Crony Phony Drug War

The Wall Street Journal recently reported that the FedEx Corp. pleaded not guilty in a San Francisco federal court “on 15 charges related to transporting painkillers and other prescription drugs that had been sold illegally.”

The “illegal drugs” do not refer to cocaine or meth but to generic medications people can buy from online pharmacies for far less than brand name ones produced by pharmaceutical corporations (Big Pharma). As part of a crackdown on prescription drug abuse, a number of companies–including competitor UPS–agreed to pay civil fines over claims that they sold or delivered medications they knew were not for legitimate medical use. FedEx refused and the Department of Justice (DOJ) is seeking a massive punitive settlement. Prosecutors claim FedEx earned “at least $820 million, and if the company is found guilty, it faces a potential maximum fine of twice that, or about $1.6 billion.”

People arguably have the right to determine their own medical treatments, including what drugs they use. And one can argue about whether a parcel delivery company should be responsible for what gets delivered. But the criminal case against FedEx raises a separate issue: crony capitalism.

Beyond the legality of drugs

Crony capitalism refers to the political dynamic in which commercial success depends upon the relationship a business has with government. Businesses that support a political faction, perhaps through campaign donations, receive favors such as tax exemptions or laws restricting their competitors.

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