by Charles Hugh Smith
August 21, 2016
Detail from 'Corrupt
Legislation' (1896) by Elihu Vedder
Library of Congress
Thomas Jefferson Building, Washington, D.C.
Any society that tolerates this systemic exploitation and corruption
as "business as usual" is not just sick - it's hopeless.
In noting that our society is sick, our economy exploitive and our
politics corrupt, I'm not saying anything you didn't already know.
Everyone who isn't being paid to deny the obvious in public (while
fuming helplessly about the phony cheerleading in private) knows
that our society is a layer-cake of pathologies, our economy little
more than institutionalized racketeering and our politics a corrupt
auction-house of pay-for-play, influence-peddling, money-grubbing
and brazen pandering for votes.
The fantasy promoted by do-gooders and PR hacks alike is that
this corrupt system can be reformed with a few minor policy
tweaks. If you want a brief but thorough explanation of Why
Our Status Quo Failed and is Beyond Reform, take a
look at this book.
If you want an example of how the status quo has failed and is
beyond reform, it's instructive to examine the pharmaceutical
industry, which includes biotech corporations, specialty
pharmaceutical firms and the global corporate giants
I hope it won't come as too great a surprise that the
pharmaceutical industry isn't about cures or helping needy
people - it's about profits.
As a Big Pharma CEO
a brief moment of truthfulness:
in Business of Shareholder Profit, Not Helping the Sick
Last month, Martin Shkreli became
a household name.
The CEO of
Turing Pharmaceuticals is now
infamous for raising the price of a newly-acquired drug to
$750 a pill. He also explained in an interview that his
company was not alone in acquiring drugs currently on the
market to raise their price and, in turn, rapidly drive up
their stock price.
Enter J. Michael Pearson, the current CEO of
Pharmaceuticals who recently said that his company's
responsibility is to its shareholders, while making no
mention of his customers who rely on his drugs to live.
"If products are sort of mispriced and there's an
opportunity, we will act appropriately in terms of doing
what I assume our shareholders would like us to do."
Already this year, Valeant has increased the price of 56 of
the drugs in its portfolio an average of 66 percent,
highlighted by their recent acquisition, Zegerid, which they
promptly raised 550 percent.
Not only does this have the unfortunate side effect of
placing the price of life-saving drugs out of reach for even
moderately-insured people, but it has now begun to call into
question the sustainability of this rapidly-spreading
an interview with CNBC, Pearson defended his business
practice of acquiring drugs instead of investing in research
"My primary responsibility is to Valeant shareholders.
We can do anything we want to do. We will continue to
make acquisitions, we will continue to move forward."
Since being named CEO in 2008, Valeant has acquired
more than 100 drugs and seen their stock price rise more
than 1,000 percent with Pearson at the helm.
But it appears that all of the public backlash over price
gouging of prescription drugs, which has included both
Hillary Clinton and Bernie Sanders taking a stance against
the practice as a platform in their respective presidential
campaigns, has placed the practice under tremendous
The House Committee on Oversight and Government Reform is
planning to issue a subpoena for information on recent price
increases from both Pearson and Shkreli.
And that pending investigation has sent Valeant's stock
price tumbling more than 27 percent in the last month, which
may have shareholders concerned enough to wonder if Pearson
pushed too hard for too long.
John F. explains the context:
"The Epi-Pen (or the generic equivalent) is the only thing that
people with severe allergies - including many children - can
carry that will save their lives if used at the start of a
severe allergic reaction.
There is no substitute. The maker, Mylan, has increased the price six-fold over the past few years.
Epinephrine is a very old generic drug. It is the packaging that
makes it patentable.
There is absolutely no reason for the cost
to make Epi-Pens to have increased.
People who have had a life-threatening allergic reaction to food
or insect stings need these - they are absolutely essential to
save their lives.
Epinephrine has been generic since I was in
medical school in the '70s, yet the FDA have allowed the
manufacturer to increase the price 600% in the last few years.
There is a generic substitute for the Epi Pen now, but they
jacked the price of it up to around $400 (it's near the end of
the article). These kits are cardboard boxes with two plastic
syringes with one needle each, with a little medicine in them.
can't imagine they cost more than $10 to make, and they have
been around since I was in medical school in the '70s, so it's
not like they must recoup extensive research costs."
40+ Drugs to Be Dropped
by Insurance - via John F.:
"I wrote to you about the huge increase in price of colchicine,
an excellent drug for people with gout, and sometimes the only
drug they can use, which is generic, but the FDA allowed a
manufacturer to jack the price to the sky in the past 12 months.
Now, the two major pharmacy benefit companies are dropping it
I can't emphasize this enough - this is the only
drug some patients can take for a disease that sometimes is
life-threatening (can cause kidney failure), and by all rights
should be ten cents a pill or less."
Unsurprisingly, pharma sales have been soaring.
generic drugs and jack up the price by 400%, and it's no
surprise that sales have risen from $550 billion annually in
2004 to over $1 trillion in 2014 (Global pharma sales to reach $1.3 trillion by 2018, from $1
trillion in 2014).
All of the exploitation, deception and corruption has been well
documented in dozens of reports and books.
Here is a small
sampling of recent titles on the sickness of our
pharmaceutical/"healthcare" systems, the political system that
funds and enforces these pathological systems and the tragic
consequences of these pathologies.
Here is a sampling of the reviews posted by readers on Amazon
I have been a physician for 10 years. I have seen my profession
gradually being taken over by the pharmaceutical industry. I
have seen countless patients harmed - alas even killed - by drug
reactions and polypharmacy.
I have sat and listened to countless drug representative
presentations that were outright falsehoods and
It has been months - maybe even years that I
have had available to me a medical education conference that was
not somehow tainted by drug company money and therefore
I have repeatedly had patients in my office begging me for
medication that they do not need.
They want it simply because it
was on TV News last night - and came with a promise of
metaphysical salvation. I spend much time every day dissuading
patients from taking medication they simply do not need - indeed
may even cause real medical problems.
The issues that are discussed in this book are very very real -
and the scary part is I do not see my fellow physicians doing a
single thing to address these huge problems.
Abramson gives specific examples where published drug studies
focus on recipients non-representative of typical (target) users
- e.g. younger, and less prone to adverse reactions.
the reported data show (if one has the time to read carefully)
that the true targets do WORSE with the medication, and this
finding is obscured by positive results with the more numerous
(atypical) younger selected test patients.
Other medical research reporting ploys utilized by drug
reporting initially positive results, while
omitting adverse subsequent outcomes
combining serious (when
increased) and minor (when decreased) adverse event numbers to
cover up problems
comparing a strong dose of a new medicine
with an inappropriate weak dose, comparing a new drug with a
placebo, instead of existing efficacious drugs
negative drug trials
failing to point out that lifestyle
changes often provide much better results than drugs
pulling advertising from medical journals running unfavorable
As a consumer who believed until recently was an "informed
consumer," I was shocked to discover that the information I was
getting on the National Institute for Health's website "pubmed"
was less than definitive when it came to clinical trials.
Dr. Abramson's book, I now understand that those clinical
trials, which most doctors depend on in helping them treat their
patients are wildly distorted.
I applaud Dr. Abramson for writing this book. Just as Rachel
Carson's book "Silent Spring" served as a catalyst for
supporting changes in how we respect our environment,
physicians, consumers and politicians should read this book and
take action to protect our nation's health.
The political corruption that enables and enforces this sick,
exploitive system society is equally obvious and
Sir Angus Deaton, recipient of the 2015
Nobel Prize in economics, recently summarized the innate
corruption of the American status quo in a Scientific
American article (Sept. 2016 issue): How
Inequality Threatens Civil Society: A
spiral of slow growth and rent-seeking by powerful interests
pose a danger to democracy.
"In the U.S., we spend enormous sums on health care, much of
which has little or no effect. This system is fiercely defended
by those whose incomes and power come directly or indirectly
from the nearly one-fifth of American GDP that health care
The very size of the health care and financial sectors gives
them political power that makes them very difficult to control.
These sectors then become engines of inequality, generating huge
rewards for some while slowing growth and undermining
Any society that tolerates this systemic exploitation and
corruption as "business as usual" is not just sick - it's
No, you can't fix this layer-cake of pathological
deception, exploitation, corruption and racketeering with the
usual pathetic "reforms" offered by lobbyists, insiders and
the status quo is itself the source of the
sickness and the rot.