From cholera to coronavirus, medicine monopolies are making us sick
Illlustration of pills opening up to show dollar signs inside

From cholera to coronavirus, medicine monopolies are making us sick

By: Nick Dearden
Date: 22 January 2024
Campaigns: Pharma

Our report, Taken, Not Earned, released this week in collaboration with Balanced Economy Project, SOMO and LobbyControl, reveals just how extreme monopoly power is, and how it drives the global wealth and power divide. Six case studies take an in-depth look at how monopoly power affects different sectors: finance, tech, pharma, agriculture, retail and energy. Here we take a look in detail at monopolies in pharmaceuticals.

Cholera cases are soaring, 667,000 cases and 4,000 deaths across the world last year. Although the world has seen this coming for many months, there is a serious vaccine shortage. Part of the problem is that pharma giant Sanofi stopped producing its cholera vaccines at the end of 2022. Despite a surge in demand, the profits generated were not, it seems, adequate incentive to keep production going.

The diseases suffered by poor people in impoverished countries have never held much interest for the biggest pharmaceutical corporations. But increasingly, nothing but the most extortionately priced medicines, out of reach of all but the very richest, makes the cut for these corporate behemoths.

Big Pharma can afford to be choosy about which drugs it makes, because the concentration of this industry means there are far fewer serious competitors than in years gone by. Between 1995 and 2015, 60 American pharmaceutical companies merged into just ten. Whole areas of medicine research were effectively abandoned.

Take vaccines. Until the pandemic, very few corporations were left in the vaccine field. Inoculating people for disease was not considered the path to super-high profits. A range of other vital medical research – including antibiotics – similarly fails to interest the big players.

Monopolies don’t drive innovation

A second reason for the industry’s power is that these companies enjoy actual monopolies. New medicines are made under patent, giving the producer exclusive control over the drugs to which they own the intellectual property rights. And that intellectual property has become tighter and stricter and much more global over the last 40 years, at the urging of the very pharmaceutical industry which has profited so handsomely from it.

One report shows that drug makers filed for an enormous 1,500 attempted patents on the 12 best selling drugs in the US – the vast majority successful – aimed at extending their monopolies far beyond the already lengthy twenty years of protection they enjoy as standard. Lawyers and lobbyists have become mainstays of this industry, rather than researchers and medical experts.

The justification for extending intellectual property privileges is that it incentivises innovation. Drugs are costly to produce, so protecting profit levels for 20 years or more, incentivises research into the most expensive, breakthrough medicines.

But the argument doesn’t stack up. In fact, as intellectual property rules have got tighter and more enforceable, innovation has plummeted.

Most breakthroughs in medicines today come through enormous public sector funding, and the work of university departments and small biotech companies. Contrary to what we’re told about private sector innovation, public sector funding is usually most important at the riskiest stage of development. A Stat news analysis in 2018 concluded that Pfizer developed only a fraction – about 23% – of its drugs in-house. The rest were acquired.

And yet, when it comes to rolling this research out, it is effectively privatised – given to the pharmaceutical sector to make life and death decisions about what medicines are produced, who gets to use those medicines, and what price they have to pay to get hold of them.

This means both unsustainably high prices on new medicines, with some drugs now on the market in the US at over $100,000 per patient. But even more galling, the public is actually paying for these drugs twice, thanks to high research costs borne by the public sector to begin with.

Life and death decisions

None of this makes our economy more efficient, effective or productive, but rather turns corporations primarily into vehicles for extracting maximum real value from the wider economy and using it to line the pockets of the already wealthy, at the cost of undermining the foundations of the economy as a whole.

We can clearly see how this played out in the pandemic. Before the pandemic, big industry players put almost no time into researching coronaviruses, or any of the other pathogens that might cause a pandemic. The research that was done, was carried out by public institutions or small businesses, often with large chunks of public money. But once the pandemic broke out, that research was effectively transferred to Big Pharma corporations, with huge amounts of additional cash put on the table to get vaccines trialled, tested, and into arms.

This allowed those corporations to make key decisions about the rollout of the vaccines, resulting in severe inequality in who received the vaccines and who didn’t. The seemingly most effective mRNA vaccines were sold overwhelmingly to the richest part of the world, while the majority world was left without. The situation got even worse when these same corporations, as a direct result of their legal monopolies, refused to share the know-how behind the vaccines with countries that could have produced them.

Thanks to the profits generated by their publicly-funded mRNA vaccine, Moderna is now run by a multi-billionaire. In fact, Covid-19 vaccines created nine new billionaires.

But the problem is not simply that this level of wealth generates huge inequality. It’s that it prevents us as a society from being able to publicly create the medicines we will need in the future, at a price we can afford. That, above all, is why we need to take on this monopoly power.

Full case study

Read more

  1. Taken, Not Earned: How monopolists drive the world’s power and wealth divide, Global Justice Now, Balanced Economy Project, SOMO, LobbyControl, January 2024
  2. World’s top firms use ‘monopoly power’ to inflate prices, The Times, 17 January 2024
  3. Case Study: Big Agriculture, Global Justice Now, January 2024
  4. BOOK: Pharmanomics: How Big Pharma Destroys Global Health, by Nick Dearden (Verso, 2023)

Image: Vire Animations/Shutterstock