The Greed of the Pharmaceutical Industry

Principles of Validation for Medicinal Products (CHEM4213)

Student Name: Reginald Ukoko

Student Number: C12346596        

Pharmaceutical Healthcare: DT422

Module Lecturer: Brian Quigley                                

Submission Date: 08/04/2016

Assessment Theme: The greed of the pharmaceutical industry and its implications on modern society.

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The greed of the pharmaceutical industry and its implications on modern society.

I begin this essay with the statement that – There are very few entities within modern society that rival the immeasurable greed of pharmaceutical companies. The pharmaceutical industry has become one where profit margins of over 30 percent have become rather commonplace. Companies like Pfizer, Johnson & Johnson and Novartis rake in billions in profits each year off of essential and life-saving medication. It is so glaringly apparent that large amounts of money stand to be made in the business of pharmaceuticals that traditional technological companies like Apple and Samsung have also tossed their hats into the proverbial health research ring in their quests to “diversify”, a word scapegoated by the unquenchable greed carried by these multinational companies. (Ward, 2015)

Apple produced its “Researchkit” in 2015, a piece of software which predictably utilises its hallmark overpriced mobile device – The “Iphone” as an instrument to measure human wellbeing. The “Researchkit” incorporates data from mobile apps like heart rate metres, step counters and even ovulation calculators. It has been touted by representatives like Jeff Williams (Apples’ head of operations) as being a piece of software which metamorphoses the Apple IPhone into a “Powerful diagnostic tool” able to easily overcome certain clinical research barriers.  I believe such an assertion to be grossly false, one not worth the paper it is printed on. It is easy to see that Apple, or any other technological company suddenly deciding to “diversify” into the health and research sector is not motivated in the hopes of promoting or aiding human wellbeing but rather lining their pockets with the money of their unsuspecting victims, a game played so skilfully by their pharmaceutical mentors. They have been so driven by the hopes of future financial gains that in their doing so have created a below par piece of supposed “diagnostic” software. I believe Nina Ahmadi (The co-founder of Bioniq health) stops short of name shaming companies like apple when she says “The noise-to-signal ratio in this space is one of the highest…..there’s a lot of people doing things without a lot of traction”. Technological companies after acting as the understudies of multinational pharmaceutical companies have decided profiteering off of illness to be too good to pass up. (Ward, 2015) 

At this stage questioning the morality behind the excessive profits made by pharmaceutical companies seem nonsensical. This is because society has announced its compliance with the corporate con men that run these companies by permitting them to continue to grossly overprice many vital medicines. It is no secret that we has long since parted with minor moral obstacles such as profiteering from the sick; after all “business is business”. “Business is business” – The rightful slogan of the pharmaceutical industry. Pharmaceutical companies are well known for their aggressive Merger and Acquisition (M & A) campaigns within the industry. Pharm companies agreed 462 billion dollars in M & A deals from 2014 to April 2015. Major companies like Pfizer, Actavis and Teva Pharma waged massive M & A campaigns against each other, (eg. Teva – Mylan and Mylan - Perrigo) other promising biotech companies and low profile produces of “generic and over the counter drugs”. The fundamental reason behind the sudden spike in pharmaceutical M & A bids during the does not come as a shock – MONEY. Financial gain has always rested at the heart of every “What” or “Why” within the pharmaceutical industry and M & A’s are no exemption. (Ward, 2015)

Some catalysts behind the surge in M & A campaigns in the pharmaceutical sector during 2014 – April 2015.  

1. Capital costs were reduced, so investment returns from the purchase of assets were extremely high.

Jeremy Levin – The former chief executive of Teva, explained the financial motivations of M & A being driven by the fact that “Capital costs have come down, so the return on investment from buying assets is higher than in the past”. (Ward, 2015)

1. To sidestep competition from lower cost pharmaceutical companies.

Pharmaceutical companies like Teva, Actavis and Mylan which manufacture generic medicines have shifted their manufacture towards “higher value branded products” like Botox due to the high competition in the generic medicines sector from lower cost Indian competitors like Cipla and Sun Pharma. (Ward, 2015)