Big Pharma rip-off /FRFI! 239 Jun/Jul 2014

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Fight Racism! Fight Imperialism! 239 June/July 2014

The independent NHS watchdog, the National Institute for Clinical Excellence (NICE), decided that a new breast cancer drug, Kadcyla, developed by Roche is too expensive. It costs more than £90,000 per patient per year to extend life by 5.8 months. The decision was criticised by Roche and some breast cancer charities, but the episode is the latest in a series of revelations showing how the pharmaceutical industry (Big Pharma – multinational monopolies including Roche, Bayer, Novartis, Astra Zeneca, GlaxoSmithKline, Pfizer, and Merck) is ripping us all off. The Tamiflu saga, where the UK government paid Roche close to £500m for a drug no more effective than paracetamol, shows the level of robbery. With the NHS facing budget shortfalls as it is privatised by stealth, and with cancer rates set to double between 2002 and 2020, Big Pharma profiteering is unsustainable and things are coming to a head.

The corporate media portrays NICE as penny-pinching bureaucrats, but NICE has to make decisions to benefit the population and the NHS as a whole, not individuals. A similar media campaign in 2005 around the Roche drug Herceptin was exposed as a PR exercise to prevent forthcoming competition from generic copies of the drug. Many charities were exposed as front groups for pharmaceutical companies. For instance, in 2006, Cancer United, presented as a coalition of doctors, nurses and patients pushing for equal access to cancer care across the EU, was exposed as entirely funded by Roche. Roche, with profits of £7.7bn in 2013, has a monopoly over these cancer drugs and sets its own prices under intellectual property (patents) rights law.

The average cost to the NHS of a generic medicine is £3.79, whilst the average cost of a branded medicine is £19.73. Big Pharma pockets enormous profits at the expense of health systems in advanced capitalist economies and rips off underdeveloped countries. In April 2013, over 100 leading cancer specialists accused the world’s drug industry of ‘profiteering’ from cancer patients. The documentary, Fire in the Blood, showed how pharmaceutical corporations, including Pfizer and GlaxoSmithKline (GSK), prevented millions of people from receiving affordable generic AIDS drugs, suing Ghana and South Africa for importing them from India. The pharmaceutical industry claims, like Roche, that the high prices of new (and old) branded drugs are due to high – but secretive – research and development (R&D) costs and that the cost of ‘innovation’ in bringing a new drug to market is between $1bn and $1.7bn; the actual costs of innovation may be less than a fifth of this (see Khadija Sharife, The great billion dollar drug scam, 29 June 2011, Aljazeera.com).

The Research and Development Cost of a New Medicine (2012) report, claimed only about 10% of the overall cost of developing a drug is taken up by R&D. Between 1996 and 2005, Big Pharma spent $739bn on marketing and administration but only $288bn on R&D. The opaque R&D costs are inflated by adding corporate tax breaks (skinning the cat twice), and accounting tactics including notional profits that might have been generated, had they invested in finance rather than scientific ‘innovation’.

Big Pharma’s response to the threat of competition from generic drugs has been to buy up the generic companies; mergers and acquisitions, not innovation, have been the primary mode of growth of the pharmaceutical industry in the last 10 years. In 2013 there were 169 deals valued at $76bn, 15% up from 2012 (fiercepharma.com). The attempted takeover of AstraZeneca (AZ) by Pfizer is a case in point. Little-Englanders were up in arms over ‘nasty’ Pfizer’s takeover of ‘our wonderful’ AZ, but forgot that in 2010, ‘our’ AZ was fined $520m by the US Department of Justice for bribing doctors to prescribe their schizophrenia drug Seroquel for everything from Alzheimer’s disease and attention deficit hyperactivity disorder to sleeplessness and post-traumatic stress disorder, for which it was not approved. AZ targeted doctors ‘who treat the elderly, primary care physicians, paediatric and adolescent physicians’ (fiercepharma.com/special-reports/top-10-pharma-settlements/top-10-pharma-settlements). Pfizer’s rationale for the takeover bid was tax breaks it would get. AZ resistance meant Pfizer’s bid failed. AZ’s value fell £7bn in the aftermath.

Cherry-picking clinical trial data to conceal serious and even fatal health risks, bribing doctors from China, Iraq, Jordan, Lebanon etc to issue prescriptions, co-opting charities and blocking cheaper generic medicines is the modus operandi of Big Pharma; private profit first. There is an irredeemable conflict of interest between Big Pharma and public health that cannot be resolved under capitalism.

By contrast, socialist Cuba has developed the only advanced lung cancer vaccine (CimaVax EGF) in the world, an amazing feat not achieved by the likes of Merck and GSK who are also in the ‘race’ for the vaccine. Cuba’s vaccines are free to all Cuban citizens, will be on sale in 25 countries by 2015, and triple the percentage of lung cancer patients still alive two years after application. How much would Roche charge for this? In March 2014, Britain approved for use in the NHS, a meningitis B vaccine Bexsero, 26 years after Cuba developed one, and is now trying to negotiate a ‘cost-effective price’ with manufacturer Novartis (fiercevaccines.com, 25 March 2014).

Cuba has developed a range of vaccines against chronic diseases, such as pneumonia, meningitis, diphtheria, hepatitis, pertussis and dengue, all at a fraction of the cost Big Pharma alleges it takes to bring new drugs to market. Only under socialism can such innovative treatments be produced in a sustainable way that is beneficial to public health and all of humanity.

Charles Chinweizu