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Protectionism and My Stuffy Nose

December 26, 2007

Tags Free MarketsHealthInterventionism

There I stood at the pharmacy counter, with a head cold, sniffing away, and begging for some product that contains pseudoephedrine, which works like a magic nose unclogger. The stuff you can get off the shelf now contains the similar-sounding drug called phenylephrine, but it might as well be a placebo. It just doesn't work, and most everyone knows this.

You can still get the good old stuff from the pharmacist but you will be suspected for this grave action. The government, you see, says that people have been buying the old stuff and turning it into methamphetamine. This is why Congress and the administration passed the Combat Methamphetamine Epidemic Act of 2005, which rations the amount you can buy and requires that you prove your identity and sign a special form.

And, yes, this act is now part of the monstrosity called the Patriot Act. I went over this whole subject last year, but this year, I really began to smell a rat, about which more below.

"Thanks Bush" I muttered as I signed the form under the glare of the pharmacist who has been trained to treat me like a possible criminal.

It's remarkable really. Two years ago, buying Mucinex was no different from buying toothpaste or shampoo. Today, it is a big deal and you get on some government list as possible suspects. And yes, they do arrest people for buying too much, as the stuffy-nosed William Fousee of New York found out earlier this year.

The data that demonstrate a national crisis of meth usage seems pretty darn thin to me, with reports of increased workplace positive tests balanced by reports of decreased usage among the young.

In any case, one has to wonder about a national law that would so dramatically affect the health of millions in order to stop some guy from making meth in his basement. In the name of saving us from ourselves, the government has made it far more difficult for us to stay feeling healthy.

Laws are passed for a reason. If not health, what possible motivation could the government have had for imposing this law? Possibly to create a national database of the stuffy nosed? Not likely.

Let's follow the money a bit. It seems that most all pseudoephedrine is manufactured in China and India, and very cheaply, much more cheaply than it can be made in the United States or Europe. What that means is that these companies don't have lobbyists in Washington who can make an effective case for their product.

Contrast this was phenylephrine, the world's largest manufacturer of which is located in Germany. The company is called Boehringer-Ingelheim, according to MSNBC. It developed the drug in 1949 for use in eyedrops. In the last two years, virtually every manufacturer of cold medicine has changed its formula to include the Boehringer drug. Some continue to make the old formula available but only with special access.

Is it possible that the move against wonderful pseudoephedrine and in favor of useless phenylephrine was really a form of protectionism in disguise? That it was really about rewarding a well-connected company at the expense of companies without connections?

If that sounds cynical, take a look at this. It seems that our friends at Boehringer Ingelheim are rather interested in American politics, with 73% of its donations going to Republican candidates for federal office. You can see here that Boehringer even has a PAC located in Ridgefield, Connecticut. Someone with more time than I have ought to check to see how the people it supported for Congress voted on the act that resulted in a massive shift toward their product, and has nearly kept its competitive product off the market.

Oh and look here. It turns out that this company spent $1.85 million on lobbying in 2005, and this was a huge upsurge over all previous years.

The following year it spent $922,000, and it decline in 2007.

And here is the Boehringer 2006 annual report, which triumphantly announces that "the phenylephrine business continued growing at a high level." (Their 2007 report is not yet online.)

Now, before you call me a crazed conspiracy theorist, consider this amazing coincidence. The main company that stands to benefit from a law—passed in the name of the patriotic war on drugs—that effectively marginalizes in main competition and gives a boost to its inferior product spent millions in lobbying and campaign donations in the very year that the law was passed. There is no record of any substantial spending before the push for the law began, and spending has been declining since the law passed.

So let me go out on a limb here and say what any reasonable person would strongly suspect. The reason you can't get Mucinex and Sudafed that work without jumping through hoops isn't really about stopping basement meth users. It is really about the racket going on in Washington in which the law is used to benefit influential producers in cahoots with the political class at the expense of less influential producers and the American people, who should have the freedom to choose.

Remember: there is a story like this behind just about everything government does. If you comprehend that, you can understand why people like Albert Jay Nock said that the state is always and everywhere the enemy.

 


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