Eight years after he was first found to be hiking up the price of a drug used to treat AIDS, cancer and malaria by more than 5000%, Martin Shkreli has received his comeuppance: a US court has banned him from ever working in big pharma and ordered him to repay the $US64.6 million he gained from the drug Daraprim when he was CEO of Turing Pharmaceuticals.
Shkreli, who is serving seven years for securities fraud, is reportedly unrepentant, a point not lost on US District Court Judge Denise Cote: “Shkreli’s anticompetitive conduct at the expense of the public health was flagrant and reckless. Barring him from the opportunity to repeat that conduct is nothing if not in the interest of justice.”
But will slugging one of the most egregious exemplars of the drug industry exploitation help restore trust in big pharma? The world has turned to pharmaceutical companies in the pandemic, relying on manufacturers for COVID-19 vaccines, treatments and life-saving interventions for those who develop severe disease. But it hasn’t done much to increase public trust: last year Australia became completely reliant on big pharma for a pathway out of the pandemic, but just 62% of people said they trusted the pharmaceutical industry. In comparison, 75% of Australians said they trusted healthcare.
Globally, trust in pharmaceutical healthcare has stayed the same since 2019, 57%, while trust in biotech healthcare dropped from 64% to 61% across 2019-21.
Do we trust big pharma?
In the 2021 Accenture Health and Life Sciences Experience Survey, only 15% of US respondents reported that they trusted pharmaceutical companies more than before the pandemic.
One US survey found fewer than 70% of respondents had a “favourable” view of Pfizer, Moderna and Johnson & Johnson vaccine manufacturers. Although a Statista survey found 62% of Australians trusted big pharma, just 50% of those in the UK did — compared with 80% of Indian respondents.
Before vaccines became widely available, misinformation and misunderstanding around COVID treatments including hydroxychloroquine and remdesivir didn’t help. In the United States, the drugs were given emergency use authorisation, with former president Donald Trump calling remdesivir a “cure” for the virus, despite no evidence.
Concerns around links to rare blood clots of the AstraZeneca vaccine had a massive impact in Australia, with many of those then eligible for the vaccine opting to wait for Pfizer to arrive, delaying the vaccine rollout. Medical mistrust has fuelled the anti-vaxxer movement abroad.
But as vaccines proved safe and effective and adverse side effects rare, big pharma enjoyed a reputational boost, albeit slight. In the US, a Gallup poll found the pharmaceutical industry was the most poorly regarded out of 25 industries. By 2021, it had moved up slightly to 21st place.
But the starting point was low following decades of overcharging, lawsuits and lobbying — and Shkreli’s ban is just the tip of the iceberg.
Money fuels mistrust
There’s a long history of mistrust in big pharma, especially in marginalised communities. The Tuskegee Study, where the US government allowed 600 Black Americans to go untreated with syphilis to study the effects of the disease, has fuelled generational mistrust. In one survey, 97% of Black HIV-positive Americans endorsed at least one general COVID-19 mistrust belief.
Then there are high-profile figures like Shkreli and Theranos founder Elizabeth Holmes, ongoing lobbying by big pharma targeting doctors by sponsoring lavish educational events and paying big money for GPs to be guest speakers and sit on advisory boards, and the increasing cost of cancer drugs despite no proof they’re better value or more effective.
A major factor fuelling mistrust is perceived profiteering, University of Sydney pharmaceutical policy research scientist associate professor Barbara Mintzes says.
“One of the things that has eroded public trust directly would be very high prices for specific medicines that are really beyond what health systems can bear,” she said.
And across the pandemic, pharmaceutical companies’ profits have been in the spotlight.
COVID treatment drug molnupiravir is sold by manufacturer Merck to the US for 40 times what it costs to make. Australia has ordered 300,000 doses. And COVID vaccine manufacturer Pfizer was fined $US106 million in 2016 for a 2600% price hike on anti-epilepsy medication. It has also been accused of price gouging after raising the price of its COVID vaccine by more than a quarter in EU supply contracts.
Pfizer has been criticised by consumer rights group Public Citizen for creating contracts with the US, UK, European Commission, Albania, Brazil, Colombia, Chile, Dominican Republic and Peru which give it the power to block countries from donating their vaccines.
Unlike AstraZeneca, Pfizer and Moderna also won’t share their vaccine “recipe” to allow doses to be manufactured under contract in other countries. It expects to make a US$15 billion profit from vaccine sales across 2021.
There are limited international laws around what drug companies can charge, and there are seven-year patent laws preventing other companies from making generic versions.
In an interview with the Wall Street Journal, Pfizer CEO Albert Bourla said it deserved to make a profit off its vaccine.
“Can you think of someone that would deserve to make money other than someone” saved so many lives, “emptied hospitals”, and saved trillions of dollars by limiting severe disease, he asked.
What can big pharma do?
Bourla acknowledged there was limited trust in big pharma, and that companies had to work hard to earn it back, but pointed to increased investment in research since he took over the company.
Lobbying transparency has increased across the past decade. In the US under Obamacare, the Open Payments database requires companies to report every payment to a doctor over $10, including buying them food, drink or paying for their accommodation.
Since 2016 Medicines Australia has asked every member company to list every payment made to a health professional, collating it into a public database. But this reporting is limited: only Medicines Australia members have to list what they’ve spent and it doesn’t cover food and drink. A 2016 study of US doctors found even a single $20 meal paid by an industry representative led to increased prescriptions of a brand-name medication.
Mintzes says there was a lot more companies and regulators could be doing.
“Countries globally together should be looking at whether the system that we have now right with patent protection is actually meeting the goals of innovation, and also ensure that people have access to the health treatments that they need,” she said.
International trade agreements for livesaving drugs have been struck before, breaking patent monopoly around AIDS and hepatitis C drugs, making them available at affordable prices around the world.
Mintzes says companies should also have to show how their brand-name drug compares with existing treatments.
University of Newcastle chair of clinical pharmacology Jennifer Martin — who has sat on a number of Commonwealth, state and New Zealand advisory committees including the Therapeutic Goods Administration advisory committee — says aid-independent fact-checking committees and declaration of interest processes are key to ensuring objective scientific decisions can be made on which drugs are publicly available and to whom.
However, she says, that doesn’t mean committee members are psychologically resistant to the personal concerns of public opinion and persistent pressure, including emails, phone calls and publication of specific clinical scenarios affected by the decision in the media.
“The aim of all lobbying behaviour from industry including indirectly from community and groups affected by the outcomes is really to generate pressure on those people making a decision,” she said.
“But we’ve got to trust that the people appointed by governments to make these decisions, and the processes and checking behind those appointments, are robust enough to stand firm from a lot of the pressures coming from industry.”
Quite an achievement for an article about trust in big pharma to not mention Perdue Pharma, its owners the Sackler family, its prize product Oxycontin, the many billions of profit and the hundreds of thousands killed.
Thanks for the quotation from Pfizer CEO Albert Bourla: “Can you think of someone that would deserve to make money other than someone” saved so many lives, “emptied hospitals”, and saved trillions of dollars by limiting severe disease, he asked.
That’s one way to put it. Martin Shkreli gives a different angle, although it is good he has been slapped down. But his scheme is still relevant. Find some product that is essential and irreplaceable to the survival of some people, get exclusive rights to it and tell those people they have a choice, ‘Your money or your life’. It’s a very effective business model with a long tradition.
Prohibition in the 1920s gave big pharma not just profit by eliminating the competition and having an externalised socialised security division aka drug enforcement police, it gave them the confidence and experience in how to corrupt governments at the political and administrative levels. Also poignant is that big pharma is a core constituent of big money and in the US, big money, the old money, was built on slavery. So a bunch of sociopathic racists. I’ll have a cup of tea now.
These examples of corporate malfeasance on the part of the pharmaceutical industry are, in the overall scheme of things, nothing more than examples of capitalism being capitalism. This is how capitalism has always worked and always will work.
As I have said before, complaining about this sort of thing is like the brothel owner who complains about the fact that his staff are having sex with the customers. It is simply what is supposed to happen. And it will continue to happen, despite all the hand-wringing, Royal Commissions and endless lamentations, as long as we have the curse of capitalism.
We have seen this sort of egregious behavior in the finance industry, building industry (remember the hundreds of buildings erected around the world that are still covered in highly inflammable hydrocarbon coatings or have been deemed uninhabitable only a few years (or even less) after their construction. Oh, and did I mention the behavior of telecommunications companies selling grossly overpriced products to indigenous communities? Then there is the aged care industry. No doubt readers will be able to think of myriad other examples.
The only answer to this racket is to nationalize all essential industries and to run them as public service utilities for the benefit of the community and not for the benefit of the privileged few.
To remain on topic, one of the most egregious examples of corporate, moral and ethical criminality by the pharmaceutical industry is recounted in this article from the Guardian:
https://www.theguardian.com/us-news/2019/jul/24/opioids-crisis-big-pharma-drugs-carnage
but the list is endless.
Spot on RR. It’ll be interesting to see if big Pharma haters start to see other industries with the same lens. The wellness industry is now 1.3 trillion about the same as Pharmaceuticals. Will they now start wondering if it is ethical to sell remedies that are proven not to work? Will they identify that many other industries have also coopted government and media with their framing of problems and the solutions?
Some good questions there Stephen.
In a ‘neo-liberal’, free-market environment where nearly anything goes, anything is possible.
Robert – I’d read about this (the article in your link) but not so systematically exposed Far out… ” Last week, Hunter wrapped up a two-month long trial of the pharmaceutical giant Johnson & Johnson that shed new light on the extent of the pharmaceutical industry’s complicity in driving the US opioid crisis, which has claimed more than 400,000 lives. Oklahoma’s attorney general accused the company of a “cunning, cynical and deceitful scheme” to ramp up narcotic painkiller sales as one of a web of firms that created the biggest drug epidemic in American history as profits surged.” and this ” The industry provided much of FDA’s income through the fees it paid for drug approvals and the relationship was closer than many thought healthy including some of the people working for the agency who claimed it was in the pocket of big pharma.” The names in the article will gobsmack you. Well VJ. It starts with opening our mouths like we’re doing here, but yes you’re absolutely right – it takes action as well and that means each of us concerned about it, does our bit towards change, whether that’s with promoting new laws or funding our watchdogs properly, to stop political parties being unduly influenced by anyone, not just big pharma, influencing our politicians and voting for those with the integrity to bring in those laws.
Jen, I have an online subscription to The Washington Post (there is no decent broadsheet general newspaper available here in Australia – if you are aware of one then please let me know). It was there that I first read about this monumental opioid scandal. Naturally the Murdoch media give it little, if any, coverage.
However Jennifer, it is only one of myriad scandals that occur under the aegis of capitalism. I think that you could easily become overwhelmed if you tried to document all the very serious transgressions (never mind the less serious misdemeanors) that occur on a globally scale.
I suspect that one day in the future (near or distant, who knows?) there will be a violent backlash against all this racketeering and it wont be pretty.
RR, while the limitations and excesses of capitalism are writ large everywhere, nationalisation is also a medusa. The government can’t regulate itself. Perhaps more carrots for voluntary compliance and a bigger stick for non compliance.
It is instructive that the people and groups behind the frothy mouthed anti vax and wellness movements are mostly libertarian. That is, the groups and people which do not want any government interference in people’s lives and businesses. So while they scream about Big Pharma on one hand, on the other hand they don’t want the sort of government regulation which could be and should be imposed on Big Pharma. They are not in the least bit concerned about the multi billion dollar lightly regulated industries which promote and sell nonsense like colloidal silver.
It is interesting that you’ll often get the information posted about Salk and the polio vaccine. People always praise Salk, but they don’t take the next step and ask why he was able to offer the vaccine without a patent. It’s because it was developed at a university as part of a university research project, as were many of the life saving vaccines which were developed around that period. Once again, the people who decry Big Pharma are usually also against government funding education, especially tertiary institutions.
If we want to talk about how to break down Big Pharma then unfortunately for those who don’t like to hear it, Big Government is the only answer.
I know which one I would prefer VJ, Big Government or Big Pharma. At least we can vote ‘Big Government’ out.
I think that I also need to break the news to you too, VJ, it is not only the anti-vax crowd who dislike the big pharmaceutical industry. They are not exactly ‘flavor of the week’ with the socialists, like me, either.
Let me give you a categorical assurance VJ. as one who does ‘decry’ (to use your term) Big Pharma, I am angry that the government does not provide more funding for education, especially tertiary education.
I think you missed the point of my comment.
Be more specific then VJ. I am only a simple man.
Your comment is as usual, vacuous, with the usual binary reductionism and lack of evidence. Libertarian are we all now. UR Foxtrot whisky.
In the US Obamacare has a requirement for practitioners to disclose over $10 from salespeople… let’s call it a donation. That sounds pretty tight (but didn’t help with mass addiction to script drugs).
In Australia we have what sounds like a voluntary reporting system for members of Medicine Australia, with only partial donations covered.
A $20 donation has been found to be sufficient to influence the recipient/tangible outcome.
In Australia our federal politicians have a requirement to disclose donations greater than $1000 per instance, but can delay reporting up to 12 months. Our federal politicians have zero requirement to report who they meet to their employers (us), when they meet and how often ‐ keeping in mind there are 3 times as many lobbyists (salespeople) as politicians, and these salespeople have their own passes into parliament house.
Nothing to see hear.
“our federal politicians have a requirement to disclose donations greater than $1000 per instance”
In your dreams. The limit for each single so-called donation is over $14,500 (see the AEC web site), and it is indexed so every year it goes up. It is easy to find ways to make multiple donations if you want to give more without declaration. The Liberals also run front organisation that can take in money destined for the party without it being classed as a political donation. And then there is the goods and services loophole, that says when you buy something from a political party, such as a plate of barely edible food for $10,000, it is not a donation.
State governments set much stricter limits, but that is seriously undermined when national parties can divert funds to their party’s state organisation’s use if they like.
Labor and the Greens voluntarily declare donations far below the statutory limits. The Liberals and Nationals hide as much as they can get away with. Labor has sometimes made serious efforts to impose much lower limits in federal politics but the Liberals and Nationals fought tooth and nail to defeat it.
If only we had our own, highly respected, world leading government-owned agency to develop vaccines for the benefit of all Australians (and the world), rather than for the benefit of shareholders.
“Our Story
The Commonwealth Serum Laboratories was established in Australia in 1916 to service the health needs of a nation isolated by war. Over the ensuing years CSL provided Australians with rapid access to 20th century medical advances including insulin and penicillin, and vaccines against influenza, polio and other infectious diseases. CSL Limited was incorporated in 1991 and listed on the Australian Securities Exchange (ASX) in 1994.”
Our Story | CSL Limited