Ah.  This is the season when ambitious folks will say whatever they think people want to hear.  I stopped wondering whether I was being lied to by politicians and bureaucrats years ago.  Now I assume that politicians are lying as my default position, this approach vindicated, I think, looking back.  

I’ve come to believe that government is in the business for…well….businesses.  And big businesses will pay big bucks for political favors, those that mandate the purchase of their products or services, or those favors that hamstring or destroy their competitors.  Creating almost impenetrable webs of lies to cover their true purpose is part of the political game, a game usually played in the name of our “well-being” or “safety.”   

How do we know what to believe?  Even harder sometimes is how to know what to look for.  I have mentioned Murray Rothbard’s “cui bono,” (who benefits), as a way to look at historical events, a method that allows one to “back in” to the real reasons that this or that policy is or was promoted.  Take electronic medical records, for instance.  Who benefitted from mandating the purchase of these systems?  If you said, “those producing these systems,” you are well on your way to discovering how government works and/or being accused of being a conspiracist.  

Our new friend, Jim Epstein at Reason Magazine, has given us another investigative tool, one which helps us know when to ask Rothbard’s question.  During his two days of filming a documentary at our facility on free market health care (due out mid-November) he suggested the idea that “industry consolidation” is a smoking gun, one which helps us know that government and its crony gangsters are up to their usual shenanigans.  

A great example would be the rapid disappearance of rural hospitals.  This has occurred simultaneously with record profitability at the big city corporate hospitals.  The big city hospitals are the obvious beneficiaries of this industry consolidation.  The difficulties of the rural hospitals are primarily due to the rules and regulations issued by Uncle Sam with which only the heavy hitting big corporate hospitals can comply.  That this hospital industry consolidation occurs, should represent sufficient evidence that the big hospital beneficiaries were actually instrumental in the implementation of these crushing rules and regulations.

Using this approach, let’s take a look at compounding pharmacies and the renewed desire of the FDA to “regulate” them, using the apparent failure of a New England pharmacy to comply with certain obvious control measures as their excuse.  Never let a crisis go to waste!  

At the Surgery Center of Oklahoma, we used Wydase (brand name of hyaluronidase) until 1999 when the FDA declared their factory “non-compliant.”   You can read about the time line for Wydase here. The patent for Wydase had expired, so there wasn’t enough profit in the production of the drug to deal with the FDA gangsters.  The compounding pharmacies came to the rescue, partly due to the fact that they don’t have to mess with the FDA’s racket.  They have supplied facilities like ours with hyaluronidase for over a decade now without a hitch.  

Hylenex and Vitrase, the new brand name producers of hyaluronidase that came on line in 2004,  charge 8 times what our local compounder charges us.  Every drug the compounders supply cuts in to the business of companies like those making Hylenex and Vitrase.  Thanks to the abuses of the compounding outfit in New England, the FDA sees its opportunity to “regulate” the compounders, a move which they know will shut down the compounders, as they are in no position to take on the FDA stormtroopers.  This is the type of industry consolidation that Jim Epstein told us to look for, particularly one that occurred with a “safety concerns” sort of veil.  

Understand that the FDA doesn’t really want to “regulate” compounding pharmacies.  They want to close them!  This will leave purchasers of these drugs at the mercy of their primary clients, the big pharmaceutical companies that pay homage in various forms to the government and the gang of politicians running things.  Can’t you imagine this sort of conversation with a congressman:  ”Do you think you could have the FDA seize the next plausible opportunity to crush these local yocal compounders?  It would sure help our stock price.”  

Many thanks to Mr. Epstein for this keen but in retrospect, obvious insight.  If you see the stock prices of the major pharmaceutical companies soar, you will know that the compounders are in trouble and that the politicians bought in at the lower price.

G. Keith Smith, M.D.