Making money off a pandemic

October 29, 2009

What does it say about the capitalist system that some of its most profitable companies are happiest when newly evolved and potentially catastrophic viruses emerge to threaten humanity, asks Keith Rosenthal?

"WITH A pandemic like this, the upside for us is clearly significant." So confessed the chief executive of Novartis Vaccines and Diagnostics in an interview in the Boston Globe, regarding the rise of the H1N1 (or "swine flu") global pandemic.

Novartis, one of the main manufacturers and distributors of flu vaccines, is hoping to make a $7 billion windfall profit this year, due largely to the demand around an H1N1 vaccine. The pharmaceutical industry is one of the most profitable industries in the U.S., and this year, all the companies are licking their lips.

Doubtless, most people reading this story are worried about the rise of the H1N1 flu strain. Recently, the World Health Organization officially designated the spread of H1N1 a "pandemic," and media outlets everywhere have given much play to the potentially fatal dangers of the virus.

Already, more than 4,000 people have died worldwide of H1N1, a cousin of the seasonal flu virus, which itself claims up to half a million lives annually. With much of the world nearing the height of flu season, the dangers will only grow.

Families waiting between 1 and 2.5 hours for H1N1 vaccinations at a hospital
Families waiting between 1 and 2.5 hours for H1N1 vaccinations at a hospital (Vera Yu and David Li)

Theoretically, this needn't be a fatal situation. Current medical science has the capacity to produce vaccines for most strains of the flu that, when distributed widely, radically decrease the likelihood of a high death toll from the flu.

However, shortages of the seasonal flu vaccine have meant that clinics across the country have been forced to stop distribution early.

The clinic where I work, Harvard University Health Services, usually runs its flu clinic until January, but we have been forced to stop administering all flu shots at the end of October due to vaccine scarcity. Nor have we been ensured a necessary supply of the forthcoming H1N1 vaccines now entering the market.

Given that the wealthiest university in the world has been unable to secure vaccines for its privileged students, what chance do the myriad of community hospitals and health centers across the country have to meet the pending need?

ONE OF the main causes of this wholly unnecessary situation is that vaccine production and distribution in America--as for much of the world--is largely monopolized by several huge and highly profitable drug companies.

When the H1N1 pandemic was declared, four of the biggest of these companies--Sanofi-Aventis, GlaxoSmithKline, CSL Limited, and MedImmune--decided to immediately cease production of the seasonal flu vaccine and switch over to the H1N1 vaccine instead.

Gone was the urgency of ensuring an adequate supply of seasonal flu vaccine to match the coming need. These companies saw nothing but dollar signs in the new virus threat and dropped everything in order to meet the need--circling this market like sharks in bloodied waters.

Ironically, the artificial short supply of seasonal flu vaccines, coupled with immense demand by world governments for H1N1 vaccines, has further boosted the profits of these companies. As you learn in any basic economics class, the tighter the supply and the greater the demand, the higher will be the price of the commodity, thus ensuring even higher profits.

The global vaccine market is expected to double to $35 billion by 2014, but these pharmaceutical companies have much to be happy about right now, in this flu season.

What else but barbaric can you call a setup in which the manufacturers of life-saving vaccines stand to gain by not producing enough to meet the need? When the very institutions ostensibly in the business of healing people are at their happiest when newly evolved and potentially catastrophic viruses emerge to threaten huge parts of humanity?

Only in a system of production and distribution based around the sole guiding principle of profit could such an arrangement be seen as normal. Accountable to nobody and nothing but their small clique of investors and board members, these companies can't be trusted with our futures.

They--and the whole for-profit, private health industry in which they are ensconced--need to be thrown on the dustbin of history and replaced by a system in which human need is made the sole guiding factor when it comes to using our vast human and natural resources.

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