"A wise and frugal government which shall restrain men
from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
(Thomas Jefferson)

Thursday, August 25, 2011

Justice Department takes profits from Google while it protects Pharmaceutical profits

We are not a fan of Google but they are getting taken to the cleaners by the Justice Department while Pharmaceutical Companies skate. Guess Google didn't donate enough money to the President and members of Congress.  If this is an example of what campaign finance reform (CFR) has accomplished, it has failed miserably.

Decided to take a look at where Pharmaceutical donations are going for the 2012 election and there is no surprise that Obama and Romney lead the group.  Until 2008, the donations from the Pharmaceutical companies favored Republicans which made sense since they passed the Medicare Prescription Drug Program in 2003.  All this money that is donated plus all the lobbyist including those who wrote Obamacare having this much power over our elected officials should alarm anyone because it affects the consumer.  The old adage follow the money trail fits.

This seems early to have this many donations.  Obamacare and Romneycare supporters (Obama and Romney) lead the way.

Top 20 Recipients
Rank Candidate Office Amount
1 Obama, Barack (D) $134,186
2 Romney, Mitt (R) $99,650
3 Brown, Scott P (R-MA) Senate $71,900
4 McCarthy, Kevin (R-CA) House $67,650
5 Boehner, John (R-OH) House $67,250
6 Hatch, Orrin G (R-UT) Senate $60,500
7 Camp, Dave (R-MI) House $58,500
8 Carper, Tom (D-DE) Senate $57,800
9 Nelson, Ben (D-NE) Senate $57,150
10 Upton, Fred (R-MI) House $54,500
11 Corker, Bob (R-TN) Senate $52,400
12 Pitts, Joe (R-PA) House $52,000
13 Hoyer, Steny H (D-MD) House $50,500
14 Feinstein, Dianne (D-CA) Senate $48,750
15 Eshoo, Anna (D-CA) House $43,500
15 Casey, Bob (D-PA) Senate $43,500
17 Matheson, Jim (D-UT) House $41,500
18 Schwartz, Allyson (D-PA) House $40,400
19 Barrasso, John A (R-WY) Senate $39,250
20 Altmire, Jason (D-PA) House $39,150
METHODOLOGY: The numbers on this page are based on contributions from PACs and individuals giving $200 or more.  All donations took place during the2011-2012 election cycle and were released by the Federal Election Commission.Source:  Center for Responsive Politics
Now we learn that drug companies advertised against Obama and Obamacare so heavily to ensure they were favored with no cap prices.  So anyone think the big Pharmaceutical companies were against Obamacare were fooling themselves.  Looks to us like they toss their money around on both sides of the aisle.  No wonder no one wants to take them on for their huge profits with some over $1B.

Reform groups say vast spending, and the threat of a lot more being poured into advertisements against the administration, has helped drug companies ensure there will be no cap on the prices they charge for medicines ‑ one of the ways the White House had hoped to keep down surging healthcare costs.
The Justice Department going after Google to fine them for advertising Canadian drugs?  If you are not a big donor to Obama, watch out for the DOJ.   Obama supporting Americans being able to buy Canadian Drugs has turned out to be a lie or was that support only until he started getting campaign donations from the Pharmaceutical Industry?
Justice Department: To Protect Pharma Profits, We'll Just Take Money From Google 
August 25, 2011 
from the it's-enough-to-drive-someone-to-drugs... dept 
So the big story of the day seems to be about the Justice Department getting Google to "forfeit" $500 million for having ads in the US for Canadian pharmacies. This isn't a huge surprise. News broke of the investigation a few months ago, when Google mentioned in an SEC filing that it had set aside $500 million to settle this particular matter. The Justice Department, in typical fashion, play up how they're protecting Americans from harm blah, blah, blah.

Here's the thing: I can't figure out how this makes any sense at all. First off, why is Google to blame? As we've discussed repeatedly, the US is pretty clear on its liability laws that liability should be applied to the party actually responsible, not third party platforms. Google accepted ads. That should not make it responsible for the content in those ads, let alone transactions that may occur because of those ads. Even worse, Google clearly made quite an effort to make sure such ads only involved legit drugs: 
 Google changed its policy on pharmacy ads in February 2010, so that it would only take ads from U.S. pharmacies accredited by the National Association of Boards of Pharmacy, and from online pharmacies in Canada that are accredited by the Canadian International Pharmacy Association. 
So, now, as a media property that has advertising, do I need to fear that the Justice Department can force me to forfeit money because one of you clicks on an ad and makes a transaction that the government thinks is illegal? That's insane! 

On top of this, it's even more ridiculous, because the US government has almost always turned a blind eye to grey market imports of drugs from Canadian pharmacies, because they know that without such affordable drugs, people will die. Here we have the Justice Department not helping to save lives, but helping to kill people off by making it that much more difficult to get approved drugs from Canada at more reasonable prices. In fact, amusingly, Senator Patrick Leahy is pushing legislation that will expand the ability of Americans to import such drugs (at the same time he's sponsoring the PROTECT IP Act, which wold force such sites off the internet -- he's not particularly consistent, that Senator Leahy). 

Let's face facts here. This has absolutely nothing to do with public safety. This is a cynical move by the Obama administration to ensure support from the pharma industry. Early on in his administration, President Obama specifically supported allowing re-importation from Canadian pharmacies. In fact, the White House has repeatedly said that it's completely in favor of allowing such reimportation

And yet now it takes $500 million from Google not for actually doing that, but for allowing ads to appear that promote a program the administration has officially endorsed? It's hard not to take the cynical view and simply see this as the US government taking from Google in an effort to make the US pharma industry (who hate, hate, hate Canadian imports) happy. 
In the meantime, as Ryan Singel points out, Google is getting dinged $500 million here, while Goldman Sachs got dinged $550 million for "melting the economy." I guess Wall Street and pharma have much better lobbyists than Google. 
Source:  Tech Dirt
Is this why so much has already been donated to the 2012 campaign by Pharmaceutical Companies hoping that somehow their lobbyists will convince members of Congress and the President to not allow the patents to end:
Drug Firms Face Billions in Losses in ’11 as Patents End
....The drug industry has long said that Americans fueled the research engine, spending much more per capita on prescriptions than in any other nation, and paying the highest prices for prescribed medicines. 
Drug industry lobbyists have beaten back Democratic proposals to set prices at the lower levels of nations like Canada or to allow Medicare to directly negotiate prices. The industry, by supporting President Obama’s health care overhaul, capped its contribution at $90 billion over 10 years in return for the promise of up to 32 million newly insured customers starting in 2014. 
The new law also contains a major threat to drug industry profits in a little-known section that would allow centralized price-setting. Beginning in 2015, an independent board appointed by the president could lower prices across the board in Medicare unless Congress acted each year to overrule it. Medicare pays more than 20 percent of the nation’s retail drug bills.... 
With billions of dollars in profits over the years, the loss of patents to keep prescription costs high is about to hit and they will soon be facing a lot of competition from the generic drugs which will turn those billions of profit into losses.  Who are they going to lay off first?  The R&D people who bring on the new drugs?  Frankly we have thought over the last decade that the FDA has allowed drugs on the market without proper testing with all the recalls and side effects.  Something about a commercial that gives a symptom that could lead to death should make anyone stop and think that is probably not a drug they want to take.

Here is the breakout of top contributors -- politicians better take the money and run because once the patents expire, profits are not going to be going into shareholder and politicians pockets or is this why they signed on to Obamacare so profits can continue?  If they have donated this much so far, how much more are they going to donate this election cycle so they can continue to make huge profits on the backs of the consumers?

Top Contributors, 2011-2012

Contributor Amount
Pfizer Inc $475,185
Amgen Inc $431,212
Abbott Laboratories $304,398
Astrazeneca PLC $262,450
GlaxoSmithKline $235,665
Merck & Co $211,300
Eli Lilly & Co $202,187
AmerisourceBergen Corp $159,000
Roche Holdings $158,569
Invacare Corp $123,200
C8 Medisensors $122,000
Boston Scientific Corp $120,951
Johnson & Johnson $120,200
Novartis AG $113,749
Ischemix $99,800
Bayer AG $85,800
Endo Pharmaceuticals $55,500
Nostrum Pharmaceuticals $55,300
EMD Serono Inc $52,500
Mutual Pharmaceutical $50,000

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