At Reason, Nick Gillespie (“How to Build a Better Epi-Pen — or Something Totally Different That’s Much Better,” Sept. 4) argues — correctly — that Mylan’s EpiPen price-gouging is enabled by government regulations. He cites fellow Reason writer Scott Shackelford’s earlier article (“Want to Reduce the Price of Epipens? Approve Some Competition!” Aug. 25) showing how FDA regulations are specifically tailored to Mylan’s product specifications so as to give it a de facto monopoly on the EpiPen. This enables Mylan to mark up the price of an EpiPen to about $300, compared to the actual ten cents worth of epinephrine in it.
Gillespie also points out that “Mylan’s path to monopoly pricing in EpiPens has everything to do with politics and nothing to do with laissez-faire economics. The approval process isn’t just long and expensive, it also opens things up to politics.” Well, that’s true as far as it goes. Of course just about the whole structure of the capitalist system as it’s existed for the past five hundred years — not to mention the monopoly capitalist system we’ve had for the past 150 or so — has everything to do with politics and nothing to do with laissez-faire economics.” Things were “opened up to politics” a long time ago, starting with land enclosures, mercantile war, colonial conquest and the slave trade.
And in pointing out all this, Gillespie can’t resist mentioning how refreshing it is for Mylan’s CEO to admit “I am a for-profit business. I am not hiding from that.” If he finds it so refreshing to hear a CEO say he’s in business to make money, he’d positively love former Archer Daniel Midlands CEO Dwayne Andreas, who not only admitted that he was in business to make money but also uttered the usually unspoken understanding of how large corporations actually make the great bulk of that money: “The competitor is our friend; the customer is our enemy. The only place you’ll find one grain of anything on the free market is in Fourth of July speeches.”
But we have yet to come to the real howler: “Mylan isn’t taking advantage of customers. It is simply working a political system to its own advantages.” Holy Moly! Take a minute to let this sink in. “This isn’t a square. It’s simply a geometrical figure with four equal sides.”
Now, at this point I need to insert a few comments on the concept of “crony capitalism,” as it’s used by the Libertarian Right. It’s something that almost all right-libertarians concede the existence of, and object to, in principle. They just have a hard time recognizing it in any actual case. The stuff they love the most is like a laundry list of crony capitalist abuses: Most “privatization” schemes, charter schools, governor-appointed city Emergency Managers, corporate managed “free trade zones” created by eminent domain seizures of peasant land, ad nauseam. If the Ex-Im Bank and flood insurance for beach houses didn’t exist, right-libertarians would have to invent them just to have a couple of real-world examples of “crony capitalism” on hand to prove their opposition isn’t entirely rhetorical.
But look — here is a case where Gillespie is actually describing, and condemning, a case of crony capitalism. Everything he says about FDA regulations being tailored to enable Mylan to price-gouge customers is entirely correct (although he leaves out drug patents, which are the biggest state aid to drug industry rent-extraction of all). But even here, he still can’t overcome a knee-jerk impulse to defend big business!