This article from Socialist Democracy (Ireland) outlines the impact of the US pharmaceutical industry following the Coronavirus pandemic.



As the numbers of casualties mount in the Coronavirus pandemic and around a third of the world is in lockdown the economic impact is becoming apparent. Capitalism is in crisis but the intensity of that crisis is not evenly spread across all sectors. Some will do well out of it in the medical and pharmaceutical industries and as the race for a vaccine heats up the bourgeois press boasts of the power of capitalism to defeat the disease, with the Wall Street Journal leading with headlines like; “Three Cheers for big Pharma as it rushes to develop a vaccine”! In the midst of the complete failure of the capitalist mode of production’s methods to even produce enough PPE to protect health workers this enthusiasm is reserved not for the protection of the working class but for the saviours of the profit system. As usual it is not the state of public health but the greed motive that they cheer for and indeed ‘Big Pharma’ is certainly viewing this as the opportunity of their corporate lives as scores of corporations vie to be the first to develop a vaccine.

Gerald Posner, author of ‘Pharma: Greed, Lies and the Poisoning of America’ has commented that as they race to gain dominance over each other this global crisis will; “potentially be a blockbuster for the industry in terms of sales and profits … the worse the pandemic gets, the higher their eventual profit.” We are definitely not ‘all in it together’!

The pharmaceutical industry in the imperialist heartland has already moved to fully realise all potential profits from the pandemic by introducing protections in to legislation accompanying the $8.3 billion coronavirus spending package, announced by the US government, which would secure their ‘intellectual property rights’. Not difficult to achieve when leading representatives of the pharmaceutical giants are sitting on the ‘White House Coronavirus Task Force’. All trace of language that would have allowed even the smallest outside chance of the US government moving to prevent price gouging by the pharmaceutical industry was removed from the final aid package, allowing big Pharma to completely control the pricing of any future drugs developed. Virtually no opposition, apart from individual token acts of protest, registered against this egregious cynicism while the Chief Executive of Eli Lilly brashly justified it. David Ricks argued that; “People should not be taking advantage. I agree 100 per cent,” … “That would be an unethical position in this time of need. But investors give us capital and expect a return.” Ricks, Pilate like, washes his hands off responsibility but his cynical genuflection to capital contains a kernel of truth; this is greater than any one company or individual, it is a problem with the capitalist system!

In London Matt Hancock also applauded the power of the corporate giants when put on the spot about the UK’s poor comparison with Germany’s much more rigorous testing regime. He claimed that Britain was at a disadvantage given the “the strength of Germany’s pharmaceutical industry”.

This strength is wildly exaggerated. German pharmaceutical output of 4.01% of global sales in 2016 may appear as large when compared to a UK output of 2.35% but both are dwarfed by the output of US based companies, not including their overseas properties outputs, which controlled almost 45% of output in the same year.

Hancock also argued that in comparison to Britain, Germany “could call upon 100 test labs ready and waiting when the crisis stuck, thanks in large part to Roche, one of the biggest diagnostic companies in the world.” Apart from the fact that Roche is actually Swiss, Global pharmaceutical giants played no real part in Germany’s relatively prompt response to the disease, indeed only 36% of testing capacity was provided even by leading German laboratories with the main effort being performed by “laboratories at universities, hospitals and government agencies”. In other words Germany still had a health and scientific technologies infrastructure that had not either been gobbled up by global giants or closed down as a burden on State expenditure. This infrastructure then had the capacity to expand to meet needs; surging from 43 test laboratories to 97 in the space of one month.

No such paean has been sung to the role of the corporate pharmaceutical giants in Ireland, where the justification would be much greater, in fact the silence is deafening! The Fine Gael government, never behind the door when it comes to singing the praises of big business is remarkably determined not to follow the example of the New York Times or Matt Hancock!

In March 2020 the ‘Guru’ of world imperialism Donald Trump, with his usual eloquence, pronounced Ireland as “a very tremendous producer” of pharmaceuticals, and almost without pause promised his reactionary support base that “We are looking to bring a lot more back home”. When he claims that “Ireland does a lot of work for us in that world, in the pharma world” he is being curtly honest however, the work performed is strictly in US imperialist interests!

There are 24 out of the world’s 25 largest Bio tech and pharma companies, by market capitalisation, in Ireland and according to the IDA there has recently been “$10 billion in capital investment in new facilities, which represents close to the largest wave of investment in biopharma manufacturing anywhere in the globe”.

Roche, singled out by Hancock, has a considerable presence in Dublin and in Clare the latter being considered “a manufacturing centre of excellence for the production of active pharmaceutical ingredients, which are used to develop medicines at other Roche facilities around the world.” Up until 2019 Ireland also had produced half of the worlds ventilators and is the second largest exporter of Medical – Technical products in Europe. At the end of 2017; “ some 28,500 people were “directly employed in the Foreign Direct Investment pharmaceutical and biotech sectors in Ireland” and these figures were projected to continue to grow exponentially.

The fact is however, that these pharmaceutical leaders of the so called ‘recovery’ in Ireland are not here out of some philanthropic sense of duty to aid the Irish economy. The southern State’s intellectual property laws allow big pharma a free hand to rip off innovations developed in Irish laboratories, no tax is paid on earnings from intellectual property where the underlying R&D work was carried out in Ireland with billions in taxpayer support, and full corporate possession of the rights to all developments means that the overwhelming bulk of “created value is not captured in Ireland”. The corporate tax rate givaway of only 12.5% is only the icing on the cake, no wonder big pharma’s production provided 43.7% of all Irish Net Selling Value (NSV) in 2016 while the EU28 level was only 3.8%.

They are simply here for the tax breaks, access to the European market and their freedom to operate with little or no restrictions. Despite the largest investment “anywhere in the globe” when the Dublin government increased the level of testing, it was not the corporate miracle of the Irish capitalist ‘recovery’ that helped in getting the turnover in analysis levels up but the German State run laboratories.

With tens of thousands of people employed in the pharmaceutical industry, representing a substantial part of Irish economic output, the Irish State could demand nothing from these giants in case they hurt Ireland’s GDP by upping stakes and finding another tax haven. Just as Apple is free to rip off Irish taxpayers so is big pharma whose globalised production system is designed only to avoid tax, make maximum profits and gain access to markets rather than to meet human needs. No alteration to its complex production system, which fragments production and promotes local specialisation as a way of keeping local developments dependent, was either desirable or possible in order to respond to local needs.

The commodification of human health has proved disastrous in the light of this pandemic and the means of production are clearly conflicting with the capitalist mode of production which directs all scientific endeavour towards the alienating inhumane pursuit of profits.

As the world continues to suffer all eyes must turn to the ‘very tremendous’ means of production which could be put at the service of humanity rather than capital but first the revolutionary workers’ upsurge must dispossess the owners of this industry and suppress the imperialist powers that protects this destructive and poisonous capitalist system. Then we will begin to see a new world where the full power of production can be brought to bear on solving humanity’s needs and the Century old slogan of the Bruree workers’ soviet mill that “we make bread not profits” can be updated to include the means of combatting the damage caused by capitalism’s destruction of human health and the environment. Then the degradation and destruction of humanity and our planet can begin to be reversed.



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