Excerpt from: CREDO Action
In late January, the Federal Trade Commission (FTC) announced an investigation into hedge fund speculator and “Pharma Bro,” Martin Shkreli.1 But if they think one investigation will bring down drug prices, they are making a huge mistake. The true problem is giant drug monopolies that jack up prices on all of us – and according to groundbreaking recent reports, the FTC may be part of the problem.2
The Federal Trade Commission (FTC) is supposed to keep companies from getting too big, crushing competition and hurting consumers – especially pharmaceutical companies. But the FTC has been far too lenient, allowing massive mergers based on empty promises from the corporations involved.3 The revolving door between the FTC and giant corporate law firms has left us with an agency that increasingly works for Big Pharma and Wall Street, not you and me.
The FTC is used to hearing complaints from big companies, but it isn’t as accustomed to public pressure as other agencies or Congress. We need to show that cracking down on one bad actor isn’t enough – Americans are demanding the Federal Trade Commission get tough on drug monopolies across the board.
2015 was a record year for mergers and acquisitions, and it’s no surprise.4 Not long ago, the U.S. government would aggressively break up big monopolies, preserving competition, lower prices, and better service. But today, the FTC rarely even blocks mergers. Instead, it prefers to use “consent agreements” where corporations make promises in exchange for approval – promises that are often broken. Or, it demands that a company spin off some portion of its operations in a token gesture to preserve competition – one that rarely works.5
In 2015, the FTC approved the Allergan / Pfizer merger, creating a massive pharmaceutical drug conglomerate. Earlier this month, it let Shire Pharmaceuticals acquire Dyax in a $6 billion deal, surprising Wall Street by not offering even the slightest opposition. We can guess how these new pharma giants will behave. Other big companies in the industry regularly demand sky-high fees for drugs that cost mere dollars to produce, or buy the license to competing drugs and then jack up prices.6
Politicians in both parties have stopped pushing to break up monopolies. But the bigger problem is supposed public servants, who don’t want to mess up their paydays in corporate law. The FTC has stopped serving the public interest because of the revolving door.
The head of the FTC’s Bureau of Competition has hopped back and forth between government and representing clients before the FTC. One law firm alone has produced the general counsel of the FTC, director of the FTC’s Bureau of Competition, and a chair of the FTC, not to mention the chief of the Justice Department’s Antitrust Division.7 We can’t afford more business as usual at the Federal Trade Commission.
When Americans are paying the highest prices for pharmaceutical drugs of anywhere in the world, we deserve more aggressive protection.8 The simplest and clearest way to help consumers isn’t new legislation, but for regulators to use the antitrust provisions that have been part of U.S. law for around one hundred years.
Sen. Elizabeth Warren’s Consumer Financial Protection Bureau has showed what a bold consumer protection agency can do, recovering millions for Americans and cracking down on abuse partly by acting where the FTC would not. Too big to fail banks are getting bigger, technology companies are driving small competitors out of business, and massive conglomerates control our food, internet access, and even pharmaceutical drugs. It’s long past time for the Federal Trade Commission to stop protecting corporate interests, and stand up for all Americans.
Tell the Federal Trade Commission: Fight Big Pharma monopolies.
- Petition to the Federal Trade Commission:
“Fight further consolidation in the pharmaceutical industry and break up monopolies that contribute to skyrocketing American pharmaceutical drug prices.”
Go to the link below to sign the petition:
Thank you for speaking out,
Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets
Nate Raymond and David Ingram, “Exclusive: U.S. FTC probes Turing over drug prices, Shkreli’s lawyer says,” Reuters, January 22, 2016.
David Dayen, “Why Are Drug Monopolies Running Amok? Meet Deborah Feinstein,” The Intercept, December 16, 2015.
Bourree Lam, “2015: A Merger Bonanza,” The Atlantic, January 9, 2016.
Dayen, “Why Are Drug Monopolies Running Amok? Meet Deborah Feinstein.”
“Sanders, Cummings Introduce Comprehensive Legislation to Lower Soaring Drug Prices.”
© 2016 CREDO. All rights reserved.