By William Lazonick, Matt Hopkins, Ken Jacobson, Mustafa Erdem Sakinç and Öner Tulum ◊ Price gouging in the US pharmaceutical drug industry goes back more than three decades. In 1985 US Representative Henry Waxman, chair of the House Subcommittee on Health and the Environment, accused the pharmaceutical industry of “gouging the American public” with “outrageous” price increases, driven by “greed on a massive scale.” Even in the wake of the many Congressional inquiries that have taken place since the 1980s, including one inspired by the extortionate prices that Gilead Sciences has placed on its Hepatitis-C drugs Sovaldi since 2013 and Harvoni since 2014, the US government has not seen fit to regulate drug prices. UK Prescription Price Regulation Scheme data for 1996 through 2010 show that, while drug prices in other advanced nations were close to the UK’s regulated prices, those in the United States were between 74 percent and 181 percent higher.
By William Lazonick and Edward March ♦ In 1999, as the Internet boom was approaching its apex, Lucent Technologies was the world’s largest telecommunications equipment company. With revenues of $38.3 billion, net income of $4.8 billion, and 153,000 employees for the fiscal year ending September 30, 1999, Lucent was larger and more profitable than Nortel, Alcatel, and Ericsson, its three major global competitors. In fiscal 2006, however, Lucent’s revenues were only $8.8 billion and its employment level stood at 29,800. Both figures were lower than those of its three major rivals. On December 1, 2006, the merger that created Alcatel-Lucent took place, making Lucent a wholly owned subsidiary of Alcatel. In this paper, we analyze the rise and demise of Lucent Technologies from the time that it was spun off from AT&T in April 1996 to its 2006 merger with Alcatel.