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Home Publications Blogs Beat the Press Patent Monopolies: The Reason Drug Companies Pushed Synthetic Opioids

Patent Monopolies: The Reason Drug Companies Pushed Synthetic Opioids

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Monday, 25 August 2014 04:38

The New York Times reported on lawsuits being filed by the City of Chicago and two California counties over the promotion of painkillers. The suit charges that the companies promoted OxyContin and other drugs for uses where they may not have been appropriate or necessary and deliberately downplayed risks of addiction and overdose.

It would have been worth noting that the reason the companies being sued had incentive to push their drugs was the high profit margins provided by patent monopolies. If these drugs had been sold in a free market in which the drug companies enjoyed the same profit margins as companies selling steel or bread, it never would have been profitable to spend tens of millions of dollars pushing their drugs for inappropriate uses.

However because patent monopolies allowed them to charge prices that were several thousand percent above the free market price, companies could make substantial profits by getting people to use their drugs even in cases where they may not have been appropriate. It would have been worth noting this basic fact, just as an article reporting on shortages of a particular product should mention that the government imposes price controls on the product.

 

Correction: "Synthetic" was added to the headline in the interest of accuracy. Thanks to Fred Gardner for the correction.

Comments (3)Add Comment
Remember When Drug Dealers Were Drug Dealers?
written by Last Mover, August 25, 2014 6:04

Funny how that works. There are 40,000 SWAT team raids a year associated with drugs, with enough overkill and devastation to constitute militarized terrorism.

Not one of them is targeted at Big Pharma and its executives behind the marketing of grossly overpriced opiods.

Those SWAT teams just keep getting the wrong houses don't they, somehow mistaking them for an executive suite. Even informants are on the payroll of Big Pharma.
Pot Keeps People From Overdosing on Opioids
written by Robert Salzberg, August 25, 2014 11:51
The federal government has been blocking research on marijuana for decades and already there's a study out showing that in states where pot is legal for medical uses, pain killer overdoses decreased.

http://thehill.com/policy/heal...-marijuana
Free market for prescription drugs? Fundamental contradiction
written by Melissa, August 26, 2014 6:01
A true "free market" (lack of govt involvement) in the sale of Oxy and other such drugs would allow unlimited over-the-counter sale of them. Patents are certainly a major distortion of the "free market" but not nearly so much as the tight govt control over access to such drugs.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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