Earlier this week, I came across an article in the New York Times by Mariana Mazzucato and Azzi Momenghalibaf. They wrote, “Unless we fix the system, American taxpayers will get gouged on a vaccine they paid to produce.”
The authors of the article quote the US health secretary, who said that there was no guarantee that treatments or vaccines for coronavirus would be affordable even though a lot of research is publicly funded. This is well-known. A paper recently analysed drugs approved by the US Food and Drug Administration between 2010 and 2016 and showed that government funding “contributed to every one” of the new drugs approved.
When I wrote about it recently, a former student who is now a top executive in a leading pharma company, called me and asked why I couldn’t join him to help him found our own company, and make more money.
Typically, the argument for high cost of medicines has been that profits were needed to sustain future research, but Mazzucato and Momenghalibaf point out that leading companies are “focusing less and less on research, instead acquiring smaller biotech firms with promising drug candidates that rely on public funding – and spending more on strategies to inflate executive pay, such as share buybacks”.
If the pharma company was owned by the workers, it is unlikely price gouging would occur or executive salaries will be out of proportion to their contributions. It would be entirely wrong to say that all the top executives of pharma companies are ‘evil’ people, by any definition. I personally know several of them occupying high managerial positions, who were not only decent, honest, well-meaning humans, they were also excellent researchers; similarly, everyone in a worker-owned company will be presumed to be an angel.
On the other hand, it is true that the way our societies have been functioning over the last few decades has led to a situation when productivity has been delinked from salaries, and it has happened differentially between workers and the top executives.
Another example – of a recent tragedy in which several children died because of toxic chemicals in the syrup. What if a worker had informed the manager of the likelihood of a toxic chemical, and the manager had informed the higher-ups, and it was decided to go ahead because the batch had already been manufactured? In a worker-owned company, isn’t the probability of this happening lower?
Or when toxic waste from a pharmaceutical unit was dumped into a water body in a village — the water body goes to a river. The executive does not live near the affected village, the workers who live there and are affected, have no say. If such decisions were taken democratically in a worker-owned firm, would this happen? Or when the price of Daraprim (pyrimethamine) was increased virtually overnight by 5,000%. This is drug for a life-threatening infection in HIV-AIDS, among other things. Many more examples can be cited.
Several among us would be tempted to say that a worker-owned pharma company or a kind of a cooperative is a utopia. There are various models of cooperatives that exist – nearly 3 million worldwide, with 280 million employees and annual turnover of $2.1 trillion. I would also request the sceptics to search for Mondragon Co., based in Basque, Spain, a worker-owned company; their website states that “the corporation’s mission combines the core goals of a business organisation competing on international markets with the use of democratic methods in its business organisation, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment.” Laudable!
Nevertheless, as the article by Mazzucato and Momenghalibaf concludes, “This is not about bashing Big Pharma; it is about reclaiming the focus on health and the public interest in an industry that has for too long been driven by profiteering. The COVID-19 crisis demands that we urgently find vaccines and treatments, and do so in a way that fixes some of the fundamental failures of our current system.”
My argument is that within the current framework in which corporations are organised, this is not going to happen. Can we wish for a different kind of company?
Samir Malhotra works at the Post-Graduate Institution of Medical Education and Research, Chandigarh.