SO LITTLE RESEARCH
In the pharmaceutical world, scandals are often put down to a bad apple in a barrel of otherwise pretty good fruit. And for every negative story that emerges, we are told ‘sure, there are always a few who take advantage, but don’t throw the baby out with the bath water – without big pharma, there would be no medicines’.
But what the Covid-19 pandemic showed clearly is that, while the pharmaceutical world is certainly diverse, the problem is not individual greed. It goes deeper. Once you start to pull at this thread you discover that Pfizer, while certainly at the more unpleasant end of the spectrum, cannot simply be dismissed as a ‘one-off’. Rather, the rules and incentives by which big pharma operates has created a deeply dysfunctional industry.
Perhaps no-one represents this new industry more honestly than the ultimate bad boy of the sector, Martin Shkreli. Shkreli was a hedge fund manager, but started up a pharmaceutical company when, by his own admission, he realised there was not enough money to be made in hedge funds. His strategy for making money was simple: buy up expired drug patents for important medicines, control the supply, and hike the price.
In 2015, Shkreli became infamous when his company acquired a simple-to-make but lifesaving anti-parasitic medicine, used particularly by AIDS patients. He then jacked the price up 5,000%. True to form, when Shkreli was asked at the end of 2015, after being labelled ‘the most hated man in America’, about any regrets he might have, he replied that he should have raised the price higher. In the highly divisive world of US politics, Shkreli managed to unite Hillary Clinton, Bernie Sanders and Donald Trump in their opposition to him.
Of course, big pharma moved to distance itself from Shkreli. He was just another bad apple. Yet, for all their denunciations, Shkreli’s behaviour really was not so abnormal, except in one respect: Shkreli did not hide what he was doing behind a wall of public relations. He told a healthcare summit: “My shareholders expect me to make the most profit. That's the ugly, dirty truth…. this is a capitalist society, capitalist system and capitalist rules. My investors expect me to maximise profits. Not to minimise them or go half or go 70% but to go to 100% of the profit curve.
The pharma industry is renowned for price-gouging, for buying up the intellectual property of other people, for acquiring or shutting down competitors, for playing the financial markets, for making insignificant changes to existing drugs and pretending they’ve made something new and important, and for lobbying for an even more favourable regulatory environment.
Indeed, big pharma has almost forgotten how to make useful medicines. What often surprises people most about the industry is that the big corporations we associate with production of medicines do so little research into the medicines we need. These are not, by and large, companies that develop vital drugs and then make obscene profits off the back of them. Rather, the drug creation is done by others, often bankrolled by the public sector.
Big pharma is not alone. The way in which medicines are made says something much more profound about our economy as a whole. Medicines give us a glimpse of a deeply broken system. Wherever we look, our economy has been hollowed out, with corporations more interested in the diktats of the financial markets than focussing on what they were set up to do. Under the rubric of ‘letting the market decide’ what gets made, we have built an actual system of monopoly capitalism, with inequality so extreme and the power of big business so great, that it threatens to overwhelm what remains of our democratic rights.
Along the way, this model has fuelled, at a global level, extraordinary levels of inequality in medical access, as well as putting unbearable burdens on public health services in the global north.