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Saturday, January 26, 2013
Meningitis pharmacy bosses looted firm before declaring bankruptcy
The Meningitis scandal that broke out last year at the New England Compounding Center is yet another example of the complete bankruptcy of the private for profit medical industry in the US. As I commented in a blog back then, the deaths associated with this outbreak are not an accident. Compounding pharmacists are businesses that mix certain drugs for people that might be allergic to a compound in the regular prescription. There were warnings about the dangers due to the lack of regulation in these small drug companies and Congress passed legislation to treat them more like regular drug companies, but the lobbyists for the industry successfully curbed the FDA's interference in their profit making enterprise and the law was repealed.
Now, after afflicting almost 700 people and killing 44, the New England Compounding Pharmacy is back in the news as its victims seek a court order that will allow them to receive compensation. The problem is that before seeking bankruptcy protection, the "company", which speaks for itself as a company has the same rights as an individual in US law, doled out millions of dollars to company insiders, including the owners Barry and Lisa Cadden. "The company's assets are little or nothing and we know why" says an attorney representing creditors also seeking recompense.
As the deaths, those murdered by the market, have stabilized, this episode is not as newsworthy as it was, but it is yet another small example of the corruption and waste in a market driven social health care system. "Anything of any value was distributed to its owners in the period leading to its demise" the attorney adds.
The company paid $16.3 million in "salary and shareholder distributions" to the Cadden family in a one year period up to Nov. 2012, including a one time $500,000 payment in October of that year five days after the first recall of the tainted compounds, the Wall Street Journal reports. The Caddens received $90,000 from the company for American Express charges that were described by creditors as, "Ordinary living expenses". The sickness industry in the US provides its owners with a very comfortable lifestyle, not for nothing do we refer to it on this blog as the "Sickness Industrial Complex."
So the company claims only $400,000 in assets after the owners and other coupon clippers looted it knowing full well it was time to jump ship. Creditors, victims and relatives of the 44 that have died so far may be able to recoup some of the assets back through lawsuits but that's not the main point here. These capitalists always emerge from these cases secure and the system is set up to offer them many different ways to hide and secure their ill gotten gains.
Very rarely do they go to prison, even when their actions cause death as they have in this case because it's hard to prove intent isn't it? It is more likely that they can do some time when they steal off each other than when they cause death and misery to members of the general public. There is supposed to be honor among thieves after all.
Not only that, it is not illegal to bribe (what they refer to as lobbying in the US) politicians to ensure that a state agency that would give the public some level of protection does not interfere in the business, does not hamper profit taking and capital accumulation. All lobbying should be banned.
The mass media applauds the market and its efficiency. The private sector is king but the reality is different. The US has the worst and most expensive medical system of the advanced capitalist countries consuming almost 18% of GDP. Thousand of people die each year for lack of basic medical care. It is an extremely expensive and wasteful system of providing social health care but for the coupon clippers and the CEOS and corporate elite in the drug, hospital care and general health care industry, profits flow freely, profits from sickness. The example of the Compounding Pharmacies is a small example of the inefficiency and waste of the US health care system. The drug industry, research, all aspects of this industry is one huge corrupt conglomerate that holds the public hostage over what should be a natural right, a social service accessible to all.
Just like the military industrial complex, the medicine business relies to a great extent on public money and public universities and institutions for its development and research and then appropriates the results for profit.
While its likely the people involved in this relatively small but tragic episode will not be prosecuted for the deaths and misery they have caused, it's the tip of the iceberg and there is a bigger issue here. In a civilized society, health can't be left to the savagery and insecurity of market forces. Public ownership of the means by which a society cares (or doesn't care) for the health of its citizens is the answer. This is the case even in a capitalist economy. But ultimately, the only solution is the public ownership and control of all these socially crucial industries by the workers, scientists, and others that provide them and those that use them. This would include the financial institutions of society that determine how capital is allocated, where our collective financial resources go. Human needs and the general health of society must replace profits as the end goal.