COVID-Profiteering: Big Pharma and Big Profits

Before COVID-19, Big Pharma's reputation was suffering due to public outrage over mounting drug prices. Vaccine and anti-viral research went largely neglected by pharma companies because large-scale, one-shot vaccines for epidemics that generally affect poorer countries weren't profitable. When the COVID-19 pandemic abruptly arrived and became a wealthy country problem, federal funding started pouring in. Presently, polls show that Pharma's reputation has hit a new high.

We've been warned by experts repeatedly that a major pandemic is around the corner. Yet, many argue that Big Pharma and the National Institute of Health (NIH) was unprepared for the current pandemic, having shown "little interest in developing vaccines—or even antibiotic and antiviral medications—until the latest outbreak offered an opportunity to rake in public funding and turn out massive profits with minimal risk." After all, the NIH is the largest public funder of biomedical research in the world, investing more than $32 billion a year in research that "has led to breakthroughs and new treatments, helping people live longer, healthier lives, and building the research foundation that drives discovery."

Without a doubt, the pandemic has led many to question whether profits rather than needs drive the focus of the NIH and Big Pharma's medical research. With the government's heavy subsidizing for drug development and turning a blind eye to price gouging, pharmaceutical companies, their CEOs, and investors "stand to make billions from COVID vaccines, in one of the most spectacular examples yet of COVID profiteering." Indeed, scientists indicate that for years to come, we will need COVID-19 vaccines. It is unclear how much profit Big Pharma will make from COVID-19 vaccines, but Corporate Watch lays out five strategies pharmaceutical world leaders follow to make money.

1. 1. Follow Profit, Not Need. Pharma follows the profit, not the needs of its patients. "High-value" patients—those with the potential for long-term drug use, are the best prospect for drug research and development. Pharma sees them as lifelong patients, especially in the United States, "where prices are highest, and with chronic conditions requiring repeat prescriptions."
   2. Patent Everything. Pharma companies hold patents-guaranteeing their "intellectual property" rights on new medicines, which means, during the life of the patent, which is typically 20 years, no other company can produce their drug without their permission. With no competition to undercut them, patents give pharma companies legal monopolies to set high prices. A 1995 World Trade Organization (WTO) agreement called TRIPS commands governments worldwide to enforce the intellectual property system. During COVID, governments in India, Africa, and NGOs have asked the WTO for a waiver from specific provisions of the TRIP agreement, which would allow them to manufacture their own vaccines at cost price—rather than wait until 2023. While no decision has been made, the idea is opposed by some wealthy countries. 
   3. Price Much, Much Higher Than Costs. Big Pharma argues that high-priced drugs are the only way to cover the research and development cost for new drugs. According to Pharmaceutical Research and Manufacturers of America (PHRMA), the leading lobby group in the U.S., "On average, it takes 10-15 years and costs $2.6 billion to develop one new medicine, including the cost of the many failures." The group argues that without patents, rivals would copy their formulas, and no new drugs would get developed. Drug companies spend roughly 20% of all their sales on R&D, but drug sales "cover costs many times over." Once drugs are on the production line, the actual manufacturing costs are small compared to the usually outrageous prices. A study conducted at USC found that U.S. pharma companies have an average 71% "gross profit" margin on drug sales. 
   4. Minimize Risk. Big Pharma giants argue they have to "bear the risk of developing experimental drugs that never make it to market." But that is not true. In reality, major pharma companies only "invent" a small handful of the drugs they patent and sell. Most of their R&D spending goes on later-stage development trials after drugs have been discovered. The "discovery" primarily happens in university and government labs or smaller research companies, much of it state-funded. The NIH, the main (but not the only) government medical research body, gives $39.2 billion a year to universities, medical schools, and other research organizations. Vaccines for COVID-19 are a perfect example. 
   5. Lobby, Lobby, Lobby. Big Pharma is powerful with friends in high places. In the U.S., over the last 22 years, pharma companies and industry groups have spent $4.45 billion, lobbying politicians. Big Pharma spends more money on lobbying in DC than any other industry—paying two times more than insurance, which is the second-highest spender. And the U.S. has the highest drug prices in the world. According to OpenSecrets, the industry employs over 1,450 lobbyists, 66% of whom are former government employees. Additionally, governments are big pharma customers, paying billions in taxpayer money to purchase their drugs. 

It is important to understand that many prescription drugs are deemed effective based on research studies funded by their own creators. The clinical trials for the experimental COVID-19 vaccines are no different. Bad Pharma author Ben Goldacre believes the ramifications of this practice are widespread and very harmful. Goldacre asserts it is not just about the much-discussed shortcomings of Big Pharma alone—regulators, journal editors, academics, doctors and patient organizations are all implicated in failing to build a transparent, reliable, unbiased and safe knowledge framework for treatment decision making that can be shared by doctors and patients alike.

In the video below, from 2012, Goldacre illustrates five specific drugs where published data fails to reveal the entire picture of efficacy and side effects. As he points out in his book: "When trials throw up results that companies don't like, they are perfectly entitled to hide them from doctors and patients, so we only ever see a distorted picture of any drug's true effects." Emphasizing that "we like to imagine medicine is based on evidence, and the results of fair tests," Goldacre writes:

"In reality, those tests are often profoundly flawed. We like to imagine that doctors are familiar with the research literature when in reality, much of it is hidden from them by drug companies. We like to imagine that doctors are well-educated, when in reality, much of their education is funded by industry. We like to imagine that regulators only let effective drugs onto the market, when in reality, they approve hopeless drugs, with data on side effects casually withheld from doctors and patients.

Medicine is broken. And I genuinely believe that if patients and the public ever fully understand what has been done to them—what doctors, academics and regulators have permitted—they will be angry. On this, only you can be the judge."