Big Pharma, profits and the value of a human life


Shkreli: now having second thoughts over the price hike for Daraprim

We live in a world where everything can be reduced to the level of a computer game. For $24.95 you can set yourself up as a pharmaceuticals giant and play with people’s lives.

Big Pharma is billed as “part logistics puzzle, part business sim”. (Sim is short for simulation.) On its website there’s a trailer asking: “Can you profit in an industry where illness is good for business?”

Sadly, the answer can be found in the real world. Big Pharma is not just a game, it’s a multi-billion pound business where huge profits can be made on the back of human misery.

That was brought home this week with news that an American company, Turing Pharmaceuticals, had increased the US price of a drug for patients suffering from Aids.

Turing, a start-up established by former hedge-fund manager Martin Shkreli, acquired the rights to Daraprim last month in a deal worth $55 million.

The drug, developed more than 60 years ago, treats toxoplasmosis, a parasitic infestation affecting those whose immune systems are compromised. It is also used to treat malaria.

In the US it had been selling at $13.50, a reasonable mark-up given production costs are reported to be about $1. Over the years, it has more than recouped its development costs.

But Turing is interested in making big profits, and increased the cost of Daraprim to $750 a tablet. Defending the increase Shkreli said marketing and distribution costs had increased dramatically. Indeed.

In a television interview, he said: “There’s a company selling an Aston Martin for the price of a bicycle. We bought that company, and asked to charge Toyota prices. I don’t think that should be a crime.

“We’re simply charging the right price that markets missed, the prior owners have missed, and we’re doing something very good with those profits, we’re putting them right back in the patients’ hands.”

The final phrase is a cack-handed way of claiming the money will be reinvested in research for new medicines that Turing Pharmaceuticals can charge a fortune for.

In the United States medicine operates, more or less, on a free market basis. Companies charge what they can get away with.

In the UK, a voluntary scheme aims to keep drugs affordable while ensuring producers make enough profit. It’s a constant tussle, and many drugs are still just too expensive for the NHS.

Daraprim is marketed here by drugs giant GSK. It charges the equivalent of 66 cents in Belfast Northern Ireland, compared with the $750 Turing is charging in Belfast Pennsylvannia.

Turing is not the first company to buy a cheap drug and increase the price significantly, and no doubt it will not be the last. But the practice is questionable.

We used to live in a world where human life was valued for its own sake. But in the world of Big Pharma a human life is worth only what a company can make out of it.

This is just the latest controversy over drug profits. While it is true that companies need to make money to fund research into new treatments, the reality is that drugs companies spend more on marketing than they do on development.

Statistics from GlobalData last year revealed that every one of the top 10 drugs companies spent more on marketing than R&D. For example, Johnson and Johnson’s $8.2 billion R&D spend was dwarfed by its sales and marketing spend of $17.5 billion. UK company GSK spent $5.5 billion on R&D, and $9.5 billion on sales and marketing.

There’s no space here to get into controversies over dodgy sales and marketing tactics – including many examples of bribery and corruption; never mind the equally tricky area of drug trials where negative results are suppressed and benefits oversold.

As the Turing Pharmaceuticals’ controversy demonstrates, the development and pricing of drugs cannot be left to the free market. The common good needs to be recognised too.

The profits on drugs come from the taxpayer and the patient. And much of the ground breaking research which fuels the industry takes place in publicly-funded universities where pharmaceutical companies have privileged access through commercial agreements.

Citing the Turing case, Hillary Clinton has said she will act against excessive drug profits if she is elected President. Under pressure, Turing has said it will think again. But drugs pricing is a global problem that has not gone away. There must be a concerted international approach to ensure the right balance is struck between profit and the public good.

  • This article appeared in The Irish News on Friday September 25 2015

The risks of swimming in a small pond


Too many graduates go into non-graduate jobs

In addition to bringing the motorcar to the masses, Henry Ford was a bit of an amateur philosopher. You could fill a book with quotes from the man who said “history is more or less bunk”, and who told customers they could have their car in any colour – as long as it was black.

Bunk or not, I think we can agree Ireland would be better off if it focused less on history and more on the lessons it teaches.

I like Ford’s observation that whenever everything seems to be going against you, it’s worth remembering that an aeroplane takes off into the wind. Stormont take note.

I once worked for a vice-chancellor who made one of Ford’s quotes his own. Professor Sir George Bain arrived at Queen’s University in 1998 with instructions to give it a kick up the backside. Queen’s suffered from the ‘big fish in a small pond’ syndrome.

By the time Sir George arrived, measures were already in place to deal with the debris of sectarianism. Like many institutions, its reputation had been tarnished by poor employment practices. Many readers will be familiar with the issues, so I don’t need to rehearse them again here.

Sir George’s job was to sort the place out academically. That need was hammered home by disgruntled alumni, his best academics, and by statistics comparing Queen’s performance with other civic universities – like Glasgow, Leeds, Birmingham and Newcastle – and found it wanting.

Two things he repeated endlessly. The first was: “A good vacancy is better than a bad appointment.” Too many of Queen’s problems were caused by having the wrong people in the wrong jobs.

The second was: “If you always do what you’ve always done, you’ll always get what you’ve always got.”

The first quote might be Bain himself. The second is classic Ford. Such was the scale of Sir George’s task that the work he began is still not finished.

Across at my alma mater, the University of Ulster, a similar task is underway. Now under new management, Ulster is grappling with the challenge of delivering higher education in a multi-campus environment. It too is trying to position itself among the UK’s research-led universities, and finds itself in a perpetual fight with Queen’s over a diminishing financial pot.

“Doing what you’ve always done,” could well be the mantra carved across the portal of the Department for Employment and Learning. It is responsible for higher education.

There’s no real appetite there for change. The department has never been much troubled by that great driver of success – a vision.

For too long HE has been used as a parking place to keep young people off the dole. Too many graduates go into non-graduate employment after they leave universities. And employers constantly complain that there are not enough people with the right skills for the job market.

Meanwhile, we have two universities fighting for the same space, delivering undergraduate degrees (often duplicated) in the traditional way – six teaching blocks of 12 weeks over three years. Many back office functions are also duplicated – HR, payroll, finance and accounts, estates and buildings, marketing and recruitment, IT.

With the autonomy they exercise through their Royal Charter status, decisions about academic provision are made without necessarily having to take a longer view about the broad educational and business needs of the society they are serving. The current row over the fate of modern languages at UU is a case in point.

So how can Northern Ireland start doing things differently? A root and branch review of higher education is needed.

Services could be rationalised and centralised. Academic provision should be refocused. We don’t need two broadly-based institutions. Queen’s should be unashamedly a world-class research intensive university, shifting its student profile to postgraduate.

We need an international institute of technology – a polytechnic in the European sense – producing scientists and engineers equipped for the modern age.

And a new approach to further and higher education – involving colleges more – could offer high quality teaching to degree level. Most undergraduate degrees could and should be delivered in two years – not three.

Such a change would make better use of the money available. It would challenge the cosy consensus and be resisted by the vested interests. All hell would break loose at the challenge to tradition.

But with globalisation, we don’t need to be swimming in a small pond any longer.

As Henry Ford once said: “We don’t want tradition, we want to live in the present and the only history that is worth a tinker’s damn is the history we make today.”

  • This article appeared in The Irish News on September 11 2015

Lost in the mists and mellow fruitfulness


Season of mists… John Keats

The school run this morning, and a mist was hanging over the Ochill mountains near my home. In the sharp sunlight of a Scottish September morning, the mist was bright white, like a linen sheet hanging out to dry.

In these early days of September we are more alert to the shift of the seasons. It is noticeably colder, though the sun seems as intense as in the balmier month of August. The nights are drawing in, like the covers of a blanket.

I haven’t yet seen him in the night sky, but I know Orion is there striding across the heavens. I associate him with autumn and am looking forward to meeting him again. He is a constant in a world of change.

I remember a weekend once in Beleek, staying at the Carlton Hotel, just a stone’s throw from the famous pottery. As I remember it, we were leaving early on a Monday morning to head back to Belfast and work. It was pitch black as we walked to the car, and the night sky was clear.

The stars were so bright you could reach out and touch them. Orion was there, a reassuring presence, the perpetual hunter of the universe, the stars of his belt radiant – Zita, Epsilon and Delta. In the near distance the Erne gurgled. The trees were still in the chill of early morning. I felt alive, at one with the world.

It is one of two skies burned in my memory. The other was near Renvyle in Connemara, returning to a dank holiday cottage after dinner in nearby Letterfrack, this time in spring.

When we stepped out of the car, it was as if the sky were falling in on us, so bright were the stars in a sky unpolluted by street lights.

“Season of mists and mellow fruitfulness…” it’s strange how snatches of verse spring into your mind. I used to know Keats’ Ode to Autumn by heart. Now it’s reduced to its most clichéd line.

I doubt my children would even recognise the opening line. Keats has had his day. He’s not cool enough for the curriculum. I don’t even articulate it, just run it across my mind, savouring its mellifluous headiness.

I have given up pointing out the beauty of the world around us, such is the indifference with which my observations are met by a car load of children heading to class.

Perhaps it’s best if they find it out for themselves.