A few days ago Andrew Witty, GlaxoSmithKline's CEO, gave vent to the industry's consternation over the fact that European countries, in their efforts to control drug costs, have resorted to more "reference pricing." Plainly stated, that means the Europeans are basing the allowable prices within their own countries on what low-priced neighbors such as Greece and Rumania will allow. Along with that, arbitrage drug trading within the continent has also increased, meaning traders will buy drugs for super-low prices in Greece and sell them for a markup in France at prices that are still below what the French would otherwise pay.
Witty is currently serving as president of a trade lobby, the European Federation of Pharmaceutical Industries and Associations. His remarks are best viewed within the context of expressing the industry's resentment at being considered a mature sector that governments will no longer coddle. To the contrary, European nations during this recession are controlling drug prices more aggressively because they expect pharma to shoulder a burden commensurate to the margins it has enjoyed over the past 30 years.
The remarks by Witty provide a companion piece to Joe DiStefano's article that summarized the results of a survey taken by fund manager John Coyne and his team at Brinker Capital Inc. Coyne polled his high net worth clients and found that for a majority of them, their top "concern is that a Democratic administration is going to try to bail out the deficit on the backs" of the wealthy. Worries about a stagnant economy, home foreclosures, lagging job gains and a European financial crisis creating a U.S. recession all stand well behind the one-percenters' tax fears. The prospect that they may have to pay tax rates comparable to what their rich counterparts did from the 1950s through the 1990s has led them to create a fictional bogeyman out of a moderate-conservative president.
The survey results, together with Witty's comments and the rantings of Tea Partiers and their clones all reflect the resentment of established, corporate and individual (largely white) segments that feel themselves threatened, either economically or culturally. They abhor that the U.S. is rapidly becoming a country of predominantly ethnic minorities and they refuse to acknowledge that Obama is conservative in the manner of every president since FDR — he wants to use the government to preserve existing institutions. The mythmakers focus instead on his multi-racial, multi-cultural cosmopolitanism as a rebuke to their sense of specialness and entitlement.