Four Steps to Transform the Pharmaceutical Industry and Survive the Pandemic

Dealing with the Covid crisis will require taking the profit motive out of our health systems. Here’s how.

Dana Brown and Christopher Morten

(Photo by John Moore/Getty Images)

Even as the Covid-19 pandemic exposes deep structural problems within America’s healthcare system, unprecedented efforts by many of the scientists responding to the crisis also point the way forward. They are thinking and working differently, sharing knowledge, collaborating across national boundaries, and focusing on delivering life-saving vaccines and cures to all. 

It is time for U.S. law and policy to catch up. In a recent statement signed by more than 150 leaders of civil society groups, healthcare providers, and experts on law, policy and public health, we lay out four steps our country should take to do just that: 

1. Make open science the law of the land 

2. Create a public option” for pharmaceutical R&D and manufacturing 

3. Embrace and expand compulsory licensing of intellectual property 

4. Take vaccine development under public control

Covid-19 calls us to rethink a pharmaceutical sector that has become an increasingly efficient wealth extraction machine. The sector takes in billions of dollars in public funds for research and hoards the results for private gain. Drug companies produce hundreds of billions in profits for their executives and shareholders by forcing Americans to pay the world’s highest drug prices — often with deadly consequences. The sector restricts access to medicines — and information on their true risks and benefits — through a complex web of intellectual property protections. All the while, clinically meaningful innovation has been on the decline for decades.

Big Pharma companies have doubled down on this playbook during the crisis, adding $51 billion to their market value during the pandemic as of the end of June, while extracting billions in new public spending. Price hikes on a myriad of drugs have continued during the pandemic, including on dozens of drugs used in Covid-19 treatment. Market consolidation and single-sourcing practices that have contributed to widespread shortages in essential medicines for years now affect drugs critical to treating the virus.

This reality is what drives our call for the long-term transformation of the pharmaceutical sector from one centered on private profit to one centered on public health and the public good. Our proposal explains how.

First, codify open science practices that accelerate innovation, reduce costs and strengthen the evidence base on which our medicines system rests. We must change our laws to prevent drug companies from keeping secret for years or decades valuable medical data, such as clinical trial results and manufacturing details — sometimes with the cooperation of government agencies. Instead, our laws should encourage — even require — broad, ready, equitable access to scientific knowledge across a drug’s entire lifecycle, from test tube to pharmacy. 

Second, create public sector capacity for full-cycle pharmaceutical innovation and production of essential medicines: a public option” for end-to-end discovery, development and manufacturing. Unlike for-profit drug companies, a public medicines agency would focus where the medical need is greatest. Public pharma would also create additional manufacturing capacity, combating shortages. We know this works: Scientists at U.S. government laboratories invented HIV prevention therapy (“HIV PrEP”), and the nonprofit Drugs for Neglected Diseases Initiative has shepherded numerous drugs through clinical trials to patients. 

Third, use the full power of compulsory licensing to ensure access to essential medicines. Intellectual property rights are often the only barrier to generic competition, which lowers prices (sometimes by 95% or more) and expands supply. The U.S. government already has the legal authority — which it used as recently as the 1970s—to issue compulsory patent licenses to accelerate generic competition. But in recent years it has lost the will to do so, even in the face of skyrocketing prices and recurring shortages. The U.S. government should not only use, but expand, compulsory licensing beyond patents to trade-secret manufacturing information and regulatory exclusivities. 

Fourth, take the vaccine industry into public ownership to assure its products are available to all. The vaccine industry is perhaps the starkest example of the failure of our current system. Until the Covid-19 pandemic hit, Big Pharma had mostly abandoned vaccine development despite billions of public dollars spent on incentives. High-profile successes like the Ebola vaccine in 2019 were funded, driven, and led by government research agencies. By making vaccines fully public, either patent-free or freely and affordably licensed through a global pool, we can properly recognize that vaccines are a public good, not a profit center.

To survive this pandemic, prepare for the next one, and finally solve the innumerable everyday health problems that Americans face — from finding EpiPens to paying for insulin—the public must reclaim control over a pharmaceutical system that puts private profit above all else. We must find the will to reorient it around public health and public good. 

Dana Brown is director of The Next System Project at The Democracy Collaborative. Christopher Morten is the clinical teaching fellow and supervising attorney in the Technology Law and Policy Clinic at the New York University School of Law.

Subscribe and Save 66%

Less than $1.67 an issue