[Plura-list] Unions are finally fighting two-tier contracts; McKinsey taught Big Pharma how to price-gouge

Cory Doctorow doctorow at craphound.com
Thu Nov 25 13:30:40 EST 2021

Read today's issue online at: https://pluralistic.net/2021/11/25/strikesgiving/


Are you going to San Diego Comic-Con? Me too!

* I'll be signing at the Mysterious Galaxy Booth (#1325) on Sunday from 12-12:45PM

* And I'll be on a panel, The Kids Are (Kinda) All Right, on Sunday from 1:30-230PM



Today's links

* Unions are finally fighting two-tier contracts: How the actual fuck did they fail to see through this bullshit decades ago?

* McKinsey taught Big Pharma how to price-gouge: Leaked slides document the lies, sleaze and profiteering.

* This day in history: 2016, 2020

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading


🕴🏻 Unions are finally fighting two-tier contracts

Now that Striketober has given way to Strikesgiving, let's pause for a moment and be grateful that labor made 2021 the year that unions wised up to the self-immolating scam that is the two-tier contract.

As Alexandra Bradbury writes for Labor Notes, this year's most prominent labor actions fought against two-tier contracts, from the Teamsters to John Deere to Kaiser to Kellogg's to UPS.


What's a two-tier contract? Just what it sounds like: management offers the union concessions on its key demands, but only for current workers. Future workers get a worse deal.

Management's theory is that workers may have solidarity with one another, but not with workers who haven't even been hired yet, and that a two-tier contract will lead to an ever-expanding cohort of workers who pay full union dues but don't get full union benefits. Thus, over the span of years, the union will get weaker and weaker, and eventually it will be too weak to stand up for any of its workers - even the top-tier workers, who will see all those gains clawed back in future negotiations.

The leaders who backed two-tier are retiring or being forced out, as with this month's historic leadership vote in the Teamsters, which saw a decisive win for reformers who made killing two-tier the centerpiece of their campaign:


As Bradbury writes, two-tier and even three-tier systems are in place at the Big Three automakers, the USPS, and universities, where they are responsible for the mass immiseration of adjuncts.

Giving in to two-tier made unions weak, poisoning the rank and file and making strikes all but impossible. But as Eugene Braswell, a Teamsters United activist, notes, fighting against two-tier is a way to bring young workers into union activism, ready to go to the wall for workers' rights.

"I thought it would be hard to get young workers] involved [in the Teamsters United campaign]. But I found when we were talking about the contract and trying to vote these people out, a lot of them said, 'My ballot is already in.'"

While we're being thankful for the union movement's Great Awakening, here's some other things Americans can be thankful for, courtesy of The Intercept's Jon Schwarz:


* We are treated better than the animals that Americans will consume by the millions this year

* Libraries are still a thing

* Antibiotics still work

* We're still having and talking about sex, despite generations of American puritanism

* Your face is covered in minuscule translucent mites that you inherit from the people you have close contact with, meaning your face is covered in your grandparents' symbiotes

* Dean Baker is still tearing it up with lucid explanations of economic injustice:


* Solar power keeps on growing and it's cheaper than ever

* "Economic Possibilities for Our Grandchildren," Keynes's stirring 1930 article describing a future of short work weeks and material abundance

* We only have to eat cranberries ("dreadful bog fruit") once per year

And while I'm on the subject of Strikesgiving, here's your reminder that the Wirecutter Union is striking this weekend and asking us not to cross their (virtual) picket-line. Don't click through on any links at the Wirecutter, because their parent company, the *New York Times*, is refusing to give Wirecutter workers a dignified wage, denigrating their labor as "not *New York Times* writing."


Fuck that bullshit. Pay the writers, New York Times. Shame on you.


🕴🏻 McKinsey taught Big Pharma how to price-gouge

Americans pay 300% more for their medicine than people in other wealthy countries, thanks to the dirty tricks, lies and profiteering of the pharma industry. As part of its investigation into this, the House Oversight Committee is looking into the role that archvillain "consultants" McKinsey and Co. play in pharma's lethal price-gouging.

It makes sense that Congress would want to investigate McKinsey; they are at the heart of so much sleaze.

They built Trump's gulags for ICE, then lied about it, then used dirty SEO to bury Propublica's coverage of their role:


They profiteered off fake reforms at Riker's Island, exacerbating the jail's violence crisis to the point of lethality:


The organization is incapable of remorse or even self-reflection. Its own internal mythology compares its consultants to "the Marine Corps, the Roman Catholic Church, and the Jesuits."


This mixture of unrepentant self-mythologizing and rapacious greed makes the company especially dangerous in health contexts. McKinsey played a starring role in nearly every American covid fuck-up, and profited handsomely from their fatal bungling:


But when it comes to pharma, things get especially bad. McKinsey once advised the opiod-pushers of Purdue Pharma that they could goose their sales by paying bonuses to pharma distributors based on the number of fatal overdoses in their sales territories:


So it makes sense that if Congress wants to know how the inability to afford medicine is turning into a leading cause of American deaths, they would start by investigating McKinsey. But even so, what they found was shocking.


The advice that McKinsey gave to pharma giant Abbvie isn't just a playbook for gaming the system to impoverish the sick and enrich the shareholders, it's also a manual for a disinformation campaign meant to distort the public discourse over pharma prices.

On Techdirt, Mike Masnick breaks down the McKinsey slide-decks that Congress extracted froom Abvie:


The sleaze begins about a decade ago, when analysts started warning that pharma's profits were in danger because the companies were no longer making any real breakthroughs. That's when McKinsey developed a plan to abuse the patent system to extend the patents on old drugs and keep generics out of the market, and then raise prices on these old drugs to extract higher profits.

A great case-study here is Humira, used to treat autoimmune diseases (arthritis, Crohn's, etc). With McKinsey's help, Abbot (Abbvie's predecessor) took Humira through a "formulation change" - a meaningless change in the molecular structure - that allowed the company to re-patent the drug as a new invention. The company then produced a stockpile of new "reformulations" that it could execute in series, extending the patent forever. As part of this program, they offered free Iphones to research staff who came up with new ideas for formulation changes, without regard to whether these changes conferred any advantage upon patients.

The problem with this plan (from Abbvie's perspective, anyway) is that a reformulation doesn't stop the old drug's patent from expiring, opening the market for cheap generics. To head this threat off, McKinsey developed a disinformation campaign to discourage doctors from prescribing generics and to convince patients to refuse such prescriptions. The McKinsey campaign included outright lies - false statements claiming that the old formulations were unsafe. Alongside those lies, McKinsey developed messaging to convince patients and docs that the old drugs were "a step backwards."

As a complement to this messaging, McKinsey helped Abbvie spread lies about its need for the extreme profits it generated from new formulations. These are part of an industry-wide practice of inflating R&D costs - for example, pharma companies routinely put the average price of new drug development at $1.2 billion, while the true figure is more like $35m.


The imaginary billions supposedly spent on R&D are key to price-gouging, and again, Humira is a great example. Humira costs $84k/year, and even with insurance, a patient's out-of-pocket is likely $60k/year. This represents almost pure profit to Abvie, a fact they cover up by following the disinfo playbook that McKinsey developed for them.

It's a great scam. According to the Institute for Clinical and Economic Review, Abvie's dirty tricks transfer an extra $1.4b/year from Americans' bank accounts to Abvie's shareholders:


As Tahir Amin writes in a must-read thread, this is the true innovative genius of Big Pharma and the enablers who serve it, like McKinsey. They're not figuring out how to make more effective medicine; they're figuring out how to tell more effective lies:



🕴🏻 This day in history

#5yrsago The only person to go to prison for a string of corporate pollution scandals was a crusading scientist who exposed them https://theintercept.com/2016/11/25/did-the-epa-prosecute-and-jail-a-mississippi-lab-owner-because-of-her-activism/

#5yrsago The neoliberal politicians who impeached Brazil’s president and took over are imploding in spectacular corruption scandals https://www.bbc.com/news/world-latin-america-38108265

#5yrsago If blue-collar workers want better jobs, they need unions, not Trump https://www.thenation.com/article/archive/workers-dont-need-trump-to-give-them-a-voice-they-need-unions/

#5yrsago Giving companies more money (loans, tax-breaks) only increases investor payouts, not expansion https://thenewinquiry.com/disgorge-the-cash/

#5yrsago Wells Fargo says that its customers gave up right to sue by having their signatures forged https://www.reuters.com/article/us-wellsfargo-accounts-lawsuit-idUSKBN13J1WX

#1yrago Random Penguin to buy Simon & Schuster https://pluralistic.net/2020/11/25/the-peoples-amazon/#merger-to-monopoly

#1yrago Office 365 spies on employees for bosses https://pluralistic.net/2020/11/25/the-peoples-amazon/#clippys-revenge


🕴🏻 Colophon

Today's top sources: Late Stage Capitalism (https://www.reddit.com/r/LateStageCapitalism/), Naked Capitalism (https://www.nakedcapitalism.com/).

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* A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown."  FINAL EDITS

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Currently reading: Analogia by George Dyson.

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