SHORT TAKES #12: BIG BUSINESS RIP-OFFS: DRUGS AND PET CARE

Private equity firms are invading the pet care business and ripping off pet owners. The big pharmaceutical corporations are ripping off U.S. customers with high drug prices.

Here are short takes on three important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information. The first item describes the invasion of private equity firms into the pet care business. The other two describe U.S. drug pricing by the big pharmaceutical corporations.

STORY #1: Some private equity, vulture capitalism firms (see this previous post for why this terminology is appropriate) have targeted the pet care sector because they know that pet owners are willing to spend lots of money on their pets, especially when pets have medical or health issues. Over the past decade, private equity firms have spent billions buying up veterinary practices and now own almost 30% of them. The private equity firms make big and quick profits by increasing prices, reducing quality of care, and making working conditions onerous for veterinarians. (This mimics what private equity firms have done in the health care system for humans. See previous posts here and here.) Since 2014, prices for veterinary services have risen by 60%. At least one of the private equity firms is also buying up pet insurance companies. [1]

Veterinarians at private equity-owned practices have reported being overworked and pressured to sell pet owners expensive tests and procedures that may, in some cases, not be needed or appropriate. Some of the private equity managers tie veterinarians’ pay to the amount of revenue they generate.

I urge you to contact President Biden and ask him to direct the Federal Trade Commission (FTC) to take strong action to stop private equity acquisitions in the pet care industry and to rein in private equity firms and their practices in general. You can email President Biden at http://www.whitehouse.gov/contact/submit-questions-and-comments or you can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414.

I also urge you to contact your U.S. Representative and Senators to ask them to support the Stop Wall Street Looting Act, which would rein in the private equity industry’s vulture capitalism. You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

STORY #2: The huge pharmaceutical corporation, Novo Nordisk, has been spending millions on lobbying and campaign contributions seeking to increase coverage of its weight-loss drugs, Ozempic and Wegovy, by Medicare and Medicaid, as well as to block regulation of their prices. Both drugs have the same active ingredient, semaglutide. In 2017, Ozempic was approved for adults with Type 2 diabetes (aka late onset or adult diabetes) to aid in appetite and weight control. In 2021, Wegovy was approved for weight loss. (Interestingly, neither of these drugs has been approved for use by people with Type 1 diabetes, the chronic life-long version of diabetes (aka juvenile or insulin-dependent diabetes.) Medicare and Medicaid only cover Ozempic for Type 2 diabetes patients and Wegovy only for patients with cardiovascular risks. Novo Nordisk is lobbying for expanded coverage that would include other patients.

Novo Nordisk has been spending about $4 million per year on lobbying since 2017. In 2023, it spent over $5 million on lobbying, hiring 77 lobbyists from 13 firms, 54 of whom had come through the revolving door, i.e., had previously been in government jobs. [2]

Since the 2013-2014 election cycle, Novo Nordisk-affiliated entities have averaged over $600,000 in campaign contributions in each of the five two-year election cycles. In the current 2023-2024 election cycle, its political action committee (PAC), executives, and employees had already made $500,000 in campaign contributions by June 30. This adds up to more than $3.5 million over 12 years.

Novo Nordisk has also engaged in aggressive marketing to increase the use of the Ozempic and Wegovy, spending $471 million on marketing them in 2023 alone. Their marketing campaign has been very successful and it’s estimated that 15.5 million Americans (6% of the population) have now used one of these injectable weight-loss drugs. This has led to shortages for the diabetics who need them the most.

Novo Nordisk charges about $1,000 per month for Ozempic injections in the U.S. In Canada, this costs about $150 and in Germany around $60, because prices there are regulated.

STORY #3: On the issue of drug prices in general, a 2021 RAND Corporation study found that drug prices in the U.S. average 2.56 times the prices in 32 comparable nations. For name brand drugs, it’s 3.44 times as much. In August 2022, President Biden signed the Inflation Reduction Act that allows Medicare to negotiate drug prices. (Price negotiation had been prohibited by the Medicare drug benefit law signed by President G. W. Bush.) Every Republican in Congress voted against the Inflation Reduction Act and Vice President Kamala Harris cast the tie-breaking vote that allowed the bill to pass in the Senate and go to Biden to be signed into law.

Medicare recently announced agreements with pharmaceutical companies for negotiated prices on ten drugs. The new prices are from 38% to 79% less than the current list prices. These prices would have saved the government about $6 billion last year if they had been in effect. About 9 million people use these ten drugs and will save about $1.5 billion a year in out-of-pocket costs after the new prices go into effect on January 1, 2026. [3]

[1] Perez, A., 8/7/24, “‘Life and death’ for pets: Elizabeth Warren targets firm buying veterinary offices,” Rolling Stone (https://www.rollingstone.com/politics/politics-news/elizabeth-warren-targets-private-equity-firm-veterinary-offices-1235075465/)

[2] Cook, M., 7/25/24, “Ozempic-producer Novo Nordisk on track for record spending on lobbying in 2024,” Open Secrets (https://www.opensecrets.org/news/2024/07/ozempic-producer-novo-nordisk-on-track-for-record-spending-on-lobbying-in-2024/)

[3] Richardson, H. C., 8/15/24, “Letters from an American blog,” https://heathercoxrichardson.substack.com/p/august-15-2024

CAMPAIGN FINANCE BAD NEWS AND GOOD NEWS

The huge amounts of money being spent on campaigns is a serious and growing problem, distorting who runs, who wins, and the policies they support. Increased giving by small donors is good news, but the bad news is that it’s overwhelmed by the giving of big donors. Nationalization of campaign fundraising and increasing donor opacity are also problems. Your involvement in giving to and volunteering on campaigns makes a difference. Matching small donations by constituents with public funds is a growing way to address problems with campaign financing.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. Thanks for reading my blog! Special Note: The new, more user-friendly website for my blog is here.)

The huge amounts of money being spent on campaigns is a serious and growing problem. For example, Peter Thiel’s $15 million and additional money from his cronies basically bought J.D. Vance a U.S. Senate seat in 2022. Elon Musk pledged $45 million a month to Trump’s presidential campaign. (He may have subsequently rescinded the pledge.) Overall, as-of August 15, supposedly independent super PACs and groups had already spent a record amount – over $1 billion – in 2024 election campaigns. This is almost twice what they had spent at the same point in the last presidential election year of 2020, which was the record at the time. [1]

The good news is that giving by small donors has increased. The bad news is that giving by big donors has increased even more and outweighs the donations of the millions of small donors. In the 2022 congressional elections, the 100 biggest donors contributed more than $1.2 billion in total (yes, billion). That’s 60% more than the total donated by millions of small donors. This is in large part due to the Supreme Court’s 2010 Citizens United decision (and related decisions) that allowed unlimited donations by wealthy individuals and corporations, asserting that this is a free speech right. Prior to 2010, small donations significantly outweighed the 100 largest donors. [2]

Another troubling trend is the nationalization of campaign fundraising, which means that more and more campaign money is coming from outside a candidate’s district, i.e., NOT from the candidate’s constituents. In high profile congressional races, out-of-state contributions now constitute the vast majority of the money spent on campaigns. This is a result of the unlimited spending by super political action committees (PACs) and other outside groups that are ostensibly operating independently of the candidate’s campaign. Nationalized funding incentivizes candidates to take extreme positions and engage in outrageous behavior to garner national attention and donors.

A third troubling trend is that campaign money is becoming harder and harder to track, i.e., it is harder and harder to identify the original source of the money. So-called “dark money” groups, which are not required to disclose their donors, are spending more and more. Legal loopholes and lax enforcement (particularly by the Internal Revenue Service (IRS) and the Federal Election Commission (FEC)) are allowing non-profits and even charities (whose donations are tax deductible) to spend money on political campaigns. In addition, more and more money is being spent on on-line activities and promotions where disclosure laws haven’t caught up with the reality of today’s campaigns.

The prominent role of big money distorts not only who wins elections, but who runs, as well as what policies are supported by candidates and then enacted by those who win. People without access to wealth, disproportionately people of color and women, are less likely to run for office and to win. Big money also exacerbates the risk of corruption, both blatant and subtle.

To address these problems, requirements for campaign donor transparency need to be strengthened and enforced. Rules and regulations for super PACs and other politically active groups need to be tightened and better enforced. Ultimately, the Citizens United and other related Supreme Court decisions need to be overturned by a constitutional amendment.

In the meantime, matching small campaign donations from constituents with public funds is needed to enhance the importance of contributions from actual voters. This also makes non-traditional candidates (i.e., non-white and non-male) more competitive. New York City, and more recently New York State, along with other states and municipalities, have successfully implemented this campaign financing reform, and it’s been very effective.

I urge you to donate what you can to candidates you support. Small contributions do make a difference, particularly in lower-profile and local elections. They also let the candidate know that you are paying attention and want your voice heard. They give you additional visibility and influence with elected officials you supported when they were running for office. To further increase your visibility and influence, volunteer for candidates you care about, if you can. Knocking on doors, making phone calls, writing postcards, and other personal communications really make a difference in campaigns!

[1] Cloutier, J., 8/15/24, “Outside spending in 2024 federal election tops $1 billion,” Open Secrets (https://www.opensecrets.org/news/2024/08/outside-spending-in-2024-federal-election-tops-1-billion)

[2] Weiner, D. I., 7/24/24, “A changing campaign finance landscape,” Brennan Center for Justice (https://www.brennancenter.org/our-work/research-reports/changing-campaign-finance-landscape)

THE ACTIVISM OF THE EXTENSIVE, WELL-FUNDED RIGHT-WING NETWORK Part 2

The extensive, well-funded right-wing network in the U.S. is actively working to turn America into an oligarchy with an authoritarian president. They do not believe in democracy. However, a solid majority of the public does not support them. Those of us who believe in democracy, need to inform the public of the right-wing’s plans, and then get the public engaged and out to vote.

J.D. Vance has now been upgraded from a newly minted (in 2022), billionaire-backed, U.S. Senator (see this previous post for background including Peter Thiel’s major role) to Republican vice-presidential nominee. Peter Thiel and other tech entrepreneurs and venture capitalists, including Elon Musk (of Tesla and Space X), lobbied hard for Trump to select Vance as his vice-presidential running mate. Musk reportedly pledged $45 million a month to Trump’s campaign if Vance was selected. (Musk has since walked back that pledge.) Having their handpicked guy as vice president would give these billionaires tremendous influence in the White House and throughout the federal government, which is what oligarchy is all about.

Peter Thiel and his cronies would look to Vance to push policies that would favor the companies they own, run, and invest in. They want to be unregulated and favored in tax policies and other laws. They see no need for government to regulate the economy so there is fair competition (as opposed to monopolistic power) and so workers and consumers are treated fairly and are kept safe. They have already gotten Trump to embrace many of their desired policies, including support for electric vehicles, cryptocurrency, artificial intelligence (AI), and the unregulated finance and acquisition strategies of the venture capital industry. [1]

Thiel’s embrace of oligarchy and authoritarianism was evident when he wrote in 2009, “I no longer believe that freedom and democracy are compatible.” (That begs the question of freedom for whom.) He also wrote that democracy and capitalism are no longer compatible, in part because women have been granted the right to vote. [2]

J.D. Vance is not only deeply indebted to Thiel and his other right-wing financial backers, he is also deeply embedded in promoting right-wing Christian nationalism. Vance wrote the foreword for Kevin Roberts’ new book, Dawn’s Early Light: Taking Back Washington to Save America. (Roberts is the President of the Heritage Foundation and led the development of Project 2025, the blueprint for a right-wing, authoritarian presidency.) In the foreword, Vance writes that he is part of the right-wing network working to create “a fundamentally Christian view of culture and economics.”

In March 2024, a specific example of the ability of billionaires to corrupt our political and economic systems was apparent when, after meeting with billionaire Jeff Yass, former president Trump reversed his position that the Chinese company TikTok should be banned in the U.S. Yass owns 15% of TikTok’s Chinese parent company, Byte Dance, and is also a big investor in Trump’s Truth Social online media company. [3] Yass is also this election cycle’s biggest donor to-date to non-candidate, Republican-affiliated Political Action Committees, having already given over $46 million. [4]

Robert Reich recently wrote that “Big money, especially from Big Tech, is the second-biggest threat to American democracy — after Donald Trump.” He noted that some billionaire donors to Democrats (in addition to those supporting Republicans) are pushing back against efforts to regulate the economy and, in particular, against enforcement of anti-trust laws and other anti-monopoly policies. Lina Khan, the Chair of the Federal Trade Commission in the Biden Administration, has been the strongest enforcer of anti-trust laws in 45 years and the billionaire businessmen on both sides of the political aisle don’t like this. Therefore, they have been calling on Biden, and now Kamala Harris, to remove her. [5]

The billionaires have money and the right-wing has a well-funded and impressive organizational network, but what they don’t have is the support of the public and voters. Those of us who want to preserve our democracy need to mobilize the public to get out to vote in record numbers to overwhelm the minority that are right-wingers and Trump cult members.

Supporters of democracy need to get out the word about who the right-wingers’ policies benefit and where they want to take our country – as they have laid it out in Project 2025’s 900 plus page blueprint. They want to implement an authoritarian presidency, an oligarchy of billionaires that control our economy and society, and policies that are aligned with right-wing Christian nationalism. They want an unregulated economy with big brother tech companies that know more about us than we know about ourselves and that use this information to relentlessly sell us products for the absolute maximum we are willing to pay – to maximize their profits and outrageous wealth. They want unregulated venture (i.e., vulture) capital firms to flourish along with cryptocurrency, which, among other things, is the financial vehicle of choice of terrorists, drug cartels, human traffickers, oligarchs laundering money, and everyday criminals.

The right-wing and their Project 2025 want to put wealthy oligarchs and authoritarians in power. They want Trump and Republican presidents to rule like the king the colonists rebelled against 250 years ago. They want a government that will benefit them and their cronies. That’s what the vast right-wing conspiracy has been all about for the last 45 years. It’s now out in the open and we need to push back hard against their 45 years of momentum.

Democracy is not a spectator sport and for too long too many citizens have been spectators – and in many cases not even watching closely at all. We, who believe in democracy, need to get them informed, engaged, and out to vote.

[1] Dwoskin, E., & Zakrzewski, C., 7/29/24, “Powerful tech group anointed Vance,” The Boston Globe from the Washington Post

[2] Richardson, H. C., 7/30/24, “Letters from an American blog,” (https://heathercoxrichardson.substack.com/p/july-30-2024)

[3] Kuttner, R., 3/27/24, “The corrupt trifecta of Yass, Trump, and Netanyahu,” The American Prospect blog (https://prospect.org/blogs-and-newsletters/tap/2024-03-27-corrupt-trifecta-yass-trump-netanyahu/)

[4] Open Secrets, retrieved 3/28/24, “2024 top donors to outside spending groups, “ (https://www.opensecrets.org/outside-spending/top_donors/2024)

[5] Reich, R., 8/6/24, “Kamala’s surprise opportunity,” Robert Reich’s daily blog (https://robertreich.substack.com/p/how-kamala-should-respond-to-the)

THE ACTIVISM OF THE EXTENSIVE, WELL-FUNDED RIGHT-WING NETWORK

The extensive, well-funded right-wing network in the U.S. is working hard to influence our politics, policies, and laws. The Federalist Society has been a very effective piece of this activism, successfully promoting right-wing legal positions and right-wing lawyers for federal judgeships, including on the Supreme Court. The right-wing network is expanding its influence and support into other parts of our society and economy, notably the technology and venture capital sectors.

An overview of the funding network that’s part of the vast right-wing conspiracy that Hillary Clinton called out in 1998 is provided in this previous post. It focuses on some current pieces of the extensive, wealthy right-wing funding network, including the recently uncovered, politically-active (probably illegally), charity Ziklag that’s working to embed right-wing Christianity in U.S. politics, policies, and laws.

The right-wing’s activism includes high-profile think tanks, such as the Heritage Foundation and the American Enterprise Institute. The Heritage Foundation is the lead organizer of the Project 2025 blueprint for the next Trump or Republican presidencies. Project 2025 has been getting a fair amount of attention lately because of its radical, revolutionary, authoritarian proposals and its concrete plans to implement them.

One of the most visible and successful pieces of right-wing activism has been the work of The Federalist Society, which promotes right-wing legal positions and right-wing lawyers for federal judgeships. It was founded in 1982 and its very influential leader, Leonard Leo, has worked there for over 25 years. It played the lead role in getting the six radical, reactionary justices onto the current Supreme Court. (See this previous post for why they should be called radical, reactionary justices, given that they are anything but conservative.) It has also led the way in the appointment of over 200 other right-wing federal judges, 28% of the federal judiciary.

Another Leonard Leo-run organization, the Marble Freedom Trust, recently received a $1.6 billion gift (yes, billion) from Chicago businessman Barre Seid. This has been described as the largest known donation to a political advocacy group ever.

ProPublica and an investigative journalism partner, Documented, have reported that over the last five years or so, Leo has also been playing a leading role with the Teneo Network. It’s a little-known network of young conservatives working to replicate the success of The Federalist Society in other realms of U.S. society. It recruits under 40 years old corporate leaders, athletes, scholars, and writers. [1]

The Teneo Network’s founders were Senator Josh Hawley (R-MO) and Evan Baehr, a tech entrepreneur. It’s striving to influence Wall Street, Silicon Valley, the media, and Hollywood, the way The Federalist Society has influenced the legal system. For example, it’s pushing back against investors and others who are advocating for good corporate environmental, social, and governance practices and policies.

As one example of the flow of money in the vast right-wing funding network, in 2021, the majority of Teneo’s funding, over $3 million, came from DonorsTrust, a funnel for laundering right-wing money and hiding the identities of donors. DonorsTrust, which had $1.5 billion in assets in 2021, had received $41 million from Leo’s group the Marble Freedom Trust (which had received the $1.6 billion gift from the Chicago businessman). Teneo has also received funding from the Charles Koch Foundation, Betsy DeVos’s family (Trump’s Secretary of Education), and other well-known wealthy, conservative donors.

Teneo’s members include Senator (and now Republican vice-presidential candidate) J.D. Vance (R-OH), Representative Elise Stefanik (R-NY), Nebraska’s Attorney General, Virginia’s Solicitor General, aides to FL Governor DeSantis, and the heads of the Republican Attorneys General Association, the Republican State Leadership Committee, and Turning Point USA (a right-wing group promoting student activism).

Teneo and right-wing activism in general have engaged and been supported by several venture capitalists and technology sector entrepreneurs. A key activist and supporter, who has been in both fields, is billionaire Peter Thiel. J.D. Vance worked at Thiel’s venture capital firm in 2016 – 2017. Thiel then and afterwards in other investment industry roles made Vance wealthy. When Vance decided to run for the U.S. Senate in 2021, Thiel backed him with $15 million for his campaign. Thiel also brought in other tech entrepreneurs, venture capitalists, and right-wingers to support Vance. In 2022, Vance won election to the Senate. There probably isn’t a clearer current example of a politician and political office having been bought by billionaires than J.D. Vance and his U.S. Senate seat. (By the way, back in 2010, Evan Baehr, co-founder of the Teneo Network, worked for Peter Thiel.)

More on J.D. Vance, Peter Thiel, and their promotion of a right-wing agenda, including Christian nationalism, in U.S. politics, policies, and laws in my next post. I’ll also identify what we can and must do to pushback.

[1] Kroll, A., & Bernstein, A., (ProPublica), & Surgey, N., (Documented), 3/9/23, “Inside the ‘private and confidential’ conservative group that promises to ‘crush liberal dominance’,” ProPublica (https://www.propublica.org/article/leonard-leo-teneo-videos-documents)