August 25, 2014
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.
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