3 February 2004, Steve Hannaford, Oligopoly Watch
Oligopolies are most effective when they not only sit at the table, but when they help legislators in the hard task of writing guidelines and regulations. That's well illustrated in a New York Times article called "Making Drugs, Shaping the Rules" by Melody Peterson (2/1/2004). [pdf]
Peterson shows that merely marketing drugs is not enough; better yet to "persuade" state health boards to mandate them for patients, making it hard for doctors to prescribe an alternative, even when the alternative is cheaper and equally, or more, effective.
Ten major drug companies, for example, used such tactics to make sure that state mental hospitals and Medicaid adopted their drugs in preference to others, Notable among these were new antipsychotic drugs made by Johnson & Johnson in preference to generic drugs whose patents have run out. These tactics were recently brought to light by a Pennsylvania lawsuit.
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A Million Thanks!
2 February 2004, Matt Bivens, The Daily Outrage
Public Citizen is calling for an investigation of Billy Tauzin, the Republican Congressman from Louisiana, who had a key role in writing the Medicare prescription drug law -- and now that he's done with that, got a big thank-you in the form of a sweet offer to lobby in Washington for the pharmaceutical industry. The compensation package, rumored to be somewhere from $1 million to $2.5 million a year, would be "likely the largest compensation package on record for anyone at a trade association," Public Citizen says. Tauzin hasn't said yet whether he'll accept it; he seems to have been given pause by the drumbeat of indignation that's risen at the idea.
"The record size of the [drug industry] contract and the fact that the offer became public less than two months after the drug industry scored a major victory with this legislation raises serious questions about whether Representative Tauzin's actions were tainted," says Joan Claybrook, Public Citizen's president. "While Rep. Tauzin was writing the bill, he put out the word that he was retiring from Congress and looking for new work. This doesn't pass the smell test."
Tauzin is not the only politician who seems to be cashing in his chips with the drug industry. Tom Scully, the White House point person on the Medicare bill, recently quit government to go work for law firms that represent pharmaceutical interests. "So we have a situation where the lead administration person on the bill and the lead manager on the bill in the House of Representatives are going to work for the pharmaceutical companies," Pelosi says. "I think it would be important to the American people to know when the negotiations for these positions began."
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