Last week, drug giant Pfizer told investors that it expects to make more than $50 billion off its COVID-19 medicines this year. Its vaccine is the most lucrative medicine in history, accruing $37 billion in 2021, and has sent its corporate revenues into the stratosphere. By the end of this year, the company hopes to bring in $100 billion — a sum that exceeds the GDP of most countries on Earth.
It’s been a good pandemic for a company that was, until recently, the least-trusted company in the least-trusted sector in the United States. Not only has the company made a fortune on its COVID medicines, it’s also become a household name, with a chief executive who moves among the world’s most powerful leaders, toasted by ordinary people across the world who are desperate for this pandemic to be over. It’s been quite the PR coup.
Dig deeper, though, and you quickly find out that Pfizer’s profits are not a justifiable reward for a much-needed solution to an era-defining crisis. Rather, Pfizer’s income is built on aggressive corporate practices and ruthless profiteering that has led to an obscene inequality in access to COVID-19 vaccines, in turn prolonging, rather than ending, this pandemic. Worse, Pfizer isn’t a one-off — it’s just one example among many of an industry that has become a symbol of our highly financialized, monopolistic global economy.
It’s easy to see where Pfizer’s profits come from. Pfizer claims that the cost price of its vaccine is just under £5 per dose, though experts say doses could be made for as little as 76p. Either way, the UK government paid £18 a shot for its first order, £22 for later purchases. Even taking Pfizer at its word, that would mean the National Health Service (NHS) has paid a markup of at least £2 billion — six times the cost of the pay rise the government agreed to give nurses last year. Even this price seems rather reasonable compared to the amount it has been claimed Pfizer tried to charge the US government: an eye-watering $100 a dose, prompting a former US disease prevention official to accuse the firm of “war profiteering.”
Pfizer prides itself on having taken no government money for its vaccine, claiming it plowed its own money into the vaccine’s development. But significant funding for this vaccine did come from the public sector.
Like all mRNA vaccines, Pfizer’s medicine was built on decades of public research. If credit for this particular vaccine goes to any company, it is Pfizer’s partner, BioNTech, a spin-off from a German university center, which was given substantial public funding. Pfizer did put its own money into producing the drug — probably up to $1 billion — but also received guaranteed government contracts of nearly $2 billion in sales for the United States alone. At most, Pfizer’s investment was a small part of the picture and is miniscule compared to the return the corporation has seen. A former US government official bemoaned “it’s not even their vaccine” and describes the fact it’s universally known as the “Pfizer” jab as “the biggest marketing coup in the history of American pharmaceuticals.”
Unfortunately, though, this vaccine is legally Pfizer’s vaccine. Like virtually all important medicines, it was built 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 a mere 1.3 percent of its supply to COVAX, the global body set up to try to ensure a more equitable distribution of COVID-19 medicines.
That’s not the worst of it. Pfizer’s monopoly power has prevented others producing, rationing supply purely so they could maintain control of the lifesaving technology. It’s been calculated that over 100 factories and laboratories around the world could have been producing mRNA vaccines if only the technology was shared. But Pfizer has taken a lead in undermining any attempt to share know-how, denouncing a United Nations initiative to pool patents as “nonsense” and “dangerous.”
Even after it had made a fortune, Pfizer refused to share its vaccine with a World Health Organization–backed laboratory in South Africa set up specifically to help lower-income countries build their vaccine capacity. The resulting inequality, shocking in itself, has also given the virus the best possible chance to spread and mutate, potentially undermining the vaccines we’ve got. But what does that matter to Pfizer when in the week after the Omicron variant was discovered, a small handful of their top shareholders added billions of dollars to their wealth as its share price boomed at the prospect of selling even more vaccines.
The monopolies that Pfizer enjoys are hardwired into the rules of the global economy. In the 1980s a handful of corporations, led by a former Pfizer chief executive, recognized that their most important assets were not their factories, their workforces, or even their research base. Rather it was the intellectual property that they sat on — the patents, the know-how, the trademarks. They set about persuading the US government to ensure this intellectual property was as well protected as possible, and in the mid-1990s US-style patents laws were embedded in the newly formed World Trade Organization as a global minimum, undermining the sort of sharing, copying, and imitation of technology that had allowed countries like South Korea to go from poverty to an advanced economy in a generation.
High protection for intellectual property was supposed to encourage innovation and reward the risky business of researching medical breakthroughs. It has had quite the opposite effect. Rather, Big Pharma companies slashed their research and development budgets and focused on buying up research, much of it publicly created, so they could sit on the intellectual property attached to it for decades. A STAT analysis in 2018 concluded that Pfizer developed only a fraction — about 23 percent — of its drugs in-house. Even the research these companies do undertake is often taken up in trying to prolong the lifetime of patents, by making insignificant changes to drugs they already own.
In this way, these firms have become more like hedge funds than research facilities, committed to squeezing every last drop of profit out of their intellectual property. This is great news for Pfizer’s superrich investors. Last week the company proudly announced that during just the first three months of 2022, it has returned $4.2 billion directly to shareholders. Between 2016 and 2020, the figure was around $70 billion — far exceeding the company’s research budget and even exceeding its net income. Pfizer’s CEO, Albert Bourla, boasted that Pfizer was the “most efficient machine to convert raw materials to 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 brand of ruthlessness that has led to a string of investigations over the course of the pandemic. The company stands accused of spreading disinformation about the rival Oxford-AstraZeneca vaccine, including funding a study that claimed vaccines like AstraZeneca’s are risky for vulnerable patients and can cause cancer — something there’s zero evidence for — which was then used to misinform health professionals in Canada.
We also know that they made extraordinary demands of countries who wanted to buy their vaccines, demanding complete liability, not just for unexpected side effects, but also negligence, fraud, or malice on the part of the company itself, in some cases demanding governments put up sovereign assets, such as embassy buildings and military bases, as a guarantee against future compensation cases brought against the company. One government negotiator said it felt like being “held to ransom.” Britain even agreed to a special investor arbitration system in its contract with Pfizer, meaning any dispute thatthe British government might have with Pfizer wouldn’t be adjudicated in British courts but in a special tribunal, overseen by corporate lawyers. Pfizer quite literally placed itself above the law of the countries it was selling to.
But while Pfizer is sometimes extreme, the underlying trends are similar across the pharmaceutical sector. Big Pharma is unable to develop the medicines we need at a price we can afford. Yet through global trade rules and a failure to build alternative institutions, we are still dependent on them. The pandemic shows very clearly that we can’t go on like this. We cannot depend for our health care on corporate executives incentivized to maximize their return to shareholders.
The first bit of good news is that we already spend huge amounts of money of medical research. Let’s stop handing it over to Big Pharma condition-free and use it to build a publicly controlled base of knowledge and technology. The second positive is that many Southern countries are already starting to do things differently. The international marketplace has failed them and they’re building factories and labs to develop their own resilience. An outstanding example of this is a new mRNA “hub” in South Africa, which is recreating mRNA technology with a commitment to freely sharing it with producers around the world.
COVID-19 has exposed our monopoly capitalist economy like nothing before. This form of economy cannot protect us from epidemics, from climate change, or from the intrusion of big business into the most personal aspects of our lives. Tearing down the monopolies has become a matter of life and death.