Capitalism Big Pharma and the Pandemic
Blocking the TRIPS waiver
In October 2020 India and South Africa submitted a proposal to the TRIPS Council of the World Trade organisation for a waiver of certain intellectual property rights for covid-19 vaccines. The Council for Trade Related Aspects of Intellectual Property Rights, to give the TRIPS its full name, polices and upholds corporate intellectual property (IP) rights across the world, including the intensely lucrative IP of the global pharmaceutical industry. The intent of the proposed waiver is to increase the scale of production of covid vaccines to cover the populations of the Global South and combat the emerging “Vaccine apartheid” repeatedly denounced by World Health Organization Director-General Tedros Adhanom Ghebreyesus.
Despite the support of over 60 countries and all of the major global humanitarian NGOs, the waiver is still being strongly resisted by the EU, UK. Switzerland and Norway and a few other countries. The USA under Trump had been a blocker, but under the new President Biden their official position has shifted to a “compromise” counter-proposal which critics say is window dressing and wouldn’t deliver the practical release of restraints needed. But why are these particular countries lining up to block the proposed waiver?
A quick check of the list of largest pharmaceutical companies in the world shows that of the top four, two are Swiss (#2 Roche, #4 Novartis) and the other two are American (#1 Johnson & Johnson, #3 Pfizer). In the top 20, those two are joined by Denmark (#8 Novo Nordisk), UK & Sweden (#12 AstraZeneca, #14 GlaxoSmithKlein - UK only), France (#13 Sanofi), Japan - another blocker - (#18 Daiichi Sankyo) and Germany (#20 Bayer). The other ranks of the top 20 are all US companies.
Clearly there is a direct correlation between the blocking position of the national representatives on the TRIPS Council and being home to one or more world-leading pharmaceutical companies. The continuing obstruction to vaccinating the whole of humanity, not just those lucky enough to live in a rich country is being led by “Big Pharma”. Without vaccinating everybody, the risk that the poor, unvaccinated parts of humanity will act as a reservoir for the SARS-CoV-2 virus until it can mutate to overwhelm our existing vaccines. The existential threat this poses to all of us, cannot be exaggerated.
Since the first draft of this article was written, the emergence of the highly virulent omicron variant has turned that risk into a reality and yet the response of the high-income countries is to double-down on buying the limited stock of vaccines available due to the ongoing TRIPS restrictions and ear-mark them for third or even fourth rounds of booster shots for their own populations, while leaving the majority of Global South humanity unvaccinated.
So, how did we get here? Who or what is Big Phama? And how have we gone from the technological triumph of producing, from scratch, a number of remarkably effective vaccines, in record short time, to ending up throttling production and creating Director-General Tedros’s “Vaccine apartheid?”
Potted history of the pharmaceutical industry
People forget how much more recent the invention of modern medical science and pharmacy is compared to the rest of the technological innovations we associate with modern industrial capitalism. The innovations of the late 18th and early 19th century created the industrial revolution. But even in the age of trains, telegraphs and steamships, medicine was stuck in the age of “miasma theory”, bleeding with leeches and surgeons coming straight from cutting up corpses to delivering babies without washing their hands. Infant mortality in the UK, the 19th centuries leading technological power, remained at near-medieval rates until well into the 1900s.
The big breakthrough in modern medicine came as late as the 1890s when the idea that most infectious diseases were caused by microscopic pathogens, invisible to the naked eye, called “germ theory” finally won over the dominant “miasma theory” of “bad airs” that had held sway over the medical profession for centuries. The work of Louis Pasteur, Joseph Lister and others contributed to overturning the deadening dogma of miasma theory. But the final move from theory to practice came with the first medicine specifically targeting a pathogen inside a human body without killing the patient, a cure for syphilis called salvarsan. Syphilis or the “Great pox”, was incurable and eventually fatal at the time, so for germ theory to deliver a working cure was a pivotal landmark in the establishment of evidence-based medicine.
The technological innovations in microscopy with electric lighting, use of industrial dyes to stain microbial slides, etc, were products of the general technological development of the time. The role of the new industrial dye manufacturing techniques was crucial, not only in allowing researchers to see the microbes under the microscope for the first time, but also in developing the first antimicrobial medicines. Researchers noticed that if they added too much dye to their slides, the microbial pathogens they were trying to look at were killed, leaving the other human cells unharmed. Many of the firms created to make the new industrial dyes for the textile industry quickly diversified into producing the new antibacterial medicines. Today many of the global top ten Big Pharma corps, names like Ciba-Geigy, Sandoz (now merged as Novartis), Bayer, Hoechst, BASF (for a time merged as the IG Farben of Nazi infamy) were originally formed to make the new synthetic aniline dyes for the textile industry.
These chemical industry pioneers brought their patent battles into the centre of the burgeoning pharmaceutical industry. Although we associate pharma and patents or intellectual property, as joined at the hip today - as TRIPS demonstrates - it was not always so. Other important strands of the development of a scientific approach to medicine were also taking place during the 19th century around painkillers (opiates) and other useful and life-saving medicines not specifically based on the research that led to germ theory. As well as morphine and quinine (important anti-malarial), Edward Jenner’s original smallpox vaccine dated back to 1796. The physicians involved in this work saw themselves as the enemies of the flowering patent medicine industry who they dismissed, not without reason, as charlatans and quacks. Up until the 1900s the ethos that the mark of true medical science was that it worked to benefit human health without the profit-gouging of patent peddlers dominated the scientific community. But the industrialists were to win the day in the early 1900s, giving us the situation today where national governments back the giant pharmaceutical firms registered in their jurisdiction as a strategic matter of national security.
Profits before People
Today Big Pharma is just one part of the global chemical industry. However, it is the elite end and this is for a number of reasons. Firstly, the profits made in the pharmaceuticals are about double those that are made in other comparable sectors of the manufacturing economy.1 Secondly, the products made by pharmaceutical corporations are often complicated molecules that must be produced to a high level of purity and safety. The active ingredients are usually made in a step-by-step manner from simpler more widely available smaller molecules. This means that a manufacturing process for a pharmaceutical active agent can involve anywhere between two and twenty individual chemical reactions, from start to finish. Each chemical step in itself will use significant amounts of solvent (including water); it will require testing regimes and quality checks throughout, as well as final purification and tableting.
The building blocks used by big pharma to make its high-end products are often supplied by other (non-pharmaceutical) chemical producers who focus on making and selling fine and specialty chemicals. It is important to note also that some of the essential building blocks that form part of many of today’s key medicines are themselves recovered as by-products from ‘dirty’ industries like oil refining and mining. In fact, the oil industry has always been the big stockpot for the chemical and pharmaceutical industries. Big pharma’s interconnectedness to the broader chemical industry is important to emphasise in order to draw attention to the industry’s wider responsibilities which it often attempts to avoid and deny. One area where we can see this in operation today is with working conditions. In some countries, big pharma is regarded as a well-paying, well-regulated industry (for example here in Ireland). Of course, big pharma likes to promote this image too. In media coverage of vaccine development and production around the Covid-19 pandemic we have often been presented with images of manicured and lawn-surrounded pharma plants. If frontline workers feature, then it is usually the clean end of the business that is highlighted with workers presented in pristine white coats, wearing gloves and using face visors or safety specs. Rarely, if ever, do we see the poor and unsafe conditions of work that are endured by thousands of those working in the wider chemical industry who in reality feed big pharma with the essential ingredients it could not function without.
Safe working conditions have always been a central issue in chemical and pharmaceutical manufacturing. Over generations, workers have had to fight long and hard, in almost all sectors – mining, refining, bulk chemical production, fine chemical manufacturing – for proper safe conditions of work. Progress was hard-won and even now requires constant vigilance by workers and their union organisation. Generally, the situation remains highly uneven with better conditions being found in the old traditional heartlands of chemical manufacturing like the UK, Germany and Italy. But the relatively recent advent of a globalised ‘out-sourced’ economy has led to a sharp deterioration in standards. At one time, say in the UK, many of the suppliers to the big pharma companies were other chemical manufacturers located in different parts of England, Scotland and Wales; with perhaps some materials being imported from nearby countries like Germany and Italy. In general UK workers were well protected by health and safety legislation won over decades through workplace mobilisations. Nowadays, the situation is quite different. Solvent suppliers and fine chemical manufacturers are often located in countries like Brazil, India or China where working conditions and safety have a much lower priority. What this change – the internationalisation of production – means is that big pharma can now command even better (cheaper) prices for the essential ingredients that they use for their high-end medicines. In other words, profits have boomed even further with the advent of the new global manufacturing model.
A case in point is India, now the sixth largest producer of chemicals worldwide. When the Bhopal disaster happened in 1984, attention briefly turned to the appalling work conditions in India’s chemical industry. A series of key safety devices failed at Union Carbide’s Bhopal site, allowing the release of tonnes of poisonous methyl isocyanate. The toxic chemical migrated in the dead of night into nearby crowded urban dwellings, killing in excess of 4,000 people and injuring over a hundred thousand more.2 At the time of accident, the Bhopal plant was owned and run by the US chemical giant Union Carbide (later absorbed by Dow). Union Carbide ran an identical plant to its Bhopal plant in Dansbury, West Virginia (in the States) that rarely gave trouble. However, its same plant in India was beset with leaks, poisonous gas escapes and workplace deaths in the lead-up to the huge tragedy in 1984. The reality was that at the Indian production site, safety had a very low priority. Workers at the facility often had to tolerate the situation or be fired.
The situation generally has not changed a great deal since 1984 – except for perhaps in one significant way. Unlike in 1984 India’s is today a key part of international chemical and pharmaceutical production. Today there is more legislative control of the chemical industry – an outcome that was to some extent a response to the Bhopal tragedy - but in reality this raft of laws has not made a huge difference. For example, between 2017 and 2020, for the three consecutive years, India recorded four major chemical accidents every month. Gopal Krishna of the non-profit organisation ToxicsWatch3 points out also that this figure is probably a significant underestimate of the problem as most smaller accidents or events in smaller chemical companies go unregistered by the authorities. These shocking figures reflect a reality that big pharma now reaps precious profits from.
Big pharma and the chemical industry is mired in a mentality of putting profits before people, and it has been like this from the outset. The subtle and not-so-subtle scale of this can also be seen in Ireland’s own relatively recent relationship with the sector. Investment in Ireland by US chemical companies properly began in the seventies growing from $22 million in the early part of the decade to $1,121 million by 1981.4 By 2002, Ireland’s Industrial Development Authority estimated that US chemical companies had invested close to $12 billion in Ireland. Why did such a degree of inward investment into Ireland take place when it did? A clue to the answer lies with the name of another country that also experienced a similar rush of investment during the same period – Mexico. Many of the big name pharma companies began life in the United States, many in the state of New Jersey itself. As manufacturing entities grew bigger (to meet the demand for chemicals and medicines), the amount of waste that the industry generated mushroomed. The approach of the chemical industry was to dump it wherever they could or alternatively pay someone to take it off their hands; the old adage ‘out of sight, out of mind’ applying. The alternative, taking responsibility for the waste they were producing was never a serious consideration. River courses were treated with similar disdain using the primitive concept that eventually ‘the waste that is dumped in the water will be diluted down to a point where it no longer presents any danger to anyone’.
Decades of malpractice by the industry literally bubbled up from underground in the fifties and sixties. Local activism was also key to a growing awareness and resistance to what the chemical industry was doing and getting away with. The scale of the problem was huge and one particular case, at Love Canal in New York, drew widespread outrage.5 As a result, in the seventies, the Clean Air Act (1970) and the Federal Water Pollution Control Act (1972), also known as the Clean Water Act, were passed into law, setting out strict rules in the US on what could be released into the air and water systems by chemical and pharmaceutical plants. Today, laws such as the above seem like basic regulations to have in place, but before 1970 these simply didn’t exist in the States.
In essence the new legislation amounted to a ‘new’ cost on production for the chemical and pharma sectors. Now instead of dumping or discarding their waste, they had to invest in finding ways to treat and dispose of the waste they were producing. A further complication was the hostile public mood towards the chemical and pharma sector. The scale of the toxic waste dumping in the States was such that for a period it was difficult to consider expansion let alone build a new plant. A further albatross around the industry’s neck was the constant bad press arising from litigation taken by communities and people affected by toxic contamination. And, of course, as one community found its voice, others followed.
The seventies and eighties in Ireland was the era then when name corporations like Pfizer, Merck, Schering Plough, Penn Chemical (a subsidiary of Smith Kline Beecham) and Eli Lilly (now Lilly) arrived. Schering Plough (now part of Merck) is an interesting case in point. Much lauded in Ireland (where it had plants in Cork and Dublin) Schering Plough manufactured several high-profile drugs (Claritin and Temodar) as well as owning the popular foot care line Dr Scholl. However, in New Jersey where it was headquartered, one of its plants (close to the town of Union) was the subject of a major toxic waste clean-up. At the turn of the millennium, Schering Plough admitted that waste it had been storing at the site, going back decades, had leaked into the local water table and nearby Elizabeth River. Schering Plough eventually admitted mis-management of the problem. The clean up is ongoing today.6
For many of the big pharma companies, moving to Ireland (and Mexico) was a no-brainer. In contrast to the situation in the States, these corporations were welcomed here with open arms. In addition, the Irish government greased the process of moving and setting up with generous grants and tax concessions. There was of course a ready and able, educated, English speaking workforce. Most significant of all, the new arrangement also allowed the pharma corporations to minimise their tax obligation through ‘transfer pricing’7 schemes and low taxation regimes.
To give a sense of what big pharma got away with in Ireland on its arrival here, let’s take the example of Pfizer. Their plant in Cork’s Lower Harbour was built in 1969 and for a period was the corporation’s large facility in the country. Early on it was given a licence by the Department of the Marine to dump 1.1 tonnes of untreated organic waste into the sea at a minimum distance of 15 miles from the Irish coast. Dumping was conducted by a ship (Moby Dick) which loaded the waste directly from the pier at the Ringaskiddy and took it out from there to sea on a regular weekly basis. The old ‘dilution’ principle was the logic behind this activity. Following a confrontation with Greenpeace over the issue (in 1988) Pfizer’s MD defended the dumping arrangement by saying ‘that disposal at sea represents the most natural of all possible mechanisms for recycling this material’. However, Pfizer were subsequently caught with their proverbial pants at their ankles when an internal memorandum (from Pfizer’s European head office) was passed to Greenpeace. The leaked document revealed that the dumping at sea option chosen by Pfizer in Ireland was in fact the cheaper option being availed of due to ‘the unadvanced state of legislation’ in the country. In order words, while bagging huge profits, Pfizer was at its age old game of dumping whatever it could wherever it could get away with dumping it. 8
Putting profits before people is not just confined to the matter of waste and what to do with it. In 2011, one of the big name pharma corporations, Glaxo Smith Klein (GSK) paid out a record settlement to one its former employees, Cheryl Eckard. Eckard was a quality assurance auditor sent a GSK’s plant in Cidra, Puerto Rico in 2002 to investigate irregularities in the production set there. She described what she found at the plant as “the worst thing I had run across in my career." The plant manufactured a range of over-the-counter products as well as pharmaceutical agents. Among other things she identified that tainted water was used in the manufacturing process; that production lines were turning out too-potent or not-potent-enough drugs; and that employees were contaminating products with different medications being packed into the same bottles. She reported what she saw back to corporate HQ in New Jersey only to find the senior managers in the company didn’t want to know about the issues, let alone do something about them. Eckard persisted and was eventually fired for telling the truth. GSK then attempted to personally discredit her and her allegations. Rather than deal with the issues – which would entail a number of product line recalls – GSK spent years denying what Eckard had reported to them. Eckard finally turned to the FDA and they took up her case. GSK eventually admitted that there were serious problems at the Cidra plant and paid out record fines totalling $730 after admitting to knowingly selling adulterated drugs and ointments. The Puerto Rico facility was closed in 2010.9
Big pharma has often been thrifty with the truth for no other reason than pure greed. As mentioned already, pharmaceuticals is a highly profitable area. True, a great deal of research goes into the discovery of some drugs, but payback on this investment is manyfold with patent law affording the corporations exclusive production rights lasting for a period of 20 years. These patent protections and the general profitability of the sector should not however distract us from the reality of what it means when a new breakthrough drug is discovered. Even for the giants in the industry, it can mean profits akin to a jackpot win at the casino. This is clearly evident already, for example, with Covid-19. Pfizer and Moderna’s breakthrough vaccines (using the mRNA technology10) were close to being first to the marketplace during the pandemic. Pfizer alone has reaped massive rewards and they are far from done yet. In August, Pfizer announced staggering profits of €11.3 billion for just the first half of 2021. The expectation is that these revenues will climb further as the world’s long term dependence on the vaccines grows.11 These are astronomical profits that will eventually find their way into the pockets of its already rich shareholders.
But the prospect of a huge financial win is also the reason why the truth can easily become an inconvenient headache for big pharma. Take for example Merck. In 1999, the corporation made the headlines when its anti-inflammatory treatment, Vioxx was approved for prescribing. Vioxx was one of a new group of treatments (NSAIDs)12 and was widely prescribed until, just six years later, in late 2004, it was suddenly removed from the marketplace. The drug’s removal for sale followed data analysis indicating that prolonged use of the drug caused heart attacks and strokes. However, the discovery of this information was more startling also because the ‘new finding’ was actually gleaned from the original test data supplied to the FDA when they were approached to approve Vioxx.13 The re-examination of the data, had been led by FDA epidemiologist Dr David Graham, and he suggested that “an estimated 88,000 to 140,000 excess cases of serious coronary heart disease probably occurred in the US over the market life of rofecoxib (Vioxx).”14
With allegation circulating that Merck may have known before the dangers posed by the drug before it went on general release, Merck commissioned an investigation of their own data, the Martin Report, which concluded (surprise, surprise) that “Merck’s senior management acted in good faith, and that the confusion over the clinical safety of Vioxx was due to the sales team’s overzealous behaviour.” In other words, the massive ‘mistake’ that was made related to the interpretation of clinical data and was not as a result of Merck’s voracious appetite for more profits.
The matter became more complicated however when the FDA gave the go ahead for Vioxx to return to the market in 2005 on the grounds that its benefits outweighed its risks and with the further contention that the risk from taking Vioxx only became serious when the treatment was taken consistently for over 18 months. But that was not the end of the matter. Over the following decade Merck fought and lost a series of court actions over the drug’s side effects. Eventually in 2007, ‘Merck agreed to pay $4.85 billion to settle 27,000 lawsuits by people who claim they or their family members suffered injury or died after taking the drug.’15 The settlement was one of the largest ever in civil litigation. Though once again the matter didn’t end there. In a further development, the lead FDA epidemiologist (Graham) who was part of the team that discovered the ‘hidden’ data in Merck’s FDA submission, publicly criticised the FDA for its failure to notice the dangers with Vioxx, claiming in 2005 “FDA is inherently biased in favour of the pharmaceutical industry. It views industry as its client, whose interests it must represent and advance. It views its primary mission as approving as many drugs as it can, regardless of whether the drugs are safe or needed"16. He later sought protection of a whistle-blower body, the Government Accountability Project.17
If we criticise Big Pharma aren’t we just playing into the hands of the anti-vaxxers?
In a word, no. We opened this article with the way the commercial interests of Big Pharma and their supporting governments in opposing the TRIPS waiver is strangling progress on vaccinating the population of the Global South. Our criticism is coming from a pro-vax position, one that supports the scientific achievements of the new vaccines, while criticising the profit-gouging of the major pharma corporations that restricts and undermines their potential benefits. Conspiracies are secret and capitalism is no secret - they teach us about it in school and it has its own section (business news and the economy) on the nightly news. The distorting effects Big Pharma’s prioritising profit has on the development of medical science and public health is not only denounced by anarchists and other revolutionary socialists and anti-capitalists, but also by dissenting voices from within the scientific and medical communities. Whether individuals like Ben Goldacre18 or Stuart Ritchie19 (to name two examples) or by many other contributors to the popular science press. What all these voices have in common is the shared position that vaccines save lives as does medical science more generally, when properly done. Whether anti-capitalists or reformer scientists, there is a common recognition that criticising the damaging effects of Big Pharma on public health is too important for human welfare to be left to dangerous conspiracists, quacks and lunatic fringe far-right propagandists. Hopefully the information in this article will help to inform and arm activists and organisers in winning the battle for hearts and minds around the challenges of the pandemic, capitalism and public health.
Pharma More Profitable than Other Large Industries, Study Shows | BioSpace “Pharma More Profitable Than Other Large Industries, Study Shows | Biospace”. 2021. Biospace. https://www.biospace.com/article/how-profitable-is-the-pharma-industry-a-new-report-shows-the-industry-is-more-profitable-than-most-other-large-companies/. ↩︎
See Poison, unlimited: India’s chemicals industry remains dangerously “Poison, Unlimited: India’s Chemicals Industry Remains Dangerously”. 2021. Downtoearth.Org.In. https://www.downtoearth.org.in/news/environment/poison-unlimited-india-s-chemicals-industry-remains-dangerously-68718. ↩︎
Robert Allen, No Global (London, Pluto 2004), 3 ↩︎
For a good explanation see https://taxjustice.net/faq/what-is-transfer-pricing/ ↩︎
Allen, No Global, 92-93. Also see Emperor’s New Clothes - Protection or Pollution? An evaluation of the Environmental Protection Agency by Cork Environmental Alliance. ↩︎
“GlaxoSmithKline Whistle blower Awarded $96M Payout”. 2010. The Guardian. https://www.theguardian.com/business/2010/oct/27/glaxosmithkline-whistleblower-awarded-96m-payout. ↩︎
As Delta spreads, Pfizer and Moderna get set for a booster shot to profits “As Delta Spreads, Pfizer And Moderna Get Set For A Booster Shot To Profits”. 2021. The Guardian. https://www.theguardian.com/business/2021/aug/01/as-delta-spreads-pfizer-and-moderna-get-set-for-a-booster-shot-to-profits? ↩︎
Bhattacharya, S. (2020) Up to 140,000 heart attacks linked to Vioxx, New Scientist. Available at: https://www.newscientist.com/article/dn6918-up-to-140000-heart-attacks-linked-to-vioxx/?ignored=irrelevant (Accessed: 7 October 2020) ↩︎
“When Did Merck Know Vioxx Was Deadly?”. 2021. Webmd. https://www.webmd.com/arthritis/news/20091124/when-did-merck-know-vioxx-was-deadly. ↩︎
Merck Agrees to Settle Vioxx Suits for $4.85 Billion (Published 2007) (2020). Available at: https://www.nytimes.com/2007/11/09/business/09merck.html (Accessed: 7 October 2020) ↩︎
FDA Incapable of Protecting U.S., S. (2020) FDA Incapable of Protecting U.S., Scientist Alleges, Fraud-magazine.com. Available at: https://www.fraud-magazine.com/article.aspx?id=4294967770 (Accessed: 7 October 2020). ↩︎
See for a good timeline on the Vioxx drug. https://www.npr.org/2007/11/10/5470430/timeline-the-rise-and-fall-of-vioxx ↩︎
See wikipedia article on Ben Goldacre’s book “Bad Science” https://en.wikipedia.org/wiki/Bad_Science_(Goldacre_book) ↩︎