The Pharmaceutical Industry is part of the larger healthcare sector. Companies in the Pharmaceutical Industry used to research and develop medicines and drugs; conduct the necessary tests and time trials; then manufacture and market the successful ones. Because of all the time and resources invested in the research, development and trials, the onward selling price of the resultant products to end users, was usually very high, in order that the companies could recoup all of their investment costs and make a profit.
Up to a point, I think this theory was generally accepted, until it became obvious that the companies avoided doing research on any products that would not offer a suitable return on their investment. They concentrated on products for the mass market and steered clear of products that would only be bought by a few people who were unlucky enough to suffer from some rare health issues. They would only develop a limited-market drug if there was a guaranteed worthwhile return. After all, pharmaceutical companies are established as businesses, not charities and they need to make a profit.
Unfortunately, or fortunately, whichever way you want to look at it, the majority of the big pharma companies made exceptionally high profits and were heavily criticised in the media and even by Joe Public. They were perceived as benefitting from people’s misfortunes.
One action taken by authorities early on in their development, was to limit the period of exclusivity they were allowed by restricting the period of the patents that were granted for new products they developed. A patent on medication does not last indefinitely. It usually involves a period of 20 years. Once the patent expires, the drug is released and other manufacturers can copy the drug and sell it under a different name. During that 20 year period the patent holder will have plenty of time to recoup all of their initial investment and then some significant profits as the icing on the cake. Their motto is probably, ‘You have to speculate to accumulate.’
In recent times things have changed slightly with a move away from doing all of the R&D in house.
Pharmaceutical companies today frequently act as capital providers, cooperating with universities or buying up biotech companies, especially those that have already developed a super drug or that have a good reputation for being able to. They will then manufacture and market the successful ones.
Apparently, in the UK, since 1983 and quite possibly since before then, it has been an ‘on and off’ policy of the Labour Party to nationalise the Pharmaceutical Industry. Based on the constant barrage of bad publicity the industry has received in the media since then, mainly due to the amount of money the UK NHS pays out to them for medicines, the objective is usually listened to with a lot of empathy by the voters, the vast majority of whom are tax payers and can see the logic.
So far it has never happened and I read a ‘Letter to The Editor’ in my local Shields Gazette a couple of weeks ago, where the writer implied it was a blessing in disguise. His thoughts were that if the UK Pharmaceutical Industry had been nationalised, we would not have been able to develop the Oxford-AstraZeneca Covid-19 vaccine. It was developed in around 10 months, which is amazingly fast and is claimed to be extremely attractive in that it is inexpensive, scalable and can be stored at 2-8 degrees Celsius.
Is the correspondent right, I wonder? Just like most ‘expert’ assumptions associated with Covid-19, we can all hypothesise but we will never know the answer to a ‘What if’ speculative question.
John H Lightfoot MBE