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Replies: 33
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Hall of Famer [20540]
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This is a good example of enlightened free-market capitalism
May 13, 2022, 3:49 PM
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The big problem we have now with capitalism is vertically integrated (basically, monopolistic) behavior on the part of behemoth companies that control multiple links in the supply and distribution chain and who leverage little guys right out of the market.
Capitalism is a simple concept. If you're got thirty fishing holes, each with a fisherman, those fishermen should then take those fish to market and the demand for their product will control the price. Competition between those fishermen will keep the price fair for the consumers.
What you don't wanna see is one fisherman owning all thirty fishing holes, and as such setting the price...or blocking access to the market so the other fishermen can't sell their product there.
Which is exactly what has driven the price of a lot of things sky-high. We don't have free market capitalism. A lot of our markets are captive markets.
But a truly free market fixes so very much.
This is a good example. We'll see if Mark Cuban can make this fly. There's an obvious gaping hole in the market here.
https://www.youtube.com/watch?v=qw2nx-I-jAA
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Heisman Winner [119698]
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Give me an example of a behemoth company that controls
May 13, 2022, 3:53 PM
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The entire supply chain….
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Hall of Famer [20540]
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Heisman Winner [119698]
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ONE COMPANY, quozz
May 13, 2022, 4:06 PM
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Name one that controls the entire supply chain…,
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Hall of Famer [20540]
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Re: ONE COMPANY, quozz
May 13, 2022, 4:08 PM
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Stop the derpy dumb MAGA stuff. It doesn't suit you well.
Look at the freaking chart I provided. In South Carolina alone Blue Cross Blue Shield has 92% market share.
That doesn't strike you as a potential problem?
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Heisman Winner [119698]
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There you go, quozz, can’t name a Behemoth
May 13, 2022, 4:19 PM
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That controls the entire supply chain. BCBS is not a Behemoth.
And please show a link where they control 92%.
Your OP is about Giant companies that control the multiple links of supply chains. Insurance companies don’t really qualify for that.
Think BASF, Apple, etc. Now tell me which control the entire supply chains in their industries..
And if you go blah, blah, MAGA, you’re the DERP!
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All-In [34582]
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ULTRA MAGA!! The groomers be mad***
May 13, 2022, 5:37 PM
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All-In [31891]
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Market-share and controlling the supply chain...
May 13, 2022, 4:51 PM
[ in reply to Re: ONE COMPANY, quozz ] |
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are vastly different things.
I'm not following the point you're making about BCBS.
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Hall of Famer [20540]
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Re: Market-share and controlling the supply chain...
May 13, 2022, 5:10 PM
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Because they do. They decide who you buy from and where you buy. They only have "authorized pharmacies"...if you go outside of those, your insurance won't cover it and the price jumps to frightening levels.
Their customers - who almost invariably have insurance provided through their employers, over which they have little control - have no realistic options about where they must obtain their drugs, or any realistic way to shop for a better price.
That's the definition of vertical integration, and a captive market. And yes, I'm aware there's government regulations that make all that possible. But those regulations are made for the benefit of drug and insurance companies, after the lobbyists from those drug and insurance companies have poured their dark money straight into the coffers of the very politicians who make those regulations.
Again, that's not a free market. That's a captive market. And the consumers lose...again, and again, and again.
In providing a realistic alternative to Big Pharma and Big Insurance, at least for the benefit of drug prices, Cuban's going to do a ton to obliterate the leveraged power those powers have in capturing the market.
Oh, and for Bengaline:
https://www.healthcarefinancenews.com/news/three-largest-insurers-dominate-market-share-least-37-states-gao-report-says
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All-TigerNet [13605]
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Re: ONE COMPANY, quozz
May 13, 2022, 4:23 PM
[ in reply to ONE COMPANY, quozz ] |
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I'll bite.
Google?
And I'm certainly no #### Maga person.
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Heisman Winner [119698]
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I would argue they have a superior product
May 13, 2022, 4:27 PM
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That has nothing to do with control of supply chain. What would their supply chain be, btw?
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Hall of Famer [20540]
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Re: I would argue they have a superior product
May 13, 2022, 4:32 PM
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Because they control the costs for their customer. Which means Blue Cross/Blue Shield's buyers effectively control the price of drugs for 92% of (insured) South Carolinians...and if you're not insured, whoo boy are you ever screwed.
Trust me when I tell you BCBS in South Carolina is not a "superior product". They effectively leveraged Anthem right out of certain hospital systems. Some of their practices are outright criminal, probably in every sense of the word. I've heard some stories about some of the profiteering that goes on within GHS, for instance....
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Heisman Winner [119698]
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You are talking about a minute part of an overall massive
May 13, 2022, 4:39 PM
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Market. You could say the same for the Dollar General store in Six Mile. They have no competition.
Again, in your OP you refer to Behemoths controlling supply chains. Then you talk about BCBS in SC.
What is your point?
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Hall of Famer [21935]
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Google does in fact control their supply chain
May 13, 2022, 5:31 PM
[ in reply to I would argue they have a superior product ] |
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Their supply chain is warehouses of spare parts to maintain their portfolio of massive data warehouses that they run to support their search, maps, email, TV, video, Android, phone hardware, laptop, tablet, google classrom, google calendar, google chrome, google photos, google cloud, google commercial products, google home products, google nest, ... I think that's all of it.
If you Googled vertical integration, Google should be #1.
This is why you should be long Google like donkey kong.
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Lot o points [155901]
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Quite the opposite I’d say.
May 13, 2022, 10:57 PM
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Unless someone is on Google Fiber (small minority of google users), they’re likely not going beyond layer 6 on OSI with their users. For a SAAS provider like Google to be supplier independent, they’d need to control up to Layer 1.
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Heisman Winner [119698]
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All-TigerNet [11196]
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And having 90%+ of market share, they have the same cush
May 13, 2022, 6:23 PM
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market in AL. But that doesn’t address your question.
Drug discovery, NCE development, finding new treatment pathways for horrible diseases is the warm fuzzy side of pharma. The business side of pharma is the horrible disease. You could argue that the large pharmas and insurers have too much power in setting prices and are colluding with buying consortiums and PBMs with US consumer paying the ultimate price. How else do you get a company that wants $1100 for one 4 oz tube of tretinoin cream? Brand is Retin A, helps with zits or wrinkles, patent expired years ago. You’re insurance company is happy to pay it and only charge you say $40. That’s effed up, where does that other $1060 come from? Did BCBS really pay that? Did the gubmint subsidize that shid? Or is the percentage scale rebate from that PBMs get from other drugs get parked on this one because it’s a pain in the ax to manufacture topicals? Kinda like trade parking on Wall Street, which is ee-legal. Shady as phugg, for sure, yet to be challenged legally because we’ll paid lobbyists discourage that kind of thing.
For a purer example look at the Novartis, mega Swiss pharma, buyout of Alcon. Novartis wasn’t in the eye business, had no reason to be, but they were taking a beating in the market around 2009/2010. Now Alcon, was a Nestle(also Swiss mega company) subsidiary, that operated autonomously and built itself into the 800lb gorilla of the optical pharma and device industry. Great freaking company, doing good science, getting new and innovative products to market, managed their business well, maintained a healthy competition with Bausch & Lomb in multiple areas ( iron sharpens iron kinda thing). They are/ were what a successful American company should look like.
Well , with stockholders threatening, Novartis needed to find a good company to help their bottom line in the annual report, so they went a search in’. *cue the song in your head, “I been searchin’ …Lo and behold, they find fellow Swiss giant company, Nestle, in possession of a really spiffy looking hat called Alcon. They say to Nestle, that’s a cool hat, I’ll give you 10 dollars for it. Nestle said nope, it is a cool hat, ain’t selling it for that. $15? Nope. How bout $20? Nut uh, they say.
Novartis board is freaking, their stock price is gonna plummet if they don’t do something quick. So they go back to Nestle, their own hat in hand, with the sob story to help a brother out, do it for Swiss pride. Nestle says ahhite, one hundred dolla for the 77% of the hat, Alcon employees and independent investors own the rest of the hat, you’ll have to get it from them. To their surprise, Novartis says OK and starts buying up the Alcon stock with Nestles approval.
Alcon, now is all, wtph? How could you do this to us Nestle? Nestle says sorry, a dollas a dolla. The real question is, as companies traded on the NYSE, how the #### did they get regulators to approve this buyout? To recover that money, SEC knows Novartis is gonna have to lowball the rest of the investors and slice and dice the company if they finally get control. Bottom line, Novartis overpays Nestle, under pays indy investors and employees, slices the company to bits to make their numbers look good and nearly ruins an iconic American company. So how did all this get approved? Novartis paid Alcon board members shid loads of money that you won’t find on any ledger, to say yes despite the protests of the indy investors and employees. Never investigated, never will be, our government regulators just looked the other way. Now why would they do that?
Moral of the story it’s not just monopolies that are bad for the US. Capitalism is great when practiced within the rules, but if you’re a company that doesn’t have to abide by US rules and laws? Oh well. This is now the reason foldable IOLs and ocular meds cost 50 times what they did 10 years ago.
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Hall of Famer [20540]
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Re: And having 90%+ of market share, they have the same cush
May 13, 2022, 8:49 PM
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That's some great stuff...sounds insidery.
Love to hear the scoop on that sometime. But that's sort of a Swiss tradition, actually. You never, ever get between the Swiss and their money. There's a reason the Vatican is still staffed by those Swiss mercenaries in their clown suits, and why those dudes in clown suits were pretty much banned everywhere else. I mean, half the art stolen by the Nazis during WW2 still resides in Swiss safe-deposit boxes.
They've got a reputation for lead-pipe mercenary dealings, always have. Love their chocolate and cheese though. And I've always wanted to stay in the Alps.
I know you wanna, but DO NOT MESS WITH THESE CLOWNS. Seriously.
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All-TigerNet [11196]
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Lived it. Never get between a Swiss dude and his money
May 13, 2022, 10:43 PM
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or an American woman and her Swiss chocolate
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Hall of Famer [21935]
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I'll help quozz here
May 13, 2022, 5:22 PM
[ in reply to Give me an example of a behemoth company that controls ] |
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Frito
Cargill
General Mills
Kellog's
Nestle
Tyson
It's a problem that prohibits true competition in the marketplace due to their ability to control prices. I think I had this conversation with one of the bots on here and oil prices alluding to some game theory nerdy #### I learned back in the day.
These guys also kind of keep me employed though, so...
Admittedly, a lot of these guys have starting going to 3PLs to handle the transportation of goods between the various nodes of their supply chains. But in my experience, and this was kind of my sector for a few years, they still own the inventory. They just took the capital off their balance sheet of having to own and maintain warehouse space and trucking. Tyson and Cargill are still pretty in control.
This has been one of my main points of emphasis with respect to a fundamental flaw in modern US economics. Growth is achieved through M&A due to the cheap cost of capital...and it's at the detriment of the consumer for the benefit of the shareholders.
There's been a massive, massive, massive consolidation of assets amongst the big players in every vertical market to get them to that sweet spot of vertical integration that ultimately gives them the most price control.
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Hall of Famer [21935]
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Forgot my homies in the ATL
May 13, 2022, 5:26 PM
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Coca Cola
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All-TigerNet [10887]
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Ah yes, the free market of pharmacuticals, LOL***
May 13, 2022, 3:59 PM
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Hall of Famer [20540]
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Re: Ah yes, the free market of pharmacuticals, LOL***
May 13, 2022, 4:05 PM
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It isn't free. That's the point.
I know you won't watch the video because you never learn anything about anything, but that was precisely what Cuban identified as the problem. He doesn't have enough drugs on offer yet - which will be the main hurdle to accomplishing what he wants to build - and so many of the pharma companies are afraid to deal with him for fear of alienating their bulk buyers.
Again, that's bullying guild behavior, and suppliers protecting their own profits even if it means the drugs they're making aren't reaching or helping nearly enough people as they would like because they're being hoarded/diverted/blocked further downstream.
Unblock those logjams and you've freed up the market...and the consumers win.
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All-TigerNet [10887]
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That's the point.
May 13, 2022, 4:33 PM
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The market isn't free, and therefore it operates like a monopoly. It's not technically a monopoly, but the regulations, pay-for-play, taxes, licenses, etc make it impossible (or nearly so) for startups to disrupt the incumbents, and so you get what we have, a sh*tshow.
However, this isn't because of natural monopoly, and in fact there is no such thing. All monopolies (or what is essentially a monopoly even though it is a handful of companies) come from authoritarian control of free exchange.
https://mises.org/library/myth-natural-monopoly The Myth of Natural Monopoly | Thomas J. DiLorenzo The theory of natural monopoly is an economic fiction. No such thing as a "natural" monopoly has ever existed. The history of the so-called public utility concept is that the late 19th and early 20th century "utilities" competed vigorously and, like all other industries, they did not like competition.
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All-In [27117]
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Hall of Famer [20540]
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Re: Yeah...going to have to agree with Tom here that
May 13, 2022, 4:10 PM
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True, but Tom wasn't making any sort of point, just "Pharma"...and farting noises ensued.
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All-TigerNet [11196]
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I’m pulling for Cuban in this endeavor.
May 13, 2022, 4:20 PM
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Worked 20+years in pharma, saw the 60 largest pharmaceutical companies in the world become 12, destroying real market competition with it. Consolidation of the generic companies took the worst of it and consumers have paid for all of it.
I’d like to see Cuban’s development and manufacturing model succeed; it would blow a hole in insurers roles, consortium buying, and other non essential players that don’t contribute anything to the process other than raising the end market price.
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Orange Blooded [2693]
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Three companies own 90% of the infant formula market
May 13, 2022, 4:50 PM
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And one of the three had a recall, leaving two companies to supply majority of formula to American families.
What could possibly go wrong?
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CU Medallion [73569]
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This is great BUT
May 13, 2022, 5:10 PM
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he has stated he is doing this for zero profit. So his company is in essence a non-profit company.
True capitalism is allowing him to do this b/c it made him so rich, he can afford to do this for free for the good of the country.
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All-In [30829]
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just because the company doesn't post a profit
May 13, 2022, 6:05 PM
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doesn't mean the people that run it aren't making a ton of money.
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Hall of Famer [20540]
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Re: just because the company doesn't post a profit
May 13, 2022, 8:42 PM
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Yeah, Cuban seems like a really good guy...as billionaires go. He's also no dummy when it comes to money because, well, he's a billionaire and clearly intends to stay that way.
He ain't losing money on this, for sure.
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Hall of Famer [21935]
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You had me at problem and vertically integrated
May 13, 2022, 5:10 PM
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didn't need to read the rest. #### it, I'm in.
In your fisherman example, currently, that sombich owns the boat manufacturer, the trailer to get it there, the marina, the ocean, the processing plant, and the transportation network to get it to us pleebs to eat.
He's also hedged and leveraged to the ##### on futures for fish costs, fuel costs, steel costs, weather predictions, and has stochastics to predict to the #### near hundredth of a percentage point what his demand is going to be (I'm partially at fault for this part).
And his market cap is worth more than all but 2 or 3 countries.
And the people that gave him money, to catch fish, also are giving money to the people growing the turf part of your surf and turf. Wash, rinse, ####### repeat.
and lastly, they got the politicians by the short hairs to do whatever they say.
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Hall of Famer [20540]
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Re: You had me at problem and vertically integrated
May 13, 2022, 5:12 PM
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FINALLY!!!!
I was beginning to think I was crazy. It's like: why is everybody arguing with me here?
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Lot o points [155901]
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This is older news at this point.
May 13, 2022, 10:32 PM
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He’s doing very well with it so far (although drug selection is limited and he’s not the cheapest in every case by a long shot), but as has been mentioned, there’s a level of altruism in the endeavor’s business model that doesn’t make it sustainable in a traditional capitalist model. Now….if he influences other prices downwards at competitors, that’s capitalism at work.
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