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Columns, Opinions

Bhaskar ’21: Reconciling the pharmaceutical industry in the age of COVID-19

Staff Columnist
Thursday, March 11, 2021

As the COVID-19 vaccine rollout progresses nationally, all eyes are on the industries responsible for creating and churning out the vaccine in such record time. Given the success of Operation Warp Speed, can we possibly praise the companies that took a huge gambit to provide us the vaccine? Or is their positive public relations spike unwarranted in light of the ethical gray zone they perpetually occupy? 

Public opinion has largely trended toward the latter. Big Pharma ranks up there with Big Oil on the list of industries that we love to hate. After all, its public image has long been laced with “crooks” (Sen. Bernie Sanders’s words, not mine) who wine, dine and bribe health care practitioners in exchange for physicians to sign, prescribe and occasionally look the other way when drug trial results fall short of the gold standard. Even despite recent amendments to limit the extent to which pharmaceutical companies may influence health practitioners, the public image of Big Pharma remains fixated on stigmatizing the industry as one that liberally compromises and undermines the tenets of public health due to its profit-hungry tendencies. All in all, many of the attacks on pharma are unfair and fail to recognize the important social benefits these companies provide.

A healthy amount of skepticism about the pharmaceutical industry is warranted — necessary even. In the past 24 years, pharmaceutical corporations have paid almost 400 settlements in instances of health care fraud. Inaccurate and misleading promotions of prescription pain medications have had disastrous results by fueling America’s national opioid crisis. The use of manipulative direct-to-consumer marketing tactics continues to impair the unbiased expertise of care providers by steering them towards certain products. On an individual level, the high prices of prescription medications pose financial barriers to access to medications, sparking public ire toward the industry. However, solely looking at the failures of the industry provides an incomplete image, one that overlooks the tremendous level of civic responsibility pharmaceutical companies handle. We must re-examine our prejudices and recognize Big Pharma for what it is: a wildly imperfect but widely necessary solution to bolster and maintain the current efficacy of health care innovation within America. 

Private drug companies are heavily responsible for funding vaccine research and development. Pre-pandemic data from 2018 reveals that private biotech and pharmaceutical firms invested a whopping $102 billion in pharmaceutical research, almost triple what the National Institutes of Health spent in that same year. These investments manifest in robust networks of labs and resources for funded research opportunities, and support for hundreds of thousands of well-paying jobs, all of which catalyze innovation. In the midst of a global pandemic, such innovation is crucial. Shortening the time taken to develop a viable vaccine has been crucial to saving lives, time and money. Left purely up to federally-funded organizations, the process of creating, producing and delegating a vaccine would likely reflect the underfunded, disparate and overall disorganized nature of federal agencies. 

While some criticize the pharmaceutical industry as being too profit-hungry, the high payoffs associated with vaccine production are precisely what motivate innovation. The process of creating drugs, especially on a molecular level, is one mired in trial and error, and biopharmaceutical companies incur tremendous risks when translating research into practice. Moreover, industries bear immense pressure from the Food and Drug Administration to monitor and minimize side effects and ensure safety throughout the process of testing and administration.

While the individual ingredients of a vaccine may not seem worth the hefty price tag, the costs of bringing a drug or vaccine past trial phases and gaining approval to be placed on the market are incredibly expensive. Costs of vaccine production include the expenses of physically developing a vaccine, observing its efficacy through three to four cycles of clinical trials and performing damage control for the sunk costs of unsuccessful trials. For therapies that target rarer diseases, the price associated with innovation and supporting the minds at work often far exceeds the market demand for it, leading companies to mark up the prices. Though the profit margins are not ideal for the public, they spur industry stakeholders to pursue research and innovation into such treatments. 

Furthermore, the industry itself relies on the minds of highly educated scientists and researchers who enter the field following rigorous higher education curricula and training. With so many financial and logistical barriers in place, one can see how the price hikes of drugs are partially necessary to fund and maintain vaccine and pharmaceutical development — during both viable trials and failures.

While Big Pharma’s capitalistic nature has many flaws, it is also the cornerstone of health care innovation in the U.S. Capitalism and the competition it provides manufacture a desire for industries to develop novel vaccines, drugs, therapies and other solutions to health care’s most pressing needs. This seemingly contradictory blend of altruistic social impact and profit-maximization is, in fact, key to understanding and posing feasible reform of the modern pharmaceutical industry. 

As an industry that impacts human life and well-being above all other economic impacts, recognizing the necessary shortcomings of the pharmaceutical industry is not mutually exclusive from pushing for greater transparency and accountability. Our concern should not lie in the fact that the industry seeks to profit, but rather that it must be checked in specific cases in which they maximize profits under unethical circumstances or transgress upon their responsibilities to public health. In such cases, accountability is necessary, and punitive measures, including financial “caps” on the pricing that the industries can set on drugs such as insulin, may be invoked. Supporting culpability does not require denigrating the entire industry.   

It is understandable, considering the pharmaceutical industry’s track record, to be convinced by socialist rhetoric lobbying for federally-sponsored pharmaceutical programs to curb the influence of large corporations. However, banking expectations upon the success and innovation prowess of a system despite the removal of extrinsic motivational factors is senseless. As it currently stands, federal and state-level public health organizations lack the organization, funding and preparation necessary to marshal, by themselves, a comprehensive response to any public health crisis of pandemic proportions. And until the day arrives in which such a coordinated response is in the cards, pharmaceutical corporations are here to stay as the only entities with the sheer manpower and resources capable of generating effective drugs and vaccines. 

While the pharmaceutical industry has myriad shortcomings, it is simply not practical to single-mindedly criticize pharmaceutical companies. The intrinsically human drive to work for an incentive, to innovate for hopes of material gain, is crucial to the pioneering of medical marvels and the efficiency of our pharmaceutical industry. 

Only by recognizing both the currently unparalleled resources that private pharmaceutical companies bring to medical innovation and the social responsibilities we must hold these companies accountable to can we pursue better policy and adequately integrate and reconcile the responsibilities that these industries hold to society. As the health care industry moves toward greater transparency from Big Pharma, we see a glimmer of hope ahead: A system better-equipped for social impact, with incentives necessary to drive entrepreneurial innovation intact. 

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  1. Puck Farma says:

    The author operates under the premise that a profit motive is necessary for driving innovation, which is patently false and immediately proven so by taking a quick look at the most significant body of innovators in the country: graduate students and post-docs in universities or research institute, most of whom make much less than half of what they would be making if they took their skillset to pharma or biotech.

    Yes, making drugs is expensive, but not nearly as expensive as pharma will have you believe. The “billions of dollars” pricetags that get floated around every now and then is a famous case of hollywood accounting and includes indirect costs such as marketing (which comprises the bulk of a pharmaceutical company’s budget – not innovation, just ads to sell you their shit).

    Finally, the icing on the cake: pharma uses discoveries and technologies developed in universities with taxpayer money, adds the minimal work to turn it into a commercial product, then sells it back to the taxpayer who has no choice but to pay for it again (now with a massively – and artificially – inflated price tag)! It’s a fucking scam that funnels money from the people to executives using scientists as stepping stones.

    We don’t need these middlemen and we certainly don’t need pharma. If a drug is made possible by the people’s collective investment into it, it should be accessible by the people. Everything besides this profoundly anti-ethical.

    • Never True says:

      Okay, so after we ban ‘big pharma’ drugs will be made and distributed by whom? Brown University grad students? Joe Biden keeps saying he’s ordering millions and millions of doses of Covid vaccines. Under your model, all of those doses will be made and distributed…how?

      • True Sometimes says:

        Production and logistics are by far the easiest part of the equation.

        For distribution, we have one of the most robust frameworks in the entire world with literally hundreds of thousands of able-bodied people willing to work for the good of the country – not for profit – in the United States Army Logistics Branch.

        Production would require infrastructure to be built and maintained, which would create a wealth of opportunities for unionized work, breathing new life to urban centers that have been struggling since manufacturing moved to SEA.

        This would all cost money, of course, but these expenses would be recouped very quickly considering that Medicaid/medicare are the government’s largest expenses and that giving all citizens affordable access to life-saving therapeutics would dramatically reduce the burden of healthcare. Not to mention being the more moral choice.

  2. Soon after the new Canadian government promised universal medication (though likely generic brand only) coverage — which would negatively affect the pharmaceutical industry’s plentiful profits — the drug companies reacted with threats of abandoning their Canada-based R&D if the federal government goes ahead with its plan.

    Apparently universal medication coverage is now yet another indefinite no-go, as it has been with past Liberal governments’ promises to initiate one.

    R&D costs are typically cited by the profitable industry to justify its exorbitant prices and resistance to universal medication coverage. But maybe the industry doesn’t put as much of its resources back into research and development (R&D) as it claims or implies. Maybe nowhere near it.

    According to a Huffington Post story (“Pharmaceutical Companies Spent 19 Times More On Self-Promotion Than Basic Research: Report,” updated May 8, 2013), a study conducted by the British Medical Journal (BMJ) found that for every $19 dollars the pharmaceutical industry spent on promoting and marketing new drugs, it put only $1 into its R&D.

    More recently, an Angus Reid study found that about 90 percent of Canadians — including three quarters of Conservative Party supporters specifically — champion universal medication coverage. Another 77 percent believed this should be a high-priority matter for the federal government.

    The same study found that, over the previous year, due to medication unaffordability, almost one-quarter (23%) of respondents decided against filling a prescription or having one renewed. Not only is medication less affordable, but many low-income outpatients who cannot afford to fill their prescriptions end up back in the hospital system thus costing far more for provincial and federal government health ministries than if the medication was covered.

    Considering it is such a serious health affair for so many people, impressed upon me is the industry lobbyists’ potent influence on our top-level elected officials for the sake of profit-margin interests.

  3. A Skeptical Reader says:

    > “Left purely up to federally-funded organizations, the process of creating, producing and delegating a vaccine would likely reflect the underfunded, disparate and overall disorganized nature of federal agencies.”

    Where is the evidence for this claim? Also, if we’re going to blame agencies for being ineffective because they’re underfunded, then wouldn’t a solution be to increase their funding?

    > “Pre-pandemic data from 2018 reveals that private biotech and pharmaceutical firms invested a whopping $102 billion in pharmaceutical research, almost triple what the National Institutes of Health spent in that same year.”

    From this study:
    “NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016.”

    In other words, public funding is critical to the success of pharmaceutical companies. Given this, I don’t see how it makes sense to imply that private R&D spending is somehow more important or impactful than public spending.

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