Big Pharma: A Monopoly in Need of a Cure

 In last week's article we discussed some of the monopolies which dominate the American economy, and by extension, Congress, the Judiciary, and the Presidency.  While powerful, especially the financial sector, perhaps none are currently more powerful than Big Pharma. Just how big and powerful?

While we get to that in just a moment, but consider this. 70% of all Americans are dependant in some way, be it medicine or medical equipment, on what Big Pharma says we need. For the majority of that 70%, what they receive is critical to their overall health and even their very survival.

So, just who is "Big Pharma" anyway? Names such as Bayer, Pfizer, Moderna, or Johnson and Johnson are household names we're familiar with, particularly thanks to the Covid pandemic. However, many others are simply unknown except through their products which are extensively marketed.

 Starting in reverse order with the tenth largest and most influential global pharmaceutical company (all revenue is from 2020) is Sonfi, the French manufacturer of Zantac, Plavix, and Ambien, reported just over $41 billion dollars in revenue. Next is Pfizer, whose revenue was about $42 billion. Bristol Myers Squibb racked up $42.5 billion dollars. GlaxoSmithKline was seventh with $43.5 billion dollars.

In sixth place was Janssen, which is part of Johnson and Johnson. Their revenue in 2020 was $45.5 billion dollars. AbbVie, the maker of Humira, made $45.8 billion dollars. Merck earned a under $48 billion. Novartis, a Swiss producer of drugs such as Ritalin, earned its shareholders $48.6 billion dollars. Second place belongs to Roche Pharmaceuticals (a division of the Roche Group), manufacturer of Valium, and also a Swiss company. It's revenue for 2020 was a staggering $49.5 billion dollars.

Finally, the top earner in 2020 was a state owned Chinese company named Sinopharm, whose revenue was $50.4 billion dollars. Sinopharm is headquartered in Beijing China. It's official name is the China National Pharmaceutical Group Corporation, a holding company for China National Pharmaceutical Corporation, China National Pharmaceutical Industry Corporation, the China National Pharmaceutical  Foreign Trade Corporation, and the China National Medical Device Corporation.

 In 2009, Sinopharm merged with China National Biotec Group. You may be more familiar with their subsidiary---the Wuhan Institute of Biological Products. Sinopharm is known for R&D and the production vaccines, included the widely distributed BIBP vaccine which is being used in the treatment of Covid-19. Other leading companies which didn't make it into the top ten included AstraZeneca (12th), Eli Lilly (14th), Bayer (16th), or Novo Nordisk (17th).

As an aside, Moderna is a pharmaceutical and biotechnology company focusing on RNA therapeutics and vaccines dealing with the immune system. It's only commercial product to date is the Moderna Covid 19 vaccine.

In the U.S., the deepest pockets belong to six companies, Eli Lilly with a market value of $98 billion, GlaxoSmithKline with $103 billion, Merck has a market value of $164 billion, Pfizer $212 billion dollars, Novartis at $273 billion, and Johnson and Johnson with a market value of $274 billion. 

It's worth noting the Big Pharma doesn't spend the majority of its substantial profits on developing on medication or devices. In fact, marketing receives 19 times more funding than development, all to provide you, the customer, with that nice warm and fuzzy feeling you get watching one of those homey  "one of us" commercials on TV, radio, in print, or social media because they care.

Going further, the top 14 U.S. pharmaceutical companies spent a combine $31 million dollars just on lobbying Congress in the first quarter of 2021. Pfizer alone spent $3.7 million.  The trade association, Pharmaceutical Research and Manufacturing spent 8.6 million on Congress for that same quarter.

That doesn't include the millions they spend on wooing doctors, pharmacists, dentists, optometrists, hospitals, nursing homes or rehab centers, nor does it include money spent on medical associations, professional medical unions, colleges, seminars, or trade shows hawking their latest wonder drug or medical devise. After all, where did you think all those "samples" or other medical items (include anatomical displays and posters) you see at the doctor's office come from? 

Lastly, they spend millions yearly cultivating what they call "thought leaders" in the medical and pharmaceutical field. Thought leaders are individuals who widely respected locally, regionally and nationally that are used to promote various drugs or devises to other professionals in the medical industry. This is often the reason physicians recommend one pill or product over another. These "thought leaders" are usually very well compensated for their endorsement with trips to fancy getaways for "seminars" (all expenses paid), honorariums, and other very nice perks.

In 2020, 2/3 of Congress cashed a check from Big Pharma. The majority of money, 7.1 million, went to Republicans while Democrats received 6.6 million, but that's still just part of the story. Big Pharma spent $263 million dollars in 2021 lobbying Congress. Every member of Congress had a minimum of three lobbyists from Big Pharma knocking on their door. What were they trying to buy?

Big Pharma abhors the idea of the Federal Government passing legislation capping prescription prices (and who can blame them with a captive market of 70%?). They equally hate the notion of allowing individuals to shop around for their prescriptions in places like Canada or Mexico (where they often cite a lack of quality or oversight) and elsewhere.

The truth of the matter is that the quality of these drugs, if bought from reputable companies, are the same or better than here in the U.S.. The main difference is that the price of drugs are four times more expensive in the U.S. as they are elsewhere, and that's just the way Big Pharma likes it.

Lobbyists for Big Pharma don't always focus on every legislator. Often, they'll concentrate on key committee members who have the clout to either push through a piece of legislation (which they wrote), or just as importantly, has the ability to keep other pieces of legislation they oppose tied up in committee. This is thanks to Congress's rigid hierarchy, but also to the extensive and always up-to-date research they compile of not just every legislator, but also their key staffers.  They often know beforehand who they can count on and who they can't.

The top influence buyers are Starkey Hearing Technologies, which gave around $564,000 to members of Congress; the majority of which went to Republicans. However, Masimo Corporation (maker of medical devises) gave all of its $533,714 to Democrats. Pfizer split its $487,000 equally between the two parties. RAAS Nutritionals gave all its $400,000 to Democrats.

Other donors included Abbotts Labs which donated slightly more of its $284,000 to the GOP. Johnson and Johnson did just the opposite with its $275,000. Eli Lilly gave most of its $214,000 to Democrats too, as did the remaining top 20 donors.

The top Big Pharma lobbyist for 2021 was the trade association, Pharmaceutical Research and Manufacturers, Inc which gave $22,903.000 (mainly to Democrats), dwarfing the other four leading lobbying organizations, whose donations hovered between $7 and 9 million each.

Big Pharma has fought to keep the conversion of name brand drugs (like Bystolic, which is used for controlling difficult to maintain blood pressure) from becoming generic because that would substantially lower prices and effectively remove that drug from their inventory, which affects their bottom line.

Therefore, pharmaceutical companies make minor changes in their drug patients (in what's called "evergreening") to extend their control over various drugs and keep prices artificially high. "Evergreening" is something some member of Congress would like to see, but not so Big Pharma.

Speaking of generics, it's worth noting the very little new drugs are actually developed in-house by some of the major drug makers. Using a 2017 annual report, STAT, which analyses the biomedical, pharmaceutical, and medical industry, looked at 62 new products belonging to Pfizer and Johnson and Johnson (44 for Pfizer and 18 for J&J).  Out of the 44 new products, only 10 were developed by Pfizer and two of Johnson and Johnson's 18. 

In looking at the drug market in general, 81% of all new developments came from outside sources. Typically one of the big pharmaceutical companies will acquire the rights to the new drug and sit on it without ever developing it for the market or, alternatively, will "lease" out the patent for research purposes.

At this point you are probably wondering who is suppose to keep Big Pharma in check. Well, the answer is (at least theoretically) the Food and Drug Administration (FDA). But all is not as it seems. The role of the FDA is to monitor the pharmaceutical and medical industry while verifying its claims, help regulate prices, and approving any new drugs brought to the public market. Additionally, the FDA is partially funded by this same industry through user and other fees.

However, with decades of cutbacks in funding, the FDA has now come to rely on those it regulates for its operational budget. Big Pharma provides 75% of the FDA's funding of its drug review budget. In effect, since the drug and other companies control the purse strings, the FDA has become all but impotent.

Should the FDA attempt to push back or exert to much control, all the drug companies has to do is reduce, delay, or stop introducing anything which generates a fee in order to have an impact.  As a result, in December of 2021, the House Committee on Oversight and Reform released a very revealing report about the clout of Big Pharma and its influence over the FDA.

For instance, the prices of the top leading 12 drugs used by Medicare recipients increased 250% simply by using various market strategies to avoid conversions to generics to minimize competition as well as "hiding" real profits and extending their monopoly over these drugs by decades. Furthermore, these same 12 drugs are now priced at over 500 times what they were when they were first introduced to the market.   

The same report also discovered that the top 14 drug companies spent $577 billion dollars on stock buybacks and dividends over the last previous five years, which was $56 billion more than was spent on research and development. These same 14 companies also received millions in taxpayer based grants and subsidies designed for the development of new drugs, not to mention huge tax breaks.  

So, what does this mean for you and me? It means simply that the medical industry, like any other industry, is largely confined to a few very wealthy and influential corporations whose first loyalty is its officers and shareholders. It also means that the care of the patient is often secondary to the profit made from some pill or device. A cured patient is a lost customer. Lower prices are lost profits.

Big Pharma will continue to peddle its influence in the halls of Washington, and closer to home in state legislatures while it has a pill for every ill to sell to us, real or imagined. Professional medical associations are often motivated by the bottom line to move patients through like an assembly line.

The more patients seen the greater the billable hours and drugs or whatever else sold. Meanwhile insurance companies second guess doctors in order to minimize costs, overriding recommendations even to the point of harm to the patient.

Western medicine, unlike in the East, is focused mainly on the treatment of symptoms and outcomes, whereas in Eastern medicine the focus is on prevention first. Medical professionals in the West tend to ignore natural or homeopathic cures, which may take a little longer, has fewer (if any) side effects, preferring what some call "controlled poisons" whose potential side effects can be worse than the illness.  Sadly, we can say the same about Big Pharma, whose profit over patient side effects are killing America.  The ancients saw healing as a gift from the gods. Today it's big business and profit.

If you want to know more, please take a look at the links below. If you enjoyed the article, please consider passing along to others and don't forget to subscribe. It's free! Lastly please be sure to "like" us on Facebook or whatever platform you use to read A/O. It helps with the algorithms and keeps our articles in circulation.

 

Pharma 50: The 50 largest pharmaceutical companies in theworld

STAT: Do large pharma companies provide drug developmentinnovation? Our analysis says no

Pharma campaign Cash Delivered with Surgical Precision

The Biopharmaceutical Industry Provides 75% Of The FDA's Drug Review Budget

OpenSecrets: Pharmaceutical and Medical Products

Who Wants To Play Monopoly?

 

I'm sure everyone has played the Parker Brothers board game "Monopoly" and tried to dominate all the properties and garner as much of the money as possible, but I'm not talking about board games. I'm talking about real life monopoly where a handful of individuals or corporations own the lion's share of the marketplace. Have you ever wondered who the real life monopoly players were? Well, if so, read on.

As many of you should know, only six corporations own 90%+ of all media. That includes movies, video games, publishers, magazines, newspapers, TV, cable, and practically all news outlets. That means just six corporations whose political and social agendas shape or influence our opinions on nearly every issue. To put it another way, those six corporations call the tune that we are forced to dance to.

While it's possible to find outside sources, most Americans either don't know where to look or they're too tired from work or just to frustrated to bother. Besides, most "go to" sources out there are biased one way or the other. There are too few non-partisan sources, such as this one, to go to. That means many American's turn to various distractions such at TV, videos or video games, movies, and so on; all of which are owned by those very same six corporations and reflect their political agendas.

So, if we weren't going to watch TV or play video games, what are we going to do? How about heading to the refrigerator for something to eat? Well, hate to break it to you, but you have the same problem. Four corporations control just over 50% of the market representing 79% of the groceries we buy. Not only that, just four companies---Walmart, Kroger, Costco, and Ahold Delhaize (the parent of companies like Food Lion, Giant Food, Stop & Shop, and Freshdirect) control 65% of the retail market.

As an aside, farmers receive only 15 cents of every dollar consumers spend on groceries. The rest goes for processing and marketing. Meanwhile, farmers received approximately $424.4 billion dollars in taxpayer subsidies from 1995 to 2020 (that includes $20 billion just under the Trump Administration). However, the majority of that money didn't go to the average small family farm. It went to the largest 15% of corporate owned farms which typically earn a million dollars or more a year.

In terms of meat processing, four companies---JBS, Tyson, Cargill, and  Marfrig---control  85% of the market while three companies, JBS, Tyson, and Hormel, control 66% of the pork market and four companies---JBS, Tyson, Purdue, and Sanderson Farms--- control 51% of the poultry industry. The same report points out that five corporations control 85% of processed pork market in Germany.

JBS alone received $78 million dollars in taxpayer based subsidies as part of a farm bailout during a trade war with China. JBS is 20% owned by the Brazilian Development Bank. In 2017, Brazilian authorities handed out the highest fines ever against JBS officials on corruption charges, including the bribery of 1,900 government officials. 

In terms of agrochemicals, such as fertilizer, four companies----ChemChina, Bayer, BASF, and Corveta own 65.8% of the market. The same companies, plus Limagrain, dominate 53.2 of the commercial seed market. In the world of "animal pharma", which makes veterinary supplies, medicines, and devices for farm and other animals, 58.3% of the market is controlled by only five companies, Zoetis, Elanco, Boehringer, Ingelheim, and Merck.

While Cargill, a global food company, is privately held, most of the other key players are owned by investment firms, banks, and pension funds; investing to the tune of $478 billion dollars in the meat and dairy market from 2015 to 2020. The major investors are Blackrock, Capital Group, Vanguard, and Norway's government pension fund! By the way, thanks to the blunder which is Citizens United, the food industry spent $175 million dollars lobbying government officials and making campaign contributions during the 2020 election cycle.

When it comes to the tech industry, which impacts nearly everything, just five companies virtually dominate the entire industry. Those companies are Google, Apple, Facebook, Amazon, and Microsoft.

Between them, they control or influence around 80% of the technology we use every day. In fact, their combined wealth makes up 15% of the entire S&P 500. I bet no one is laughing at those high school geeks now! Of course, the tech industry, like everything else, needs electricity to operate. So who dominates the energy market?

The three primary sources of energy for the United States is oil, natural gas, and coal, with oil and gas accounting for 60% of all energy produced and used.  Renewable energy such as wind, hydro, and solar makes up a tiny fraction of America's energy source, and if the leading companies controlling the energy market have any say in it (and they do), renewable sources will never be a major player.

The industrial sector makes use of 32% of all energy produced. This is followed by the transportation sector which uses 29%,  which is closely followed by the residential sector which uses around 20%. The commercial sector, which includes businesses, hospitals, schools, etc., consumes 18%.

When it comes to production of all this energy, the largest global company is ExxonMobil, followed by Royal Dutch Shell, Chevron, Total, and British Petroleum. PetroChina and Sinopec make up the sixth and seventh spots. Others in the top 20 producers include a third Chinese company, CNOOC Limited (15th), Italy's Eni (10th), and Halliburton, a U.S. company, in 20th place. Together these 20 companies nearly dominate the entire energy industry.

You may be interested to learn that the oil and gas industry donated around $8,708,787.00 dollars in the 2020 election cycle. Of that Donald Trump received $3,773,155.00. Joe Biden, the only Democrat to receive money among the top five candidates, got a paltry $1,609,976.

The oil and gas industry gave $63.6 million dollars to the Republican Party while the Democrat Party got just $13.3 million dollars during the 1990 to 2020 election cycles. Thus far in the 2021/22 election, the GOP has received $8 million compared to the Democrat's $2.4 million. How's that for influence buying? 

With all that money, it's got to go somewhere! So, who are movers and shakers in the financial industry? The financial industry is highly diverse. It includes everything from banks, to fund managers, to holding companies, insurance companies (commercial and retail), to lenders and collection agencies. 

However, if we're looking at assets held or controlled, there are roughly 30 or so leading companies which dominate the U.S. financial market. The top ten (from tenth to first) are Blackrock, Citigroup, Morgan Stanley, Wells Fargo, Bank of America, PayPal, MasterCard, Visa, JP Morgan Chase, Visa, and Berkshire Hathaway. Also in the top 30 are Travelers (29th), Capital One (23rd), and Goldman Sachs (13th).

Globally, it's a slightly different story. While Berkshire Hathaway is still number one, the next five companies are all Chinese (Ping An Insurance Group, ICBC Banking, China Construction Bank, Agricultural Bank of China, and China Life Insurance). Next is the German company (and the parent of my old company, Euler Hermes) Allianz, which is a financial conglomerate.  

In eighth place is another Chinese company, Bank of China, followed by JP Morgan Chase, and AXA Insurance. Other companies in the top 30 include 12 American companies, eight Chinese, four French, four English, four Japanese, two German, two Canadian, and a smattering of Indian, Italian, Swiss, Spanish, and Dutch. Notably absent are those from Hong Kong, Australia, Brazil, Mexico, or Singapore.

As we all know, nothing happens in Washington without palms getting greased in one fashion or another. As with any other industry, the financial sector made its presence felt in the 2020 election cycle. Wall Street executives, directly, trade associations, PACs, lobbying, and so forth, spent $2.9 billion on the 2020 election cycle. Of that, $1.9 billion went specifically to candidates running for a federal office. 

47% of that $1.9 billion went to Republican candidates while 53% went to Democrats, with $74 million going to Joe Biden. So much for the Democratic Party being one of the working class! If we were to include money coming from the real estate investors and insurance companies, along with the financial industry, the money spent jumps up to $250 million dollars to support Biden.

 Meanwhile, "The Donald", who made his living in real estate investment and development, received only $103 million from those same industries. Five U.S. senators received a combined $300 million, including Lindsey Graham (R-SC) and Mitch McConnell (R-KY).

The same study showed that lobbying efforts by these same industries spent a whooping $932 million dollars for the same election cycle. Who spent the most? Apparently the top spenders were Blackstone, American Bankers Association, Charles Schwab, Susquehanna International, Bain Capital, and Renaissance Technologies. All I can say is that I hope they got what they paid for (well, maybe not).

Some groups and individuals would have you believe that America is "turning socialist" (or Communist. They use the two different ideologies interchangeably). Obviously if that was true, none of the above would be happening since socialism is the ownership of production by the workers and Communism is the ownership of everything by the state.

America is a Corportracy, a form of fascism, meaning a close partnership or even "hand-in-glove" relationship between corporations and government. As you'll note from the above, that's clearly what we have. Like any system, it has managers or overseers. Those managers are the uber wealthy Oligarchs who own or control these corporations. What they want they get, and it's usually at our expense.

Studies have shown that, on average, the wealthiest 10% of American's typically get what they want from government about 65% of the time. When average American's oppose a policy the super wealthy support (like the Wall Street bailout under President Obama), the rich usually win as they did in that instance.  The same argument can be made when it comes to tax cuts, low/no interest federal loans, bailouts, subsidizes, or foreign policy matters.

This isn't the work of would-be "socialists" or Communists. This is the work of an powerful and unbelievably rich Oligarchy where party means absolutely nothing except a means to divide us. They have an agenda and it's not the restoration of our former Republic or furthering the spread of democracy. This is about power and control. As George Carlin once said, "it's a big club and you and I ain't in it".  It's time we had our own club. It's time we stop playing Monopoly by their rules.

If you want to know more, please take a look at the links below. If you enjoyed the article, please consider passing along to others and don't forget to subscribe. It's free! Lastly please be sure to "like" us on Facebook or whatever platform you use to read A/O. It helps with the algorithms and keeps our articles in circulation.

 

Companies: dominating the market from farm to display case

America's food monopolies and power imbalances

Just a Few Companies Control the Meat Industry. Can a NewApproach Level the Playing Field?

GAFAM: The Big Five Tech Companies Facts

Lobbying spending of oil and gas companies in the UnitedStates

Disturbing data: The rich and powerful get their policiesadopted even if opposed by most voters

The Top 30 largest US financial companies in 2021

List of the largest financial services companies by revenue

Wall Street execs, employees spent $2.9 billion to influenceWashington during the 2020 election, study shows