The Drug Industry: Capitalism's Inefficiency and Waste Exemplified

Jeffrey Aronin

By Richard Mellor

Afscme local 444, retired

Jeffrey Aronin is described by the Wall Street Journal as a Drug Pioneer, In actuality he's a drug dealer and the business has been very good to him. He buys older drugs from the big companies and jacks up their prices. In the last 7 years, prices of US made pharmaceuticals have risen 49%. Aronin owned Marathon Drug but is getting out of the business though as it's not what it used to be, he's cashing out as the WSJ says.

Before he owned Marathon, Aronin, the humane egalitarian character that he is, started his first drug company, Ovation, in 2000. According to the WSJ Aronin described his activity as “resurrecting drugs neglected by bigger companies.”   Ovation, the Journal says, was “open about boosting prices”.  In fact, this is recognized as a type of “business model” in the sickness industrial complex. As an example, Aronin and Ovation bought (the WSJ says “Acquired”) six drugs from Abbott Laboratories.  With the business model as its guide, Ovation, “Immediately repriced the product from $289/vial to $1950/vial” according to the Journal.

In another case, Ovation planned to raise the price of some drugs it bought from Merck by an average of 500% with five of them being raised by 1,360% . This purchase “represented a ‘high margin business opportunity’” the WSJ writes.

Anyway, Jeffrey bless him, soldiered on and in 2009 when Ovation “sold itself” whatever that means, but corporations are people, Jeff got $60 million for his 7% stake.

For 15 years Jeff has been accumulating millions of dollars doing this sort of social work, a tireless devotion to humanity. Marathon was established in 2008 was a big part of that. In it’s very first year, it bought “two barbiturates and a diarrhea medication” and jacked up their prices two to five times. Yummy!  Marathon was started by a man named Robert S Altman and Aronin started working there in 2012.

Aronin’s LinkenIn profile describes himself as the founder of Marathon, who knows what that’s about, but Jeffrey, dedicated to helping the ill and infirm, got to work. The company bought two other drugs, one for extremely high blood pressure and one for slow heart rates, from another sickness industrial complex firm called Hospira. And guess what!  You got it, Marathon raised the prices by 3,500% and 350% respectively. Isn’t the free market swell!

In February this year Marathon got the right to sell a muscular dystrophy drug in the US. Here’s what the WSJ reports:  “Marathon set the price at $89,000 a year. Some families were paying about $1,200 to buy the drug, a steroid called deflazacort, from an online pharmacy in the UK.”

 A generic version of this drug can be purchased in the US for less than $10 a month. *

Legislators are taking a closer look at Jeffrey’s activity and think that Marathon may have taken advantage of a special FDA “approval program” for rare disease drugs.  What this tasty little piece of legislation does is allow a company to have “seven years of market exclusivity” before a generic version can be approved. Sole market dominance for 7 years, a capitalists dream.

It’s one of those cases where Aronin’s activity might be a little too blatant, too thuggish for his class colleagues. There must be some honor among thieves and part of that honor is not embarrassing them, giving ammunition to the victims. These companies “might have found a way to game the system” says one Republican from Alabama. It’s ok to steal from the working class, to take advantage of people who are weak or infirm, that’s what capitalism is all about; but please play by the rules.

So Aronin may just well cash out and spend his time on other things, maybe just kicking back and looking at Lake Michigan from his $11 million Highland Park mansion. Meanwhile, his brother Greg, a former briber, I mean lobbyist, for Johnson and Johnson is representing the firm in talks with legislators.

This is the tip of the iceberg. I am guessing that Medicare or some other form of public assistance pays for these outrageously priced medicines or people simply die; in other words, the US taxpayer. Health care is the leading cause of bankruptcies in the US and literally thousands and thousands of people die each year due to the barbaric US health care system.

And the propaganda is that the market is efficient and the public sector is not. The so-called free market is extremely wasteful. The USPS is perhaps the most efficient enterprise in the US. You can live at the top of a mountain in a rural area and you will get mail. The private sector wants to get their grubby little hands on it and they will close 4000 PO’s to make it more efficient. If you are an older person in a rural area or in a depressed urban one, you’d better find someone that can drive to the mall and get your prescription drugs from the post office in Staples if its privatized.

When your local school board wants to raise taxes to keep the public school in the dismal state it is already in or when your local council wants to raise taxes for public services, remember this little snippet of free market thievery. When your trade union leadership says there is no money and you have to take pay cuts, throw them out. The alternative is to fight and instead they all come back to the consumer, the working class for money.

And don’t be fooled by the anti-immigrant and foreigners are taking all our jobs either.

* Some doctors claim that the generic has more side affects.