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Nationalize the Pharmaceutical Industry Now

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This Thursday night, join us live online to celebrate 46 years of muck-racking, truth-telling journalism at the In These Times anniversary celebration, featuring Adam McKay, writer and director of "Don't Look Up." As the coronavirus pandemic ripped through the globe earlier this year, it seemed for a&nbsp;moment that the scale of the calamity and the depth of desperation for a&nbsp;cure might force governments and industry to prioritize our health above&nbsp;profiteering.Many other countries have practices in place that help to keep prices of medicines down.Whatever nationalist bluster and threats came out of Washington or Beijing, scientific collaboration across borders moved forward with great speed and scale. The reported in April, ​Never before, researchers say, have so many experts in so many countries focused simultaneously on a&nbsp;single topic and with such urgency.” The positive results of this ramped up research are beginning to .Even the notoriously corrupt pharmaceutical industry had to pause for a&nbsp;breath. In March, Gilead Sciences had obtained the Food and Drug Administration’s ​orphan” status classification for remdesivir, a&nbsp;drug which has the potential to treat Covid-. Orphan status is usually reserved for medicines intended for rare diseases, and comes with great for pharmaceutical companies. But soon forced Gilead to relinquish its right to the special&nbsp;status.Fast forward a&nbsp;few months, and very little of fairness remains. Despite benefiting from tens of millions of dollars in taxpayer-supported research, and despite an estimated cost of less than $ to produce, Gilead Sciences has priced remdesivir treatment at over $, per person. Regardless of the ​orphan” status classification, run-of-the-mill patent laws will be effective enough in preventing the adequate distribution of cheaper, generic versions of the&nbsp;drug.Gilead has already signed confidential licensing deals with pharmaceutical manufacturers in Egypt, India and Pakistan, which will limit the countries in which generic versions can be distributed, and likely the quantity and timeline in which they will be produced. Companies will set their own prices, but royalties to Gilead will be added once another Covid- treatment or vaccine is approved, or the World Health Organization declares an end to the public health&nbsp;emergency.To make matters many orders of magnitude worse, the Trump administration is answering the shameful record of in the United States with America-First rhetoric, and has bought up almost the entirety of treatment courses that Gilead will produce for the next three months. Vital treatment is not only a&nbsp;means of corporate profiteering for the pharmaceutical companies, but also a&nbsp;tool for global&nbsp;domination.Especially in a&nbsp;pandemic, the logic of market-driven health care leads to price gouging and bidding wars, rather than global cooperation and guaranteed medicine. Though cross-border scientific collaboration is thankfully still ongoing, Big Pharma is primed to make a&nbsp;killing at home and abroad, in the midst of a&nbsp;devastating pandemic.Gilead’s price gouging track record is well-known. Gilead priced Sovaldi, which can cure Hepatitis C, at $, for a&nbsp;-week treatment. ​The drug,” Terry Allen, ​was nearly market-ready in November when Gilead paid $ billion cash to acquire Pharmassett, which had forecast a $, price tag for the -week course. In December , Sovaldi hit the market at well over twice that price.” Meanwhile Gilead’s other main is HIV medications. Truvada, which helps prevent transmission, costs nearly $, a&nbsp;month despite a $ cost of&nbsp;production.What on earth could justify these&nbsp;gaps?When the Institute for Clinical and Economic Review (ICER) released its of pricing for remdesivir, it distinguished between ​cost recovery” (under $ per treatment) and ​cost-effectiveness,” which weighs the cost of a&nbsp;drug against the costs saved to the health care system, ​willingness” (read: ability) of consumers to pay, and a&nbsp; placed on our lives. In this case, ICER determined the ​cost-effective” price or remdesivir could be as high as $.In essence, ​cost-effective” pricing is meant to reward companies relative to the costs society would bear if we didn’t have the benefit of the drugs. What would be the cost of several more days on a&nbsp;hospital ventilator, or X&nbsp;number of years lost in a&nbsp;life? Just as patent laws ostensibly encourage innovation (but in fact ), cost-effective pricing, too, is meant to incentivize the development of&nbsp;pharmaceuticals.Cost-effective” pricing is generally assumed to be a&nbsp; to the otherwise Wild West approach in which drug makers set pricetags without any framework apart from charging the highest amount they can get away with. But, in fact, even ICER’s watchdog status in the industry has quietly shifted to what pharma companies consider the for cost&nbsp;debates.Remdesivir, like many drugs, was the result of a&nbsp;, which took place over the course of among governmental organizations and employees, universities, and scientists across the world. Over of taxpayer funding contributed to its development. The unspoken but understood agreement within the pharmaceutical industry is publicly funded innovation, private ownership of the&nbsp;product.The unfortunate reality is that there is nothing extraordinary about Gilead’s greed. While Big Pharma uses monopoly positions to profit off of skyrocketing drug costs, ​Small Pharma,” including many companies charged with producing cheaper generic drugs, has also created monopoly conditions through acquisitions and patent manipulations. Companies find a&nbsp;drug for which there is little market competition, buy out the firm that produces it, and immediately raise the prices. In this way, smaller companies can mimic monopolistic strategies by cornering markets for particular&nbsp;drugs.Martin Shkreli’s Turing Pharmaceuticals made those strategies infamous a&nbsp;few years ago when it acquired and then jacked up by ,% the price of Daraprim. As pointed out, ​For drugs like Daraprim, for which only about , prescriptions are filled a&nbsp;year, it simply isn’t worth it for other companies to try to come up with generic alternatives. This allows for a&nbsp;price monopoly in which the drug manufacturer can set virtually any price it&nbsp;wants.”These moves have been defended on the basis that super-profits are necessary to fund further research and development. But pharmaceutical companies typically spend, at most, % to % of their revenues on research and development. And those that have most aggressively pursued the acquisition and price-hike model tend to spend much&nbsp;less.&nbsp;Many other countries have practices in place that help to keep prices of medicines down. The United Kingdom’s National Health Service, for instance, negotiates nationwide drug prices. By negotiating on behalf of the entire country, it exerts ​bulk buying power.” American insurance plans and hospitals are obliged to pay whatever prices are set in an unregulated market. Even Medicare is legislatively barred from negotiating drug prices. Instead, we pay whatever the drug companies ask for, and pray that the ​invisible hand” of the market leads to more competitive&nbsp;prices.&nbsp;But competition leads to its opposite in the form of monopolies. Corporations gain in size, or corner a&nbsp;market, precisely so that they don’t have to compete to make the best or most affordable product. Patent laws further entrench monopoly conditions, and hold us hostage to the unlikely good will of Gilead and other&nbsp;companies.In the context of monopoly positions, the ​free market” does not produce price competitions in which multiple firms vying for consumers lower their prices. Instead pharmaceutical companies set whatever price tag they think they can get away with, and as fair under the cover of convoluted economic metrics and ​cost-effectiveness.”Imagine if we applied this framework to the Fire Department. Instead of providing a&nbsp;free, public good to save lives, local fire departments would calculate ​cost-effective” prices for their services based on the average amount of value stored in houses, the belongings, and the price of the lives that would be saved in each house. Such a&nbsp;framework would seem barbaric and absurd. But the lifesaving stakes of drug development and distribution are just as&nbsp;critical.To effectively battle Covid- we’ll need international collaboration on research, education and funding, and to widely and freely distribute treatments and vaccines. The virus knows no borders, and neither can its cure. Now that vaccine trials are beginning to go live — and showing some —we need to prepare for pricing driven by shareholders, competition among companies, and governments stockpiling&nbsp;inventory.There should be a&nbsp;simple solution to the disaster unfolding. Public funding should translate into public use. Asking ​what’s the incentive?” for pharmaceuticals to do the research is the wrong question. Profit as a&nbsp;motive creates obvious conflicts of interest. Instead, we should nationalize the industry and release scientific knowledge to the public domain. Our lives are literally on the&nbsp;line.Win your dream vacationThe In These Times raffle is our most popular fundraiser of the year. This year, the grand prize is a trip to a destination of your choice—airfare and lodging are on us.The live drawing will take place at our virtual annual event on Thursday, September 15, but you don’t need to be in attendance to win. With a grand prize of a $1,000 airfare voucher and a $1,000 Airbnb gift card, you can design your ultimate getaway. 100% of your donation will go towards supporting our independent, progressive journalism.is an activist and socialist in New York, the author of , and a&nbsp;regular contributor to Jacobin Magazine. She tweets at @HadasThier.Have thoughts or reactions to this or any other piece that you'd like to share?More articles by Hadas ThierSimilar articlesJoin our newsletterFearless journalism, emailed straight to you.Subscribe and Save 66%Less than $1.67 an issueWatch live Thursday nightAcademy Award-winning filmmaker Adam McKay, writer and director of “Don’t Look Up,” joins us to celebrate the 46th anniversary of In These Times. Plus: Chris Smalls and the JFK8 Amazon workers.

This Thursday night, join us live online to celebrate 46 years of muck-racking, truth-telling journalism at the In These Times anniversary celebration, featuring Adam McKay, writer and director of "Don't Look Up." As the coronavirus pandemic ripped through the globe earlier this year, it seemed for a&nbsp;moment that the scale of the calamity and the depth of desperation for a&nbsp;cure might force governments and industry to prioritize our health above&nbsp;profiteering.Many other countries have practices in place that help to keep prices of medicines down.Whatever nationalist bluster and...

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Nationalize the Pharmaceutical Industry Now

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