Capitalism is glorified for providing a 'laissez-faire
economy,' dependent on a 'free market.' The words imply a completely
unregulated market giving complete freedom to the buyer and seller to make a
fair exchange. It is enshrined in the law for evaluations, what a willing buyer
would pay and a willing seller would accept is the true value recognized in
law. The current corporate media and right-wing politicians use these words to
capture the minds and hearts of voters. This is a myth. A free (unregulated)
market does not and cannot exist under modern market capitalism or any other
large economic system. Take its current, most exalted global example to open up
free trade, the Trans-Pacific Partnership (TPP) that must rely upon the
coercive effect of its potential penalties in Article 28. Capitalism relies on
the coercive protections to support the market, and those protections favor
those who select them, either Corporate America and the Oligarch Billionaires,
or the general population through fairly elected representatives.
Perhaps in small markets where all know each other and the producer or service
provider must deal directly with the consumer, a measure of 'laissez-faire' can
be achieved. But we are far beyond that in the United States today. Even in the
local Farmer Markets, common weights and measures and recognized means of
exchange must exist, ultimately enforced by coercion if needed. So complete
freedom cannot be achieved even in a local farmer's market without regulation.
Today the market is controlled mostly by the seller. Without regulation this invites price gouging. It has been reported that " Pharma giant Pfizer just announced its 2015 earnings " of nearly $50 billion. Its business appears to be healthy. Never-the-less, Pfizer found a merger in 2015 to move its operations to Ireland, which will allow it to avoid billions of dollars in taxes. On top of this, Pfizer just chose to raise the U.S. price of 105 of its drugs by up to 20%.
The 11 largest drug companies took $711.4 billion in profits over the 10 years ending in 2012, according to an analysis of corporate filings by Health Care for America Now (HCAN). The global pharmaceutical industry derived much of that profit from price-gouging the Medicare Part D prescription drug program for seniors and people with disabilities. Americans pay significantly more than any other country for the exact same drugs. In 2012 alone, the drug companies' profits reached $83.9 billion, 62 percent higher than in 2003.
On April 29, 2013, a group of over 120 cancer doctors released a joint statement condemning America's pharmaceutical industry. These specialists accused the pharmaceutical industry of 'price gouging' and being 'immoral': "the group of doctors insists that Big Pharma is charging patients over $100,000 for a life-saving drug that cost only a few dollars to manufacture." As of 2008, laws against gouging have been enacted in 34 states.
On July 28, 2008, Congress examined drug price-gouging in a hearing before the Joint Economic Committee and raked over the coals some specialty pharmaceutical companies such as Ovation Pharmaceuticals that had boosted the price of Indocin, a drug needed to help newborns breath, to $1,500 per unit from $108 per unit soon after buying the product from Merck. It made huge price increases on three other drugs purchased, and Congress received testimony of 100 single source older drugs with the price increases from double to profiteering at more than 10,000 percent.
On September 23, 2015 Laura Clawson reported that former hedge fund manager Martin Shkreli turned new C.E.O. of Turing Pharmaceuticals was having second thoughts, after the public outcry, about his raising the price of Daraprim, a 62-year-old drug used to treat AIDS patients and others with compromised immune systems over 5,000 percent, from $13.50 a tablet to $750 per tablet. Mr. Shkreli is reported to have said, relying on the original Standard Oil Tycoon, John D. Rockefeller, that "everything we've done is legal." His stockholders, he explains, expect him to maximize profits.
Skreli's actions reflect common practice and philosophy, as r eported by Dan Rattiner on October 19, 2015 , of rich people increasing their fortunes by purchasing old but effective drugs that have been selling inexpensively, and raising the cost by nearly 100 times the prior price. And the new owners are protected by the existing approval of the F.D.A. of the drugs they have bought, and the prohibitive expense of new producers entering the market.
This price gouging can go on and on, industry to industry, in a truly mythical "Free Market Capitalistic Economy" where there is no protection for the completely overwhelmed consumer. Only when the electorate insists on a Fair Market, not a mythical Free Market, will we see improvements.
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