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.

Copyright Quirks

This post is set to follow on from my earlier one on the subject of copyright law and its origins. However, just understanding the existence of copyright law does not necessarily premeditate the understanding of the various complications, quirks and intricacies that get people quite so angry about it- so today I want to explore a few of these features that get people so annoyed, and explain why and how they came to be.

For starters, it is not in the public interest for material to stay forever copyrighted, for the simple reason that stuff is always more valuable if freely in the public domain as it is more accessible for the majority. If we consider a technological innovation or invention, restricting its production solely to the inventor leaves them free to charge pretty much what they like, since they have no competition to compete with. Not only does this give them an undesirable monopoly, it also restricts that invention from being best used on a large scale, particularly if it is something like a drug or medicine. Therefore, whilst a copyright obviously has to exist in order to stimulate the creation of new stuff, allowing it to last forever is just asking for trouble, which is why copyrights generally have expiry times. The length of a copyright’s life varies depending on a product- for authors it generally lasts for their lifetime plus a period of around 70 years or so to allow their family to profit from it (expired copyright is the reason that old books can be bought for next to nothing in digital form these days, as they cost nothing to produce). For physical products and, strangely, music, the grace period is generally both fixed and shorter (and dependent on the country concerned), and for drugs and pharmaceuticals it is just ten years (drugs companies are corrupt and profit-obsessed enough without giving them too long to rake in the cash).

Then, we encounter the fact that a copyright also represents a valuable commodity, and thus something that can potentially be put up for sale. You might think that allowing this sort of thing to go on is wrong and is only going to cause problems, but it is often necessary. Consider somebody who owns the rights to a book, and wants someone to make a film out of it, partly because they may be up for a cut of the profits and will gain money from the sale of their rights, but also because it represents a massive advertisement for their product. They, therefore, want to be able to sell part of the whole ‘right to publish’ idea to a film studio who can do the job for them, and any law prohibiting this is just pissing everybody off and preventing a good film from potentially being made. The same thing could apply to a struggling company who owns some valuable copyright to a product; the ability to sell it not only offers them the opportunity to make a bit of money to cover their losses, but also means that the product is more likely to stay on the free market and continue being produced by whoever bought the rights. It is for this reason legal for copyright to be traded between various different people or groups to varying degrees, although the law does allow the original owner to cancel any permanent trade after 35 years if they want to do something with the property.

And what about the issue of who is responsible for a work at all?  One might say that it is simply the work of the author/inventor concerned, but things are often not that simple. For one thing, innovations are often the result of work by a team of people and to restrict the copyright to any one of them would surely be unfair. For another, what if, say, the discovery of a new medical treatment came about because the scientist responsible was paid to do so, and given all the necessary equipment and personnel, by a company. Without corporate support, the discovery could never have been made, so surely that company is just as much legally entitled to the copyright as the individual responsible? This is legally known as ‘work made for hire’, and the copyright in this scenario is the property of the company rather than the individual, lasting for a fixed period (70 years in the US) since the company involved is unlikely to ‘die’ in quite the same predictable lifespan of a human being, and is unlikely to have any relatives for the copyright to benefit afterwards. It is for this reason also that companies, rather than just people, are allowed to hold copyright.

All of these quirks of law are undoubtedly necessary to try and be at least relatively fair to all concerned, but they are responsible for most of the arguments currently put about pertaining to ‘why copyright law is %&*$ed up’. The correct length of a copyright for various different stuff is always up for debate, whether it be musicians who want them to get longer (Paul McCartney made some complaints about this a few years ago), critics who want corporate ones to get shorter, or morons who want to get rid of them altogether (they generally mean well, but anarchistic principles today don’t either a) work very well or b) attract support likely to get them taken seriously). The sale of copyright angers a lot of people, particularly film critics- sales of the film rights for stuff like comic book characters generally include a clause requiring the studio to give it back if they don’t do anything with it for a few years. This has resulted in a lot of very badly-made films over the years which continue to be published solely because the relevant studio don’t want to give back for free a valuable commodity that still might have a few thousand dollars to be squeezed out of it (basically, blame copyright law for the new Spiderman film). The fact that both corporations and individuals can both have a right to the ownership of a product (and even the idea that a company can claim responsibility for the creation of something) has resulted in countless massive lawsuits over the years, almost invariably won by the biggest publishing company, and has created an image of game developers/musicians/artists being downtrodden by big business that is often used as justification by internet pirates. Not that the image is inaccurate or anything, but very few companies appear to realise that this is why there is such an undercurrent of sympathy for piracy on the internet and why their attempts to attack it through law have met with quite such a vitriolic response (as well as being poorly-worded and not thought out properly).

So… yeah, that’s pretty much copyright, or at least why it exists and people get annoyed about it. There are a lot of features concerning copyright law that people don’t like, and I’d be the last to say that it couldn’t do with a bit of bringing up to date- but it’s all there for a reason and it’s not just there because suit-clad stereotypes are lighting hundred dollar cigars off the arse of the rest of us. So please, when arguing about it, don’t suggest anything should just go without thinking of why it’s there in the first place.