Last week, drug giant Pfizer told investors it expects to make more than $50 billion this year from its COVID-19 drugs. The vaccine is the most lucrative drug in history, worth $37 billion in 2021, and has sent its business revenues into the stratosphere. By the end of this year, the company hopes to raise $100 billion — an amount that exceeds the GDP of most countries on the planet.
It’s been a good pandemic for a company that was until recently the least trusted company in the least trusted industry in the United States. The company has not only made a fortune from its COVID drugs, it has become a household name, with a chief executive moving among the world’s most powerful leaders, roasted by ordinary people around the world who desperately want this pandemic to pass. is. It’s been quite the PR coup.
Dig deeper, though, and you’ll soon discover that Pfizer’s profits aren’t a justifiable reward for a much-needed solution to an era-defining crisis. Instead, Pfizer’s income is based on aggressive business practices and relentless profiteering that have led to an obscene inequality in access to COVID-19 vaccines, prolonging rather than ending this pandemic. Worse, Pfizer isn’t a one-off — it’s just one of many industries that have become a symbol of our highly financialized, monopolistic global economy.
It’s easy to see where Pfizer’s profits come from. Pfizer claims the cost of its vaccine is just under £5 per dose, although experts say doses can be made for as little as 76 pence. Regardless, the UK government paid £18 a shot for its first order, £22 for later purchases. Even taking Pfizer at his word, that would mean the National Health Service (NHS) has paid a mark-up of at least £2 billion – six times the cost of the pay increase the government agreed to give nurses last year. Even this price seems reasonable compared to the amount it claimed Pfizer was trying to charge the US government: an eye-watering $100 per dose, leading a former US disease prevention official to accuse the company of “war profits.”
Pfizer boasts that it has not taken any government funding for its vaccine, and claims it has invested its own money in developing the vaccine. But significant funding for this vaccine came from the public sector.
Like all mRNA vaccines, Pfizer’s drug is built on decades of public research. If the credit goes to one company for this particular vaccine, it’s Pfizer’s partner, BioNTech, a spin-off of a German university center that has received significant government funding. Pfizer has poured its own money into manufacturing the drug — likely up to $1 billion — but also received guaranteed government contracts worth nearly $2 billion in sales to the United States alone. At most, Pfizer’s investment was a small part of the picture and is minuscule compared to the returns the company has made. A former US administration official complained that “it’s not even their vaccine” and describes the fact that it’s commonly known as the “Pfizer” shot as “the biggest marketing coup in the history of American pharmaceuticals”.
Unfortunately, however, this vaccine is legal vaccine from Pfizer. Like virtually all major drugs, it was based on public knowledge, but that knowledge was then privatized — handed over to a multinational corporation that can then dictate who can make it, how much it will cost, and who can buy it. Unsurprisingly, Pfizer sold the vast majority of its doses to rich countries and only 1.3 percent of its supply to COVAX, the global agency created to try to ensure a more equitable distribution of COVID-19 drugs.
That’s not the worst. Pfizer’s monopoly power has prevented others from manufacturing and rationing supply, purely to maintain control of the life-saving technology. It has been calculated that more than 100 factories and labs around the world could have produced mRNA vaccines if the technology had been shared alone. But Pfizer has led the way in undermining any effort to share know-how, denouncing a United Nations patent-bundling initiative as “nonsense” and “dangerous”.
Even after making a fortune, Pfizer refused to share its vaccine with a World Health Organization-backed lab in South Africa specifically set up to help low-income countries build their vaccine capacity. The resulting disparity, shocking in itself, has also given the virus the best possible chance to spread and mutate, potentially undermining the vaccines we have. But who cares about Pfizer if in the week after the Omicron variant was discovered, a handful of their top shareholders added billions of dollars to their assets as the stock price skyrocketed at the prospect of selling even more vaccines.
Pfizer’s monopolies are anchored in the rules of the global economy. In the 1980s, a handful of companies led by a former Pfizer executive recognized that their most important assets were not their factories, their personnel, or even their research bases. Rather, it was the intellectual property they were sitting on – the patents, the know-how, the trademarks. They began persuading the US government to ensure that this intellectual property was protected as best as possible, and in the mid-1990s, US patent laws were embedded as a global minimum in the newly formed World Trade Organization, forcing the sort of sharing, copying and imitating technology that had enabled countries like South Korea to move from poverty to advanced economies within a generation.
High intellectual property protection would encourage innovation and reward the risky undertaking of researching medical breakthroughs. It has had the opposite effect. Rather, Big Pharma companies slashed their research and development budgets and concentrated on buying up research, much of it publicly created, so they could sit on the intellectual property attached to it for decades. A 2018 STAT analysis concluded that Pfizer developed only a fraction — about 23 percent — of its drugs in-house. Even the research of these companies to do entrepreneurship is often used to extend the life of patents by making minor changes to drugs they already own.
In this way, these companies have become more hedge funds than research facilities, committed to squeezing every last drop of profit from their intellectual property. This is great news for Pfizer’s super-rich investors. Last week, the company proudly announced that it has returned $4.2 billion directly to shareholders in the first three months of 2022. Between 2016 and 2020, the figure was about $70 billion — well above the company’s research budget and even above net income. Pfizer CEO Albert Bourla boasted that Pfizer was the “most efficient machine for converting raw materials into doses”. It would be more accurate to describe the company as the most efficient machine for converting public resources into shareholder wealth.
Pfizer has its own special ruthlessness that has led to a series of investigations over the course of the pandemic. The company is accused of spreading misinformation about its rival Oxford-AstraZeneca vaccine, including funding a study that claimed vaccines like AstraZeneca’s are risky for vulnerable patients and can cause cancer – something for which there is no evidence whatsoever – which was subsequently closed. used to misinform health professionals in Canada.
We also know that they made extraordinary demands on countries that wanted to buy their vaccines, demanding full liability not only for unexpected side effects, but also negligence, fraud or malice on the part of the company itself, in some cases demanding that governments sovereign assets, such as embassy buildings and military bases, as a guarantee against future damages actions brought against the company. A government negotiator said it felt like “being held for ransom”. Britain even agreed to a special investor arbitration system in its contract with Pfizer, meaning that any dispute the British government might have with Pfizer would not be settled in British courts, but in a special tribunal, overseen by company lawyers. Pfizer literally placed itself above the law of the countries it sold to.
But while Pfizer can be extreme at times, the underlying trends are similar in the pharmaceutical sector. Big Pharma is unable to develop the drugs we need at a price we can afford. But due to the rules of world trade and the inability to build alternative institutions, we are still dependent on them. The pandemic shows very clearly that we cannot go on like this. We cannot depend for our healthcare on business leaders who are incentivized to maximize their returns to shareholders.
The first good news is that we already spend huge amounts of money on medical research. Let’s stop handing it over to Big Pharma on a conditional basis and use it to build a publicly controlled base of knowledge and technology. The second positive is that many southern countries are already doing things differently. The international market has failed them and they are building factories and labs to develop their own resilience. A prime example of this is a new mRNA “hub” in South Africa, which is recreating mRNA technology with a commitment to share it freely with manufacturers around the world.
COVID-19 has exposed our monopoly capitalist economy like never before. This form of economy cannot protect us from epidemics, climate change, or the intrusion of big corporations into the most personal aspects of our lives. Breaking down the monopolies has become a matter of life and death.