Big Pharma likes to hype the monopoly-based patent system as “the most effective tool to reward and incentivize innovation.” But the industry’s boosterism overlooks an important fact, which has been laid bare during the COVID-19 pandemic: lifesaving medications often are developed with the help of taxpayer money. Drugmakers then obtain lucrative patents and charge abusively high prices to the very people whose tax dollars helped develop the drug.
Consider the National Institutes of Health (NIH), which has played a singular role in developing new treatments and vaccines against coronaviruses. Reports show that the NIH has invested nearly $700 million in coronavirus research and development since the 2002 outbreak of severe acute respiratory syndrome (SARS). The US government funneled millions of dollars to Moderna alone as early as 2013 to develop its mRNA technology. When the new coronavirus emerged in Wuhan, the NIH worked with the company to design and test the mRNA-1273 vaccine. Other COVID vaccines have similarly benefited from substantial public funding by federal agencies and foreign governments: AstraZeneca (with Oxford University), Johnson & Johnson, Merck (with the International AIDS Vaccine Initative), and Pfizer (with BioNTech).
Research from the watchdog organization Public Citizen (full disclosure: I work for the group) shows that well before the COVID-19, the US Department of Health and Human Services, the Department of Defense, and the governments of Canada and Germany contributed hundreds of millions of dollars and scientific expertise to develop new vaccine technologies and manufacturing facilities. Big Pharma, meanwhile, stood on the sidelines.
Left to their own devices, pharmaceutical companies are incentivized to invest in research and development only for treatments that command high prices — not necessarily those that meet public health needs. Under the current monopoly model, private sector research tends to neglect less lucrative health needs, such as vaccines and treatments for infectious diseases. No matter how you slice it, a truly public health-oriented approach would kneecap the pharmaceutical industry’s profit margins.
The millions of lives lost to the COVID-19 pandemic suggests the need for a new approach to vaccine and drug development, for this much is clear: we cannot depend on monopolies to deliver the medicines we need.
Just how we got to the point where pharmaceutical corporations can get away with setting criminally high prices for drugs in the first place is the focus of a new book by Alexander Zaitchik. Owning the Sun: A People’s History of Monopoly Medicine from Aspirin to Covid-19 Vaccines is both an intellectual history and exposé of Big Pharma’s monopoly model.
As Zaitchik writes, “Between 2000 and 2018, the thirty-five largest drug companies reported cumulative gross profits of almost $9 trillion,” exceeding the value of the world’s gold reserves. It didn’t always have to be this way. The current “Strangelovean comedy of corporate vaccine nationalism” would have surprised the likes of Jonas Salk and other medical luminaries who thought that “non-rivalrous” goods like medicine should be exempt from monopoly control.
The book takes its title from a remark by Salk. Most people who have heard of the polio vaccine will likely know it for this flashy Jeopardy! fact: it was developed in 1955 and then given away for free. What’s less known is that as Salk was working on the polio vaccine, he accepted a consulting gig with the Detroit-based drug company Parke-Davis for the development of adjuvants, a vaccine component that boosts potency. Still, as Zaitchik relates, the experience didn’t exactly make him a cheerleader for the private sector. Instead, it imbued him with a “lifelong skepticism about the industry’s reliability and trustworthiness.”
Years later, when Salk was asked, in a TV interview, who “owned” the patent for his polio vaccine, he likened the idea to an equally preposterous one: patenting the sun. “[Salk] strongly advised against giving one company control over production, and instead advocated for a pooling approach that enlisted ‘all those who are interested in helping solve the problem of poliomyelitis.’”
Benjamin Franklin was of a similar persuasion, having never patented any of his numerous inventions. Thomas Jefferson, who had the distinction of serving as the nation’s first patent administrator, expressed misgivings about the putative ability of patents to spur progress. Indeed, for great stretches of this nation’s history, the very notion of “patent medicine” offended the noble sensibilities of doctors and druggists who, Zaitchik writes, “rejected the intermixing of medicine, commercialism, and monopoly.” The American Pharmaceutical Association and other medical associations carried codes of ethics that forbade members from patenting medicines themselves or prescribing any of the various patent medicines. Such name-brand medicines were extremely popular in the early nineteenth century; the bestselling brand was Brandreth’s Vegetable Pills, a purgative which allegedly purified one’s blood.
The election of Andrew Jackson to the presidency in 1828 introduced an era of lax views on patenting. The inherent value of sharing scientific knowledge gave way to the legend of the plucky individual genius. A murderer’s row of inventors, including Thomas Edison, Samuel Morse, George Westinghouse, and Henry Ford, are singled out by Zaitchik as “the most prominent gravediggers” who “built research castles and pulled the drawbridge, forcing those who might wish to follow them to overcome financial and legal barriers maintained by teams of in-house corporate patent lawyers.” The 1836 Patent Act enshrined the idea of patents and copyright as “plain property rights” and bulked out the Patent Office. An overwhelming number of the 650,000 patents issued between 1790 and 1900 were issued after passage of the Patent Act. The nineteenth century also saw the rise of modern corporate research labs and drug manufacturers that together facilitated the corporate enclosure of the scientific commons.
German drug companies played an outsize role in remaking the US drug research landscape. One German firm, Farbenfabriken vormals Friedrich Bayer, proved especially adept at crossing ethical lines and set a model for others. It was barred from patenting three “wonder drugs” in its native country, so it instead took out patents in the United States. The German patent strategy concerned itself with not just the big picture but the smallest details. According to the historian Jonathan Liebenau, as cited by Zaitchik, the elaborate process involved “patenting every chemical in the course of the research effort, effectively patenting around the final, marketable drug.” This was an effective deterrent for would-be competitors: why go through the trouble of developing a drug when all the incremental ingredients were patented and off-limits?
One of Bayer’s “wonder drugs” was Aspirin. Patented in 1899, the anti-inflammatory medicine quickly became “a hated symbol of the un-American medical monopoly.” Later, drugmaker Parke-Davis would take a page from Bayer and set a patenting precedent by securing a patent on the production of an enzyme to help with digestion. Parke-Davis would also patent a form of the hormone adrenaline, used to reduce bleeding during surgeries — a decision that caused much controversy.
Some of Zaitchik’s best insights are relegated, regrettably, to the footnotes. In one chapter, he notes that a serpent-entwined rod was used, in Sumerian religion, to symbolize health and sickness, life and death. (It’s often seen on the letterhead logos of US hospitals and insurance agencies.) Yet buried in a footnote is this perceptive point: Hermes, patron saint of commerce, was represented by a similar-looking rod, bearing two serpents rather than one. That the two symbols are easily conflated is a telling error, offering an inadvertent commentary on the modern health industry’s increasing alignment with trade.
“Which symbol is used — one or two snakes, flanked or not flanked by wings — is important because, for both the Greeks and the Romans, medicine was an art of the temple, not the bazaar,” writes Zaitchik. “In the temple, a place set apart, avoidance of harm is paramount.”
Salk may have thought it was futile to try to “patent the sun,” but not everyone agreed.
In 1923, Wisconsin biochemist Harry Steenbock discovered that feeding rats vitamin D, or the “sunshine vitamin,” could stave off rickets. Instead of publicizing his finding to benefit mankind, he decided to “keep vitamin D out of the enemy hands of the oleomargarine industry.” Margarine was then the enemy of dairy, and Steenbock worked in the agricultural chemistry department at the University of Wisconsin at Madison, where much of his work was funded by Wisconsin’s dairy industry.
Steenbock faced an issue of optics: he could not patent the method of infusing food with vitamin D himself without appearing mercenary and losing professional credibility. So he contrived to get university administrators to create a separate bureaucratic apparatus to handle “the legal and financial aspects of patenting and licensing.” The Wisconsin Alumni Research Foundation (WARF), established in 1925, provided an embarrassingly thin veneer of legitimacy, but it was nonetheless distinct from the university proper.
WARF’s monopoly of vitamin D made waves. One outraged letter, written to University of Wisconsin deans, sounded what would become a familiar critique, given renewed relevance in the time of COVID:
It seems to me that information discovered by the use of public money belongs to the public and it is difficult for me to understand how such discoveries can be patented and some private corporation determine how they shall be used.
Steenbock’s decision to license his discovery to companies not in the margarine business had downstream consequences that Zaitchik takes special pains to point out. Because margarine was cheaper than butter, poor families tended to buy the former. Those suffering vitamin D deficiencies were disproportionately poor. The creation of WARF would also carry ramifications for the pharmaceutical industry, shaping the formation of many later academic-industry partnerships that characterize our current age of drug development.
The US government has, according to Zaitchik, acted as the “obsequious junior partner” to the pharmaceutical industry for some time now. The book’s closing section brings us up to date with the development of COVID vaccines. Operation Warp Speed, the federal initiative started in May 2020 to accelerate the development of a coronavirus vaccine, “extended the $42 billion annual subsidy currently enjoyed by the industry,” Zaitchik notes. Though taxpayers have invested billions in the search for effective vaccines, the Donald Trump administration ceded controlling patent rights to drug companies like Moderna and “treated the resulting vaccine monopolies as national security secrets in a medical-themed Spy vs. Spy cartoon.” The pharmaceutical industry today is “built on threats,” and the intellectual-property regime known as Trade-Related Aspects of Intellectual Property Rights (TRIPS) comes under special scrutiny as “a brute and profoundly undemocratic expression of concentrated corporate power.” It’s hard to read all this and not feel a sense of outrage at the US government’s subservience to Big Pharma.
For all the book’s useful context-setting, it stops short at offering radical solutions. Zaitchik admits that his book is more descriptive than prescriptive: “This is not a book about how to hasten the combustion of monopoly medicine, or about the many fine alternatives that could take its place to humanity’s benefit,” he writes. Readers may feel a bit deflated, but there are silver linings, even to the COVID saga. Public pressure can sometimes force pharmaceutical companies to do the right thing.
Early in the pandemic, when Gilead Sciences sought to gain a seven-year monopoly on remdesivir (a medicine then being explored as a treatment for COVID-19), several activists and civil society groups sprang into action. They called out Daniel O’Day, chairman and CEO of Gilead, for looking to profiteer off a deadly pandemic by seeking a lucrative “orphan drug” designation for remdesivir. (An “orphan drug” is a medication designed to treat rare diseases. In practice, the designation would have allowed Gilead to receive additional federal tax credits and to exclude generic and more affordable competition while charging exorbitant monopoly prices for a longer period.) The activists pointed out that remdesivir was developed through at least $70 million in taxpayer money. It worked: one of the most profitable pharmaceutical corporations on Earth ended up renouncing its government-sanctioned monopoly guarantee for a potential COVID-19 treatment.
We are now three years into the pandemic. To avert global vaccine apartheid, in which the rich get access to vaccines while the poor are left to suffer, the US government should exercise its rights to make coronavirus vaccines affordable to all in plentiful supply. Beyond freeing vaccine technologies from corporate secrecy, exclusivity, and control, the United States should share its intellectual property and know-how with the rest of the world, so all qualified producers can scale up production and ensure timely universal access to a vaccine.
But to really put medicine to use for the common good, we’ll need to go further than the COVID-19 vaccine and release drugs generally from the stranglehold of the patent system. After all, the public is paying for them — they should be used to promote public health, not private profits.