The ravenous price increases that pharmaceutical companies slap on their medicines are part of the reason the US health care system is eating an ever larger slice of consumer, corporate, and government spending, and why the rest of the economy has trouble moving forward. Some of the price increases have turned into scandals with plenty of mouth-wagging by politicians.This worst part about this is not that this is legal, but that it is in fact the direction that our ruling elites believe that our society should continue further down this path.
Private equity firms have figured this out. You can make a ton of money with a basic formula: Fund a newly created outfit that buys the rights to a prescription drug with little or no competition and with stagnant or declining sales, jack up the price of the drug, then flip the company at an enormous profit.
This has become the latest way of wringing out the American economy without contributing anything to it, and at the expense of everyone else. So Bloomberg dug into the role private equity firms play in these schemes.
Companies will do whatever they can to build, use, and abuse monopolies, dysfunctional markets, patent laws, and other government protections in order to maximize profits while cannibalizing the entire economy.
They don’t care. And they’re not required to care.
The fault lies with Congress and regulators that have been “captured” by the industry. They’ve allowed and encouraged this form of price gouging. They’ve recklessly and willfully shuffled off the responsibility of keeping prices under control to market forces and competition, knowing perfectly well that there are no market forces and competition for many drugs, and nothing else to keep prices in check.
One need only look at the current IP regimes, and the associated "free trade" deals, to see that increasing parasitic monopoly rents is seen by the "establishment" as an independent good.
It needs to end.