As we head into the abyss, I want to make sure we still don’t lose sight of the corporate criminals who are still running rampant throughout our economy. Today’s price fixers are, shockingly enough, in the pharmaceutical sector again.
Sanofi, Novo Nordisk, and Eli Lilly were accused in a class action suit in Massachusetts of conspiring to price fix the cost of insulin. Since insulin is pretty much a life-saving drug that patients absolutely must have, it has little price resistance so the drug makers could just keep on jacking up the price, knowing that patients would pay. From 2002 to 2013, the price of insulin nearly tripled and all three drug makers essentially moved their prices in lockstep. Having been caught engaging in illegal activity, the companies are trying to buy their way out of paying for their crimes. Lilly is offering discounts of up to 40% while Novo Nordisk promises to limit the price increases to 10% per year. Is this the only industry where a well-known and generic product actually increases in price over time? I thought the genius of capitalism meant that competition would drive prices down. Unfortunately, capitalism requires competition to work effectively. Oligopolies, which this market apparently is, just create kleptocracy. Of course, the scam that the drug makers were running also required the collusion of the pharmacy industry. As we have seen with
the opioid epidemic in West Virginia, these two groups work hand in hand to continually rip off the American consumer and actually harm the health of Americans.
Atrios gives a heads up about another pharma firm that provides the injector device for naloxone, the drug that can keep opioid overdose victims from dying. As the opioid epidemic sweeps the country, often with the complicity of Big Pharma and local pharmacies, the price of naloxone has doubled in the last few years but still is priced around $150 for a 10-mililiter vial. The price of the injector, known as Evzio, has gone from $690 in 2014 to $4,500 today for a twin-pack. Evzio accounted for almost half of the naloxone prescribed in the last two years for the over 40 age group that comprises the bulk of naloxone users. As with Epi-Pen, the company that produces these injectors claims that they provide discounts for bulk buyers and even provide free injectors to government agencies. But that probably does not help individuals and smaller groups that need the product.
But, not to worry, Donald Trump will make sure the government will negotiate with these big pharmaceutical….oh, sorry. Trump will offer these big pharmaceutical companies less regulation and bigger tax cuts. That will surely bring prices down.
I have
written about Deutsche Bank (DB) money laundering scandal before. The bank was knowingly laundering about $10 billion for Russians through its Moscow, London, and New York branches using a fairly simple scheme called mirror trades. The mirror trades always produced losses for the customer because DB was collecting commissions on both of the simultaneous transactions. That alone should have been a red flag for DB officials. The Russians, despite those small continual losses were able to convert their rubles into more other more stable currencies and move it offshore at the same time. According to a study in London, these DB transactions laundering money for Russians accounted for nearly 20% of the “unreported” capital movements into the UK, or about $1.5 billion per month. Today it was time for DB to buy its way out of jail.
DB was forced to pay a $425 million fine to the NY State Department of Financial Services (DFS) for this illegal activity as well as a $204 million fine to the Financial Conduct Authority in the UK. As the Times article notes, “The Russian scheme… highlights what has been a pervasive culture at Deutsche of skirting regulations to pad profits and personal bonuses”. Please read the whole
DFS consent order. You will be shocked at the level of criminality in all the areas of the bank associated with these trades. It also provides a rundown of DB’s long history of regulatory violations. It must also be pointed out that this scheme ran for 2011 to 2015. This was not part of the “go-go” years before the financial crisis. This was AFTER the big global banks nearly destroyed the world’s financial system. But don’t worry, Trump is going to roll back regulations and those harmful Dodd-Frank rules so that DB and others can continue their massive fraud unabated.
Again and again I ask, how and why are any of these companies still in business?
