We use the term ‘big pharma’ to describe the large, multinational drug manufacturers who monopolise the production and sale of the key drugs. Big pharma companies often have a limited role in the actual development new drugs, with smaller companies and public sectors doing a lot of the riskier research. Yet, these giant firms use patent monopolies to make billions in revenues, with their profit margins usually outstripping even lucrative sectors like energy, finance, and technology.

The current pharmaceutical model prioritises profits over people, with disastrous consequences including:

• Big pharma neglects research into diseases that are prevalent in lower-to-middle-income countries (LMICs) simply because these diseases are less profitable;
• Big pharma charges extortionate prices for medicines meaning many people around the world cannot afford them – even the NHS sometimes has to ration access to certain drugs;
• Big pharma is bad at innovation, with the profit-driven system incentivising drugs that offer little therapeutic advance and primarily serve to prolong patent protection;
• The system of patent monopolies stops scientists from collaborating to share and improve medicines or make them more widely available.

When the pandemic hit, there were hopes that the urgency of the crisis would prompt a more collective approach to the development of a Covid-19 vaccine. However, even though all the major Covid-19 vaccines were developed with public funding, pharmaceutical corporations quickly imposed patent monopolies on them, driving up prices and refusing to share their knowhow with global south countries who wanted to produce them. This led to what campaigners have called a ‘vaccine apartheid’ with higher income countries entering into contracts with pharmaceutical companies to immunise their populations, while people in the global south were denied access.

Demands by over 100 countries, mostly from the global south, to suspend intellectual property rights during the Covid-19 pandemic were resisted by big pharma, as well as American and European governments. The World Health Organisation estimated that 1.3million fewer people would have died from Covid-19 if vaccinations had been shared equitably. Without big pharma’s vaccine monopolies, many more lives could have been saved during the pandemic.

Big pharma companies spend surprisingly little of their huge revenues on creating new drugs, with studies showing that most pharmaceutical companies spending more money on sales and marketing than they do on research and development for new drugs.

Pharmaceutical companies also generally invest in drugs they know have a strong chance of being profitable, rather than the ones that will bring the most health benefit. Over 50 per cent of new medications that reach the market, for example, are ‘copy-cat’ drugs that do not bring any added therapeutic advances for patients.

Large drug corporations also benefit enormously from public institutions, public funding, and charitable funding. Increasingly, they are buying up the work of public bodies or smaller biotech companies instead of commissioning their own research. Yet, pharmaceutical companies often get exclusive licences on such drugs, allowing them to charge sky-high prices for medications. In short, taxpayers are paying twice for medication by buying back medicines they already paid to discover!

Fun fact:

• The Oxford-AstraZeneca Covid-19 vaccination was 97 per cent publicly funded while the Moderna vaccine was 100 per cent publicly funded;
• Humira, a popular drug used to treat arthritis and for years the most costly drug for the NHS, was developed at the University of Cambridge;
• The prostate cancer drug, Abiraterone, which pharma company Janssen priced so high that the NHS had to ration access, was developed with heavy financing from the publicly-funded Institute of Cancer Research.

Our research revealed that pharmaceutical companies have charged the NHS an eye-watering £13billion for just ten medications over the previous decade, charging mark-ups of up to 23,000 per cent! What’s more, pharmaceutical giants are now attempting to water down a scheme known as the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) which helps stop the medicines bill from spiralling out of control. According to the government’s own estimates, the new deal could cost our NHS an additional £2.5 billion annually. You can read our report Bitter Pills: Why the NHS can’t swallow Big Pharma’s profiteering by clicking here.

Unfortunately not! The profit-driven model of the pharmaceutical industry means it invests little in diseases affecting lower-income countries. A measly four per cent of newly developed drugs are for neglected diseases affecting people in the global south. Meanwhile, despite growing concerns about drug-resistant infections, which could kill 50 million people globally by 2050, big pharma companies are largely neglecting new antibiotics, because it is not considered a lucrative market.

The giants of the pharmaceutical industry rely on intellectual property legislation, including patent law, to maintain their monopolies. Patents enable drug companies to maintain exclusive ownership over ‘inventions of the mind’ – thereby prohibiting the manufacture, use, or sale of an invention without the patent holder’s explicit permission for a minimum 20-year period.

Historically, medicines were considered far too important to put patents on, and Switzerland, a country with a large pharma industry, didn’t put patents on medicines until 1977. Many countries in the global south, including India and Brazil resisted for longer, since international patent laws would limit their ability to make drugs cheaply. However, this resistance was met with an aggressive response from the United States, including through trade sanctions. International patent laws asserted through the World Trade Organisation have slowed the growth of independent pharma industries in many countries, leaving large parts of the world dependent on neo-colonial models of charity.

Here are Global Justice Now, we are campaigning for alternative pharmaceutical models that prioritise stakeholder interest over shareholder greed. Different ways of organising the pharma industry could include:

• Finding new ways to incentivise scientific progress, beyond patent monopolies: for example, US senator Bernie Sanders has proposed an interesting alternative to the patent system which would involve the state providing prize money for drug development. The prize would be paid to successful companies instead of giving them lengthy patents for creating new drugs, and health priorities, both national and international, would be decided democratically.
• Conditions on public funding: Given that the public is paying for so much of the most important pharmaceutical innovation, governments should put conditions on that funding, including on pricing and cost transparency.
• Share knowhow and science: A more collaborative and open approach to knowledge-sharing would likely encourage more medical innovation, especially when compared to the strangling effect of patents. After the deadly inequality of the Covid-19 pandemic, it is clearer than ever that lower income countries cannot depend on big pharma corporations for life-saving medicines. To prevent such disastrous failures from happening again, and to make sure that diseases that affect mainly the lower income countries are invested in, global north governments must ensure technology transfer to the global south.
• Where the private sector is failing, public infrastructure must be rebuilt: the gross global inequity in accessing Covid-19 vaccines showed us the problems of being over-reliant on a small handful of companies who have the capacity to produce certain medicines. The government must intervene to prevent these ‘bottlenecks’ by establishing public manufacturing centres where needed.

We won’t be able to replace the big pharma system all at once, but better regulation, more public control, and investing in genuine alternatives are necessary now to improve the supply of medicines to all.

Scientists around the world are already showing that a better way of producing drugs is possible, even as the failing pharma system continues. A breakthrough programme which is seeking to make vaccines for neglected diseases and share patents widely is already up and running in 15 countries. These hubs are located in regions across the global south and aim to challenge the restrictive western mode of drug development by encouraging knowledge exchange between countries in the global south.

Brazil’s public medicines institution, Fiocruz, is one great example of how democratically-owned models can make huge scientific advances, while providing its medicines much more cheaply than the big pharma model. Meanwhile, the relatively underfunded Texas Children’s Hospital shows that it is possible not only to make a patent-free jab, but to transfer vaccine technology to other countries that want to reproduce it. Now try to imagine what they could achieve if they had the resources of big pharma companies!

When thinking about the impact of building a new pharma system, it is also important to remember that pharmaceutical companies are currently failing to invest in the new drugs we need, with up to 80 per cent of newly approved drugs corresponding to ones already on the market. The real risk lies in sticking to the same, failing system.