PhRMA, the Pharmaceutical Research and Manufacturers of America, presents itself as pro-consumer. But when thinking about this trade body, readers should remember the wisdom of Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Despite their free-market rhetoric, Pfizer et al do not operate in a free market. They work in a protected market. In the market for laptop computers, for example, if existing producers enjoy abnormally large profits, new companies come into the market to get their bit of the action. But in the market for pharmaceuticals, patent protection prevents that from happening. In the US, uninsured consumers of drugs are being held to ransom.

In opposing free trade ("parallel trading") in pharmaceuticals, drug companies are effectively putting a gun to the heads of US consumers and saying: your money or your life! Either pay our inflated prices or we won't be able to develop new drugs. If that does not convince, the companies implausibly claim the issue is one of safety. Yet there has been free trade in drugs in Europe for over two decades and safety has not been an issue.

Given that pharma has been the most profitable sector in the US economy for most of the last quarter century, and given that they spend less on R&D than on marketing or on profits to shareholders, their claim that free trade would affect their R&D makes no sense. All they are trying to do is protect their profitability. As one Pfizer vice-president has explained, profit is the sole reason drug companies oppose free trade in drugs.

When you also note that drug companies are heavily reliant on government-funded research for many of their most innovative, most socially-important new drugs, one thing becomes clear: the economic system the research-based drug companies support today is not the free market. It is statism.