It’s sort of striking that as RFK Jr.’s nomination is being considered, there is almost zero discussion of the substance of his complaints about the pharmaceutical industry being corrupt. Of course, the vast majority of what RFK Jr. says is utter nonsense, for example when he pushed an antisemitic conspiracy theory about the origins of the Covid pandemic.
But there is a real story about the pharmaceutical industry being corrupt. The most notable case was the industry’s involvement in pushing opioids, by denying their addictiveness when marketing them to doctors. This led to tens of thousands of deaths and ruined hundreds of thousands of lives.
While the opioid scandal is an extreme case, it certainly is not isolated. The industry routinely exaggerates the effectiveness and downplays the safety risks of its products. There is a simple reason, money.
The point is straightforward, the patent monopolies that we grant pharmaceutical companies to give them an incentive to develop new drugs and vaccines, also give them an incentive to push their products as widely as possible, even if it means being dishonest about their benefits and risks. When a patent monopoly means you can sell a drug for more than a hundred times the cost of manufacturing and distributing it, the incentive is enormous.
To take one prominent example, when the hepatitis-C drug Solavdi first came on the market it was being sold here for $84,000 for a three-month course of treatment. At the same time, a generic version was available in India for less than $800. The generic manufacturer in India was making a profit at this price, so this means the whole gap between the $84,000 charged here and the $800 charged in India was simply excess profit. That is the sort of money that can get a drug company to be less than honest about the products it sells.
Unfortunately, neither RFK Jr. nor the media seem to have any interest in this very real source of corruption in the pharmaceutical industry. Also, it is important to note that it is not inevitable. There are alternative mechanisms for financing drug development, most obviously direct public funding.
We already spend over $50 billion a year financing biomedical research through the National Institutes of Health and other government agencies. We could look to double or triple this money to replace the research currently supported by patent monopolies. If we paid for the research upfront, we could require that all patents be put in the public domain so that new drugs would be available as cheap generics from the day they are approved by the FDA. (I outline what a system along these lines could look like in chapter 5 of Rigged [it’s free].)
Generic manufacturers would still make money from selling drugs, but they would not have the enormous incentive to lie that patent monopolies give them. Manufacturers of shovels and paper plates also make a profit, but they do not have much incentive to push dangerous lies to increase sales. It would be the same story with generic drug manufacturers.
Ironically the best example of an important drug or vaccine being developed without the incentive of patent monopolies is probably the Covid vaccine Corbevax. This was developed by Drs. Peter Hotez and Maria Elena Botazzi at the Center for Vaccine Development at Texas Children’s Hospital. They relied on various grants totaling in the single-digit millions. It is available as an open-source vaccine, meaning anyone is free to manufacture and distribute it. Over 100 million doses have been given in India and Indonesia
It sells for around $2.50 a shot in these countries. By contrast Pfizer and Moderna are charging $130 a shot for their Covid boosters. This vaccine would be a huge threat to these companies if the FDA would allow them to be used here, but so far they have blocked the vaccine.
If RFK really wanted to challenge the corruption in the pharmaceutical industry, he would be talking about Corbevax and pushing the FDA to approve it for distribution in the United States. Instead, he actually has been targeting Dr. Hotez, absurdly labeling him a shill for the pharmaceutical industry because he has promoted vaccines to protect people from deadly and debilitating diseases.
Given his history, we don’t have much right to expect serious discussions from RFK Jr., but we can ask the media reporting on his nomination to treat these issues more seriously. There is a very real problem with corruption in the pharmaceutical industry. It would be good if the media could talk about it.