‘Drug Corporations Have Really Been in the Driver’s Seat’

Janine Jackson interviewed Public Citizen’s Peter Maybarduk about Paxlovid price-gouging for the October 27, 2023, episode of CounterSpin. This is a lightly edited transcript.

NPR (12/31/19)

Janine Jackson: There are a number of crises that the Covid pandemic did not create, but certainly threw into relief. It has always been disgusting, frankly, that pharmaceutical companies are permitted to sell necessary, life-improving and life-saving drugs at many times the cost of their development and production, keeping them out of the hands of those who can’t afford them, and leading some who can just about afford them to ration them dangerously. It’s a particularly callous aspect of the US profit-driven system—so out of keeping with basic tenets of public health that one kind of wonders how long it can be allowed to continue.

We’re looking at the latest example of this right now with a Covid-19 treatment. Here to tell us about it is Peter Maybarduk, director of Public Citizen’s Access to Medicines group. He joins us now by phone from DC. Welcome back to CounterSpin, Peter Maybarduk.

Peter Maybarduk: Great to be with you.

JJ: I’m sure that people won’t be shocked to hear that the company in question right now is Pfizer, though they’re hardly alone in these sort of practices. What is this most recent outrage that folks are concerned about?

PM: So Pfizer has more than doubled the price of its Covid-19 treatment Paxlovid—nirmatrelvir plus ritonavir—to the US government from around $530 a course up to $1,390 for a list price now. And that despite the fact that Pfizer’s already made $18 billion off this drug in global sales, and they’re raising the price right at a time when it hurts most, because will, obviously, to fight and to fund pandemic response has diminished greatly, and the US government is transitioning its response to the commercial market.

So there’s very limited public resources now, in the United States and around the world, to ensure continuity of treatment. And in order to make up for the loss of volume, Pfizer has decided to increase prices, but that’s going to suppress demand further; that’s going to make it harder worldwide to access Covid treatment for people that need it.

And it’s also been pointed out that the cost of production of this drug is a mere $13. And when you look at it that way, Pfizer is increasing prices to 100 times the cost of production for this drug.

JJ: I just take a pause there, and we’ll come back to it, but let’s just lay out there: Paxlovid is an important drug; it’s not an ancillary drug. It has been shown to be impactful, and then, globally, access to it has not been what it should have been.

Public Citizen (10/17/23)

PM: So we put out a study just last week finding that there’s been more than 8 million cases of unmet need in 2022 alone, looking in last year’s data; that basically more than 90% of need for Covid treatment, as measured by high-risk infections, was unmet in developing countries.

And this despite the fact that manufacturers have pointed to what they consider to be a supply glut; they say they’re making enough of the drug. But, again, the problem has been monopoly, single source of supply; opaque agreements about who is getting the drug and when; and very high prices have suppressed demand. So that if you look at high-risk infections in the Global South, if you look at even just people over 65—which is what we looked at, but it’s a significant undercount, because it doesn’t give you people with preexisting and ongoing conditions, and other vulnerabilities—you see that very, very, very few of those individuals received Paxlovid when they needed it.

JJ: It just seems, in a way, like there’s at least two different conversations going on, one of which is about: There’s a global health crisis, how do we address it? And then another one that’s like, well, we have these pharmaceutical companies, and they need to make money. And it’s almost as though there’s no overlap.

I mean, I just saw Pfizer’s CEO, a week ago, saying, “We remain proud that our scientific breakthroughs played a significant role in getting the global health crisis under control.” It sounds like, from what you’re saying, that, actually, they could have played a much different role in actually working towards getting the global health crisis under control.

Peter Maybarduk: “Pfizer has decided to charge high prices to the few, rather than affordable prices to the many, in order to meet its benchmarks.”

PM: It’s very frustrating to us that health authorities have relegated so much power to the pharmaceutical companies. In many ways, Covid-19 is a pandemic where prescription drug corporations have determined who receives what treatment or vaccine when, at least at a population level, at a sort of country-by-country level. And health agencies have been on the receiving end of that; they haven’t always known what price another country’s paying, they haven’t known what’s their place in line, the terms and conditions.

And, of course, global health authorities haven’t been able to effectively prioritize and indicate that we must prioritize population A, B and C, in these ratios, in order to end the pandemic as quickly as possible. Instead, drug corporations have really been in the driver’s seat, working privately, secretly, on their own logic’s terms, of where they can make the most money, or what public relations and pandemic concessions they want to make. And, unfortunately, that’s continuing here in this case.

Pfizer could choose to be a good partner at this stage, like set any sort of R&D ideas aside. They’ve made $18 billion off this drug. It’s a bonanza. And there’s an opportunity now to meet the funding shortfall with solidarity and with public health interest. Pfizer can afford to say, “We’re actually going to reduce the price of the drug, because there is a funding shortfall, so that more people can get it, so that we can make up the access gap.”

And you almost don’t hear about that anymore, because prices have been high enough, and funding limited enough, that the world has kind of given up. There was, if you roll the clock back a year or two, there was an ambitious call for a global test-treat programming. So all over the world, you could get a Covid test, and then have a straight path to the appropriate treatment that you needed.

And what materialized is a small pilot program in a dozen countries, instead of that great global ambition, and a very significant factor there has been that the treatments are too expensive for developing countries, or for the global effort, to pay for. And so, instead, we just have this shadow of an effort. We’re almost giving up on the idea that treatment can be available to everyone.

And if you walk around in public health circles, you’ll sometimes hear, well, there’s no demand; countries aren’t ordering the treatment. Then you have to think about why. And if you are a health ministry that’s squeezed for resources, you have to make tough decisions about, you know, hospital beds and available protocols against malaria. Do you shell out what was then $250, minimum, probably $250 to $500, I think, and probably now potentially going to be more, to Pfizer for this treatment? Or do you hold on that, not least given you don’t even know when you’ll receive it, because of those shortages.

And it might be different if the drug actually costs something like that. But knowing Pfizer’s production costs are far lower, $13, perhaps less, and the revenue they’ve made so far, it’s a conscious choice on Pfizer’s part to make it harder to prescribe Paxlovid, and to make up for that by charging a premium. Essentially, Pfizer has decided to charge high prices to the few, rather than affordable prices to the many, in order to meet its benchmarks.

Common Dreams (10/19/23)

JJ: And that’s a public health decision. It’s not a corporate—it is a corporate, capitalist decision, but it’s a public health decision in its impact. And I just want to say, finally, you’ve been quoted saying Pfizer is treating Paxlovid like a Prada handbag, a luxury for the few, rather than a treatment for the many. Meanwhile, Pfizer CEO took home $33 million last year, having been gifted a 36% raise from 2021. I think that folks can see that this is stomach-churning and confusing and weird and bad, but what Pfizer is doing is incentivized, or at least they’re not being prevented from doing it. So where are the checks, or where are the guardrails, on this sort of behavior? What do we do about it?

PM: Yeah, that’s part of the problem, is that we have insufficient guardrails. HHS recently negotiated a deal with Pfizer to keep people without insurance on treatment in coming years, and to contribute courses to a national stockpile. So HHS has taken some appropriate steps to ensure continuity of treatment here. But why did HHS have to pay the high prices that it paid? Could it have negotiated lower prices?

I think it is a significant concern, and undergirding it all is the patent monopoly that allows Pfizer to exclude competitors from the market; again, the drug is inexpensive to produce, and had we authorized generic competition, we probably could have an affordable supply by now, bringing these prices down to earth. We’re not paying for research and development here, we’re paying for a monopoly.

And we were among a number of organizations that called on the Biden administration early on to issue a compulsory license, or exercise certain rights it has under law, to authorize affordable generic competition with expensive patented Paxlovid, and bring alternatives online. And, of course, the government hasn’t acted on that proposal because of the lobbying power of the pharmaceutical industry.

So right now we’re kind of stuck, but there are reforms that we can make to prevent this sort of thing from happening again. And there’s going to be ongoing discussions about that. I mean, you saw this week, in the hearings for a new NIH director, we saw Senator Sanders taking a stand and saying we have to take responsibility for medicine pricing in our executive policies, and there will be an upcoming review by HHS and Commerce of government authority to act against drug monopolies in certain circumstances. So it’s an ongoing conversation, but our government has too few tools, and does not sufficiently use the tools that it has.

JJ: We’ve been speaking with Peter Maybarduk, director of Public Citizen’s Access to Medicines group. You can learn more about their work online at Citizen.org. Thank you, Peter Maybarduk, for joining us this week on CounterSpin.

PM: Thanks so much.