Photo courtesy of Pranjal Mahna via Flickr
When you hear the words “Big Pharma”, what is your initial response? Do you wrinkle your nose in disgust while denouncing the abject capitalism pharmaceutical companies seem to embody? Or do you shrug your shoulders, and say that their behaviour is to be expected, and there is nothing you can do to change it? Even rarer would be to find a person who actually defends the pharmaceutical industry and its methods.
Unfortunately pharmaceutical companies – as they currently stand – are something of a moral grey area. They are businesses, and businesses exist to make money and keep their shareholders pockets filled. The problem with pharmaceutical companies is that their business massively impacts the daily lives of people, often when they are under huge amounts of stress due to the illness of a loved one. This heightened emotional state of the consumer, coupled with the bureaucracy of modern business and its capacity to reduce people to numbers on a page, creates a situation so volatile that it is no wonder pharmaceutical companies are some of the most reviled of all large corporations.
This is not a piece defending these companies. They have shown themselves to be capable of pretty much anything when they put their minds to it, but that is not to discredit the hordes of people who work for them who are simply trying to actually make a difference to peoples’ lives. Not everyone goes to work for a pharmaceutical giant to become a corporate shill. Some of them genuinely want to further our understanding of human disease and how to fight it, in fact a huge proportion of them do.
There is also the fact that pharmaceutical companies sink massive, almost unimaginable amounts of money into R&D to try and solve the mysteries of cancer, Alzheimer’s and other terrible illnesses. Research in these areas is difficult, time consuming and expensive, so pharmaceutical companies are the ideal places to research them, as they already have the scientific expertise on hand.
Therein lies the dilemma. Academic research is limited in funds and can only go so quickly, pharmaceutical companies have huge resources and the ability to power through research at an incredible rate. The problem arises directly because of the resources at their disposal however, and the fact that people are incredibly greedy. It is a paradox that has yet to find a proper balance, though of late the general trend seems to be swinging in the direction of the brighter end of the moral grey area.
Many will know the story of the Hydra, the ancient Greek monster with seven heads. Cut off one, the story goes, and another will grow in its place. Such is the current situation in the pharmaceutical industry. Tighter regulation and higher accountability expectations have forced the industry to start cleaning up its act, and though there are still issues (and probably always will be) it has been on a trend of improvement in recent years. Of course, it was only a matter of time until the Hydra grew a new head.
Therein lies the dilemma. Academic research is limited in funds and can only go so quickly, pharmaceutical companies have huge resources and the ability to power through research at an incredible rate.
About a month ago, a story broke of a “pharmaceutical” company (and I hesitate to even call them that. Loan shark for pills would be a more accurate description) that inspired outrage across the globe. A company by the name of Turing Pharmaceuticals (the existence of which must have their namesake positively spinning in his grave) bought up the rights to a drug called Daraprim. Turing have no pharmaceutical background whatsoever, their entire business model revolves around buying up the rights to certain niche drugs, then jacking up the price to make a massive profit.
Daraprim is used to treat a condition called Toxoplasmosis, a disease caused by a tiny microorganism. A huge amount of the population of the developed world lives with the organism that causes this illness daily and sees no adverse effects. For immuno-compromised individuals such as those with HIV however, the tiny protozoa can cause severe illness and even death. This doesn’t happen to a huge amount of people every year, but for those that it does happen to, the medication is necessary and life saving. It is even on the WHO’s list of essential medicines, which is a list of medicines that are needed to maintain a functioning healthcare system.
The patent on Daraprim expired years ago and so it is allowed to be made by any company to sell at a price of their choosing. Its’ synthesis is simple, well known, remarkably cheap and available on Wikipedia. The problem now is that Turing Pharmaceuticals bought the exclusive marketing rights for Daraprim in the US, meaning that only they can distribute it. Their next order of business was to hike the price up to around $750 per tablet. That’s about $75000 for a single months’ treatment. Considering that the drug is only usually prescribed to people who are already sick with other immune disorders, and the fact that the same drug costs next to nothing in almost every other country worldwide (£0.66 per tablet in the UK in fact) has led to a massive public outcry.
CEO of Turing Pharmaceuticals – the inimitable, former hedge-fund manager, Martin Shkreli – came out to defend the price hike, saying it was “still underpriced, relative to its peers,” which he then declared to be various cancer and rare disease drugs, immediately invalidating his logic. The outpouring of rage that followed forced Shkreli to publicly announce that he would reduce the price of the drug (but not before he acted like a spoiled child on social media, tweeting Eminem lyrics at his detractors and just generally behaving like dirt). Weeks later, and the price still has yet to come down.
Their next order of business was to hike the price up to around $750 per tablet. That’s about $75000 for a single months’ treatment.
Shkreli is the most public face of a worrying trend currently developing in the pharmaceutical industry. There are startling amounts of ex hedge fund managers who, since the market crash of 2008, have turned their attention to pharmaceuticals. These companies have no background in pharmaceuticals, no real capacity for R&D so they can develop new drugs (as Shkreli claimed was the reason for his unwarranted price hike) and no scruples.
What has followed can only be described as despicable. Turing is not alone in its practices. Companies have been popping up left right and centre. One such company, by the name of Valeant, claimed that by buying up drugs, they were actually helping R&D. They neglected to mention that when they acquire a company and that companies intellectual property, the first thing to go is all of their research labs and equipment because that stuff is expensive and doesn’t return a profit fast enough. They effectively cut off any further R&D capacity, leaving scientists unemployed and thus hindering research into new possible treatments.
In the last year alone, Valeant has increased the price of 81 per cent of its entire drug portfolio, the largest hike being a price increase of 550 per cent for a drug called Zegerid. This drug has another name, Omeprazole, and is one of the biggest selling drugs of all time. What does it treat? Acid reflux, a condition so common that the drug has a guaranteed huge market. To claim that the massive price hike for a cheap, commercially successful, widely used and widely available drug is to pump money back into R&D is utter rubbish.
Yes, the pharmaceutical industry has its issues, but companies are doing irreparable harm to the industry and its reputation. Companies like these could bring the entire industry to its knees, and if that happens, research stops. No new and better treatments for debilitating and awful diseases like Alzheimer’s, Parkinson’s or any of the many forms of cancer will be discovered anytime soon, and the entire health care system will be set back years, possibly decades because of the actions of a select few.