Pfizer's Bid for AstraZeneca

A huge US pharmaceuticals company, Pfizer, wants to buy a huge UK pharmaceuticals company, AstraZeneca, for £63bn, possibly more. Is there a side to take in the battle? Or is it more revealing to consider what each company represents?

Consider these points:

- Both companies operate in markets heavily protected by patents that keep the prices of proprietary drugs high.

- Both companies have lucrative deals with public sector purchasers of their drugs, financed by taxation.

- Both market many branded drugs whose effect is little different from generic and much cheaper products (eg Pfizer's Anadin is basically a combination of aspirin and caffeine, but at a price that roughly equals a regular aspirin plus a cup of coffee at Starbucks).

- Both operate in a sector that is infamous for producing research on the efficacy of medicines that is biased by deliberately distorted evidence (see the valuable work by Dr Ben Goldacre, in Bad Pharma and elsewhere).

In the UK, opponents of the Pfizer takeover argue that it buys up other companies rather than investing in new pharmaceuticals research itself, and that it cuts back research operations. In Sweden, home of the Astra part of AstraZeneca, there are opponents of the Pfizer bid too. But they need to take account of AstraZeneca's actions before they press their case.

Zeneca is an offshoot of the former British monopolist, Imperial Chemical Industries, and its takeover of Astra in 1999 also led to a shift of corporate power and decision making to the UK from Sweden. Like Pfizer, AstraZeneca has also been involved in many takeovers of other companies to boost its ownership of pharmaceutical products. It has not been immune from the high cost of research, which, for example, led it to close research facilities, most recently in Loughborough in December 2011 with the loss of 1,200 jobs.

For every jobs-related worry on the European side about the deal, there is an equal concern in the US. However, while understandable, to get a more grounded view as to what is happening one needs to see the bigger picture of the economics of imperialism today.

Take tax. Pfizer admits that a key factor in its bid for AstraZeneca is the tax regime in the UK that it can use to boost its corporate profitability. On the bid being accepted, the formal corporate location will probably be changed to the UK, something that has led British Prime Minster Cameron to be favourable, despite other UK opposition. It is probably only this tax deal that stops Pfizer, like many other corporations, from otherwise using the alternative infamous 'Double Irish' or 'Dutch sandwich' tax tricks to achieve the same result by locating elsewhere.

Corporations, and their owners, always want to avoid tax. But the more significant point is that scientific ingenuity is used under capitalism as a means for private appropriation not social gain, something exacerbated by the power of monopolistic corporations. This would be true even if the corporate executives were not, on the whole, a bunch of useless bastards.

Tony Norfield, 10 May 2014

Olympic Imperialism

The London 2012 Olympics (here I am possibly breaching copyright, just using the term) offer the usual sporting rivalry that is mixed with a wide range of national prejudices. Most interesting is how major powers look upon the medals table as a signal of relative strength in the wider world, with all the risk that the ranking upsets their view of who is really in charge.

This is the backdrop to the western media attack on the 16-year old Chinese girl swimmer, Ye Shiwen, who swam 'too fast'. A US coach made a big point of doubting that her speed could have been achieved by normal training methods. The implicit suggestion was that there had been the use of performance-enhancing drugs, despite the fact that the Olympics now enforces strict testing and, in the latest (and previous) tests, she has been declared 'clean'. So then the UK media discussion turned to the possibility that the inscrutable and devious Chinese were using special drugs that had escaped the testing regime. This is an excellent ploy - the fact that you cannot find the drugs used only shows how devious they are! The lack of evidence is evidence. In the event that this ploy does not work, one news programme today on the BBC included a report suggesting that 'genetic manipulation' might have been used to enhance her performance, and this cannot be picked up by the tests on athletes currently used. Some sports commentators have pointed out that it is common for teenagers, like Ye Shiwen, to improve their performance dramatically over a year or two, given good training, but this gets little coverage.

In my view, this is another sign of imperial anxiety: by the US at China's rise, and by the UK because its fortunes in the world economy are tied very closely to US power. After the Beijing Olympics in 2008, the US media promoted the idea that they had won because they had won the most medals. This was true because the US had a tally of 110 medals versus China's 100, except for the awkward fact that China had won 51 gold medals versus 36 for the US. So far in London, China has the same number of medals, but still more golds. With the size of the Chinese economy now rivalling that of the US - depending on how you count the GDP! - it is not such a wonder that a 16-year old girl has become the focus of imperial propaganda.

Tony Norfield, 31 July 2012