Should Big Pharma companies be privately-owned?
Big Pharma is an industry that is often characterised by conspiracy and its level of public distrust. When making decisions, executives of pharmaceutical companies must often choose between prioritizing the health and wellness of the communities they serve, or prioritizing the success of their business. The way in which Pharmaceutical companies approach these decisions is indicative of their moral and ethical stance on public health. However, is it reasonable for the fate of a community’s health and wellbeing to be so reliant on the decisions of privately-owned companies?
Pricing Versus Product
Notably, companies do not price products based on their R&D costs but rather on what the current demands on the market, an interpretation endorsed by senior drug company executives (McKinnell 2005). In other words, the more desperate patients are for a drug, the higher the demand — and subsequently, the price — will be. Similarly, the America-based biopharmaceutical company, Gilead-Sciences, was under scrutiny earlier this summer for the pricing of their drug, remdesivir; a drug that has been proven to expedite the recovery of COVID-19 patients. Despite the financial devastation the COVID-19 pandemic has caused throughout the globe, Gilead-Sciences chose to offer the remdesivir treatment for $2,340 USD (Marchione, 2020). This decision was met with outrage and confusion, as a large amount of tax-payer money contributed to the development of the drug.
Restrictions on Big Pharma
A number of Big Pharma companies have argued that imposing strict regulations about pricing and distribution will decrease companies’ available resources for R&D and lead to a decline in drug and medicinal innovation. In fact, a study suggests that reducing drug prices by 40 to 50 percent in the United States will cause a 30 to 60 percent decrease in R&D projects (Paul Howard, 2015).
Innovation and the Effectiveness of R&D
Though the aforementioned claims are valid, many pharmaceutical companies have shifted their focus from R&D to marketing and revenue maximization. Studies have shown that the effectiveness of R&D has decreased over the past few decades (Praet, 2014); correspondingly, Big Pharma has opted to allocate less resources to this sector. In 2017 the drugs that were distributed by some of the most successful and influential pharmaceutical companies were not discovered in-house. For instance, Pfiezer had invented 23% of its products, and Johnson & Johnson had only discovered 11% of its products in-house (Jung et al., 2019). Thus, these findings do not suggest that the current lack of regulations and structure of privately-owned pharmaceutical companies promote innovation.
With reference to the Design Thinking to Enhance Innovation model, the aforementioned business models focus on the Viability and Feasibility aspects of the innovation enhancement process.
Bribing of Healthcare Faculty
Emergency physician Joel Lexchin wrote in his book Doctors in Denial Why Big Pharma and the Canadian Medical Profession Are Too Close For Comfort that pharmaceutical companies donate money to medical schools to build ties with healthcare faculty members. Dr. Nav Persaud, while a second-year med student at the University of Toronto (U of T) in 2004, took part in a course on pain-management (Laura Hensley, Global News 2019). It was later discovered that the course was funded by drug companies, including Purdue Pharma, the manufacturer of OxyContin. The course material stated that oxycodone was a weak opioid, even though it is known now that it is actually 1.5 times stronger than morphine (Keating & Granados 2017). This phenomenon of pushing bias into the Canadian medical landscape has had disastrous consequences, namely the opioid crisis (Michael Butler 2016).
Resolution
Though steps have been taken to improve the regulation of drug distribution and pricing, it is clear that when given the liberty, many Big Pharma companies will opt to act out of self-interest. This has been exemplified by the lobbying, bribing, and inflation that continuously occurs within the healthcare industry. Therefore, pharmaceutical companies should not be privately-owned to ensure that the invention and distribution of drugs and treatments are done in the best interest of the general public.
References:
Baker, B. (July 2017). Canada blinks in face of US/Pharma pressure. ISDS Platform https://isds.bilaterals.org/?canada-blinks-in-face-of-us-pharma
Canadian Guideline for Opioid Use for Pain — Appendix B-8: Opioid Conversion and Brand Availability in Canada. (2020). McMaster University — National Pain Centre. http://nationalpaincentre.mcmaster.ca/opioid/cgop_b_app_b08.html
Compton, K. (2020) Big Pharma and Medical Device Manufacturers. Drugwatch. https://www.drugwatch.com/vioxx/
Compton, K. (2020) Vioxx. Drugwatch. https://www.drugwatch.com/vioxx
Hensley, L. H. (2019, September 12). Big pharma pours millions into medical schools — here’s how it can impact education. Global News. https://globalnews.ca/news/5738386/canadian-medical-school-funding/
Jung, et al. (2016, December). Do large pharma companies provide drug development innovation? Our analysis says no. Stats Canada. https://www.statnews.com/2019/12/10/large-pharma-companies-provide-little-new-drug-development-innovation/#Table1.
Katya Marc, K. M. (2020). Lecture 8 — Guest Lecture — Innovation and Entrepreneurship [Slides]. McGill University. https://mycourses2.mcgill.ca/d2l/le/lessons/463805/units/5087266
Keating, D. K., & Granados, S. G. (2017). See how deadly street opioids like ‘elephant tranquilizer’ have become. https://www.washingtonpost.com/graphics/2017/health/opioids-scale/
Marchione, M. (2020, June). Gilead’s US$2,340 price for coronavirus drug draws criticism. Ctv News. https://www.ctvnews.ca/health/coronavirus/gilead-s-us-2-340-price-for-coronavirus-drug-draws-criticism-1.5003919
McKinnell H. 2005. A Call to Action: Taking Back Healthcare for Future Generations. New York, NY: McGraw Hill.
Michael Butler, M. B. (2016). Who is behind Canada’s opioid epidemic? https://conseildescanadiens.org/node/14099
Paul Howard, P. H. (2015, September 23). To Lower Drug Prices, Innovate, Don’t Regulate — NYTimes.com. The New York Times. https://www.nytimes.com/roomfordebate/2015/09/23/should-the-government-impose-drug-price-controls/to-lower-drug-prices-innovate-dont-regulate
Petri, W. (July, 2020). Remdesivir is an effective treatment against coronavirus but many drugs are not helpful. ABC News. https://www.abc.net.au/news/2020-07-02/coronavirus-what-drug-treatment-works-medication-remdesivir/12414604
Praet, N. (2014, June). The new drug dilemma: Does big pharma have a duty to humankind — or its shareholders? Financial Post. https://financialpost.com/investing/the-new-drug-dilemma-does-big-pharma-have-a-moral-duty-to-humankind-or-its-shareholders
