On Thursday 7th December, Nick Dearden gave the Annual Lecture to the Centre for the Study of Social and Global Justice on his new book Pharmanomics: How Big Pharma Destroys Global Health, of which we produce an edited version below.

The inspiration for this book was obviously the pandemic, although we were working on Big Pharma before that, because we recognised it was such a broken model and particularly disastrous for Global South.  

Covid-19 became a mass campaign everyone cared about. But then people wanted to forget – so I wrote this book to try to stop that and ensure that we learn the right lessons.

And so of course, I tell the story of how vaccines and other treatments for Covid-19 were developed,  how they were rolled out and what we need to learn from that.

That’s important because there’s a common story which you hear from the pharma lobbyists which goes like this: We invented Covid vaccines in record time. We then got those vaccines into people’s arms on a mass scale, in record time. And this is a wonderful example of how much you need the ingenuity of Big Pharma companies. True, what we do isn’t always cheap. But at least we come up with the goods. We’re at the cutting edge of scientific achievement – all human progress relies on us. And you don’t get any of this without investors, without markets, allocating capital on the basis that they hope to achieve a good return from this work. So, in the memorable words of Boris Johnson, “it was greed, my friends” which was responsible for getting us out of the pandemic.

Except it wasn’t. What Covid really exposed was complete market failure and that without massive state intervention, we would have had no vaccines. Because those vaccines were not created by the corporations that came to bear their names.

No wonder a former US government official involved in vaccine procurement complained: “It’s not even their vaccine… the biggest marketing coup in the history of American pharmaceuticals.”

In fact, back in 2016, the World Health Organization issued a warning – that next to no proper research was being done by Pharma giants into viruses with potential to cause a pandemic. Two years later, Pharma corporations still had no research projects into coronaviruses.

The research that was being done was being done by university departments – with public money, or small biotech companies – with public money. Thank God, without that, we’d have been in real trouble.

Even so, when the pandemic broke out, this needed to be massively scaled up.

Unprecedented amounts of money were poured into turning what research there was into the creation and production of vaccines.

But rather than ensuring the knowledge behind those vaccines remained open to use, it was effectively privatised and handed over to Big Pharma corporations who walled off with the knowledge we so desperately needed.

And – thanks to international patent rules –  they got to decide how many vaccines would be produced, and where, who could buy them, and for what price. In other words, decisions with massive implications for everyone in the world were taken in the most unaccountable way imaginable. There’s still almost no transparency around how those decisions were made.

This is a huge problem. It’s not simply that these corporations are making astronomical profits, far, far higher than an average company. It’s that life and death decisions are being made not on the basis of public interest but on the basis of how you make the best return possible for the shareholders. What a way to run a vaccine rollout in the worst pandemic in a century!

More broadly, that’s the economy we have: an economy run for the benefit of investors and shareholders – by and large the very rich. 

So that almost all of the sales of Pfizer and Moderna’s vaccine was to the richest countries in world and almost nothing was sold to less wealthy countries.

The pharma companies said: Well that’s OK, hopefully those countries we’ve sold to will donate some of their vaccines.

Well that didn’t happen either. Except for the US, which made substantial donations though still insufficient, every other western country made derisory donations.

But it gets worse. Not we didn’t sell vaccines to the majority of world. Not only didn’t we donate vaccines.  We prevented most countries producing their own versions of these vaccines – even though over 100 factories could have safely produced mRNA vaccines

The corporations that owned that tech refused to share it, artificially limiting the supply.

The result – we know. To take you back three years: most of us had two Covid vaccinations – at least those who wanted them And there were preparations for a booster campaign in the autumn.

But most people in the world – even health workers and the most vulnerable – had nothing.

Low Income Countries – at the current rate of rollout – would be waiting decades to vaccinate everyone.

But it was good news for pharma companies. Meanwhile, Pfizer reported sales of $36bn that year. The following year, Pfizer’s vaccine and its anti-viral treatment brought in $50bn.  Several of Moderna’s board including its CEO became billionaires.

Because no one else could produce them, they were able to charge an average of £20 a shot.  

To produce the vaccine, Pfizer claimed, cost just under £5, although scientists suggested more like 76p. £20 was the pandemic price – they are now charging more like £70 in the US.

So these corporations made a fortune, by enclosing knowledge that they hadn’t even created, creating a vaccine apartheid from which 100,000s people died unnecessarily.

But these corporations are not drug development companies. Really, these are more akin to hedge funds. They don’t invent medicines. The public sector and small companies do that. Then these corporations buy up the Intellectual Property to those medicines. And they sit on it – squeezing as much profit as they possibly can from it – even if that means people who could benefit from that medicine can’t get access to it.

This isn’t just Big Pharma – it’s how our economy as a whole operates.

I argue in the book that there was probably a time when it could be argued that Big Pharma invented useful drugs and then profiteered off them.  They still had huge access to public money and research but in the ‘golden age’ of medicine discovery –the 1940s to the 1960s – Big Pharma was doing a lot of research. They were certainly not angels  – they were very powerful and used that power, sometimes, in deeply inappropriate ways. But economically, they were focused on their product.

In the 1990s something changed in the way our economy works – financialization – which changed the way Big Pharma behaved. Indeed, Big Pharma was in vanguard of that change.  

Now in order to explain this change, I go back to Naomi Klein’s book No Logo. What was seen as increasingly important to modern big business wasn’t really the stuff they made, but something much more intangible – the Levis name, the McDonalds brand. They had a monopoly over this.

It was the same with Big Pharma. What was most important to their profits was the monopoly which the rights to produce medicines gave them – the intellectual property (IP).

You can buy that. You don’t need factories, doctors or medical researchers. You don’t need R&D facilities.

You need money – to buy IP or companies that own it. And to get that money, you have to be a more attractive proposition to investors than your competitors – that is, you’ll give them a greater return on their investment.

That produced a big transformation. Up to now, consumer-facing Transnational Companies generated profits through making products in the most cost-efficient ways and promoting those products heavily.  Now, they had to become cash machines for their investors – even at the expense of their long-term business interests.

This has wider implications for capitalism as a whole. It has hollowed out, as some – the Financial Times, Joe Biden – recognise.

So for Big Pharma that meant less R&D, less productive capacity. What they really wanted was to ensure their monopolies were as well protected as possible – were deeper and longer and more enforceable.

They set out to do this in the 1990s, saying these monopoly rights must be enshrined in the rules of the global economy. They won. The TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights), one of the first agreements of the newly founded WTO, was heavily lobbied for by Big  Pharma executives.

They won because their arguments were very successful: yes, our drugs are expensive, but without us, you have no drugs.

And they had a second argument: they told decision makers: look if you don’t protect our IP, our exclusive right to this know-how, your country will lose competitiveness to other parts of the world. And many bought it..  We have TRIPS which extended US-style patenting to rest of world.

Now this was a big change.  In the 1990s, most countries didn’t have patents on medicines.  

Even in Western Europe, in the 1970s, most didn’t patent medicines. It was very controversial.

In fact, one of main reasons countries engaged in trade up to this point was precisely so they could learn from technologies developed in more advanced economies.

TRIPS changed all that.  It shifted power from manufacturing to finance, labour to capital, from the Global South to the Global North. It locked many countries into a neocolonial economic relationship – they produce basic materials cheap, we turn them into expensive stuff, they rent it back. It forced them to give up on the idea of economic development and it undercut the development of a medicines industry in many countries around world – which is why it’s so centralised today.

For the Global South it produced the situation in South Africa. Here it produced… Humira, used to treat arthritis. This cost the NHS $2.7 bn over ten years. It was built on years of public research, like all drugs, then the final medicine was produced by a small company, which AbbVie bought for $7bn. It then spent $5bn on R&D – but don’t be fooled. Most of that R&D spend seems to have gone on working out ways of extending monopolies on Humira – making small changes that would allow AbbVie to extend monopoly protection beyond the baseline 20 years.

Then AbbVie – having done nothing to actually make the drug hub more effective – jacked up the price – 470% – to $77,000 for a year’s supply, making it the most expensive drug in history.

It can charge this simply because no one else is allowed to produce it. It has nothing to do with what it cost to produce it. It has nothing to do with what it cost to invent in first place,

This matters because these same, highly financialised, monopolistic companies have no incentive to research medicines which won’t be blockbusters.  They have no incentive to research medicines which affect only poor people in poor countries. They have no incentive to research viruses which might cause pandemics – because pandemics might not happen.

We can see this with antibiotics now. This will be the next problem we face: antibiotics are failing and we desperately need them – modern medicine depends on them. But Big Pharma is doing very little research on new antibiotics because they simply aren’t lucrative enough. 

This matters because it’s not just with medicines but how we produce food, how we deal with climate change.

But there are alternatives. Dr Peter Hotez runs a vaccine research centre at the Texas Children’s Hospital.  He and his fellow scientists “make vaccines for diseases that the pharma companies won’t.”  Everything the scientists do is aimed at making medicines which can be cheaply and easily recreated in settings without access to advanced levels of medical technology.

When the pandemic struck, the scientists looked into using their expertise to make a Covid vaccine. They explicitly set out to “make a vaccine for the world,” and got almost no external support. But they did it anyway.

Hotez says: “If we had even a fraction of the support that, say, Moderna or the other pharma companies had gotten, who knows? We might have been able to have the whole world vaccinated.”

“What we do is we license the technology, and we provide the prototype, production cell bank, no strings attached, no patent. We help in the co-development. And then the countries themselves and those companies own it…  We’re hands-off. We don’t try to meddle into their business. You know, very much we are a believer in this concept of decolonization.”

A second example is a different project taking place in South Africa.  In mid-2021, the South African government, in partnership with the WHO, launched an initiative to start doing things differently. The concept was simple: to help Southern countries get to the stage where they could produce their own mRNA vaccines, and share that knowledge openly.

They asked the companies that currently control mRNA vaccine technology – Pfizer, Moderna – to share. These corporations were already producing vaccines, and no one was suggesting they stop. But the companies’ interest was less in making money from individual sales, and more in controlling a technology which could be used to create major money-spinners for years to come.

Vaccines for HIV, malaria, tuberculosis, and other diseases were already in development. 

Why would these corporations share know-how that could transform our medical knowledge and save countless lives, when sitting on and monopolising this know-how could allow them to make a killing for decades into the future?

The scientists were undeterred. Within just a few months, they declared a breakthrough – they worked out how they could produce it.

Of course, this is not the end of the road. The really radical bit was when they started sharing that information with those who could make safe and effective use of it. Argentina and Brazil were involved – the know-how was being actively shared with 15 countries.   

There was an almost post-liberation sense of optimism and energy around the mRNA hub.

The facility is run by a company called Afrigen, headed up by Petro Terblanche, staffed by youthful and passionate scientists, doing their ground-breaking work while the facility is literally being built around them.

“If all goes to plan,” one journalist wrote, the hub “could upend global vaccine production… For a growing number of people in Africa, it’s not just that donations are taking too long to arrive, it’s that they have to ask for them at all.”

As the hub’s chief scientist puts it, “We didn’t have help from the major COVID-vaccine producers, so we did it ourselves to show the world that it can be done, and be done here, on the African continent.” 

And: “What happens next with the hub is very significant. It looks like they’ve really done it. You can ask as nicely as you want, but at the end of the day, if you don’t want to be dependent on northern charity or on the marketplace, you have to do it yourself.”

Peter Maybarduk, who directs the US-based Public Citizen’s access to medicines group, has devoted his life to challenging power of Big Pharma. That’s very challenging in a country where Big Pharma has around two lobbyists for every member of Congress, with huge power too at state level, and has successfully woven a narrative that they are the embodiment of innovation.

But then, things started to change, sparked by a mix of the sky high prices of drugs in the US, but also the opioid crisis which has affected the American psyche profoundly. “Today everyone hates pharma,£ he says, “ and you have that combined with the sort of populism in our political culture now.”

The President Biden backed a plan to give the federal government the authority to negotiate the price of some medicines. It won by one vote.

So concerned was the industry that they poured money into lobbying – outspending all other industries in the first half of 2022, with a leading Senator saying pharma companies had been “throwing everything but the kitchen sink against this.” 

Maybarduk says: “The really big thing, and you can’t overstate how big it is, Pharma has stopped winning. And instead of losing to them, they’re in danger of losing to us… there’s now widespread popular opposition to the monopoly control of drugs globally. It’s really all to play for.”

Here, we all take for granted that our health service is provided universally, free to use, for all of us, as a human right. If we accept the NHS should be run like this, why are the medicines dispensed in the NHS made in the most ultra-capitalist way imaginable?

It doesn’t have to be like this.

Nick Dearden is the Director of Global Justice Now. Pharmanomics: How Big Pharma Destroys Global Health was reviewed on Labour Hub here.