One should really read the whole to obtain a complete understanding.
a few tidbit that may induce you to read the article:
Brandeis wrote his dissent in Liggett v Lee , famed economist Thorstein Veblen had updated this concept to include the industrial corporation, showing a big business might have control but not responsibility, leading to grave, and unexpected harm, even without intent.
To stop absentee ownership and gain some control of their lives, Brandeis noted, is one reason the citizens of Florida wanted to block the expansion of chain stores.
Indeed, the pervasiveness of absentee ownership is one of the most important business problems we face today. It’s a term I’ve tried to resurrect in discussing why big tech firms allow the sale of counterfeit goods, and it’s one a core problems in private equity. Absentee ownership is one of the most dangerous consequences of monopolization, because a firm that is too big to manage but nonetheless has immense power, can correspondingly do immense harm. And this concept brings me to the opioid crisis, and to the shortage of a medicine called Adderall, both of which are rooted in the same problem that Brandeis noted in 1933.
Like a lot of drugs, Adderall has properties that are addictive if misused, and people do abuse it. In that sense, it’s a lot like Fentanyl, morphine, or oxycodone, which are prescription drugs that have very similar properties to heroin, and are used to legitimately treat cancer and other forms of severe pain, but could be funneled into a black market.
This shortage is complicated, and has several causes.
I suspect that we aren’t hearing about one part of the problem. Monopolization. Indeed, monopolies often leads to shortages, which we’ve seen with baby formula, hospital medicine, ammunition, and military equipment. And they are a part of the problem here.
A side story is about an independent pharmacist who had his Adderall supply from Cardinal Health cut off due to lack of supply. This pharmacist has a contract buys 90% of his generic drugs from Cardinal Health. He is worried about what happens if he does meet that threshold. Why? He’s not allowed to read the contract that he’s a party to, as it’s secret (which in and of itself is crazy). But he tries to buy as much through Cardinal as possible.
How does this happen!
Exclusive dealing is fairly common, and there are a bunch of carrots and sticks that wholesalers have to enforce such exclusive dealing arrangements, from loyalty rebates that return more money the more you buy, to penalties for shopping elsewhere. The cloak and dagger nonsense is also routine.
So opaque pricing just like medical & hospital pricing. And we wonder why the US has the highest health care cost in the world.
Oh by the way Cardinal Health was caught in ***2008, 2012, 2016, and 2017, for distributing oxycodone pills to pharmacies that were clearly fronts for organized crime.***LOL You can’t make this stuff up!
One would think revamping US health care system would yield much better returns that US foreign unilateral intervention throughout the world projecting its power. But I must have my priorities mixed up.