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December 2000

Staff Editorial
There is hope in an era of Bush.
by the PERSPECTIVE staff

UC Endorsement
Steve Smith and James Coleman are the liberal's choice.
by the PERSPECTIVE staff

Canadian Comrades
It really is better up there.
by Danny Schlozman

Triumph or Tragedy?
Clinton's legacy is one of calculated compromise.
by Jeffrey Theodore

Buying Survival
Africa needs money, now.
by Ved Lekic and Alexandra Neuhaus-Follini

Pharmitas
Pharmaceutical companies fund Harvard research.
by Nathan Perl-Rosenthal

Students for What?
Folic acid has a hidden message.
by Shelby Meyerhoff

Greens Take Root
PERSPECTIVE talks to Cliff Ginn.
by Dev Purkayastha

A Year to Remember
A year from Seattle, the WTO protests go on.
by Bob Elliott

Cry Freedom
America's ideal of freedom is questionable.
by Nikhil Jaikumar

Introspective
In Defense of Money
by Brad Hershbein

Salmagundi

The Back Page
Keeping Christmas
by Julia Silvis

By Nathan Perl-Rosenthal

In the ten minutes it takes you to read this article, the ten largest drug companies in the world will have raised $3 million in revenue, and kept nearly half a million of it in profits. Many of these companies, referred to collectively as Big Pharma, are household names in the United States: Merck, Johnson & Johnson, Bristol-Myers Squibb, Pfizer, American Home Products, Abbott Laboratories, Eli Lilly.

The vast majority of Big Pharma’s profits comes from sales of medications for baldness, impotence, high cholesterol, depression, allergies and high blood pressure: overwhelmingly the maladies of the developed world. For proof, one need only look at the full-page advertisements regularly placed in glossy magazines by the Pharmaceutical Research and Manufacturers of America (PhRMA), a trade association and lobbying group. They feature a black-and-white head shot of a person and the caption "This is not the face of heart disease" (or cancer, or some other disease). It’s no accident that this advertising features well-dressed middle-aged Americans with heart disease, cancer or diabetes: it is in these markets that Big Pharma makes most of its profits.

According to PhRMA, the US sales in 1999 accounted for $105.6 billion, over 70%, of US pharmaceutical company revenues. The remaining 30% of sales were those to Europe, Asia and Africa combined. The vast majority of Big Pharma’s profits clearly come from the US. A fair amount of that money also comes from the middle and upper classes, as evidenced by the price of AIDS drugs. A recent, low-end estimate by the RAND Corporation, a conservative think tank, said that effective AIDS treatment can cost as much as $20,000 per person per year in the United States. That is, quite literally, more than the income needed to support a one-child family at the Federal poverty line, which is approximately $18,000. Even a relatively inexpensive drug, such as the heart disease medication Procardia, costs from $720-$1080 per year according to its manufacturer, Pfizer.

The caption on the magazine ads is "Leading the way in the search for cures." As consumers, we’re most familiar with the drug companies from the pharmacy, but—as the ads indicate—the actual products are only the tip of the pharmaceutical iceberg. A large part of the pharmaceutical companies’ resources is devoted to research, the "search for cures." Big Pharma overall spent $27 billion on research last year; Merck alone devoted $2.07 billion to R&D, slightly over a third of its profits in the same period. The purpose of all this research, of course, is to generate profitable products for the companies. Since the majority of Big Pharma’s sales come from wealthy US customers, the majority of their research is devoted to developing treatments for the diseases of these customers.

As it pours vast sums of money into research on the maladies of its US customers, Big Pharma ignores some of the world’s deadliest diseases. Even though malaria kills 1 million people every year according to the World Health Organization, not a single new anti-malarial drug has been discovered since the mid-1980s. The most widely used antimalarial, chloroquine, was discovered in 1934 and resistance to it is now widespread, to the point that it can no longer be used as a first-line drug in parts of Africa, according to Doctors without Borders. Selling drugs to treat malaria, sleeping sickness or dengue fever to impoverished Africans is not nearly as profitable as selling hair-loss tonics to wealthy but insecure balding American men.

More disturbing, perhaps, than the lack of new research are the decisions made by some drug companies to stop producing existing drugs. A 1998 New York Times article showed that the drug company Aventis Pasteur had stopped producing two of the four drugs available to treat sleeping sickness. The company’s stated reason for discontinuing production was that the drugs no longer turned a profit. Sleeping sickness affects as many as half a million people a year, of whom 150,000 a year sink into a coma and die. When asked to comment on the impact of discontinuing the drugs to those threatened by the disease, an Aventis spokesman said "the industry has never been philanthropic."

Whenever they are asked to explain the exorbitant prices of their drugs, the companies answer that it isn’t their responsibility to make them affordable. And in a way, they are right: like all corporations they seek only profit. But the drug companies, unlike many other corporations, produce products that saves lives. This invests them with a social responsibility beyond a simple responsibility to their shareholders: their drugs must be available.

Big Pharma on Campus

It is unfortunate that Harvard has strong ties to these corporations. The most obvious connection is the stock Harvard holds in Big Pharma. The Harvard Managament Corporation (the investment arm of Harvard) has well over $250 million invested in drug companies, according to its most recent Securities and Exchange Commission report. But this connection is hardly unique: Harvard holds stock in practically every corporation you can imagine, including a substantial stake in such black sheep as Wal Mart, Halliburton (Dick Cheney’s alma mater), and food services giant Sodexho-Marriott. Harvard’s connection to drug companies goes much deeper than simply owning stock.

As we’ve seen, a significant part of the drug companies’ business is developing treatments for diseases. The first step in that process is biomedical research. Harvard, particularly the Medical School (HMS) and the School of Public Health (HSPH), are major partners with Big Pharma in that research.

It’s a win-win situation for Harvard and the companies. Harvard gets outside money to support research, which improves its research programs and makes it more attractive to prospective faculty, students, and alumni. Research done at a corporation is going to be directed towards making money, and will therefore be somewhat suspect; research done at a university is largely free of that taint, even when it is funded by corporations. Corporations also get access to a new pool of promising researchers.

Given these advantages, Harvard, like all major universities, accepts a significant amount of outside funding for research, over $400 million in 1999. That money comes mainly from four sources: the Federal government, state governments, private foundations, and corporations. Federal funds are by far the most generous, providing some three quarters of all sponsored research money at Harvard.

According to the 1999 Office of Sponsored Research Financial Report, domestic corporations gave $15 million in 1999 and foreign corporations, although direct figures are not available, gave at least another $2-$3 million. All of the corporations among the top 30 research sponsors in 1999 were in the medical industry, and all but one were pharmaceutical companies. This pattern suggests that the vast majority of total corporate sponsored research is biomedical and funded by pharmaceutical companies. Furthermore, over 85% of the $15 million given by corporations in 1999 went to HMS and HSPH, where most University biomedical research is conducted. This represents 6% of total sponsored research expenditures in HMS and HSPH.

Perhaps as important as direct funding is cooperation between Harvard and drug companies’ researchers. These collaborations provide another way for drug companies to get access to Harvard’s pool of researchers and to its credibility. These collaborations are sometimes quite substantial: a major study of an AIDS vaccine was published earlier this year in the prestigious journal Science by HMS researchers in cooperation with scientists at Merck. The advantages of collaboration, though, do not end at publication. Working with Harvard scientists gives drug company researchers a chance to develop personal relationships with University researchers, and obtain data from them.

Companies, of course, are not altruistic. Pharmaceutical companies make profits by patenting drugs and selling them at monopoly prices. A major part of the industry’s purpose in sponsoring research and collaborating is to get rights to possible patents. Harvard’s patent policy makes it possible for drug companies to profit from research at the university. The policy requires all patents to be owned by Harvard but gives research sponsors special rights: "SPONSOR shall have a period to negotiate the terms of a license agreement and HARVARD agrees to negotiate these license terms in good faith. During this period HARVARD will not offer a commercial license to any other party." The exclusive licensing policy gives special rights to corporate sponsors, giving them the option of marketing the products of the research for which they pay. Collaboration also generally gives patenting rights to the collaborators.

Federal patent policy also makes possible the heavy influence of corporations. The National Institutes of Health place only two restrictions on its grantees: that they publish their data and that they give the Federal government free access to their patents. But the right to patent any discoveries made with Federal money lies with the grantees. Large amounts of Federal money fund most of the lab’s activities without requiring anything in return, and a small amount of drug company funding extracts from that built-up lab exclusive rights to the patents and drugs produced in it. Collaboration also gives the drug companies a way to market largely federally funded labs. It is impossible to determine the exact extent to which this occurs, because the University does not release a precise breakdown of grants, but the existence of collaborative papers by different groups, and the spread of pharmaceutical money to HMS and HSPH suggests that a significant number of labs are involved in these interactions.

Anti-Pharma

The anti-corporate movement, especially here at Harvard, has largely allowed the pharmaceutical corporations to pass beneath its radar. The movement here has focused on sweatshops and a living wage for Harvard workers—both admirable goals—but it should not ignore Big Pharma anymore. The anti-corporate movement, fundamentally, opposes corporations that claim to transcend morality in the pursuit of profit. The pharmaceutical industry, more than any other industry, claims the right to amorality.

"Moral" is a tricky word, but it is ultimately the best description of the movement’s central claim. The movement believes that every person is entitled to both a decent standard of living, one consonant with human dignity, and to essential human rights. The precise definition of these rights and standards is a matter of contention, but it is universally agreed that such rights and standards, whatever they are exactly, are everyone’s moral entitlement. Corporations, by contrast, argue that the pursuit of profit puts them above morality. In essence, corporations claim that they are not fundamentally responsble, as every individual surely is, for the common good. The movement is anti-corporate precisely because it is corporations alone that make such claims.

This moral logic of the anti-corporate movement suggests that the movement ought to take on Big Pharma. In terms of sheer numbers left to be injured, maimed and killed by disease, Big Pharma is unsurpassed. But Big Pharma says that it is not its problem if people can not get the drugs they need to live. And why is it not its problem? Because, it says, corporations are not responsible for the general welfare; they are responsible only for making profit. What Big Pharma says is true—corporations as they exist now are only supposed to be concerned with profit—but the movement believes that is fundamentally unjust. A company can pursue profit, the movement agrees, but that company cannot ignore the moral claim of workers and dying patients to a decent life just because its corporate mission is to make money.

The pharmaceutical companies, by denying responsibility for patients who do not bring them profit, practice the most extreme amorality: they claim they are not responsible for human life. The movement has to show Big Pharma, as it has shown the sweatshop employers, that the pursuit of profit does not transcend morality. Not just the movement as a whole, but we Harvard students in particular. Harvard’s relationship to Big Pharma brings the drug companies into the realm of our responsibility, and we should demand that Harvard do its partómorally and materiallyóto promote responsible drug development. We should pressure the Corporation to divest itself of pharmaceutical stock. We should pressure HMS and HSPH to revise research guidelines to promote socially responsible drug development. We should pressure Harvard to cut its scientific ties to Big Pharma altogether. Let’s begin to fight the worst corporations of all: those that callously leave millions to die every year in the name of profit.

Questions? Comments? Please contact perspy@hcs.harvard.edu