Wednesday, March 13, 2013

How income redistribution happens part one—“Free” Trade

The mantra of Occupy was “we are the 99%”. The idea was simple, the vast majority of the population was not benefiting from the economy. Specifically, not benefiting from the measures taken after the financial meltdown of 2008, whereas the banks and their acolytes had. But how does the 1% become the 1% and how do we change it? Occupy did a great job of identifying the problem and mobilizing people but the non-hierarchical of the movement kept it from pushing particular policies.
Perhaps the anti-occupy movement could be personified by the Fix the Debt campaign. Fix the Debt is basically a group of CEOs masquerading as a public interest group. Their focus is on decreasing government, especially those pesky entitlements that people are so fond of, that is the social programs that for many people are the difference between a decent life and poverty, or poverty and the streets.

As Thomas Engall details in this terrific post, the idea that Social Security and Medicare are “Bankrupting America” (another corporate group) is nonsense. Fix the Debt has not been successful so far, even as the ideas they are pushing have gained traction in the media. The “grand bargain” of cutting social programs to decrease the debt, the worst thing to do in a struggling economy, (ask Europe how that’s working out) has yet to happen in spite of the President’s best efforts.

No, the smart 1%ers know the best way to maintain hegemony is in the dark, maintain a positive image while keeping the transfer of wealth hidden. No group of companies does this better then the pharmaceutical industry. As a group these companies emphasize their “innovation” and their “life-saving” products. As detailed in Marcia Agell’s “The Truth about the Drug Companies” most  “innovation” is done by NIH that is paid for by you and me. The vast majority of the budgets of the pharmaceutical companies go to marketing and “education” of physicians.  That is, they pay for lunches, vacations, cruises; you name it, while “educating” about their product. Pharmaceutical companies have always funded the clinical trials but in the last 10 years it has become clearer that much of this is rigged. One way this is done is by publishing only some of the trials, therefore the true effect of the medication is masked. This has led to a campaign by Ben Goldarce calling for all trials to be published to push for complete transparency.  
Pharmaceutical companies make their profits from a government-enforced monopoly, patents.  People tend to think of patents required for innovation but they are not, and nobody manipulates them like the pharmaceutical industry.  A patent is a 20-year exclusivity clause to charge insurance companies a lot of money. For that, the medication does not actually have to be better then what is on the market, it just needs to show it is better then nothing. Patents are frequently granted for medications that are not actually novel, but small “twists” on current medications, or they are issued in a different amount (making them preferable to generics made in a different size) or extended for, say pediatric patients even though there is no chance a pediatric patient will take them.

The US has the most onerous patent (and intellectual copyright) protection in the world; guess who has the highest cost of medications? Not only do Americans pay the most for medication but we in essence subsidize the rest of the world. Other countries, especially non-Western countries are much less protective of patents, and as a results can get more life-saving treatments to their people.
From the pharmaceutical industry, this is regrettable. That is “money on the table” so to speak and a way to get around this is through trade agreements. Right now the Trans-Pacific Partnership (TPP) is being negotiated between the US and 10 other Pacific rim nations. These negotiations are held in complete secrecy, with no input from non-corporate groups. According to MSF the US has harsh language regarding patent and copyright protect, and in spite of pressure from the negotiated countries is not discussing any changes. The idea is that the US is trying to “run out the clock”—that is present the final document right before approval is required putting countries under extreme pressure to immediately sign. (You know, kind of like how you present a complex contract to privatize a major public resource, say parking meters, and insist the aldermen sign it NOW, because the world might end, but I digress . . . ) If the TPP goes through as currently written people will die, it’s as simple as that. 

Aside from the real-life consequences of the TPP the increased money and power that it will give the pharmaceutical industry is no small thing. As it is, they are practically untouchable—between co-opting doctors and practically setting policy. In the various small and large “give-ins” from different groups over the ACA one group gave up nothing, the pharmaceutical industry. Most notably, Medicare does not negotiate prices—unlike the VA, nor does Medicare make use of a formulary--a list of specific medications that will be covered, usually heavy on generics--like Medicaid. Both of these approachs can significantly cut prices; if Medicare was to negotiate drug prices this could save a lot of money 
If you need a specific example  of how this game works, you don’t have to look any farther then Canada, NAFTA, and Eli Lilly. Lilly is essentially suing Canada—through  NAFTA –claiming that by denying a particular patent Canada is performing an “expropriation” of Eli Lilly’s property rights. This has never been done before, patents are government-granted so should follow the government can choose to not grant a patent.  Because Lilly is challenging Canada’s patent denial under NAFTA the dispute will not be held in a regular court, but will be presented to an “investor tribunal court”. Gee, wonder who is favored there? An investor tribunal is held in secret, the government has to pay for it, and there is a very limited appeals process. By the way, while NAFTA does not list patents in its definition of protected "investment" the TPP explicitly does.
So what can be done about this? Well first you can write to your Senator to oppose TPP-which needs to be approved by the Senate. But more important, people need to educate themselves on who are the real “free-loaders” are in this country. They are not the poor, the people on Social Security, or on disability. They are the corporations that, through the use of state policies, enrich themselves at the cost of us all. 

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