We Need a Public Option in the Pharmaceutical Industry

Janine Jackson: Having made billions of dollars from aggressively and irresponsibly promoting the painkiller OxyContin, spurring a wave of opioid addiction and overdose that has led to tens of thousands of deaths, Purdue Pharma has filed for bankruptcy. The company was facing some 2,600 lawsuits from cities, counties and tribes, which were brought together before a federal judge in Ohio. There are still other lawsuits from states that aren’t part of this Chapter 11 deal, which would turn Purdue into a kind of public trust that the company says will “provide billions of dollars and critical resources to communities trying to cope with the opioid crisis,” for which, by the way, they admit no responsibility whatsoever.

Some media are showing interest in accountability for the Sackler family that owns Purdue, who have been busily moving money out of the country as these lawsuits piled up. And that is more than valid.

But what about accountability writ larger? What if we wanted not just to replace these pharmaceutical profiteers with other pharmaceutical profiteers, but change the structure that facilitated—indeed, incentivized—their unscrupulous behavior?

Joining us now to talk about that is Dana Brown. She’s director of The Next System Project, working particularly on the intersection of health and economics. She joins us now by phone from Washington, DC. Welcome to CounterSpin, Dana Brown.

Dana Brown: Thank you so much. Pleasure to be here.

Let’s get right into it. The Purdue bankruptcy and asset transfer is far from a done deal itself. Like I say, some states, like New York, really aren’t down for it. But you think it’s already served a function by opening up to consideration some forward-looking ideas. Tell us what you’re talking about.

Sure. Well, I think this case is very illustrative of what the for-profit pharmaceutical industry naturally produces. The incentives and the fiduciary duty of corporations is to maximize profit for their shareholders. And I guess the question is, is that in the best interest of the public? Especially when we’re talking about health?

So we see high prices, recurring shortages and declining innovation, but also these issues about drug safety and mass marketing, as kind of the natural outcomes of an industry that is oriented around the singular goal of maximizing profit.

So I think that to get different outcomes, we actually need a different design. And that’s why we’ve been working on a model for a structural alternative, which is public ownership in the pharmaceutical sector across supply chains. And as you say, the idea of turning Purdue into some sort of public trust has come up in this litigation. But it’s a little odd; it sort of relies on the company continuing to operate and continuing to make profits off opiates, which, of course, some people need, right, but they can’t make the same profit if we’re going to try to stem the tide of the epidemic. And then we’re going to somehow use that profit to make things right. And I guess the question is, there’s never been more momentum on this issue of holding drug corporations to account; can we use this opportunity to really transform the industry and make sure that it works for us?

So you’re talking about really a public option. How would that work, a public option in pharmaceuticals?

I think there are probably several different structures that it could take here in the United States. We’ve done some work in collaboration with others and proposed one way for that to work, with publicly owned enterprise at the national, state and even local level, that span research and development, manufacturing and wholesale distribution.

And a lot of this work comes from other countries, looking at case studies of other countries where they’re already doing this. There are a number of countries around the world, from Brazil to Argentina, India, China, Thailand, Sweden, that have public companies in some or all of the parts of the pharmaceutical supply chain.

So this can be done, and people have been talking about it a bit for the United States. And I think it really brings home the point that there are alternatives, and that when something is in the public interest, and when it has to do with public health, there is a way that we could provide for that from the public sector. And it could even spur further competition with the private sector when that’s needed.

We always hear from media, and media channeling other folks, when it comes to why we can’t have generic drugs, or why we need to have private companies making billions of dollars, we hear, “Well, without that profit incentive, no one’s going to be inspired to do the research and to create new drugs.” But that doesn’t hold water, does it?

It’s an interesting argument, and it makes sense on the surface. But I say two things. One is that the National Institutes of Health, a public entity, already funds the vast majority of the basic scientific research that underpins pharmaceutical drug development, and has for quite a long time.

Right.

In fact, it’s one of the largest funders in the world of pharmaceutical drug development. But also, looking at places like Europe, there are a lot of countries in which it was illegal to patent drugs and medical products and even chemicals until fairly recently, but they had thriving pharmaceutical industries anyway. So, yeah, I don’t quite buy that argument anymore.

And I think that when we have public companies into which we’re funneling those public dollars, there are a lot of efficiencies, there are a lot of gains that we could get, because we wouldn’t be negotiating rebates, and the outcomes would really be better for all of us.

And it’s not about “sticking it to the rich guy,” or damping down innovation. We’re talking about health and humanity here. Whatever you think we should do, I don’t see how you can maintain the idea that the “system is working fine” when we have people dying from trying to ration their insulin, because they can’t afford it.

Absolutely. And insulin is a really excellent example, because insulin was developed in a public lab in Canada. And the scientists who discovered it sold their US patents for $1 apiece, and stated explicitly at the time that they wanted to maintain affordability forever. So it’s a drug that while developed by public dollars, has somehow been captured, and now is feeding corporate interests, as you say, to such an extent that we have 20-somethings dying in the richest country in the history of the world because they can’t afford to fill their prescriptions.

But there are also classes of medication, like antibiotics, for example, which you’re supposed to take for a short period of time and which are curative, where the industry has said, we have no incentive to develop new antibiotics. But as a country, we know that we’re going to need new antibiotics. So again, there are places where, I think, the public can and should intervene for the public good, where industry has already shown, both in action and in their word, that they are not best-placed to play the role.

You note, in a recent piece that you co-authored with Isaiah Poole, that the 1998 tobacco settlement, which folks might think is kind of an analog to this Purdue bankruptcy thing—you don’t think that tobacco settlement should be the model here at all, do you?

Well, I think there are some positive things that came from that settlement. But I think we also live and learn, and should also, as a country, always be striving to do better. Again, we have an unprecedented opportunity here, because there’s never been more attention on the ills of profit-motivated pharmaceutical production and the multiple issues that we have. And we have an opportunity here to really transform the industry, we have an opportunity to assure long-term, affordable access to all essential medication, if we take action now.

Again, we’re the richest country in the history of the world. We can do this. We effectively provide an awful lot of services from the public sector. I took public transportation to work this morning. We have a lot of public electricity and water, right? We know that this can be done. And I think it’s about not letting this opportunity slip past us.

We’ve been speaking with Dana Brown, director of The Next System Project. They’re online at TheNextSystem.org, where you can find the full report Medicine for All: The Case for a Public Option in the Pharmaceutical Industry. Her piece on the issue, co-authored with Isaiah Poole, can be found there, as well as at NewRepublic.com. Dana Brown, thank you so much for joining us this week on CounterSpin.

Thank you.