Big Pharma

The pharmaceutical industry is (some might say amazingly) the second largest on the planet, worth over 600 billion dollars in sales every year and acting as the force behind the cutting edge of science that continues to push the science of medicine onwards as a field- and while we may never develop a cure for everything you can be damn sure that the modern medical world will have given it a good shot. In fact the pharmaceutical industry is in quite an unusual position in this regard, forming the only part of the medicinal public service, and indeed any major public service, that is privatised the world over.

The reason for this is quite simply one of practicality; the sheer amount of startup capital required to develop even one new drug, let alone form a public service of this R&D, would feature in the hundreds of millions of dollars, something that no government would be willing to set aside for a small immediate gain. All modern companies in the ‘big pharma’ demographic were formed many decades ago on the basis of a surprise cheap discovery or suchlike, and are now so big that they are the only people capable of fronting such a big initial investment. There are a few organisations (the National Institute of Health, the Royal Society, universities) who conduct such research away from the private sectors, but they are small in number and are also very old institutions.

Many people, in a slightly different field, have voiced the opinion that people whose primary concern is profit are those we should least be putting in charge of our healthcare and wellbeing (although I’m not about to get into that argument now), and a similar argument has been raised concerning private pharmaceutical companies. However, that is not to say that a profit driven approach is necessarily a bad thing for medicine, for without it many of the ‘minor’ drugs that have greatly improved the overall healthcare environment would not exist. I, for example, suffer from irritable bowel syndrome, a far from life threatening but nonetheless annoying and inconvenient condition that has been greatly helped by a drug called mebeverine hydrochloride. If all medicine focused on the greater good of ‘solving’ life-threatening illnesses, a potentially futile task anyway, this drug would never have been developed and I would be even more hateful to my fragile digestive system. In the western world, motivated-by-profit makes a lot of sense when trying to make life just that bit more comfortable. Oh, and they also make the drugs that, y’know, save your life every time you’re in hospital.

Now, normally at this point in any ‘balanced argument/opinion piece’ thing on this blog, I try to come up with another point to try and keep each side of the argument at an about equal 500 words. However, this time I’m going to break that rule, and jump straight into the reverse argument straight away. Why? Because I can genuinely think of no more good stuff to say about big pharma.

If I may just digress a little; in the UK & USA (I think, anyway) a patent for a drug or medicine lasts for 10 years, on the basis that these little capsules can be very valuable things and it wouldn’t do to let people hang onto the sole rights to make them for ages. This means that just about every really vital lifesaving drug in medicinal use today, given the time it takes for an experimental treatment to become commonplace, now exists outside its patent and is now manufactured by either the lowest bidder or, in a surprisingly high number of cases, the health service itself (the UK, for instance, is currently trying to become self-sufficient in morphine poppies to prevent it from having to import from Afghanistan or whatever), so these costs are kept relatively low by market forces. This therefore means that during their 10-year grace period, drugs companies will do absolutely everything they can to extort cash out of their product; when the antihistamine drug loratadine (another drug I use relatively regularly, it being used to combat colds) was passing through the last two years of its patent, its market price was quadrupled by the company making it; they had been trying to get the market hooked onto using it before jacking up the prices in order to wring out as much cash as possible. This behaviour is not untypical for a huge number of drugs, many of which deal with serious illness rather than being semi-irrelevant cures for the snuffles.

So far, so much normal corporate behaviour. Reaching this point, we must now turn to consider some practices of the big pharma industry that would make Rupert Murdoch think twice. Drugs companies, for example, have a reputation for setting up price fixing networks, many of which have been worth several hundred million dollars. One, featuring what were technically food supplements businesses, subsidiaries of the pharmaceutical industry, later set the world record for the largest fines levied in criminal history- this a record that persists despite the fact that the cost of producing the actual drugs themselves (at least physically) rarely exceeds a couple of pence per capsule, hundreds of times less than their asking price.

“Oh, but they need to make heavy profits because of the cost of R&D to make all their new drugs”. Good point, well made and entirely true, and it would also be valid if the numbers behind it didn’t stack up. In the USA, the National Institute of Health last year had a total budget of $23 billion, whilst all the drug companies in the US collectively spent $32 billion on R&D. This might seem at first glance like the private sector has won this particular moral battle; but remember that the American drug industry generated $289 billion in 2006, and accounting for inflation (and the fact that pharmaceutical profits tend to stay high despite the current economic situation affecting other industries) we can approximate that only around 10% of company turnover is, on average, spent on R&D. Even accounting for manufacturing costs, salaries and such, the vast majority of that turnover goes into profit, making the pharmaceutical industry the most profitable on the planet.

I know that health is an industry, I know money must be made, I know it’s all necessary for innovation. I also know that I promised not to go into my Views here. But a drug is not like an iPhone, or a pair of designer jeans; it’s the health of millions at stake, the lives of billions, and the quality of life of the whole world. It’s not something to be played around with and treated like some generic commodity with no value beyond a number. Profits might need to be made, but nobody said there had to be 12 figures of them.

Other Politicky Stuff

OK, I know I talked about politics last time, and no I don’t want to start another series on this, but I actually found when writing my last post that I got very rapidly sidetracked when I tried to use voter turnout as a way of demonstrating the fact that everyone hates their politicians, and I thought I might dedicate a post to this particular train of thought as well.

You see, across the world, but predominantly in the developed west where the right to choose our leaders has been around for ages, less and less people are turning out each time to vote.  By way of an example, Ronald Reagan famously won a ‘landslide’ victory when coming to power in 1980- but only actually attracted the vote of 29% of all eligible voters. In some countries, such as Australia, voting is mandatory, but thoughts about introducing such a system elsewhere have frequently met with opposition and claims that it goes against people’s democratic right to abstain from doing so (this argument is largely rubbish, but no time for that now).

A lot of reasons have been suggested for this trend, among them a sense of political apathy, laziness, and the idea that we having the right to choose our leaders for so long has meant we no longer find such an idea special or worth exercising. For example, the presidential election in Venezuela – a country that underwent something of a political revolution just over a decade ago and has a history of military dictatorships, corruption and general political chaos – a little while ago saw a voter turnout of nearly 90% (incumbent president Hugo Chavez winning with 54% of the vote to win his fourth term of office in case you were interested) making Reagan look boring by comparison.

However, another, more interesting (hence why I’m talking about it) argument has also been proposed, and one that makes an awful lot of sense. In Britain there are 3 major parties competing for every seat, and perhaps 1 or two others who may be standing in your local area. In the USA, your choice is pretty limited to either Obama or Romney, especially if you’re trying to avoid the ire of the rabidly aggressive ‘NO VOTE IS A VOTE FOR ROMNEY AND HITLER AND SLAUGHTERING KITTENS’ brigade. Basically, the point is that your choice of who to vote for is limited to usually less than 5 people, and given the number of different issues they have views on that mean something to you the chance of any one of them following your precise political philosophy is pretty close to zero.

This has wide reaching implications extending to every corner of democracy, and is indicative of one simple fact; that when the US Declaration of Independence was first drafted some 250 years ago and the founding fathers drew up what would become the template for modern democracy, it was not designed for a state, or indeed a world, as big and multifaceted as ours. That template was founded on the basis of the idea that one vote was all that was needed to keep a government in line and following the will of the masses, but in our modern society (and quite possibly also in the one they were designing for) that is simply not the case. Once in power, a government can do almost what it likes (I said ALMOST) and still be confident that they will get a significant proportion of the country voting for them; not only that, but that their unpopular decisions can often be ‘balanced out’ by more popular, mass-appeal ones, rather than their every decision being the direct will of the people.

One solution would be to have a system more akin to Greek democracy, where every issue is answered by referendum which the government must obey. However, this presents just as many problems as it answers; referendums are very expensive and time-consuming to set up and perform, and if they became commonplace it could further enhance the existing issue of voter apathy. Only the most actively political would vote in every one, returning the real power to the hands of a relative few who, unlike previously, haven’t been voted in. However, perhaps the most pressing issue with this solution is that it rather renders the role of MPs, representatives, senators and even Prime Ministers & Presidents rather pointless. What is the point of our society choosing those who really care about the good of their country, have worked hard to slowly rise up the ranks and giving them a chance to determine how their country is governed, if we are merely going to reduce their role to ones of administrators and form fillers? Despite the problems I mentioned last time out, of all the people we’ve got to choose from politicians are probably the best people to have governing us (or at least the most reliably OK, even if it’s simply because we picked them).

Plus, politics is a tough business, and what is the will of the people is not necessarily always what’s best for the country as a whole. Take Greece at the moment; massive protests are (or at least were; I know everyone’s still pissed off about it) underway due to the austerity measures imposed by the government, because of the crippling economic suffering that is sure to result. However, the politicians know that such measures are necessary and are refusing to budge on the issue- desperate times call for difficult decisions (OK, I know there were elections that almost entirely centred on this decision that sided with austerity, but shush- you’re ruining my argument). To pick another example, President Obama (and several Democrat candidates before him) have met with huge opposition to the idea of introducing a US national healthcare system, basically because Americans hate taxes. Nonetheless, this is something he believes very strongly in, and has finally managed to get through congress; if he wins the elections later this year, we’ll see how well he executes.

In short, then, there are far too many issues, too many boxes to balance and ideas to question, for all protesting in a democratic society to take place at the ballot box. Is there a better solution to waving placards in the street and sending strongly worded letters? Do those methods at all work? In all honesty, I don’t know- that whole internet petitions get debated in parliament thing the British government recently imported from Switzerland is a nice idea, but, just like more traditional forms of protest, gives those in power no genuine categorical imperative to change anything. If I had a solution, I’d probably be running for government myself (which is one option that definitely works- just don’t all try it at once), but as it is I am nothing more than an idle commentator thinking about an imperfect system.

Yeah, I struggle for conclusions sometimes.