will not personally suffer from the occasional tip of the scales they are content to believe free market forces will cure all ills, because markets are never controlled, manipulated, or regulated. This is the fantasy in the center of the Libertarian Fantasyland, the Sleeping Beauty's Castle of our libertarian princess, Megan McArdle.

Which brings us to her post on Pfizer.
Derek Lowe on the Pfizer settlement:
The six whistleblowers in the case are getting anywhere from $2.3 million to $51 million now that the settlement has been announced (that upper figure is Kopchinski, who seems to have provided the most serious evidence). As I mentioned the other day, I think this is a good thing. It takes a lot of nerve to step up when your employer is doing something outside the limits of the law (and asking you to do it as well). A chance to make up for the certain loss of your job (and the near-certain loss of any future prospects in the field) goes a long way.

And there's an interesting perspective on why a settlement was reached:
. . .Pfizer is the pharmaceutical equivalent of insurance giant American International Group Inc., which was too interwoven into the global economy to be allowed to fail. Likewise, if Pfizer were convicted of a crime, it would face debarment from federal programs. And that would mean that Medicaid and Medicare patients would have to either somehow pay pocket for vital medicines the company produces or go without.

Hadn't thought of that one. I wonder if any company will have the nerve to use this as a negotiating tactic? Perhaps Pfizer already did, come to think of it. . .

Pfizer's behavior has tipped the scales of free market out of balance, and some counteractive force must come to bear to force them back into line. The public, in the form of a government fine, is doing its free market job of acting as a counteragent to the other side of the market. McArdle must be delighted.
This implies that the larger the share of government spending in health care, the more license pharma will have to misbehave . . .

But--but---the invisible hand of the marketplace! And market equilibrium! Why does Megan McArdle hate free market capitalism? Whatever countermeasure are taken by the public and government are not only good they are absolutely necessary and must not be stopped by any means. If they go too far then corporations will withhold their drugs and the government or citizens will be forced by free market forces to ease up, the way God and Milton Friedman intended.

It is just as wrong to block the free activities of one side of the equilibrium as the other! The fans of the free market have been horribly remiss in not reminding the public to hold up their end of the free market bargain. They should exhort everyone to follow corporations with an eagle eye and help keep down wild, destructive swings in equilibrium, which often end up harming the public no matter which side is out of balance.And Pfizer has not only swung the poor, abused free market out of equilibrium, it has knocked it for a loop-de-loop.
The Obama administration intensified its public campaign against health-care fraud Wednesday, putting drugmakers on notice that they will be forced to atone for improper marketing practices as prosecutors unveiled a record $2.3 billion settlement with Pfizer.

Officials at the departments of Justice and Health and Human Services called the agreement with Pfizer and one of its subsidiaries a cautionary example of their strategy to team up with states to police errant health-care businesses.

The Pfizer unit Pharmacia & Upjohn pleaded guilty to a single felony charge that accused the company of marketing its anti-inflammatory drug Bextra for broader uses and higher dosages than those approved by the Food and Drug Administration.

The company allegedly enticed doctors to prescribe the drug for pain relief by taking them on lavish trips, created sham requests for medical information as an excuse to send unsolicited advertising materials to physicians, and drafted articles promoting the pills without disclosing its role in preparing the stories.

In connection with the settlement, Pharmacia & Upjohn consented to pay $1.3 billion in fines and forfeiture, the biggest criminal penalty ever imposed in the United States, prosecutors said. Pfizer paid an additional $1 billion to state and federal authorities to resolve civil allegations of improper marketing over Bextra and three more drugs: Geodon, an antipsychotic medicine; Zyvox, an antibiotic; and Lyrica, an epilepsy medicine. In the bulk of the civil allegations, the company did not admit wrongdoing.

The settlement comes as federal agencies pursue a wider strategy to target wrongdoing in the deep-pocketed health-care industry.

McArdle should be thrilled to see market forces at work, yet instead she warns that the bigger and wealthier Pfizer becomes, the more dangerous it becomes. What could keep Pfizer from withholding drugs right now if it wanted to? In a sense they already do, since they only produce the drugs they think will be profitable. We know McArdle approves of this approach because the more money the drug companies have, the more research and development they can do, saving hundreds of millions of lives. Unprofitable drugs would kill millions, therefore drug companies cannot and should not make them. It's the millions of lives saved in the future (when McArdle will be old and therefore sick) that counts, not the scant un-and-under-insured millions now, who are not Megan McArdle. We must bow to the demands of Pfizer or they will deny us access to drug we must have, and there is nothing we can do about it.

To me, that sounds like craven submission to corporate blackmail, to a corporatist economic ideology. That sounds like fascism.


brad said...

Pssst, gotta fix yer blockquotes.

Euripides said...

From Schaum's outline of theory and problems of microeconomic theory By Dominick Salvatore:

"In the absence of government regulation or control of the economy, the problem of "for whom to produce" is also solved by the price mechanism. The economy will produce those commodities that satisfy the wants of those people who have the money to pay for them. The higher the income of an individual, the more the economy will be geared to produce the commodities the consumers want (if they are also willing to pay for them)" (emphasis added)

So, people like you Susan, are OPPRESSING Megan, and stopping her from having more stuff that she doesn't want or need.

And some people have the gall to suggest that she doesn't care about poor people ;)

tigris said...

This implies that the larger the share of government spending in health care, the more license pharma will have to misbehave

The government going to the mat and getting a huge reimbursement settlement and the 2nd largest criminal fine ever implies that, does it? Those big softies.

Susan of Texas said...

Thanks, brad.

Downpuppy said...

Mammon was a good old fashioned God, with all the proper attributes. Megan's worship of the Invisible Hand is just a stupid cargo cult, laughed at by (but useful to) the Great & Powerful Oz behind the curtain.

Susan of Texas said...

They just don't worship gods like they used to.

Downpuppy said...

I dunno. Political priests, human sacrificies, official vs real religion - nothing that would surprise a 2nd century Roman.

Susan of Texas said...

There used to be more snakes, though. Now it's just feed the poor, tend the sick, blah blah blah.

Downpuppy said...

And peeing standing up: