Big Pharma: 8 Reasons We Need to Talk About the Pharmaceutical Industry

by Nick Carpenter

17 December 2014

More and more polls are showing that the overwhelming majority of the population want our NHS, energy companies, Royal Mail and railways to be in public hands. You won’t see the same questions asked about the pharmaceutical industry (also known as ‘Big Pharma’ or simply ‘Pharma’), but I think it’s a conversation that we seriously need to start having.

The pharmaceutical market is the second most profitable in the world. It’s a $1tn industry which produces the medicines many of us take every day and undertakes or funds most of the scientific research into health today. Given that, we might ask: whose interests is it working in?

1. The pharmaceutical industry uses patenting to socialise risk whilst keeping profits private.

Use of intellectual property patenting of drugs has developed the culture of ‘block-buster’ drugs – those that make more than $1bn a year – incentivising the treatment of the largest amount of people for the longest time, rather than finding cures for those conditions that most need addressing.

Industry claims it costs up to $2.6bn to create a drug, and these costs are used to justify outrageously high treatment costs. These values are enormous overestimates of data which is fudged and hidden from scrutiny, but better estimates suggest that the true cost may be a twentieth of the size.

The large claims are generated by including the cost to the research group of all their failed or ‘orphaned’ experiments. In other words, when we pay for the end product, we pay for the risks taken, defeating the point of a ‘risk-taking’ private market.

2. Which isn’t working for us in the rich world.

Big Pharma pulls out of research and development in key areas to focus on ‘copy-cat’ or ‘me-too‘ drugs (ones that attempt to copy an existing drug providing little-to-no new value) which are a more reliable source of income.

As analysts are now admitting, market incentives can’t bring us the antibiotics we need, and indeed The Economist stated that “the [Food and Drug Administration] approved 16 new antibiotics between 1983-7, five between 2003-7, and two since 2008[to 2012].” Furthermore, no new classes of antibiotics have been developed since 1987.

3. The poor are being priced out of essential medicines and some treatments just aren’t being developed.

1bn of the world’s poorest suffer from what are called ‘neglected tropical diseases'(NTDs). Because they are considered unprofitable, almost no Big Pharma research is directed towards these conditions.

Whether it’s the lack of interest in the main infectious diseases of the global south despite enormous investment from the public and NGO sector, or the increasing health disparities between rich and poor countries, Big Pharma has a long history of denying treatment in the name of protecting its intellectual property and profit margins. The most infamous case of which was the denial of AIDS medication to sub-Saharan Africa and the thousands of deaths this caused.

4. The well of research is poisoned, so we can’t trust the evidence base.

Medical research is supposed to rely on impartial and objective evidence from clinical trials. However 90% of medical research is at least partially funded by Pharma. Industry-sponsored trials are more likely to be in the industry’s favour than independent trials, calling into question their impartiality.

Data is often hidden and trials are buried, meaning doctors can’t tell which drugs are safe and which aren’t. Meanwhile the industry spends more on unnecessary marketing than it does on research and development, pushing unnecessary treatments and further inflating the price.

5. And yet Big Pharma is in secular decline.

The rate of patenting new products is declining in the US. Just ten companies own the patents to more than two thirds of new drugs.

The number of companies who own a patent on a new drug is down to its lowest since the 1980s, whilst 20% of companies who own a patent have never been awarded one themselves but only gained it through acquisition and merger. As in so many other areas, we are moving to a situation of corporate oligopoly.


6. Which is just as well, given its criminal activity…

As the medical blogger David Healy puts it, Big Pharma has been “hiding the bodies” and paying the fines. In 2012 GlaxoSmithKline paid a settlement of $3bn for unlawful promotion of pharmaceuticals, ‘fraud’ and ‘failure to provide safety data’. These are euphemisms meaning: “for 15 years GSK knowingly sold drugs that caused heart attacks and suicide.” The fines involved were less than three months’ worth of company profits.

But this is just one example. Such cases are common and considered ‘the cost of business’. In a recent book, Peter Gøtzsche likens Big Pharma to organised crime.

7. …which the regulatory agencies are powerless to prevent.

The ‘revolving door’ between Big Pharma and regulation means that the same people who are writing government policy are also working for the pharmaceutical industry, which may well have had a role to play in the recent NHS privatisation bill.

Pharma has captured the regulators who are meant to control them, making them unable to defend our interests. The regulatory bodies that are meant to protect us receive their funding from the pharmaceutical companies, and compete with each other to deliver approval-on-demand, as fast as possible.

8. Profit has no place in health care.

At the heart of these problems are two core issues: corporate power and intellectual property. Who owns our medicines, and on what grounds? The leaked Big Pharma ‘wish-list’ shows us where its interests lie: against democratic safeguards and the free flow of information, for corporate control and higher profits.

Health is a public good, a human right and a social value. We need to start an open and serious discussion about the future of this industry and how we the public, as primary stakeholders, want our medicines produced and regulated. Our health should not depend on paying rent to a corporate class.

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We’re up against huge power and influence. Our supporters keep us entirely free to access. We don’t have any ad partnerships or sponsored content.

Donate one hour’s wage per month—or whatever you can afford—today.