Thread by @doctorow

A couple days ago, I wrote about how lax antitrust enfforcement caused America's ventilator shortage, because medtech giant Covidien bought out tiny rival Newport to kill a USG contract to produce tons of low-cost ventilators.

pluralistic.net/2020/03/30/med…

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I based that post off this excellent NYT piece, which gets deep on history of the plan to produce the ventilators, and the way that Covidien killed it, and then got acquired by an even bigger company, Medtronic (who were already a horrible shithow).

nytimes.com/2020/03/29/bus…

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But there's even more to the story, as @ddayen writes in @theprospect.

prospect.org/coronavirus/un…

The whole story is even more of a parable about late-stage capitalism than it appears at first blush.

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First of all, this kind of buy-and-kill maneuver is an epidemic in the health industries. This paper identifies 45 instances per year in which pharma companies acquire small competitors to prevent the release of low-cost competitors to their products:

papers.ssrn.com/sol3/papers.cf…

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For example: Roche killed a promising hemophilia cure from small rival Spark Therapeutics, whose one-shot drug would have ended the market for Roche's once-a-month hemophilia drug Hemlibra.

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Then there's Covidien's acquisition by Medtronic, which wasn't an acquisition in the traditional sense, rather, it was a "tax inversion" -- a piece of financial engineering -- that allowed Medtronic to move $1B in offshore money to the US tax free.

houstonchronicle.com/business/econo…

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Covidien had a long history of financial shenanigans, dating back to its years as a division of Tyco International, whose CEO was imprisoned for fraud. Covidien has variously billed itself as a US, Bermudan and Irish company.

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tldr: "Covidien, a longtime corporate tax cheat and serial acquirer of competitors, scooped up a rival and scotched its most promising project, which would have significantly boosted our ability to cope with pandemics."

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"Then it merged with an even bigger rival and lent it the same tax avoidance and corporate consolidation tactics, making the medical supply chain even more fragile."

eof/