Entries tagged with “Big Pharma” from Reality Window

I was discussing what must change about how our economy is viewed this morning with my husband as I was making coffee. Then I sat down and found this powerful bit of analysis about Pfizer's bid to acquire Wyeth. And it illustrates my point beautifully.

This assessment of the proposed merger by a WSJ commenter sums up the first part of the problem identified by the blogger:

I don't get it. Why do the investment analysts and business journalists go along with this sham? The previous mergers have not worked in providing value to the shareholders as other posters have noted. The analyst and journalist should be screaming against this merger if they were true to the principles of long term growth and value. There seems to be a conspiracy of idiots looking to make a quick dollar.

Comment by Anonymous - January 23, 2009 at 12:23 pm

The blogger Minerva concludes:

The bulk of US innovation in the past decade appears to have occurred in variations on bogus financial instruments, and in the concoction of outrageous ponzi schemes.  

Meanwhile, as marketers, financial whizzes, and patent attorneys slowly crushed the life out of our world-class research labs - and out of our world-class scientists - many of our brightest students in younger generations deployed a cold-eyed calculus to abandon science and engineering and pursue easy $ millions on Wall Street or in "hedge funds" (i.e., legalized gambling).

Not a good outcome for society.

We woke up last year to the reality that most of the US economic growth over the last decade has been pure illusion, amounting to little more than a zero-sum transfer from the many struggling to get by to the few super-rich.

Meanwhile, our infrastructure for real innovation - that drives real economic growth - and in the pharmaceutical area can make a real difference in people's lives - has been badly battered, twisted, and atrophied.

And its not just pharma - many elements of this decline echo loudly across the empty corridors in other industries - think electronics or automotive - that the US broadly dominated in the 20th century through the consistent introduction of innovative products.

And after Pfizer buys Wyeth (assuming that the gravitational force of the black hole proves irresistible) and empties out all Wyeth's labs - and another half of its own labs - our capacity to innovate (however its been misdirected of late) will be that much smaller and that much weaker.  

Dozens of programs will be abandoned.  No drugs will be closer to approval.  Thousands of fed-up scientists will likely abandon the industry.  

Enbrel commercials may get a little bit snappier.  The sales reps will be hotter.

And the bottom line: Pfizer pursuing "it's only option" will look like a great deal to Wall Street.  

At least until the next round, probably circa 2012, by which time Pfizer's stock price will be in the single digits.

Which brings us back to what I think is the most profound question posed by the Obama transition:

Was the Bush Administration, with its myriad failings in every policy and regulatory sphere, the disease -- or really only just a symptom of something bigger, and worse?

It's a symptom.

We need to refocus on valuing the industrial part of our economy - the part that creates and makes real things whether they be pharmaceuticals, cars, or green energy technology. The part that employs tool and die makers, master carpenters, scientists, people who create and make real things.

Too much emphasis on the ponzi scheme that is Wall Street and the service industry has left our economy in shambles. To the extent that Wall Street damages industry's ability to create and make real products, it is damaging the future of our country.

People need to understand that.

That Wall Street traders are doing this solely for short-term gains in wealth among a select population without regard to its impact on the long-term future of the country is the behavior, the ethos that must be changed.