The For-Profit Pharmaceutical Industry Is Leaving Us Exposed to Pandemics Like Coronavirus

The pharmaceutical industry has so far failed to develop a coronavirus cure. But that’s just the tip of the iceberg: the privatized health care model can’t provide the drugs we need to combat even deadlier bacterial epidemics, because they’re producing drugs for profit rather than human need.

Male nurses wearing a face mask and overalls bring a patient on a stretcher into the newly built Columbus COVID-2 temporary hospital to fight the new coronavirus infection, on March 16, 2020, at the Gemelli hospital in Rome. Andreas Solaro / AFP via Getty

The rapid spread of COVID-19 is revealing the manifest failures of the US health-care system, from our lack of preventive care and emergency response preparedness to our failure to produce a cure. These problems are rooted in the organization of our health-care system around the profit motive. But the coronavirus is just the tip of the iceberg. If and when the disease is contained, our for-profit system leaves us vulnerable to even more frightening epidemics.

“Deadly Superbugs Win as Wall Street Flees Makers of Antibiotics,” Bloomberg reported in June 2019. The growing threat of these “superbugs” — bacterial infections that are resistant to standard antibiotics — means that development of new antibiotics is badly needed.

But because research and development of antibiotics is insufficiently profitable, drug companies aren’t stepping up. Without medicines to combat superbugs, humanity is at risk of other deadly epidemics unseen since the discovery of antibiotics.

Given these risks, we need to scale up our production of medicines that can fight such diseases. Yet large pharmaceutical companies have been doing the opposite — they’ve abandoned antibiotic development for years because the companies don’t consider such antibiotics profitable enough.

As a result, production of new antibiotics has fallen to small, boutique start-ups. These start-ups are struggling to survive, however, even as the federal government continues to offer additional incentives for companies to bring new drugs to market.

It’s further proof of what socialists have long argued: the profit motive isn’t getting us the medicines we need. We need to de-commodify antibiotics and make their provision a public responsibility.

The Success of Antibiotics and the Challenge of Antibiotic Resistance

The discovery of antibiotics, and their subsequent clinical application in the treatment of infectious diseases, is one of the great achievements of human civilization. Antibiotics are estimated to add ten to twenty years on average to global life expectancy (from fifty to sixty years of age to seventy-one years). According to the American Academy of Pediatricians, before antibiotics, common illnesses like strep throat and ear infections were often deadly. Many medical procedures ― including routine surgeries and cancer treatments ― put patients at risk for bacterial infections. Without effective antibiotics, these procedures would involve an enormously high risk of complications from life-threatening infections.

The incredible power of antibiotics has limits, however. Like all living organisms, bacteria are subject to natural selection. When antibiotics are administered to a patient with an infection, most of the infection-causing bacteria will be killed. A small subset of the bacteria may be resistant to the antibiotic. These antibiotic-resistant bacteria survive and reproduce.

Repeated use of antibiotics on a mass scale has led to the development of antibiotic-resistant strains of many bacteria that commonly cause disease in humans. The evolution and proliferation of these diseases has been driven by the overuse and misuse of antibiotics (e.g., to treat viral infections), as well as the massive use of antibiotics as growth promoters in livestock.

The result: humanity now faces epidemics of antibiotic-resistant diseases. The Infectious Diseases Society of America reports that methicillin-resistant Staphylococcus aureus, commonly known by the acronym MRSA, kills roughly 19,000 people in the United States every year. That is greater than the number of people that die of emphysema, HIV/AIDS, Parkinson’s disease, and homicide combined.

The report also notes that of the nearly 99,000 Americans who die every year of infections acquired during hospital stays, the vast majority succumb to antibiotic-resistant diseases. The problem stretches far beyond the United States, however. According to the Lancet Infectious Diseases Commission, a variety of superbugs — including bacteria that commonly cause urinary tract infections, respiratory tract infections, and sexually transmitted diseases — are now found globally.

Big Pharma Exits the Market

You might think that the proliferation of superbugs would lead to increased research and development of new drugs to combat these deadly new infections. In fact, the exact opposite has happened: major pharmaceutical companies have all but abandoned the research required to develop new antibiotics.

In his 2013 case for socializing big pharma, science writer Leigh Phillips noted that big pharmaceutical companies had mostly stopped producing new antibiotics by the 1980s. The explanation for this is simple: it is rarely profitable to research, develop, and bring new antibiotics to market. That is in large part because most people take antibiotics for a very short period of time until their infections are cured. Unlike drugs that treat chronic conditions, antibiotics cannot be sold to a base of long-term customers, and so they are much less attractive as investments for drug companies.

At the same time, there is increased awareness among health-care practitioners around the misuse of antibiotics and the problem of antibiotic resistance. In 2017, the US federal government mandated that all hospitals implement a comprehensive antibiotic stewardship program to monitor and improve antibiotic prescribing practices in their facilities. These stewardship programs play a vital role in ensuring that antibiotics are used judiciously.

However, stewardship programs routinely restrict new antibiotics to both preserve their future utility and keep costs down, since new antibiotics tend to be much more expensive than older generic ones that are used routinely. This has the effect of limiting the number of patients treated with newly developed antibiotics, and so restricting the potential profits of pharmaceutical companies. Without a robust return on their investment, companies have little incentive to develop new antibiotics.

Meanwhile, while antibiotic stewardship may slow the pace of superbug evolution, it does not eliminate it. So antibiotic-resistant infections continue to crop up and spread while the drugs necessary to treat them are nowhere to be found.

The Failure of Market-Based Solutions

Big Pharma’s exit from the antibiotic space has spurred a number of US government attempts to find market-based solutions, aimed at making investment in antibiotics sufficiently profitable for private firms.

In 2012, Congress passed the “Generating Antibiotics Incentives Now” (GAIN) Act. The GAIN Act extended the period over which pharmaceutical companies had exclusive rights to sell new drugs intended to treat antibiotic-resistant infections, thereby ensuring companies a higher rate of return.

In 2016, the US Department of Health and Human Services Biomedical Advanced Research and Development Authority (BARDA) — charged with stockpiling vaccines and antibiotics in preparation for potential epidemics — helped found CARB-X, a public-private partnership involving government agencies and philanthropic foundations from across the globe. Its stated mission is “accelerating antibacterial research to tackle the global rising threat of drug-resistant bacteria.” On its website, CARB-X declares proudly that it has “up to US$500 million to invest” in “the best science from around the world.”

Yet neither the expansion of incentives nor public-private partnerships have led to sufficient development of new drugs. Big Pharma is still staying clear of the antibiotics space. Smaller biopharmaceutical firms have been attempting to bring new drugs to market, but they are struggling to survive.

San Francisco–based Achaogen, which received early funding from BARDA and CARB-X, was one of the few such companies working on new antibiotics. Achaogen went bankrupt in spring of last year, sending a dire warning to other small drug firms and their investors.

Two months later, a fellow boutique drug company named Tetraphase Pharmaceuticals — once regarded as a promising investment — was forced to restructure as investors fled the antibiotics market and the company’s stock price plummeted. And in December 2019, yet another antibiotics maker — Melinta Therapeutics — declared bankruptcy.

We have been counting on small firms like Achaogen, Tetraphase, and Melinta to provide us with badly needed antibiotics, but they are all going under. These companies are failing for the same reason that big pharmaceutical firms stopped developing antibiotics: they’re just not profitable enough.

We Need to De-Commodify Pharmaceuticals

Health professionals and policymakers are aware of the problem, and they are proposing tweaks to the health-care system to make investment in new antibiotics profitable. The latest proposal is the “Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms” (DISARM) Act, currently being considered by Congress. The law would allow Medicare to provide additional payments to hospitals that use new antibiotics to treat serious superbug infections. The DISARM Act is essentially an attempt to shore up the antibiotics industry by using government funds to boost demand for new antibiotic drugs by hospitals, who would otherwise decline to use them because of the high cost.

If history is any guide, however, these measures will be insufficient. Just as market-based solutions have failed to provide decent, affordable housing for the vast majority, so continued pushes and pulls around the edges of the antibiotic market are doomed to fail.

The problem lies in the nature of the capitalist system. In a capitalist economy, even basic necessities like medicines are commodities: they are produced by private firms for sale on the market, in order to earn profits for the firm’s owners or investors. A firm will produce certain goods if, and only if, its owners or investors believe that those goods will deliver a sufficiently high return on investment.

This dynamic has tragic consequences where basic necessities like housing and health care are concerned. The market will either not produce enough of the relevant goods, or it will price them too highly for poor and working-class people to afford. The result is the obscene spectacle of people living in camps on the street or dying because they cannot afford life-saving medicines, while the rich enjoy obscene levels of wealth. (At the other extreme, corporations will continue pursuing activities that are profitable even when they mean global destruction, like the fossil fuel industry.)

The failure of private drug companies to address the looming superbug crisis is just one more instance of this general problem, highlighted most recently and dramatically by the coronavirus epidemic. And it demands the same solution. We must de-commodify antibiotics and other pharmaceuticals, using state power to free drug development from the logic of the market. We can publicly fund and democratically manage the production and distribution of antibiotics, in order to ensure that we are developing new drugs rapidly enough to treat emerging superbugs.

Bringing research and development of antibiotics under public control should be just one part of a broader program of de-commodification of basic necessities like Medicare for All and public ownership of the energy system. But at the bare minimum, to avoid coronavirus-style disasters in the future, we need to de-commodify antibiotics right now.