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The Tyranny Of Big PHARMA: Morally *and* Economically Foolish
SHORT TAKES: Biden Gets A "B Minus" Grade on Corporate Influence; A Unified Child Benefit; A "Well-Being" Economy; George Floyd
| Jonathan Tasini | Apr 22 |
LONG TAKE
To say that Big PHARMA has cost millions of lives is probably not a revelation—lives lost because the greed of these companies puts live-saving medicine out of the reach of poor people, not to mention lives lost because the cost of drugs bankrupted people who sunk deeper into misery and perished because economic destitution kills.
So, here we are at a key moment with a question that might be answered in just a few weeks: will COVID-19 kill millions of people simply because Big PHARMA’s profits mattered more than the lives of people, principally in poorer countries? And, depending on what he does, Joe Biden will have that monumental loss of life as a stain on his legacy.
I wrote about this two months ago but this is an issue to keep after. So, the background is easy to understand:
Under the World Trade Organization rules, Big Pharma gets *lengthy* monopoly protections for medicines, tests and the technologies used to produce the medicines and tests. That’s one reason people have opposed these bad trade rules for years—these trade deals, which were sold to us using the marketing phrase “free trade” have nothing to do with the theory of “free trade”.
It’s the exact opposite: it’s not free trade. It’s very much controlled trade—controlled for the profits of big corporations like Big Pharma. These deals set up massive lists of rules that allow corporations to control money, capital and, in this case, patents to make piles of money at our expense. The specific rules under the WTO are called “Trade-Related Intellectual Property Rights” (TRIPS).
What does this mean? Poor countries can’t afford the prices under these patented vaccine protections so, while millions of people in richer countries might get vaccinated this year, it’s likely that tens of millions of people in poorer countries won’t get access to a COVID vaccine until as late as 2024. Instead, richer countries are buying up hundreds of millions of doses at the prices being demanded by Big PHARMA, leaving pooer countries starved for doses.
[Warning: now getting deeper into the weeds] You might read that, under the WTO rules, countries can issue compulsory licenses for vaccines—in other words, forcing the companies to license the vaccine process. Well, technically, that’s true—but, in practice, it’s a rare occurence: first, a country has to negotiate with a given company and, then, declare that the company is not making the drug or vaccine available at a reasonable price, and Big PHARMA deploys armies of lawyers to drag the process out... and, during a pandemic, there is no time to wait.
Second, more important, poorer countries have essentally been threatened by richer countries—especially, the U.S.—that issuing a compulsory license will bring retaliaion, which is why very few have been issued in the last two decades. Here’s a very clear threat embedded in a report by the United States Trade Representative (hat tip to the footnote in the U.S. Senator’s letter mentioned below):
To maintain the integrity and predictability of IP systems, governments should use compulsory licenses only in extremely limited circumstances and after making every effort to obtain authorization from the patent owner on reasonable commercial terms and conditions. Such licenses should not be used as a tool to implement industrial policy, including providing advantages to domestic companies, or as undue leverage in pricing negotiations between governments and right holders.
This is a very clear, bureaucratic warning: do not do this or your will suffer blowback. “Providing advantages to domestic companies” in this story means allowing a local drug company to make a COVID vaccine for very little or not cost—which enrages Big PHARMA.
Big PHARMA puts out reams of propaganda saying it needs to make these huge profits to fund research. Utter nonsense. And the COVID-19 pandemic proved the nonsense—somewhere on the order of $100 billion of public money (meaning YOUR TAX DOLLARS) was handed over to half-a-dozen drug companies to develop the COVID-19 vaccines, companies that stand to make tens of billions of dollars in profits. I’m not against public money being used to come up with life-saving drugs or other medical advancements—but we, the people, then, should own what we fund. And with a government that wasn’t in the grips of Big PHARMA lobbyists (read: campaign donations) it would have been a no-brainer to cut a deal that demanded the removal of patents and other intellectual property barriers and required the open sharing of know-how.
This is simply about pure greed. And, specifically, CEO greed. Take Pfizer, for example. It is no coincidence that Pfizer is charging $39 for its two-dose vaccine and making an 80 percent profit AND the pay of the CEO of Pfizer, Albert Bourla, went up 17 percent last year to more than $21 million—and that’s not even including his stock options and pension benefits that will give him millions more.
Macro point: The tyranny of Big PHARMA is yet another example of the many ways in which the U.S. Constitution is irrelevant, at best, and, at worst, preserves inequality, racism and bad government (e.g., the Senate is an anti-Democratic institution and should be abolished)¹. Patents and copyrights are a Constitutionally-protected right:
Article I Section 8 | Clause 8 – Patent and Copyright Clause of the Constitution. [The Congress shall have power] “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.
Of course, the purpose of the above was actually to prevent the controlling of information and knowledge by a King or autocrats and making sure little folks could make a little coin from their works—but the slave-owning white guys who wrote the Constitution could not know that that clause would be a protection that shoveled huge profits to the Kings of Disney, Amazon and, in our case at hand, Pfizer et. al., to the detriment of peoples’ lives and pocketbooks.
The cost to us from the tyranny of patents and copyrights is invisible to most—but it is monumental. Economist Dean Baker, who has been on this issue for a long time, calculated back in 2018 that the annual cost to us of patent and copyright monopolies is around $1 TRILLION. And what I mean by cost to us is pretty easy to understand: Bill Gates, to use one example, is a fabulously rich person not because he’s smart but because of his monopoly control over patents and copyrights for Microsoft software which we pay through the nose to use. And you can make the same point about Apple, HBO and the high-tech platforms like Google and Amazon.
Ok, so, what’s the short-term, COVID-vaccine-for-the-people play here? Back when I first wrote about the issue, there was a massive international movement to get the WTO to waive the TRIPS-related patent rights—and it was supposed to be decided at a meeting in February. The issue was raised but tabled because you need consensus of all countries to make a change. The effect of the waiver would be to let poorer countries get immediate access to the tools needed to get vaccines made—that includes “the know-how, biological material and technology behind their vaccine”, as The Peoples Vaccine campaign points out.
And on May 5th, the WTO is scheduled to meet. It’s a date that could decide whether millions more people get sick and die—or not.
And the main obstacle to the waiver has been the U.S. government. So, the current focus is largely aimed at Joe Biden.
The demand for a waiver is accelerating, coming from, among others, 60 former heads of state and 100 Nobel Prize winners, 400 prominent U.S. health, faith, consumer, labor, development and other organizations, and 10 Democratic U.S. Senators who wrote directly to Biden last week.
Let’s say you don’t give a shit about poor people in other countries, and you love Big PHARMA. There are two entirely self-interested, related obvious reasons to clamor loudly for this waiver.
First, as long as COVID-19 rages uncontrolled in other countries, fertile ground will exist for new variants to arise—which will undermine even further, potentially, the current vaccines. True, we all have to accept the notion that we will need booster shots, likely every year, to adjust our immunity to new versions of COVID-19. But, booster shots can be either as a ho-hum, matter-of-course process with the pandemic more or less stamped out OR a much-worse continued shutdowns and restrictions because of wide spread surges.
Second, there are pretty solid economic reasons to give it away for free. Per Oxfam:
The International Chamber of Commerce estimates that vaccine inequality at today’s scale could cost the world around $9.2 trillion in economic losses, in the worst-case scenario, with rich countries suffering half of that blow. Drawing on the findings of this study, Oxfam calculates that these losses are equivalent to:
The United States could lose up to $2,700 per person in household spending in 2021, which is $1,300 more than the recent stimulus check. Overall, the US could lose as much as $1.3 trillion in GDP as its share of the cost of vaccine inequality.
The UK could face up to a $1,380 loss in spending for every person. Similarly, a $1,239 loss in 2021 per person in France, roughly equivalent to a monthly rent bill.
Per capita losses in household spending in Japan and Italy in 2021 could amount to around $1,451 and $1,495 respectively.
Canadians could miss out on $1,979 this year in spending as a result of global vaccine inequalities.
Another calcualtion in a recent January issue of The Economist pegged the cost of the COVID-19 pandemic last year and this coming year at around $10 trillion in goods and services that were not produced because of the pandemic. That’s a lot of lost futures, lots of broken dreams and misery for millions.
Make it free. Now.
SHORT TAKES
I’m skeptical of report cards (probably because I resisted the hamster-wheel intensity of the top-grade pursuit in school…is that another way of saying I was lazy?) partly because the way which grades are assigned in the policy world is highly subjective—and you just have to be aware of how the criteria are set that end up in a grade.
With that caveat, The Revolving Door Project has a report card out outlining the Biden Administration’s “success at preventing corporate capture of his executive branch 100 days into his presidency”. In other words, how hard has the “revolving door”—the portal through which operatives go seamlessly from government to the corporate world and back into government, carrying the water for corrosive corporate agendas—been spinning. It’s not terrible but not great either: Biden gets an overall B Minus (I would have been happy to see that grade) and, in some industry specific cases, a lot worse:
Although the bar is low, Biden has proven to be the least captured and most public-oriented President of any of our lifetimes. Certainly compared to the Trump administration, which was the most corrupt in American history, Biden has fared incalculably better at limiting corporate influence over governance. Thanks to the tireless work of progressive groups, Biden has also done appreciably more to limit the industries that negatively influenced policy under the Obama administration, such as the finance and technology sectors. This all represents a genuine sea change from the neo-liberal era of the 1980s-2010s. This did not just happen. Instead, progressives recognized that personnel is policy, that the executive branch is a key locus of policymaking, and they got organized. This engagement could help bring about a real revitalization of American governance for the public good.
That said, Biden’s administration thus far is certainly not spotless. Allies of Big Tech, Wall Street, Big Pharma, the military industrial complex, and the fossil fuel industry have secured jobs in various corners of the executive branch —typically not as high-profile heads of agencies, as they had been under past presidents, but in advisory or sub-appointee positions. Because Biden has inherited so many interlinking crises of public health, economic inequality, racial injustice, and climate change, the existential stakes, and crucially short window of time, to act on each of these means that the shortcomings of his administration —fewer though they are, compared to recent past presidents —carry more weight. Therefore, it is vital that the Biden administration redouble its efforts to prevent undue influence by powerful corporate interests, especially as these industries push for policy at odds with the clear public interest.
Right now, the U.S. has two major child benefits applied through the individual income tax system: the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC). The American Rescue Plan Act broadened the Child Tax Credit, but these changes expire after 2021.
So, Shawn Fremstand, senior policy fellow at the Center for Economic and Policy Research, has a proposal that he argues would create a unified progressive child benefit:
This plan would consolidate and simplify the CTC and EITC to create: (1) a Unified Child Benefit paid on a monthly basis by the Social Security Administration (SSA),(2) supplemental benefits for children with disabilities and solo parents, and (3) a simplified individual worker credit that is not tied to the presence of children.
A very important and interesting debate, which I’ve written about before and will do so more at length in the future, is how to measure what a “good economy” is. Without a doubt, the economy we live with now…sucks: it has created historic inequality and ravaged the planet.
Here is a new take called, “Towards A Well-Being Economy That Servces People and Nature”. It’s focused on Europe but has entirely global applications. From the summary:
The economy depends on people, who depend on nature and the resources taken from it. Decades of unfettered growth of extraction, production and trade have fuelled a cycle of large-scale destruction. This overexploitation is the result of political choices. We as civil society organisations from many parts of Europe demand political change that will steer us away from the current destructive economy towards a socially and ecologically just one.
Oxfam Germany and the European Environmental Bureau (EEB) have examined the root causes of the current crisis: past and present injustices between and within countries, the spiralling social, economic and political inequality and associated concentration of power, and a fixation and structural dependency on economic growth. This report focuses on the European economy and its role and responsibilities, both globally and locally. It covers the domains in which people produce, distribute and consume products and services, whether this is done via the market economy or through other mechanisms.
The safe and just space for humanity has a just social foundation and a hard ecological ceiling. To understand how we can arrive there, we need to see the bigger picture. Our interconnectedness today is unprecedented, but the ugliest realities are kept well out of sight and mind for European consumers.
How we steer our economy, and what corporations headquartered in the EU are allowed or not allowed to do, affect the lives and livelihoods of people and the integrity of nature around the world. Currently, the economies of the 27 EU member states plus the UK are massively overshooting planetary boundaries
George Floyd. My observation, which I tweeted soon after the verdict, was this, slightly reworded: Let it be said—the fact that everyone was on edge about a verdict, despite the clear-cut, undeniable VIDEO evidence, tells you everything about systemic racism, injustice and oppression in the United States.
Read “How Democratic Is the American Constitution?” by Robert Dahl
