When one thinks of monopolies, some of the first images that come to mind are the board game, or the famous 19^th- and 20^th-century entrepreneurs who have universities and record labels named after them. These staples of American history have maintained complex, yet endearing personas. While they were able to completely control market prices, they also singlehandedly fixed the Panic of 1907. Cornelius Vanderbilt once said, “What do I care about law? Ain’t I got power?” He built a vast amount of wealth through almost complete control of American railroads and shipping. The monopolies were easy for the general public, and the government to spot, because they were so tangible. A person can see, smell, hear, and touch industry/manufacturing. However, today, intellectual properties, patents, and copyrights, have made monopolies more difficult to spot.

The United States spends more than any other first-world country on healthcare. USA Today reported in 2012 that we spent almost $9,000 per person. According to former secretary of labor Robert Reich, in his latest book Saving Capitalism, the government spent over $3 trillion on healthcare in 2014 and 10 percent went directly to the drug industry. 

Martin Shkreli, the hedge fund manager turned pharmaceutical CEO, was made famous a few months back when he hiked the price of Daraprim from $13.50 to $750 per pill. Though his actions represented the less flattering side of capitalism, they did one important thing. “Pharma Bro,” as dubbed by the media, brought widespread social media conversation to the state of modern monopolies in the American economy.

Though Shkreli’s case brought price-gouging to the media spotlight, this is not a new issue. Before 1990 many vaccines were open to the public domain because companies were unable to patent derivatives of nature. However, in the 1990s the US government changed this ruling. In Reich’s book, he writes that in the past 20 years the number of applications for patents on vaccines increased tenfold, and companies like Pfizer have drastically increased profits; in 2013 the multinational drug company based in New York City earned over $4 billion. 

All this paperwork allows companies to hold the rights to create and distribute lifesaving drugs until the patents run out, and then re-patent the same recipe with insignificant changes once the original documents expire. Even though these drugs are cheaper overseas, it is illegal for Americans to shop in foreign markets. Reich writes that in 2012, Congress authorized US Customs to destroy drugs purchased outside of the country. The reason given was to protect citizens from counterfeits, but Reich reveals that from 2002 to 2012, tens of millions of prescriptions were filled over the internet and that there was not a single case of an American being harmed by the drugs they purchased from abroad.

Not only are the American drug companies able to set the prices of our medication, but they have also successfully cut off our ability to seek cheaper vendors, even if they are selling the same product. How are big pharmacies able to do this? According to OpenSecret.org, Big Pharma shelled out well over $30 million in campaign contributions during the last presidential election. Reich writes that in 2013 these companies spent $225 million on lobbyists. They have also successfully paid off generic drug companies through pay for delay agreements. Generic drug companies receive large sums of cash, and in return Big Pharma earns enormous profits from the market.

Pharmaceutical companies are far from the only monopolies in this country. Most billion-dollar institutions see the value of intellectual property rights and dedicate millions of dollars to collecting as much as they can. Even companies we respect as true American tech giants, like Apple and Google, are tied up in the patent treasure hunt. Gizmodo.com and the New York Times have both written about how in 2012 Apple and Samsung spent more money litigating than researching and developing New technology. In 2011 Google spent over $12 billion dollars to acquire over 17,000 patents from Motorola.

Part of the problem is our patent system and the revolving door between Washington, DC and the private sector. We live in a country where government officials are rewarded with high-paying jobs from corporations which they have helped with legislation. For example, Meredith Atwell Baker was able to jump from the Federal Communications Commission to a senior vice president of government affairs for NBC Universal, after helping push Comcast’s bid to buy NBC in 2011. 

By allowing companies to eliminate competition, Americans are rewarded with higher-priced mediocrity. That is why we pay more than any other advanced country for internet and cable services, yet have slower speeds; PBS reports that a New Yorker will pay double the cost of internet compared to someone in London, Paris, Hong Kong, Tokyo, or Seoul, and move eight times slower. Many households in the United States have almost no choices for cable and internet providers; and even if they choose to go satellite or cellular, they still do not have many choices. This is because the same capitalism that nurtures competition in other countries is being manipulated by monopolies in our own. 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jeffrey Goldfarb and are not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.