Americans pay two and a half times more for their prescription drugs than residents of any other nation on Earth. Though generic versions of popular compounds accounted for 84 percent of America's annual sales volume in 2021, they only generated 12 percent of the actual dollars spent. The rest of the money pays for branded drugs — Lipitor, Zestril, Accuneb, Vicodin, Prozac — and we have the Reagan Administration in part to thank for that. In the excerpt below from Owning the Sun: A People's History of Monopoly Medicine from Aspirin to COVID-19 Vaccines, a fascinating look at the long, infuriating history of public research being exploited for private profit, author Alexander Zaitchik recounts former President Reagan's court-packing antics from the early 1980s that helped cement lucrative monopolies on name-brand drugs.

Counterpoint Press

Copyright © 2022 by Alexander Zaitchik, from Owning the Sun: A People's History of Monopoly Medicine from Aspirin to COVID-19 Vaccines. Reprinted by permission of Counterpoint Press.

When Estes Kefauver died in 1963, he was writing a book about monopoly power called In a Few Hands. Early into Reagan’s first term, the industry must have been tempted to publish a gloating retort titled In a Few Years. Between 1979 and 1981, the drug companies did more than break the stalemate of the 1960s and ’70s — they smashed it wide open. Stevenson-Wydler and Bayh-Dole replaced the Kennedy policy with a functioning framework for the high-speed transfer of public science into private hands. As the full machinery was built out, the industry-funded echo chamber piped a constant flow of memes into the culture: patents alone drive innovation... R&D requires monopoly pricing... progress and American competitiveness depend on it... there is no other way...

In December 1981, the drug companies celebrated another long-sought victory when Congress created a federal court devoted to settling patent disputes. Previously, patent disputes were heard in the districts where they originated. The problem, from industry’s perspective, was the presence of so many staunch New Deal judges in key regions like New York’s Second Circuit. These lifetime judges often understood patent challenges not as threats to property rights, but as opportunities to enforce antitrust law. Local circuit judges appointed by Republicans could also be dangerously old-fashioned in their interpretations of the “novelty” standard. By contrast, the judges on the new patent court, named the Court of Appeals for the Federal Circuit, were appointed by the president. Reagan stuffed its bench with corporate patent lawyers and conservative legal scholars influenced by the Johnny Appleseed of the Law and Economics movement, Robert Bork. Prior to 1982, federal district judges rejected around two-thirds of patent claims; the Court of Appeals has since decided two-thirds of all cases in favor of patent claims. Reagan’s first appointee, Pauline Newman, was the former lead patent counsel for the chemical firm FMC.

The Supreme Court also contributed to the industry’s 1979–1981 run of wins. When Reagan entered office, one of the great scientific-legal unknowns involved the patentability of modified genes. Similar to the uncertainty around the postwar antibiotics market—settled in the industry’s favor by the 1952 Patents Act — the uncertainty threatened the monopoly dreams of the emergent biotechnology sector. The U.S. Patent Office was against patenting modified genes. In 1979, its officers twice rejected an attempt by a General Electric microbiologist to patent a modified bacterium invented to assist in oil spill cleanups. The GE scientist, Ananda Chakrabarty, sued the Patent Office, and in the winter of 1980 Diamond v. Chakrabarty landed before the Supreme Court. In a 5–4 decision written by Warren Burger, the Court overruled the U.S. Patent Office and ruled that modified genes were patentable, as was “anything under the sun that is made by man.” The decision was greeted with audible exhales by the players in the Bayh-Dole alliance. “Chakrabarty was the game changer that provided academic entrepreneurs and venture capitalists the protection they were waiting for,” says economist Öner Tulum. “It paved the way for a more expansive commercialization of science.”

But the industry knew better than to relax. It understood that political victories could be impermanent and fragile, and it had the scar tissue to prove it. Uniquely profitable, uniquely hated, and thus uniquely vulnerable — the companies could not afford to forget that their fantastic postwar wealth and power depended on the maintenance of artificial monopolies resting on dubious if not indefensible ethical and economic arguments that were rejected by every other country on earth. In the United States, home to their biggest profit margins, danger lurked behind every corner in the form of the next crusading senator eager to train years of unwanted attention on these facts. Not even Bayh-Dole, that precious newborn legislation, could be taken for granted. This mode of permanent crisis was validated by the return of a familiar menace in the early 1980s. Of all things, it was the generics industry, an old but weak enemy of the patent-based drug companies, that reappeared and threatened to ruin their celebration of achieving dominance over every corner of medical research and the billions of public dollars flowing through it.

***

As late as the 1930s, there was no “generic” drug industry to speak of. There were only big drug companies and small ones, some with stature, others obscure. They both sold products that were, in the parlance of ethical medicine, “nonproprietary.” To be listed in the United States Pharmacopeia and National Formulary, the official bibles of prescribable medicines, drugs could only carry scientific names; the essential properties of a good scientific name, according to the first edition of the Pharmacopeia, were “expressiveness, brevity, and dissimilarity.” The naming of drugs and medicines formed the other half of the patent taboo: branding a drug evidenced the same knavishness and greed as monopolizing one. The rules of “ethical marketing” did permit products to include an institutional affiliation—Parke-Davis Cannabis Indica Extract, or Squibb Digitalis Tincture—but the names of the medicines themselves (cannabis, digitalis) did not vary. “The generic name emerged as a parallel form of social property belonging to all that resisted commodification and thereby came to occupy a central place in debates about monopoly rights,” writes Joseph Gabriel.

As with patents on scientific medicine, the Germans gave the U.S. drug industry early instruction in the use of trademarks to entrench market control. Hoechst and Bayer broke every rule of so-called ethical marketing, aggressively advertising their breakthrough drugs under trademarks like Aspirin, Heroin, and Novocain. The idea was to twine these names and the things they described in the public mind so tightly, the brand name would secure a de facto monopoly long after the patent expired.

The strategy worked, but the German firms did not reap the benefits. The wartime Office of Alien Property redistributed the German patents and trademarks among domestic firms who produced competing versions of aspirin, creating the first “branded generic.” During the patent taboo’s extended death rattle of the interwar years, more U.S. companies waded into the use of original trademarks to suppress competition. As they experimented with German tactics to avoid “genericide” — the loss of markets after patent expiration — they were enabled by court decisions that transformed trademarks into forms of hard property, similar to the way patents were reconceived in the 1830s.

After World War II, branding and monopoly formed the two-valve heart of a post-ethical growth strategy. The industry’s incredible postwar success — between 1939 and 1959, drug profits soared from $300 million to $2.3 billion — was fueled in large part by expanding the German playbook. While branding monopolies with trade names, the industry initiated campaigns to ruin the reputations of scientifically identical but competing products. The goal was the “scandalization” of generic drugs, writes historian Jeremy Greene. The drug companies “worked methodically to moralize and sensationalize generic dispensing as a dangerous and subversive practice. Dispensing a non-branded product in place of a brand-name product was cast as ‘counterfeiting’; the act of substituting a cheaper version of a drug at the pharmacy was described as ‘beguilement,’ ‘connivance,’ ‘misrepresentation,’ ‘fraudulent,’ ‘unethical’ and ‘immoral.’”

As with patenting, it was the drug companies that dragged organized medicine with them into the post-ethical future. As late as 1955, the AMA’s Council on Pharmacy and Chemistry maintained a ban on advertisements for branded products in its Journal. That changed the year Equanil hit the market, opening the age of branded prescription drugs as a leading source of income for medical journals and associations. “Clinical journals and newer ‘throwaway’ promotional media now teemed with advertisements for Terramycin, Premarin, and Diuril rather than oxytetracycline (Pfizer), conjugated equine estrogens (Wyeth) or chlorothiazide (Merck),” writes Greene. In 1909, only one in ten prescription drugs carried a brand name. By 1969, the ratio had flipped, with only one in ten marketed under its scientific name. In another echo of the patent controversy, the rise of marketing and branded drugs produced division and resistance. By the mid-1950s, an alliance of so-called nomenclature reformers arose to decry trademarks as unscientific handmaidens of monopoly and call for a return to the use of scientific names. These reformers — doctors, pharmacists, labor leaders — made regular appearances before the Kefauver committee beginning in 1959. Their testimony on how the industry used trademarks to suppress competition informed a section in Kefauver’s original bill requiring doctors to use scientific names in all prescriptions. The proposed law reflected the norms that reigned during ethical medicine’s heyday, and would have allowed doctors to recommend firms, but not their branded products. Like most of Kefauver’s core proposals, however, the generic clause was excised. The only trademark-related reform in the final Kefauver-Harris Amendments placed limits on companies’ ability to rebrand and market old medicines as new breakthroughs.

In November, former PlayStation IT security analyst Emma Majo filed a lawsuit against Sony, claiming the company discriminated against women at an institutional level. Majo alleged she was fired because she spoke up about gender bias at the studio, noting she was terminated shortly after submitting a signed statement to management detailing sexism she experienced there. 

Majo later filed the paperwork to turn her case into a class-action lawsuit, and just last month Sony attempted to have the whole thing thrown out, claiming her allegations were too vague to stand up to legal scrutiny. Plus, Sony's lawyers said, no other women were stepping forward with similar claims.

Today, eight additional women joined the lawsuit against Sony. The new plaintiffs are current and former employees, and only one of them has chosen to remain anonymous. One plaintiff, Marie Harrington, worked at Sony for 17 years and eventually became a senior director of program management and chief of staff to senior VP of engineering George Cacciopo.

"When I left Sony, I told the SVP and the Director of HR Rachel Ghadban in the Rancho Bernardo office that the reason I was leaving was systemic sexism against females," Harrington said in a court statement. "The Director of HR simply said, 'I understand.' She did not ask for any more information. I had spoken with the Director of HR many times before about sexism against females."

Harrington claimed women were overlooked for promotions, and said that during annual review sessions, Sony Interactive Entertainment engineering leaders rarely discussed female employees as potential "high performers." She said that in their April 2019 session, only four of the 70 employees under review were women, and while all of the men in this group were marked as high performers, just two of the women were. 

"Further, when two of the females were discussed, managers spent time discussing the fact that they have families," Harrington's statement reads. "Family status was never discussed for any males."

The remaining women shared similar stories in their statements, with the common theme being a lack of opportunity for female employees to advance and systemic favoritism toward male employees. The plaintiffs claimed male leaders at Sony made derogatory comments including, "you just need to marry rich," and, "I find that in general, women can’t take criticism.” 

One plaintiff alleged that while on a work trip to E3, her superior tricked her into having drinks with him at the hotel bar, hit on her even after she declined, and told other male employees that "he was going to try to 'hit that.'" Another plaintiff shared a story about a gender equality meeting at Sony that had a five-person panel, all of them men.

The lawsuit against Sony comes at a time of reckoning for many major video game studios, including Activision Blizzard, Ubisoft and Riot Games. Activision Blizzard is facing a lawsuit and multiple investigations into claims of institutional sexism, sexual harassment and gender discrimination, while Ubisoft has long faced similar allegations from former and current employees. Riot Games paid $100 million in December to settle a class-action lawsuit over workplace sexual harassment and discrimination.

Sony has not yet responded to the latest movement in the class-action lawsuit, though it denies Majo's claims of gender discrimination. The company has requested the lawsuit be dismissed, and that will be decided in a hearing in April.

A judge has ruled that voting machine manufacturer Smartmatic can proceed with a $2.7 billion defamation lawsuit against Fox News and Rudy Giuliani. The company has accused them and others of making false claims that it rigged votes in favor of Joe Biden in the 2020 presidential election.

Fox News parent Fox Corp, anchor Maria Bartiromo, former anchor Lou Dobbs, The Five host Jeanine Pirro and ex-Donald Trump lawyer Sidney Powell all tried to have Smartmatic's claims against them dismissed. Justice David Cohen of New York State Supreme Court dismissed the claims against Pirro and Powell, though rejected the bids from Fox Corp, Bartiromo and Dobbs.

Smartmatic claimed Fox News made up a story about helping Biden to steal the presidency from Trump to boost ratings. A lawyer for the company said Fox News caused "catastrophic damage" to Smartmatic's business and reputation, according to Reuters.

Cohen ruled that Fox News "turned a blind eye to a litany of outrageous claims about [Smartmatic], unprecedented in the history of American elections, so inherently improbable that it evinced a reckless disregard for the truth." He also said Giuliani accused Smartmatic of rigging elections in Venezuela and claimed it engaged in "old tricks" in the presidential election, which provided grounds for Smartmatic to proceed with some of its claims against the former Trump lawyer.

Fox News called Smartmatic's claims "baseless." It plans to appeal Cohen's decision and countersue Smartmatic for fees and costs.

In December, a judge dismissed an attempt by Fox News to toss out a lawsuit by another voting machine maker. Dominion Voting Systems has accused Fox News of defamation in its $1.6 billion suit.

Elon Musk isn't backing down in his rejuvenated campaign against the SEC. Ars Technicareports the Tesla chief has asked a federal court to terminate his $20 million settlement with the SEC in 2018 over claims the regulator both pressured him into an agreement and overstepped its limits. Musk felt "forced" to sign the consent decree at a time when Tesla's financial health was at risk, according to the memorandum of law sent to the court. The EV executive also insisted in a declaration that he told the truth in tweets at the heart of the dispute — he maintained he really had been considering taking Tesla private and had secured funding.

Musk also characterized the SEC's approach as "governmental abuse." Officials were allegedly using the agreement to police Musk's First Amendment free speech rights by requiring that he pass tweets through an approved monitor who would determine what he could say. The SEC has also made compliance "more onerous" than the settlement originally demanded, Musk's attorney argued. The Commission supposedly interpreted the consent decree as granting powers it didn't previously have, letting it issue subpoenas and otherwise conduct "never-ending investigations."

Musk further called for an order determining that a November 2021 subpoena over insider trading allegations exceeded the SEC's authority and was issued in "bad faith." The Twitter poll in question was just meant to gather input, Musk claimed, and not a disclosure of information the exec would have to report to the SEC. The Commission is investigating whether or not Musk's brother Kimbal was aware of the impending poll when he sold Tesla shares one day earlier.

The entrepreneur has routinely sparred with the SEC. He was teasing the agency mere days after announcing the 2018 settlement, and declared he could tweet what he wanted. Most recently, he and Tesla accused the SEC of mounting a "harassment campaign" to stifle his criticism of the government. The two contended the SEC couldn't issue subpoenas without requiring court approval.

Musk might not want to count on victory, however. The court rejected the previous demands, arguing they weren't specific enough. This latest effort is more focused, but it also hinges on the court accepting Musk's version of events — and that's far from guaranteed.

HBO is facing a class action lawsuit over allegations that it gave subscribers' viewing history to Facebook without proper permission, Variety has reported. The suit accuses HBO of providing Facebook with customer lists, allowing the social network to match viewing habits with their profiles. 

It further alleges that HBO knows Facebook can combine the data because HBO is a major Facebook advertiser — and Facebook can then use that information to retarget ads to its subscribers. Since HBO never received proper customer consent to do this, it allegedly violated the 1988 Video Privacy Protection Act (VPPA), according to the lawsuit.

HBO, like other sites, discloses to users that it (and partners) use cookies to deliver personalized ads. However, the VPPA requires separate consent from users to share their video viewing history. "A standard privacy policy will not suffice," according to the suit. 

Other streaming providers have been hit with similar claims, and TikTok recently agreed to pay a $92 million settlement for (in part) violating the VPPA. In another case, however, a judge ruled in 2015 that Hulu didn't knowingly share data with Facebook that could establish an individual's viewing history. The law firm involved in the HBO suit previously won a $50 million settlement with Hearst after alleging that it violated Michigan privacy laws by selling subscriber data. 

Rivian is facing a shareholder lawsuit after raising the price of its electric pickup and SUV and subsequently reversing course, Protocol has reported. The action alleges that Rivian failed to disclose that it would hike the base price of its vehicles by around $12,000, nor the potential damages that would cause. An individual shareholder brought the complaint, but is seeking class-action status.

On March 1st, Rivian unveiled the higher pricing that applied to everyone except those who placed the earliest orders, including most reservation holders. The company did give potential buyers another option, as it also introduced dual-motor versions of the R1T and R1S EVs, with both starting at the original $67,500 and $72,500 prices. However, neither of those vehicles will be available until 2024, and both will have smaller "standard" battery packs that deliver less range than the large packs (260 instead of 310 miles).

Two days later, the company reversed the price increases. Anyone who reserved before March 1st will pay the original price, and those who cancelled because of the increase can reinstate their orders with the same price and delivery date. The company's CEO RJ Scaringe also apologized. "I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful," he said. "I am truly sorry and committed to rebuilding your trust."

Rivian gained a massive $10.7 billion in funding with investors including Ford and Amazon, which owns the largest stake (22 percent). The company went public via a regular IPO and not a SPAC merger. It had a "blockbuster debut," according to CNBC, with an initial valuation of $86 billion. Early reviews of the R1T electric pickup, including by Engadget, have been positive. 

Activision Blizzard is dealing with particularly serious fallout from the sexual misconduct allegations surrounding the company. The Washington Post has learned Activision Blizzard is facing a wrongful death lawsuit from the family of Kerri Moynihan, a woman who died by suicide in April 2017 during a company retreat. The family alleges sexual harassment at the game developer played a "significant factor" in her death.

Moynihan's death was referenced in a California Department of Fair Employment and Housing (DFEH) lawsuit over Activision Blizzard's reported "frat boy" culture, albeit without mentioning her name. Male colleagues reportedly shared an explicit photo of Moynihan at the holiday party preceding her death, according to that lawsuit, and referred to a male supervisor who supposedly brought sex toys to the retreat.

The family lawsuit alleges Moynihan's boss, Greg Restituito, lied to Anaheim police and otherwise tried to hide evidence of a sexual relationship with the victim. He made "unusual inquiries" with employees present with Moynihan the night before her demise, according to a police report cited in the suit. Restituito left Activision Blizzard in May 2017, the month after Moynihan's death.

Activision Blizzard was reportedly uncooperative with police at the time. It refused to hand over the company laptops of either Moynihan or Restituito, and also declined access to Restituito's phone.

The family's lawyers shared a copy of the lawsuit with The Post, but otherwise haven't commented on the lawsuit. Anaheim police and Restituito have so far been silent. An Activision Blizzard spokesperson said the company was "deeply saddened" by Moynihan's death and would respond to the complaint through legal channels, but said it had "no further comment" out of respect.

Activision Blizzard has taken numerous actions in response to the misconduct scandal. It removed 37 employees between July 2021 and January 2022, and disciplined another 44. Blizzard leader Mike Ybarra has also vowed to restore trust by reforming company culture. The Moynihan lawsuit underscores the apparent toxicity at Activision Blizzard in previous years, however, and adds to the pressures on the company (and its buyer Microsoft) from the SEC and others to fix its workplace practices.

In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. Crisis Text Line can be reached by texting HOME to 741741 (US), 686868 (Canada), or 85258 (UK). Wikipedia maintains a list of crisis lines for people outside of those countries.

SEC officials do not know the whereabouts of Satish Kumbhani, the founder of crypto trading platform BitConnect, who was charged last week with defrauding investors of $2.4 billion in a Ponzi scheme. This puts the SEC in quite a bind, since they have to serve the 36-year old entrepreneur with his court papers. In a court filing from Monday, the SEC stated that they did not have an address for Kumbhani, an Indian citizen, and suspected that he likely fled to another country. 

The DOJ is charging Kumbhani with a number of offenses, including conspiracy to commit wire fraud, conspiracy to commit commodity price manipulation and conspiracy to commit international money laundering.

“Kumbhani’s location remains unknown, and the Commission remains unable to state when its efforts to locate him will be successful, if at all," wrote the SEC in its filing.

In order to buy some time, the SEC is asking the US District Court for the Southern District of New York for an extension of 90 days. Since BitConnect is an unincorporated entity and not a formal corporation, all court papers have to be served to Kumbhani himself.

First founded in 2016, BitConnect attracted a lot of attention on social media for its “Lending Program” which allowed users to lend their Bitcoin in exchange for a propriety Bitconnect cryptocoin. The program claimed it could guarantee returns by using investors’ money to trade on the volatility of the cryptocurrency markets." 

“Under this program, Kumbhani and his co-conspirators touted BitConnect’s purported proprietary technology, known as the 'BitConnect Trading Bot' and 'Volatility Software', as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets. As alleged in the indictment, however, BitConnect operated as a Ponzi scheme by paying earlier BitConnect investors with money from later investors,” wrote the DOJ’s Office of Public Affairs in a press release.

After years of crypto existing in a legally murky universe, U.S. government officials are cracking down on cryptocurrency fraud and scams at an increasing rate. Last year, the DOJ launched a national cryptocurrency enforcement team to handle complex cryptocurrency investigations, and recently appointed veteran cybersecurity prosecutor Eun Young Choi as its director.

BitConnect is just one of many cryptocurrency schemes that law enforcement has pinned down in recent months. The founders of BitMex, a crypto derivatives exchange, plead guilty to skirting anti-laundering laws in the US and were ordered to pay $20 million in fines. Earlier this month, the DOJ arrested Ilya Lichtenstein and Heather Morgan, two entrepreneurs who allegedly attempted to launder more than 25,000 Bitcoins stolen from the 2016 Bitfinex hack.

The California State Bar is investigating a potential data breach after finding that a public website published confidential information related to approximately 260,000 attorney discipline cases. Over the weekend, the bar said it learned of the exposure after finding the files on a website that aggregates public case records. According to the organization, the website displayed information related to case numbers, file dates, case status as well as respondent and complaining witness names. As of Saturday evening, the bar said all the leaked information had been removed from the website.

State Bar officials don’t know if someone obtained the information by hacking. The organization has tasked the provider of its Odyssey case management system to investigate the incident. It has also notified law enforcement and hired a team of forensic experts to aid with the investigation. “The State Bar deeply apologizes to anyone impacted by this breach,” the organization said. “We are doing everything in our power to get to the bottom of it and prevent any future harms.”

OnlyFans is facing a pair of lawsuits over claims it conspired with Facebook to disable adult entertainer accounts by placing their content on a terrorism database, the BBC has reported. One was launched earlier this week by a rival platform called FanCentro, and the other is a class action lawsuit made on behalf of three adult entertainers. Both Facebook and OnlyFans were named as defendants in the latter complaint. 

The class action suit claims performers' content was placed on the Global Internet Forum to Counter Terrorism (GIFCT) website despite not being terrorist in nature. That reportedly led to a decline in traffic to websites that compete with OnlyFans. Similar claims were made by FanCentro in its lawsuit. Both say that the problem is happening on Instagram more than any other platform. 

OnlyFans told the BBC that the legal claim has "no merit," while Facebook parent Meta said "these allegations are without merit and we will address them in the context of the litigation as needed." A GIFCT spokesperson said: "We are not aware of any evidence to support the theories presented in this lawsuit between two parties with no connection to GIFCT."

OnlyFans is best known for hosting pornography, but it was in the news last summer after saying it would ban "sexually explicit conduct." It said the request was made by "banking partners and payout providers," but it subsequently backtracked after receiving "secured assurances" required to support its adult creators.

However, the move shook the trust of some sex workers and other OnlyFans creators, since a potential ban threatened a key source of their income. Some likely decided to move to rival sites, only to now be allegedly facing a shadow-ban on social media.