Ritchie on AstraZeneca

I noted this headline in the FT’s emails this morning, and without ever actually reading the related article I have to say I fundamentally disagree with it:

First of all, most drug development takes place with substantial government support. In my opinion it does matter very much who gets that support: we need to know that those who are subsidised are accountable for the benefit that they receive. There is a greater chance of that in the case of a UK-based company.

Second, knowing that the benefits of any such activity will stay in the UK matters. Again, this is much more likely if a company is based in this country.

Thirdly, UK companies are more likely to employ UK staff. I know that the relationship will not be perfect, and that very clearly there are some UK companies that have been more than willing to embrace outsourcing, but I think that the correlation is real, and will certainly be of significance to employees. That matters. People drive innovation. Employees needs have to be considered on this issue.

Lastly, I have to say tax matters. US Companies aren’t too good at paying tax in Europe right now. I want to see a return on the UK’s investment in pharmaceutical companies, and don’t believe that will happen with a US controlled company undertaking research here.

So, very definitely, ownership matters. Only the naive or neoliberals who are indifferent to the interests of the state argue otherwise.

Let’s just take all of that as being true for a moment. So, an American company, Pfizer, applying to become a British company after the merger with AstraZeneca, will put all of Pfizer’s business under the greater control of the UK won’t it?

Absolutely every argument Ritchie uses there, assuming we take them to be true, is an argument in favour of the merger, not against.

22 comments on “Ritchie on AstraZeneca

  1. “most drug development takes place with substantial government support”
    What absolute bollocks!

  2. If we were to believe that it is government support that funds drug development (I honestly don’t know but find it difficult to believe unless we count government controlled health services buying commercialised drugs as government support for development) then nothing says that this is done by the UK government in any special way (on the contrary it would likely be the US government)

  3. I’m not aware of any current government-supported drug development. Some preclinical stuff happens through the universities and shroud-waving charidees, those latter occasionally fund the odd speculative phase I trial. Doubtless you could find a couple of potential subsidies (perhaps some regulatory procedure or other not charged for at or above cost).

    But governments actually paying for drug development? Other than via the “all your money are belong to us” factor that governments are the payer for most medicines? Nope. Sure the regulatory agencies can be “supportive” (yes, genuinely can, other times needlessly obstructive) but they generally charge service fees.

  4. Richie clearly can’t differentiate the R from the D. There is no government money going into drug development which is the drain that gobbles up 80 – 90% of your R&D spend in bring a drug to market.

    There is some government support for the R (research) bit provided by the Universities and MRC in the UK

    AZ is only a “British” company in that it’s domiciled in London. Its is a multinational created from British, American and Swedish companies in 1999. It’s run by a Frenchman who responds to a Swedish Chairman.

    If people are concerned that Pfizer might reduce the R&D workforce in AZ this will only be a continuation of the company’s own strategy which has seen thosuands of research scientists made redundant over the last 5 years.

  5. Notwithstanding the fact that governement actually makes it more and more difficult to develop drugs in the 1st place via regulations and such like.

    I agree that I would not want to ingest something that is not tested as safe as possible, but I can very well see people who do not have the choice of waiting years for a new drug.

    All regulations should be optional.

  6. Arthur Dent – “If people are concerned that Pfizer might reduce the R&D workforce in AZ this will only be a continuation of the company’s own strategy which has seen thosuands of research scientists made redundant over the last 5 years.”

    Regulation has killed the industry. It simply takes too long and is too expensive to bring a new drug to market. Add in insane legal costs if something goes wrong – or merely looks like it has (see Fen Fen) – and you see why these companies have to consolidate because they have so few drugs on the books.

    I am not even going to comment on the stupidity that gives a pharmaceutical company a 20 year patent while Mickey F**king Mouse and Cliff “Nothing Wrong With That” Richards appear to get indefinite protection.

    monoi – “I agree that I would not want to ingest something that is not tested as safe as possible, but I can very well see people who do not have the choice of waiting years for a new drug.”

    If you’re politically powerful, ie you’re part of a Gay lobby that regularly threatens and uses violence, you can get drugs without going through the full process. The rest of us don’t even get equal funding.

  7. Americans coming over here with bagfuls of cash = bad.

    Somalis coming over here without bagfuls of cash = good.

    I’m puzzled. Is this not just racism, pure and simple?

    The argument against Pfizer seems to be that they are American, and er, that’s it.

    And does anyone imagine for a second that if Labour were in power this would not be being trumpeted from the rooftops as a Milliband masterstroke by exactly the same crew who are blaming Cameron for not illegally blocking ?

    I live in hope that, as they get ever more confident, with the smell of victory in their nostrils, these leftist fuckwits will reveal themselves to the point where even really stupid people see through them.

  8. Looking at Bloomberg, by regional owner AZN is 46% US owned and only 25% UK owned, By his own logic Ritchie should surely be happy that Pfizer is buying AZN then, as they are likely to move either global or regional HQ to the UK so it can be under more scrutiny?

  9. Interested:

    The US is a multiracial country, so technically it isn’t racism.

    It is naked bigotry, of course, and the self-styled tolerant people who engage in it need to be called out on their hypocrisy.

  10. Where to begin?

    Second, knowing that the benefits of any such activity will stay in the UK matters

    Presumably he’s talking about drug development here, in which case he seems to be worrying about a drug being developed in the UK and then exported. Let’s hope it’s not an AIDS vaccine.

    Thirdly, UK companies are more likely to employ UK staff.

    Hmmm. It is unlikely that Pfizer would replace any of the current British workforce with Americans, except perhaps the few who occupy top management positions. And since when has Ritchie been the champion of executive job protection?! Or maybe he is concerned about those AstraZeneca jobs overseas which are held by Brits, but since when has Ritchie been the champion of expatriate job protection?!

    People drive innovation.

    And it is important for them to be British because….?

  11. “without ever actually reading the related article I have to say I fundamentally disagree with it”

    Sums him up perfectly.

  12. Tim N,

    “Hmmm. It is unlikely that Pfizer would replace any of the current British workforce with Americans, except perhaps the few who occupy top management positions.”

    Exactly. AZ already have lots of international centres. If they can get people better in the US or Germany, presumably they have.

    If they can work out how to do more with less jobs, well, great. That means that you can produce drugs for less, and isn’t that what governments keep bitching to drug companies about, the cost of drugs?

  13. Rob

    Even better summing up from these reponses which sum up his credo – in response to ‘DannyB’

    ‘ Odd how the world seems to agree with me, from the FT on ‘

    ‘Posted subject to Section 5 of the comments policy’

    What a twerp….

  14. “without ever actually reading the related article I have to say I fundamentally disagree with it”

    Says it all, really…

  15. @Ted S “The US is a multiracial country, so technically it isn’t racism.”

    Absolutely Ted – I was levelling the left’s standard accusation at them. Just like not being fond of Muslims is racist, when there are Arab Muslims, Chinese Muslims, Anglo Saxon Muslims, sub Saharan Muslims, Slav Muslims and so on.

  16. As Van Patten has already noted, Ritchie doesn’t seem to know what his objection is or even to what he is objecting. “Thirdly…mumbo jumbo candidly…it is British and we need to keep it…it isn’t really going to move to Britain…don’t talk about where the employees are based, what difference does that make?…read Andrew Dickie (well named) talking about asset stripping the patents…unitary tax, based on TANGIBLE assets and where the employees are situated…only writing this because the JRF is paying me and I need to keep writing shite or the cheques stop coming…stop being crass!

  17. Rob – “Sums him up perfectly.”

    Actually, to be fair to the tosser, he does have a point. I never have to read Ritchie to know I am going to fundamentally disagree with everything he says.

  18. Hey, what’s the betting he’s too tight-fisted to subscribe to the FT, hence he only gets the emails and not the whole articles?

  19. “Ownership matters, a very great deal.”

    Except when it comes to discussing Starbucks when the only thing that seems to matter to Mr R is where the sales take place.

  20. AstraZeneca have outsourced loads of jobs over the last few years, almost the entire R&D IT department are in the process of leaving right now, and they are heading full pelt to move chemistry offshore. The aren’t going to be anywhere as many science jobs as people think to be based in UK by the end of AZ’s restructuring.

  21. Indeed AZ have just closed down its Brixham Ecotoxicology facility, making all the staff redundant. This had been in Brixham for over 50 years and was the towns largest employer. Ironically Pfizer might have kept it open..

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