With Pharmanomics, Nick Dearden provides a fascinating account of the evolution of Big Pharma into a profit-hungry monster that destructively distorts a major component of the world’s healthcare systems. However, when it comes to the political conclusions he draws, his hopes that the leopard might change its spots and more rationally serve global health needs won’t convince those who take a more radical view of social transformation.
Having said this, the limitations of Dearden’s analysis shouldn’t come as any great surprise. He is, after all, a major figure within the international NGO network and, though he provides a powerful indictment of the pharmaceutical companies, he is better suited to the role of conscience of capitalism than that of the system’s gravedigger.
Profits vs human need
From the opening pages of the book, we see how a general feature of capitalism came to be applied to the provision of medicines. In this vital area of human need, the profit system decides who will live and who will die, ensuring that the research, development, distribution and availability of pharmaceuticals has far more to do with marketing strategies than with curing, containing and preventing diseases and illnesses.
In the first chapter, Dearden considers the pivotal role of the U.S. Sackler family, from the 1950s on, in shaping the pharmaceutical industry that would develop. ‘Arthur Sackler’s real talent was in selling drugs, and he is credited with inventing the modern forms of pharmaceutical marketing in the United States. In particular, he was expert at marketing to doctors directly, understanding the role that doctors played not in the prescription process, but as symbols of trust in society’ (p.2).
Sackler’s approach was based on the notion ‘that virtually everyone should be taking really strong medicines on a regular basis.’ This included promoting the use of Valium by ‘people with no psychiatric symptoms at all’ (p.3).
After Sackler’s death, his successors began marketing OxyContin in 1996 and ‘America’s biggest modern drug scandal began.’ Like Valium, OxyContin was a potentially useful medicine but it ‘was aggressively marketed as a medicine that was not addictive, and that was appropriate for nearly everyone, even with moderate pain. Unfortunately, that was far from the case’ (p.4).
Five years after it went on sale, OxyContin was bringing in over $1 billion in sales, but this came at the cost of an epidemic of addiction and death. As Dearden points out, a ‘drug like this should be prescribed very sparingly [but] profit-seeking businesses like Purdue don’t behave like this. Their imperative is to maximise sales, and shift any costs onto wider society’ (p.5).
Dearden notes that the ‘power that lobbying and unconstrained political donations give the pharmaceutical industry is hard to overstate’ (p.12). He also explains that ‘there is a revolving door between industry and government, through which Big Pharma attracts experienced officials to work for it by offering lucrative salaries’ (p.13). Such mechanisms of influence and control, however, are insufficient to explain ‘the sheer scale of the industry’s power.’ It is necessary to appreciate how Big Pharma has been able to ‘frame its own interests as being at one with those of the political establishment, academia, and the health profession, as well as citizens and patients’ (p.14).
The post-war years saw ‘a new wave of breakthrough drugs’ (p.14) that massively extended ‘the number of pills we took as a matter of routine’ (p.15). In this situation, the pharmaceutical industry grew and consolidated its operations. The division between research and manufacturing broke down and a series of mergers created ‘a handful of major, vertically integrated players’ (p.15).
As the contradiction between the health needs of communities and the profit-making priorities of pharmaceutical companies became ever clearer, various efforts to regulate and control their activities emerged on both sides of the Atlantic. In this context, ‘Big Pharma learned … that it needed to spread its influence deep in society.’ Critically, this involved ‘cementing its arguments that high prices were justified by the costs of research’ (p.22).
Dearden shows how the ‘problems with the industry’s stranglehold on research extend also to the regulatory approval process’ (p.30). The U.S. regulator, the FDA, ‘is increasingly green-lighting expensive drugs despite dangerous or little known side effects and inconclusive evidence that they curb or cure disease’ (p.31).
The second chapter considers how the financialisation process associated with the neoliberal era has intensified the destructive role of Big Pharma. The ruthless and reckless pursuit of profit has become even more entrenched. In this context: ‘Intangible assets, particularly intellectual property, are at the heart of the pharma model’ (p.51).
Today, ‘Big Pharma spends more and more of its resources trying to bolster the value of its intangible assets, rather than engaging in productive activity’ (p.51). The degree to which the research and the manufacturing of medicines are subordinated to this consideration is staggering. We see ‘that only 2-3 per cent of new drugs represent genuine breakthroughs.’ A 2017 study in Germany showed 57% of new medicines offered no therapeutic value at all’ (p.59).
What has emerged in this situation is ‘a crisis of drug discovery, with big companies living off patented medicines, and doing little to replace them when those patents run out’ (p.62). Meanwhile, curable diseases stalk the Global South without any meaningful effort to contain them. ‘In the last fifty years, only two new treatments for tuberculosis have been developed, while fourteen new treatments have been developed for a condition that kills no one, hay fever’ (p.60).
In considering Big Pharma’s role during the global pandemic, the third chapter challenges Boris Johnson’s contention that it ‘was capitalism that ensured that we had a vaccine in less than a year and the answer therefore is not to attack the wealth creators, it is to encourage them’ (p.80). Dearden retorts that ‘greed and capitalism created the pandemic. And they were about to hinder efforts to deal with its effects’ (p.83).
While the probability of a major pandemic had been fully understood for years, Big Pharma had consistently shown ‘a near-complete indifference to coronavirus, or indeed any likely candidate for a global pandemic, because they were considered too unlikely to be profitable’ (p.87). Had a different approach been taken, ‘we could have been in a much better place. The fact that we weren’t goes to the heart of the problems in the industry’ (p.88).
Dearden shows how Big Pharma retained ownership of the vaccines that were developed and profited from them, even though publicly funded research and distribution initiatives were central to the response to the pandemic. ‘By handing the vaccines to a select number of profit-making companies, we were also handing fundamental decisions to them–such as who got to make the vaccines, at what price, and in what order they could be sold’ (pp.94-5).
The vast profits made by pharmaceutical companies during the pandemic flowed in large measure from shameless price gouging. ‘Moderna’s vaccines could be produced for as little as $2.85 a dose, yet they are in fact the most expensive vaccines on the market, averaging between $19 and $24 a dose’ (p.98).
Dearden considers the harmful impacts of Big Pharma’s intellectual property rights being used to block the distribution of vaccines to poor countries at affordable prices. He shows how efforts to overcome this stranglehold were undermined by the folly of attempting ‘to get the Covid vaccine to communities and peoples in the developing world without disrupting the global pharmaceutical market’ (p.109).
During the pandemic, Dearden was involved in the campaign for a ‘People’s Vaccine’ and he deals with this during the fourth chapter. In the context of a global health emergency, this initiative sought to challenge ‘the intellectual property rules that place “property rights” over human rights.’ It confronted ‘a market-based healthcare model that is failing most of the people in the world’ (p.117).
In line with a proposal from India and South Africa, the People’s Vaccine ‘came in strongly behind the demand for a waiver from the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS’ which had ‘extended Western style patent protections across the whole world’ and that ensured that pharmaceutical companies ‘could dictate who could use their creations and what price they should be charged’ (p.118).
As the pandemic raged, ‘vaccine technology was in the hands of just three corporations, all of them committed to turning a substantial profit’ with the result that ‘even by 2022, for every dose of mRNA vaccine delivered to low-income countries, fifty-six were delivered to rich countries’ (pp.120-1). The rate at which the populations were vaccinated was, of course, correspondingly unequal.
As this vast global injustice played out, the big three vaccine producers paid $26 billion to their shareholders in April of 2021, an amount that could have been used to ‘pay to vaccinate at least 1.3 billion people, the equivalent of the population of Africa’ (p.126).
In the fifth chapter, Dearden explores the intellectual property rules that Big Pharma has used to such considerable advantage. He notes that ‘it is fitting that TRIPS was one of the first agreements negotiated by the newly founded World Trade Organization (WTO)’ (p.161).
This body, established in 1995, is ‘a lynchpin of the globalisation project’ (p.161) that solidified the international trade relations which favoured the imperialist centres. ‘If capitalism was to expand into a truly global market … rules would need to be standardised. If that undercut the ability of some countries to develop their own technologies, and in turn their own economies, that was just too bad’ (p.168).
The measures that have paved the way for Big Pharma were ‘born as a brute and profoundly undemocratic expression of concentrated corporate power’ (p.168). ‘If it had not been for the twelve American-based transnational corporations of the Intellectual Property Committee … there would be no agreement on (TRIPS) today’ (p.169). TRIPS was adopted because ‘the United States, working closely with Big Pharma lobbyists … [engaged in the] isolating and bullying of countries, often openly threatening them with economic consequences if they held out’ (p.169).
The stultifying restrictions imposed by TRIPS, however, led to ‘a cat-and-mouse game between Big Pharma … and campaigners and governments of the Global South.’ Pharmaceutical interests pressed for ‘TRIPS plus’ measures that would grant them even greater advantages. Dearden shows that Big Pharma, for all its enormous power and influence, contends with an ongoing opposition that sometimes forces it to retreat.
In the sixth chapter, Dearden extends his examination to the broader global healthcare system. He suggests that the application of the same approaches that have greased the wheels for the pharmaceutical companies have had catastrophic impacts on frontline health services (p.187).
Dearden decries the undue influence of the World Bank in healthcare projects. Its approach has been based on ‘a competitive market in health insurance, the privatisation of public sector healthcare, and only a minimum safety net for the poor.’ The Bank has worked with ‘important big philanthropists, whose intervention in the field would alter global healthcare in profound ways. No one would symbolise this new wave better than Bill Gates’ (p.196).
The World Bank and the Gates Foundation have teamed up to ‘mobilise $1 billion in equity investments and loans to finance the growth of private sector participation in healthcare in sub-Saharan Africa. These ‘investments to date have, in practice, predominantly been in expensive, high-end, urban hospitals offering tertiary care to African countries’ wealthiest citizens and expatriates’ (p.201).
In the last two chapters, Dearden poses alternatives to the dominant role of Big Pharma. He sees the People’s Vaccine movement and its efforts during the pandemic as an outgrowth of struggles that were taken up during the HIV/Aids crisis of the 90s.
There is no doubt that, in both situations, those who opposed the unbridled pursuit of profit and demanded viable responses to healthcare needs succeeded in winning back ground from Big Pharma and that they saved lives in the process. Still, for all his considerable practical knowledge and experience, Dearden’s hopes for a more just and rational global healthcare system contain a striking element of wishful thinking. He clearly believes that the right lobbying approach will convince governments to bring Big Pharma under control.
Dearden argues forcefully that the vast global inequalities he has set out demand ‘the decolonisation of the model’ (p.224). Yet, his suggestion that people in the Global South can pressure their own governments and, by ‘holding their own accountable,’ ensure that they are ‘able to take transformative steps forward’ (p.224), underestimates the class divisions in the South and the ties of elite interests there to the U.S.-led world order.
Role of the state
Dearden correctly points out the role of the state in developing technologies but feels that governments have become ‘embarrassed about their role in the economy’ (p.240). He argues that they ‘should end the pretence that the market is the source of all prosperity and progress and embrace the role they play’ (p.241). This is a very familiar liberal argument that supposes that the power of the state has been neutralised by neoliberalism, when it has actually been refocused and redirected to serve the needs of an agenda of intensified exploitation.
As the book draws to a close, Dearden looks for rays of hope in dismal places. In .U.S legislator Elizabeth Warren’s ‘Accountable Capitalism Act,’ he sees the possibility of ‘amending the legal duties of company directors so that they are obliged to serve a broader interest than the narrow concerns of shareholders’ (p.243). He even places a very inflated confidence in the posturing of Joe Biden on limiting the power of Big Pharma (p.254).
Dearden asserts that ‘seeds of change’ are in evidence and that ‘the state is back’. In support of this, he points to ‘the level of state intervention and planning during the financial crisis or the Covid-19 pandemic’ (p.258). It is certainly true that the years since 2008 have seen points at which the state has intervened with great vigour to stabilise global capitalism, but there is little evidence of any sustained effort to impose greater controls on major corporations or embrace higher levels of social compromise.
The book, perhaps fittingly considering the author’s political outlook, concludes with a final appeal to the state to contain capitalism’s worst instincts. Quoting a co-thinker, Dearden leaves us with the message that the ‘really big question is: Do governments have the courage to really take this where it needs to go? How can we pressure them to make sure they do?’ (p.268).
Pharmanomics is an enormously useful book that should be read by all those who want to understand the mechanisms of irrational greed that undermine and distort the production and distributions of medicines on a global scale. It also shows very clearly the key policy areas in which Big Pharma is being challenged, and where it needs to be confronted far more decisively. When it comes to the political analysis that this will require, however, the liberal NGO perspective that Dearden advances falls seriously short of the mark.