Free Market Freebooting

Merck Inc., passed a milestone on Friday, more potentially painful than passing a golfball-sized kidney stone. Actually, the right metaphor might be a gall stone.

Merck’s patent for its best-selling drug, Zocor, expired, allowing three other companies to sell generic versions of the popular drug, possibly at 90 percent of the patent price.

But corporate pirates don’t get rich just by commandeering dinghies. Merck plans to cannonade the entire generic drug industry by using its market power to lower the price of the brand-name Zocor to less than what the generics cost. This would be a kick to the head, or lower, of Pfizer, whose competing drug, Lipitor, will lose market share as large insurers stick with the cheaper Zocor. And as for the generic market – watch out for the wake!

This strategy is called illegal “dumping” when applied to imported consumer products. But the big boys in Big Pharma don’t have to worry. After putting generic competitors out of business, they will continue to raise prices to Medicare recipients, raking in the profits awarded to it by Congress when it refused to allow the government – the market’s biggest purchaser — to negotiate for volume discounts.

1 COMMENT

  1. This posting drew my attention to your blog, and I have now looked over some of your earlier posts. I’m delighted to discover someone who can write cogent political/social commentary on scientific issues.

    I’ve taken a break from the more political postings at my blog here at Science Blog, but I plan to get back to such commentary soon.

    Having you here to keep me company in looking at the politcial and cultural side of science is encouraging. keep up the good work! Maybe we can find some areas of disagreement and have a good tussle down the line.

    Fred Bortz — Science and technology books for young readers (www.fredbortz.com) and Science book reviews (www.scienceshelf.com)

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