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Might AstraZeneca break the capitalist drug that money always wins?

DrugsDare one say it, but the tide is slowly but perceptibly moving in AstraZeneca’s direction. A week ago, despite Pfizer being untrustworthy with flimsy pledges on jobs and R&D which could be ‘adjusted’ if ‘circumstances significantly change’ and despite the deal being more about US tax arbitrage than the British national interest, it looked a near-racing certainty that the US predator would prevail.

Cameron, batting (as Thatcher would say) for the US and against Britain, had abandoned any stance of neutrality and was doing his best to egg on the deal at any cost, while the fund managers who control most of the AZ shares, were salivating at the prospect of  fat, short term gains. They miscalculated.  Not only was the British science community understandably up in arms, but opinion in the UK has swung strongly behind AZ, matched by serious concerns in Sweden (from which the Astra part of AZ originated) and even more importantly outright hostility in the US Senate because of loss of US jobs if big American Pharma moved its HQ to Britain and opposition to US firms relocating to escape US taxes. So might money this time actually lose out?

It will certainly be a milestone if it happens. The general view in the capitalist class is that with enough money, you can pull off anything. Their cynical attitude to government/democracy is that public policy can be auctioned off to the highest bidder. Unfortunately there is good evidence for it. Agribusinesses manage to capture the bulk of the subsidies intended for small farmers. Oil multinationals, though enormously profitable, still manage to lean on government to write off their investment costs via capital grants or tax breaks. Private equity funds have for years blocked efforts to treat their hugely lucrative ‘carried interest’ profits as normal income. And directors of these giant companies arfe still taxed at a lower rate than their secretaries or cleaners.

But this time it may well be different. Cameron, seeing the turmoil in his own party (the only real constraint on government power), has suddenly switched and announced that he is “not satisfied” with Pfizer’s assurances.   Vince Cable, backed by Ed Miliband, is seriously pursuing a public interest test. The former head of AZ has denounced Pfizer as a ‘praying mantis’ because of its destructive record of chopping R&D after acquisitions.

Swedish politicians are loud in their condemnation after Pfizer’s broken promises after buying their drug company champion Pharmacia. Even Wall St Journal writer Al Lewis wryly admits that “Pfizer has been gouging America for decades”.   Perhaps most poignantly of all, even Pfizer’s own shareholders are unenthusiastic: Pfizer’s shares have fallen 7% since the proposal was first made public, so that its £50 offer in cas is now worth less than £48.    Meanwhile AZ”s shares are at £46, suggesting the market doubts Pfizer’s ability to offer the £55 which might settle the deal (for the market, that is, not for government or the EU Commission).

2 Comments

  1. Mr jeffrey l davies says:

    look at the chocolate deal there wasn’t to be any lay offs but then she lied and took it look stock and barrel to france yes trusting them would you trust a politician to tell the truth nah

  2. James Martin says:

    I seem to remember that there was a motion passed at Conference in the 70s about nationalising the big drugs companies. As that policy has never been formally overturned perhaps it is now time to resurrect it. The NHS is the biggest buyer of drugs in the world, and yet we have a nationalised body entirely dependent on private companies for the products it uses. It’s a dangerous and expensive nonsense that needs to end, nationalise the drugs companies as well as starting to work closer with other governments producing cheap generics (South Africa, India, Cuba etc.) is the way forward.

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