Originally written for Professor Karen Pinkus’s Comparative Literature 303 seminar entitled “Globalization: Culture, Change and Resistance.” The piece won Comparative Literature’s departmental Welch Essay Prize in 2008 and was a finalist in the Research category of the whole school’s Undergraduate Writer’s Conference in 2009.
The Global Pharmaceutical Industry
As one of the world’s most profitable businesses, the $500 billion, multinational pharmaceutical industry can earn $10 billion a year on sales for a single product. With the cash flow that the industry possesses and the influence its largesse wields over international policy and public perception, Big Pharma has even more potential than supranational assemblages like the World Health Organization to combat health crises like AIDS and eradicate global suffering from easily treatable diseases like malaria and diarrhea, which still kill millions of people a year. But the multinational pharma corporations do not move towards these progressive goals. Instead, their pursuit of profit leaves and even contributes to the problems of a globalized public health crisis. The inequality of drug access is exacerbated by an international “patent regime” that squashes the efforts of the developing world to medicate its own people. Outsourced clinical trials exploit the populations of the developing world by subjecting them to experimental drug treatments that nobody in the developed world wants to risk, and these results are used in a transnational drug marketing campaign that skews cultural notions of sickness and well-being for the maximization of corporate revenues. These various effects of globalization on the pharmaceutical industry must be collectively assessed to not only understand how globalization has ensured that “the market alone will not provide adequate drugs to poor people, or ensure the development of drugs for diseases primarily affecting the poor” (Bull and McNeill 65), but also to become aware of how Big Pharma is driving and being driven by globalization towards a corporate monopoly of just a few multinational giants that fundamentally changes what, and who, is considered worth healing.
The processes necessary for the pharmaceutical industry’s growth can be divided into three broad categories: those relating to production, R&D, and marketing. All three segments of the industry interact with globalization in such a way as to ensure that the spread and influence of the multinational pharmaceutical industry continues to escalate, but not to encourage diversity in the market: rather, the top multinational conglomerates of the developed world simply keep getting bigger and more profitable, while the ability of start-up drug industries and sick peoples of the developing world to supply and access badly-needed medicines is being undermined.
Drug Manufacturing – Global Relocations and the International Patent Regime
When it comes to assessing the effects that globalization has wrought upon the actual processes involved in creating pharmaceuticals, it is difficult to thoroughly investigate the production lines that Big Pharma extracts active ingredients and synthesizes chemicals with because of the industry’s secrecy. However, their geographical patterns can at least be traced, and have been seen to follow the general trends of neoliberal globalization: factories relocate to places where overheads are lowest, as they did when Clinton made a literal economic island out of Puerto Rico by granting “special provisions for the extension of tax benefits to businesses looking at Puerto Rico to establish or expand operations,” establishing Puerto Rico as one of the top five global drug-making centers for a time (PIA-PR.com, Associated Press 2007). Those factories also left Puerto Rico for sites in Asia when those incentives were lost in 2007, laying off 3,000 high-paying jobs and ensuring that things were “going to be pretty bad for a lot of people,” as a local construction worker commented to news agencies (Associated Press 2007, Gale 2007). In this regard the pharmaceutical sector is as guilty as any other globalized industry for “evaporating” labor (Klein 201).
Given the necessarily skilled labor of pharmaceutical industrial engineering and the paranoid secrecy with which the industry guards its production patents, it seems that most of these relocated factories would emerge in other places as fully proprietary production sites instead of being truly outsourced to host country contractors (Law 14, 74). If true, it might be inferred that the exploitation of outsourced labor hat Naomi Klein has documented the globalized textile industry as utilizing does not occur (Klein 202). However, the manufacturing process itself can be split into low-level tasks such as the “limited mixing of several purchased inputs,” and at least one pharmaceutical representative has accounted for how much of the industry’s focus has been on “outsourcing to lower-cost but highly effective companies in Asia” (Abdelgafar 112, Gale 2007). An industry guide to outsourcing justifies this with a rationale considering that “with high fixed costs and a correspondingly high level of government interaction, it would be difficult to realize manufacturing economies without jeopardizing standards of quality or future capacity” (Piachaud 117). But since “production licenses are often obtained by individuals who do not, themselves, have any manufacturing capacity, but who will sell or lease the license to any available and willing manufacturer,” it is wholly possible that those “standards of quality” are jeopardized since the final manufacturer could avoid regulated inspection (Abdelgafar 112).
How many of these truly globalized production outlets there are and their conditions of labor are not public knowledge – PIA-PR, the industry’s publicity outlet for operations in Puerto Rico, has many restricted areas on their website and in a publication geared towards the prevention of industrial pollution the US Environmental Protection Agency even cited the “competitive” pharmaceutical industry’s unwillingness to “divulge details pertaining to their processes” (PIA-PR.com, Environmental Protection Agency 1991). However, hints as to what these globalized processes could be shortcutting are beginning to surface with independent accounts of mass amounts of pollution from the effluent runoff of Indian factories that have been outsourced pharmaceutical processes (Cox 2005). Abdelgafar shows how the global pharmaceutical players even use outsourcing to threaten and persuade developing nations to bend to their agenda: Egypt’s government is under constant threat of losing its foreign-contracted drug production centers to Gulf countries if they do not eliminate their drug price controls (136). If these methods and attitudes are standard for the outsourcing of pharmaceutical production, then it is clear that the public health of developed nations is coming at the expense of the public health of the developing world, and that this paradigm is acceptable and taken for granted by the industry.
The impetus for the move of Swiss-based Roche’s production centers for the antiviral drug Tamiflu to China’s Shanghai Pharmaceutical Co. also illustrates the influence of globalized drugmakers on local, host country populations. In this case, Roche’s Tamiflu was looked to as the “only defense the world currently has against the threatened [avian] flu pandemic,” and governments, corporations, and individuals were calling for stockpiles of the drug (Laurance 2005, CIDRAP News 2006). However, the production of Tamiflu was hampered by the low supply of star anise, a Chinese herb used in teas, as a traditional treatment for infant colic, and as a thousand-year-old traditional cold medicine (Fong 2005). The key ingredient for Tamiflu synthesis, shikimic acid, can also be extracted from star anise, and during the peak demand of the flu-scare in 2006 about 90% of the world’s pharmaceutical star anise was coming from Guangzi Province in China (Garner-Wizard 2006).
Oguamanam points to the “stress” that “international economic and political forces” place upon local communities to “exploit their natural resources,” and such was the case for star anise: national governments pressured Roche to increase supply to meet stockpiling need, and the demand was felt by Guangzi farmers who immediately planted more star anise trees to compensate (Oguamanam 55, Garner-Wizard 2006). Workers were paid only “about $3 a day to scramble up the misty hills to pluck the fragrant pods” – a sum arguably far more than the usual Chinese peasant subsists on, but still obnoxiously low given the 34% increase in profits that Roche saw in 2007 (BBC, 2007). However, star anise trees take 6-10 years to bear fruit, and the industry has already moved on to forms of shikimic acid extraction that would not require star anise (Garner-Wizard 2006). This will eradicate the 4-cents-a-pound market that Chinese peasants intended to satisfy with their investment into more star anise trees, leaving them penniless (Fong 2005). Roche will not assist them.
In fact, prevailing wisdom among developed nations and the mega-pharmaceuticals they harbor states that the developing world ought to be able to manage handsome profits from their bioresources like star anise. This assumption is based on the Western model of intellectual property rights, which the global North prescribes to the global South “as an instrument of technology transfer and as capable of enhancing the latter’s economic development” (Oguamanam 7). This technology transfer fails to happen, since Big Pharma outsources only very limited segments of the production process to overseas production centers. Roche has even “held out against” granting full production licenses to overseas manufacturers with paternalistic arguments that “the production process is complex and involves the use of potentially explosive chemicals” (Wright 2005). The global South also certainly does not exercise intellectual patents to the “aggressive” level that the global pharmaceutical giants protect their bioprospecting endeavors with (Oguamanam 7). It has been argued that patent laws as “industrial and free-market models” are even antithetical to “non-Western cultural milieus,” and the expectation for developing countries rich only in biodiversity to exercise strong patent laws represents a form of cultural imperialism (Oguamanam 61).
At the end of 1994’s Uruguay Round of the General Agreement on Tariffs and Trade, supranational bodies took this cultural imperialism and drafted it into a controversial document that emphasized protection of intellectual property rights. This was the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights), which now holds all WTO members responsible for increasing the scope, duration, and geographical coverage of industrial patents (Walker x). “There is no mention of the informal, traditional, or ecological knowledge of local people” in the TRIPS Agreement, further marginalizing the sociocultural contexts that indigenous cultures’ uses of genetic resources “thrives in” (8). It has also has been pointed out that TRIPS “sits uneasily with the other agreements of the WTO” because it flies in the face of even neoliberal ideals by promoting “intervention in the market to protect private property rights” (Walker x). Therefore, in addition to the cultural suppression of local lore, TRIPS also suppresses the growth of developing nations’ own domestic pharmaceutical industries, which depend in large part on the reverse-engineering of leading drugs to gain knowledge and experience for the development of their own production process (Abdelgafar 66, Lakoff 113).
The benefits of such derived knowledge are not limited to only those who figure it out, either. When Cipla and Ranbaxy, India’s most advanced domestic pharmaceuticals, discovered how to reproduce the antiretroviral treatments for AIDS that Big Pharma had been producing and selling for $15,000 a year, they improved upon them by combining other copied drugs into a cocktail of their own. Generic production of this Indian-made AIDS treatment reduced prices to only about a hundred dollars a year. Nonprofits and activist groups soon began importing the cheap generic AIDS medications to AIDS hotspots around the world, much to the disgruntlement of the multinational drug companies. Thirty-nine of them ended up suing South Africa’s government in 1998 for just importing the Indian drugs, and by blackmailing India’s effort to join the World Trade Organization via TRIPS enforcement, “crippled” India’s generic drug production and eliminated the world’s hundred-dollar-a-year AIDS treatment (Shah 15, Law 74-75).
There does exist an oft-debated clause of TRIPS that exempts nations facing public health crises like AIDS from patent observation, allowing them to manufacture generic versions of vital drugs. But the United States has consistently opposed this “compulsory licensing” with international lawsuits and limits the drugs they will grudgingly allow to be copied – often with only a single AIDS treatment among them (Outterson 171-172, Elliot 233). Barred from gaining the capability to produce their own medicines and left only with the option of purchasing expensive foreign drugs from large multinational brand names, developing countries are put in a difficult position. Although the big player pharmaceuticals utilize a pricing differential that adjusts drug costs according to individual nations’ GDPs (which also accounts for the price difference between Canadian drugs and American ones), these reductions are still not enough for most situations, especially given health crises such as AIDS, malaria, and tuberculosis that plague developing countries (Mills et al 33, Law 75, Graham 2002).
These top-down mandates from global assemblages support the static dominance of the few giant pharmaceutical corporations, but in an odd way they also stimulate the industry to escalate their global presence. The move of Tamiflu production to Shanghai would seem to be a prime example of pharmaceutical outsourcing, but for one important distinction: it was spurred by Beijing, rather than Roche. Most threatened by avian flu and yet forbidden by TRIPS to produce drugs for their own stockpile, the Chinese announced that they would violate Roche’s patent on Tamiflu and begin producing generic versions of the drug on their own unless Roche agreed to contract legally with their domestic pharmaceutical production centers (Wright 2005). Roche gave in and Shanghai Pharmaceutical Co. began to prepare for legal production of Tamiflu.
Brazil found itself in a similar situation after having neoliberal structural reforms “unilaterally” introduced to it, and the former head of Brazil’s main domestic pharmaceutical Far Manguinhos recently confided to interviewers that her public laboratories had “already reversed-engineered two [anti-retroviral/HIV] drugs that were under patent production and were ‘ready to go into production if the government deems it necessary’” (Biehl 219, 226). In response, in 2001 the US threatened to bring down sanctions on Brazil should their Big Pharma patents be broken, and an uneasy agreement was reached where Brazil was allowed to break them so long as it did not export the resulting products (Biehl 229). These constitute instances of states learning how to participate in the global pharmaceutical “nexus”: they can “claim spaces of independence for themselves” by simply ignoring international copyright, and can also “undercut industry attempts to establish market strength by imposing strict regulations and procedures for product approval and advertisement” (Petryna and Kleinman 19). But as will be seen in the next section, the pharmaceutical industry not only hijacks these state attempts at regulation, but effectively escapes them altogether by shifting more than just production abroad – the critically important research & development process can also be outsourced, with disturbing ethical and cultural implications.
Global Drug R&D: Clinical Trials on the Poor
The commonly cited justification for outsourcing pharmaceutical research is the same as it is for production: other costs are rising, making it “increasingly difficult to allocate resources to such activities as R&D.” That the “rising costs of production” are often already offset by outsourcing and that “such activities as R&D” ought to comprise the innovative backbone of any pharmaceutical enterprise are unmentioned (Abdelgafar 136). What are constantly mentioned are figures for the mammoth expenses associated with producing drugs: the Pharmaceutical Research and Manufacturers of America (PhRMA), the most influential of the industry’s lobbying representatives, set up a study in 2001 that claimed to reveal the average cost of developing a pharmaceutical drug in the US to be $802 million. But Sampath points out that this figure may have been inflated by as much as half, because “such estimates include not only the costs of R&D into potential leads…but also contain the costs of borrowing money to finance the R&D process and the marketing costs of the product (which can add up to approximately 40 per cent of all total costs)” (Sampath 16).
Despite such industrial figure-fudging, it is true that establishing a clinical research trial to prove the safety of new drugs has been considerably difficult ever since “unregulated medicines…killed thousands of Americans” in the early 20th century and prompted government intervention (Shah 37). Now, drugmakers are required to test their products in increasingly wide human trials before releasing them to the market in Phase I toxicology tests, Phase II efficiency investigations, and Phase III overall evaluations (Piachaud 90-91). While the Phase III studies are called upon to involve only about one to three thousand human subjects, in reality, Big Pharma companies were typically forced to find one hundred thousand people for any one Phase III trial because “only a fraction show up for their appointments and of these only a fraction could be medically eligible” (Shah 3, Piachaud 91). The citizens of Big Pharma’s home countries opt out of clinical trials because they have options available to them other than untested, experimental medications: Pfizer’s eye-disease drug Macugen fared terribly in its American Phase III trial because nobody wanted to inject it directly into their eyes (Shah 4-5). Accordingly, Americans in particular are the largest consumers of drugs but “less than one in twenty are willing to take part” in clinical trials (Shah 4). But somebody has to participate in these “valley of death” trials that “will take forever and will cost the earth,” so pharmaceutical executives have recently begun to look beyond Big Pharma borders for human guinea pigs (Shah 39, Piachaud 127).
Facilitating this global shift are Clinical Research Organizations (CROs), third-party outfits that take contracts from pharmaceutical corporations to run clinical trials and deliver results (Piachaud 127, Shah 6-7). The utilization of CROs for research and development is very analogous to the usage of third-party chemical manufacturers for drug production, with the same globalizing implications. For a time the CROs also kept their operations within national boundaries, but after a few drug applications based solely on overseas clinical trials passed through the FDA without incident, CROs and drug companies “streamed across the border” (Shah 7). As of 2003, America’s Pfizer and the Anglo-Swedish AstraZeneca have placed “global clinical trial hubs” in India, Britain’s GlaxoSmithKline has moved at least 30% of its clinical research to India and Poland, and just a single CRO has peppered trials all over South Africa, India, Southeast Asia, Latin America, and Eastern Europe (Shah 7, 9). This has made the largest pharmaceutical corporations truly “multinational enterprises,” and has also saved at least one big drugmaker up to $200 million in R&D expenses (Abdelgafar 136, Shah 9). By 2004 there were more than sixteen hundred overseas trials running in Russia, India, South Africa, and other Asian and African countries (Shah 7). But as Shah points out, it is “the broken, impoverished countries of Eastern Europe and Latin America” that are especially favored by drug corporations and their proxies for clinical research (Shah 7, Petryna 41).
Why this is so reveals once more how global neoliberalism begets globalized industry. David Harvey has extensively shown how the “structural reform” recommended upon developing nations frequently leads to disaster, and in Eastern Europe this was precisely the case: “rapidly opening markets combined with economic shock therapy” prescribed by the IMF and the World Bank and the “strings-attached” loans that came with it diverted funds out of social service and health programs which were suddenly considered expendable (Harvey 92-119, Petryna and Kleinman 4-5, Shah 12-17). This pattern repeated itself throughout most of the developing nations that accepted neoliberal economic recommendations, from Zambia (whose “nascent welfare state was methodically dismantled”) to AIDS-ridden South Africa (Shah 25). The gaps in healthcare that these structural reforms created for the Third World allowed Big Pharma to fill the void with offers of badly-needed medication (Lakoff 113, Shah 16). In this manner, the multinational pharmaceuticals fill their Phase III trial quotas quite handily – those receiving the experimental medications have no other alternative.
The attitudes of those who run the trials can be remarkably cavalier about this exploitation. “The real world is exceedingly painful,” noted one industry PhD – as if the “ill health of the developing world” were “as static and irreversible as the setting sun,” making it just as well that Big Pharma is taking advantage of it (Shah 10). Another story described a group of CRO researchers at a conference talking about how Western patients balked at “painful, invasive procedures” such as intravenous catheter insertion, while those in Russian clinical trials “were happy to do this as other alternatives were not available.” A colleague reportedly “chortled,” saying “I would not say that they were happy to do it, but they did it!” Giggling ensued (Shah 8-9). The questionable sensitivity of these contracted clinical researchers may be anecdotal, but the questionable ethicality that they run their trials with can be criminal.
Most of the ethical controversies surround the exclusive usage of the placebo control in outsourced clinical trials’ experimental designs. The most scientifically rigorous way to confirm that a drug actually works is to compare a group of subjects taking it to a group that is taking nothing at all, or taking an ineffective sugar pill (the placebo). The ethics of giving no treatment to the placebo group have been repeatedly attacked, especially if it is already known that the treatment is effective to some degree. As a study progresses, evidence for a treatment’s efficacy will gradually reveal itself, and when this happens researchers as caregivers are ethically obligated to administer the treatment that works best. However, doing so would end the trial – and trials must be carried to completion to make the drug eligible for the market (Shah 19, Petryna 42-43).
The dilemmas this raises are illustrated anecdotally: “how could researchers justify looking HIV-positive pregnant women in the eye and allow them to deliver their babies?” (Shah 90). In another case in Zambia, a new drug for diarrhea was being tested on HIV-infected toddlers in different groups. The first group received the drug and survived; the second group began their placebo treatment afterwards resulting in nine children dying. By the time the second group started their trial the positive data on the diarrhea treatment had already been known and other drugs had been available that could have saved the lives of those in the placebo group, but the data’s integrity took priority (Shah 28-35). The stakes are so high between health and harm that placebo trials have been all but discontinued in developed nations while Robert Temple, one of the chief regulators of the FDA, still continues to wholeheartedly endorse it as the preferred method of research (Shah 28-29, 19). That he does so indicates that “the harm considered tolerable for experimental subjects varies, depending in part on where in the world the subjects live” (Shah 19).
The extent of this “tolerable harm” has been demonstrated; researchers are willing to let Third World babies die just to get a drug out on the market and the real possibility of failed Phase III trials have not even been mentioned – drugs that don’t work, or are even more harmful than the placebo (Shah 19). But for all the dangers that the global poor risk in their compelled testing, “trends in the industry suggest that the margin of benefit for new drugs is rapidly shrinking” (Shah 37). Unless the industry soon develops breakthrough innovations on a level that has not been seen since the 1940s, the drug trial tribulations of the developing worlds’ ailing people may come to be for nothing (Law 10). How the large multinational pharmaceuticals have kept the developed world from noticing the lack of innovation in their drugs is all due to an aggressive marketing effort that rebrands drugs as lifestyle accoutrements and even alters conceptions of health and disease.
Pharmaceutical Marketing: Branding Health and Determining Cures
The advertising game is one that the pharmaceuticals as its pioneers have been playing for a long time: as far back as the late 19th century when Merck sold cocaine and Bayer sold heroin, active ingredients in drugs were even then only known by “catchy slogans and advertising jingles” (Shah 37, Petryna and Kleinman 1). Acting on the logic of profits, pharma’s marketing emphasis has today become the dominant concern among the three segments of the industry. Production is de-emphasized to the point where the factory has become “discarded,” which has been demonstrated by the difficulty in piecing together accounts of drug manufacture (Klein 201). Research and development now “is the marketing”: not only do CROs splice trial results into prestigious journals and insert professional tabulations into FDA applications for their clients, but clinical trials are even designed “with marketing purposes in mind” to garner professional support (Law 45, Shah 7). Big Pharma openly acknowledges this, citing again “intense competition and longer development times” to justify “a high promotional spend” as the only way they can recoup their investments and risks (Piachaud 118). A decade ago this high spend was between two and three times as much as was invested into R&D at $1.3 billion, and it can only have gone up since then (Shah 53).
The images and persuasion of pharmaceutical marketing easily transcends borders to attack a global market, despite having to do it in different incarnations in some places. Shanghai pharmaceutical employees hand out drug samples on city streets, African street vendors are supplied drugs to sell, and Indian pharmacists get color televisions from Big Pharma corporations for placing large drug orders (Petryna and Kleinman 16). Only the United States and New Zealand currently allow “direct-to-consumer” advertising of prescription drugs, which has also increased the prices of drugs in those places to make up for the advertising investment (Weber 158). Despite DTC marketing being prohibited elsewhere, “the industry is fighting relentlessly for similar deregulation” (Moynihan and Cassels, xvi). “Messages about drugs have become part of who we are and how we live in the global market, with its enormous hold on the transnational and domestic cultural space created by television and other advertising media,” say Petryna and Kleinman, and there are numerous examples to prove them right of instances where particular drugs have altered the consciousness of what health and disease even are (16).
Viagra’s exploitation of male mid-life insecurities for its treatment of “erectile dysfunction” is a favorite of Vince Parry, a Madison Avenue branding specialist who has assisted multinational pharmaceuticals with their marketing campaigns (Moynihan and Cassels, xii). Parry describes how drugs like these make it “not just about branding the drug,” but also about creating whole patient populations by “branding the condition” (Shah 51). By manipulating the developed world’s fears of death and decay and recasting First World conceptions of health as a “commodity and distinct personal achievement” with clever images and media advertisements, Big Pharma has tapped into a huge cash cow (Petryna and Kleinman 1-3). However, they have in the process redefined the “ups and downs of daily life,” turning them into mental disorders, abnormal conditions, and broad dysfunctions (Moynihan and Cassels x-xiv). These depictions of “individualized health” make images of true health crises like AIDS appear “inchoate or hopelessly untreatable,” which further divides paradigms of health into categories that can be “valued and treated differently” (Petryna and Kleinman 3). The ridiculousness of the First World’s focus on “lifestyle meds” is illustrated by allergy drugs: after more than $100 million was spent by various big drug companies in an allergy med advertising war in 1997, disgusted HMO executives commented that “except for antibiotics we are spending more money on runny noses than anything else” (Shah 49-50). And yet those various drugs – Zyrtec, Claritin, and Allegra – were found to act almost identically (Shah 50).
Whole marketing castles have been built of air in this fashion, and whether the industry’s biggest prize – its cholesterol-lowering statin drugs, of which Pfizer’s Lipitor leads global drug sales with yearly incomes of $10 billion – has been similarly fabricated is being disputed right now. After a single study was released in 1985 that correlated low cholesterol levels with long life, Merck led the way with an “advertising and public relations blitz to paint cholesterol as Americans’ top health adversary,” then hyped up its first statin Mevacor the next year with rave clinician reviews. It did not seem to matter that the costs of taking statins like Mevacor could bankrupt small countries and that simply dieting and exercising would confer much broader and safer health benefits (Shah 45, Moynihan and Cassels 1). But later studies would suggest the complete opposite: that people with higher cholesterol lived longer, half of all heart attacks occur in people with normal cholesterol levels, and that overuse of statins even disintegrates muscle tissue (Shah 54-55). At that point, however, the consumption of “lifestyle drugs” (that is, drugs which do not save lives from imminent death and sickness) had gone truly global, with Australians taking “ten times more antidepressants in 2000 than they did in 1990,” the number of Canadians on statins tripling in a decade, and prescriptions in the US for both these drug categories doubling in less that time (Moynihan and Cassels xi).
Since the marketing of such drugs has reaped such rich rewards, they continue to be produced while truly life-saving cures go uninvestigated. The difficulties of drug production that Big Pharma consistently whines about encourages the duplication of proven drugs to obtain some market share for them: after Merck released Mevacor, “copycat statins” continued to be released by the other top pharmaceutical players, with Bristol-Myers Squibb releasing Pravachol, Pfizer releasing Lipitor, Bayer joining with Baycol and AstraZeneca chipping in Crestor (Sampath 17, Shah 53). Partly due to this sort of corner-cutting and also that there doesn’t exist any FDA regulation requiring drugmakers to “invent high-priority drugs,” only three hundred drugs of the thousands available in the US are classified by the WHO as being “essential for public health” (Shah 44, 53).
That lack of FDA intervention to force the industry to produce crucial, life-saving medications is critical, and even more so considering that neoliberal reforms in most countries relaxed approval regulations to depend only on whether a “leading country” had already approved the drug (Lakoff 113). Problems with the FDA (as one of those leading regulating agencies) are plentiful – it has become overworked by the high volume of non-critical drug applications with as much as three-quarters of its applications being for me-too drugs like the copycat statins (Shah 53), a new system of applicant payments has meant that half the agency’s work is now being funded by the same pharmaceutical corporations it is trying to regulate (Moynihan and Cassels 19, Petryna and Kleinman 11), and it is even estimated that 90% of those “writing guidelines for their peers” on it have conflicts of interest due to financial ties to Big Pharma (Moynihan and Cassels 4). Regulators have proved poor defenders from the practiced marketing of the multinational pharmaceutical industry, which increasingly with globalization determines on its own what drugs will be produced, where they will be developed and manufactured, and how expensive they will be.
The Globalization of the Pharmaceutical Industry: “The Ever Growing Pharma Monolith”
Globalization has been seen to be aiding the pharmaceutical industry in reducing production and R&D costs, despite continued assertions that those costs are extravagant and justify massive marketing expenditures that go on to net huge revenues. These effects combine to spell out big profits for the industry, and in 2003 only ten drugs earned almost $50 billion (Law 8). Normal profit margins are 40%, which does not even include the high wages that workers in such a knowledge economy receive (Law 34). However, the escalation of profits for such a few number of products always necessitates greater and greater amounts of capital to be sustainable (Law 31), and periodically the top players of pharma devour each other in gigantic megamergers. When Glaxo took over Wellcome it cost $14 billion. When GlaxoWellcome transformed into GlaxoSmithKline it took $76 billion (Law 33). AstraZeneca as an Anglo-Swedish corporation represented one of the first truly individual-but-multinational firms and Pfizer practiced its own brand of expansion via aggressive acquisitions (Law 32). It seems that, at a certain point, all of these mergers will simply aggregate Big Pharma into a single true corporate monopoly that could dominate not only health policy and pharmaceutical access for the whole world, but will also continue to dictate who is worth giving healthcare to and for what. At stake is the public health and cultural dignity of both the developed and developing nations, as well as hopes for future drug innovations of any significance.
Works Cited:
Abdelgafar, Basma. The Illusive Trade-Off: Intellectual Property Rights, Innovation Systems, and Egypt’s Pharmaceutical Industry. Toronto: University of Toronto Press, 2006.
Biehl, Joao. “Pharmaceutical Governance.” Global Pharmaceuticals: Ethics, Markets, Practices. Eds. Adriana Petryna, Andrew Lakoff and Arthur Kleinman. Durham: Duke University Press, 2006.
Bull, Benedicte and Desmond McNeill. Development Issues in Global Governance: Public-Private Partnerships and Market Multilateralism. New York: Routledge, 2007.
Cox, Stan. “Exporting Cures, Importing Misery.” AlterNet. January 19th, 2005. http://www.alternet.org/environment/20964/
Cox, Stan. “Fighting Big Pharma in Little Digwal.” CounterPunch. February 15th, 2005. http://www.counterpunch.org/cox02152005.html
Cox, Stan. “Who’s Really Paying the High Prices for Your Pharmaceuticals?” CorpWatch. September 19th, 2007. http://www.corpwatch.org/article.php?id=14695
“Energy costs, lost tax breaks make pharmaceutical plants retreat from Puerto Rico.” Associated Press. November 18, 2007. http://www.iht.com/articles/ap/2007/11/18/business/CB-FIN-Puerto-Rico-Fading-Pharma.php
Gale, Jason. “For drug making industry, center of gravity shifts to Asia.” Bloomberg News. August 8th, 2007. http://www.iht.com/articles/2007/08/08/bloomberg/sxdrug.php
Graham, John R. “Why the Difference between Canadian & American Drug Prices for Prescription Drugs is Widening,” Fraser Forum, September 2002.
Harvey, David. A Brief History of Neoliberalism. Oxford: Oxford University Press, 2005.
Klein, Naomi. No Logo. New York: Picador, 2000.
Lakoff, Andrew. “High Contact: Gifts and Surveillance in Argentina.” Global Pharmaceuticals: Ethics, Markets, Practices. Eds. Adriana Petryna, Andrew Lakoff and Arthur Kleinman. Durham: Duke University Press, 2006.
Law, Jacky. Big Pharma: Exposing the Global Healthcare Agenda. New York: Carroll & Graf Publishers, 2006.
Moynihan, Ray and Alan Cassels. Selling Sickness: How the World’s Biggest Pharmaceutical Companies are Turning Us All Into Patients. New York: Nation Books, 2005.
Oguamanam, Chidi. International Law and Indigenous Knowledge: Intellectual Property, Plant Biodiversity, and Traditional Medicine. Toronto: University of Toronto Press, 2006.
Outterson, Kevin. “Fair followers: expanding access to generic pharmaceuticals for low-and middle-income populations.” The Power of Pills: Social, Ethical, & Legal Issues in Drug Development, Marketing, and Pricing. Eds. Jillian Clare Cohen, Patricia Illingworth and Udo Schuklenk. London: Pluto Press, 2006.
Petryna, Adriana. “Globalizing Human Subjects Research.” Global Pharmaceuticals: Ethics, Markets, Practices. Eds. Adriana Petryna, Andrew Lakoff and Arthur Kleinman. Durham: Duke University Press, 2006.
Petryna, Adriana and Arthur Kleinman. “The Pharmaceutical Nexus.” Global Pharmaceuticals: Ethics, Markets, Practices. Eds. Adriana Petryna, Andrew Lakoff and Arthur Kleinman. Durham: Duke University Press, 2006.
Piachaud, Bianca. Outsourcing R&D in the Pharmaceutical Industry: From Conceptualisation to Implementation of the Strategic Sourcing Process. New York: Palgrave MacMillan, 2004.
Sampath, Padmashree Gehl. Regulating Bioprospecting: Institutions for Drug Research, Access, and Benefit-Sharing. United Nations: United Nations University Press, 2005.
Shah, Sonia. The Body Hunters: Testing New Drugs on the World’s Poorest Patients. New York: The New Press, 2006.
Walker, Simon. The TRIPS Agreement, Sustainable Development and the Public Interest. Geneva: International Union for Conservation of Nature and Natural Resources, 2001.
Weber, Leonard J. Profits Before People? Ethical Standards and the Marketing of Prescription Drugs. Bloomington: Indiana University Press, 2006.
