Taxpayers Funded COVID-19 Research, And Big Pharma Profited

April 16, 2020

It's definitely just a coincidence that one of Trump's coronavirus task force members is a former lobbyist for Gilead Sciences, the company that won orphan drug status for its COVID-19 treatment.

It's definitely just a coincidence that one of Trump's coronavirus task force members is a former lobbyist for Gilead Sciences, the company that won orphan drug status for its COVID-19 treatment.


Right: U.S. President Donald Trump speaks at the daily briefing of the White House Coronavirus Task Force in the Rose Garden at the White House April 15, 2020 in Washington, DC. Alex Wong/Getty Images

Story Transcript

This is a rush transcript and may contain errors. It will be updated.

Marc Steiner: Welcome to Real News. I’m Marc Steiner. Great to have you with us as usual.

Now there are some stories that seem to be overlooked when it comes to the intersection between dealing with fighting COVID-19, the lies Trumps tells, and the power of big pharmaceutical. Some leading the corona task force for Trump, like Secretary of Health, Alex Azar, and Joe Grogan, who heads domestic policy, comes straight from big pharma. US government has always spent hundreds of millions of dollars on researching drugs that threaten our lives to help us. Then we give them to big pharma that takes over and takes what we make for them and gouging our pocketbooks and wallets. Medications to treat corona have been developed with our tax money, are now being given to big pharma to make their profits. How is this happening and what can we do about it?

Let’s welcome back to Real News Alex Lawson, Executive Director of Social Security Works. Alex, good to see you.

Alex Lawson: Thanks for having me.

Marc Steiner: It was a great piece that you wrote and I really learned a lot in what you laid out for us. So let’s talk a bit about this. One of the things you talk about in there is that the United States government spent $700 million, given to the National Institutes of Health to study coronavirus and drugs that could affect coronavirus.

So it’s our public money being spent to help us fight this disease, but someone else is going to gouge us to make the profits. Am I making too much of that?

Alex Lawson: No, that’s exactly how it works. Look, it’s actually worse than most people can even sort of conceive. All of the basic research, 100% of the basic science is taxpayer funded, right? It’s our tax dollars go into the National Institute of Health, the NIH, also into grants that go to universities around the country and then a host of other government agencies and programs, like BARDA is one specifically set up to create vaccines for pandemics. That’s all taxpayer funded.

So we fund all of this basic research. We fund a lot of the early stage research, like 80% of the early stage research, and in some cases we spend all the way through late stage clinical trials, meaning that the taxpayer is funding for some drugs, and a recent study put it at one in four drugs we fund all the way through their life cycle.

Now, 100% of drugs we’re doing the basic research, which is the riskiest part. You’re just looking for things. You don’t know, you don’t have any idea if it’s going to become something. We take all of the risk, and in some cases we develop it all the way to the end and then we literally give the patents to a pharmaceutical corporation. That’s what they do. We hand it to them and they turn around and they charge us the highest drug prices in the world.

The system is totally, absolutely corrupted by pharmaceutical money, and I’m hoping that people can see with the coronavirus the absolute failing of the pharmaceutical corporations to be prepared for this, because not only do they get the patent and can charge whatever they want, they also direct where the the priorities are. So if we’re doing the early stage research but they don’t see a way to profit from it, say with doing more research on vaccines for coronaviruses, then it just sits on a shelf, because they don’t know how to profit from that. They’re going to spend their money on things that they know how to profit from, another lookalike drug for cholesterol, a statin, or hundreds of millions of dollars investigating male pattern baldness, which again, that’d be great. They should be doing that. But not at the expense of doing research to prevent a pandemic, to prevent what we are living in right now.

Our system is not set up to benefit the public health. It’s set up to benefit the bottom line of these corporations.

Marc Steiner: So there’s common wisdom out there. Let’s talk about this for a moment and jump right back to COVID-19 and what’s going on at this moment, but most people are told, think that the reason our drugs cost so much money, well, we have to [inaudible 00:04:32] money at the pharmacy is because big pharma spends all their money on R&D and that’s how they recoup the hundreds of million dollars they spend on R&D is by charging us the money they do. What you’re saying is that’s a mythology.

Alex Lawson: Yeah, I would just say a lie. A lie that costs lives. It’s obviously a myth, but it’s one of the best crafted pieces of propaganda out there that the high drug prices that we pay are somehow to pay for innovation.

The only thing, the only thing that these pharmaceutical corporations are good at innovating in is increasing their profits, is increasing the stock prices of their companies through gimmicks like stock buybacks. They spend more on stock buybacks then they do on research and development, or by marketing drugs to people some of the drugs that people don’t need. Anyone who watches corporate television knows, it’s all pharmaceutical commercials. They spend more on marketing than they do on research and development.

The system as it is is hurting innovation. There’s no incentive for these companies to innovate new molecule, new treatments and new cures. There is always an incentive for these corporations to innovate new ways to extend the patents on drugs that make them money. That’s where they’re innovating is new and fascinating ways of gaming the system so that they can continue their monopoly so that they can charge these outrageous prices that we face.

And I just want to do one example outside COVID so that everyone gets it. Insulin is over 100 years old. The current molecules that we use, they’re biologics so they’re not molecules, but the current analogs that we use are decades old. There’s been no innovation on insulin, none, zero since the analogs came out. No innovation on it, and yet the price of insulin goes up every single year.

There’s three companies who produce these insulin analogs. Alex Azar used to run one of them, and in lockstep as a cartel, they raise the price every single year. That’s not to pay for innovation. There is no innovation. It’s an old drug. That’s just so that they can buy another yacht at the expense of people’s lives. That’s what the pharmaceutical business model is right now.

Marc Steiner: So you mentioned Alex Azar, and let’s talk about him for a moment, and Joe Grogan, who also comes out of big pharmaceutical, who heads domestic policy for Trump, and the role they may be playing in all of this, some of it speculation, we just don’t know really. But clearly they’re in the midst of that and part of the corona task force. And then Joe Grogan, as you said, was in Gilead, which is getting this huge contract from the government. So let’s talk a bit about that.

Alex Lawson: So you have Joe Grogan who used to be the chief lobbyist for Gilead, and you have Alex Azar who used to run US Lilly, Eli Lilly, one of the three in the insulin cartel. And in fact it’s funny because they’re both like super pharma bros, right? They are not putting country first, they are putting corporations first. The reason they’re in government is to protect these pharmaceutical corporations’ interests and then when they leave government, they’re going right back into these pharmaceutical corporations.

But the funny thing is, and this is also sort of normal, they’re not allies. They actually are at each other’s throats a lot. And when you’re watching it, you can kind of see the tug of war between them. But in both cases, it’s not like one is fighting for the people’s interests and one is fighting for the corporate interests. They’re just fighting for their own different corporate interests. And again, we don’t have a detailed knowledge of how Joe Grogan, for example, was involved in Gilead getting this orphan drug status.

An orphan drug is a drug that is used to treat a very small number of people and therefore there’s not much incentive for companies to develop those drugs. And it’s a myth. It’s actually always used to game the system, but that’s like the general setup, and Gilead applied for and got an orphan drug status on a drug that they have that’s showing promise to treat COVID right now, a pandemic. The word pandemic means all. It’s the opposite of an orphan drug. That’s how greedy they are. They see a pandemic and they’re going to look at any way to gain the system.

It was so egregious and we created such a din in a clamor that they had to roll that back, but it’s not like we won, because they already still get five years of market exclusivity. Five years Gilead gets of charging whatever they want. Astronomical rates for a potential treatment that again, the US taxpayer paid to develop. It was actually developed originally around Ebola and the Canadian taxpayer, and then this company is going to profit from it in any way that they can. That shows the level that they’re willing to go to make a dollar.

Marc Steiner: So it’s probably just a coincidence that Grogan happened to be a lobbyist for Gilead and Gilead got this huge contract from the government. We have got no proof, but it’s probably just a coincidence.

Alex Lawson: That’s usually how it works in DC, right?

Marc Steiner: Right. So let’s jump into this. You had a quote in the Washington Post, in the article, and it was interesting. This is your quote, it’s something that folks should see, but I’ll just read it. I won’t try to mimic you, but I’ll just read it.

“Look at their plan, and you can see exactly who this guy is: Mnuchin is pushing a giant slush fund to give handoffs to corporate America and was forced to add unemployment insurance for millions of Americans losing their jobs and money for hospitals in the middle of a pandemic. These were concessions he had to make. He sees a global pandemic as an opportunity to move taxpayer money into the wallets of his Wall Street friends.”

Let’s pick up on that point you made. Look at Gilead and also Johnson & Johnson now and how they’re going to benefit from this research and how all this ties together.

Alex Lawson: Yeah, what they’re looking at is, they’re seeing this pandemic… Let me actually say the other way. So there was an era when you had scientists and the government working for the people, where you had Jonas Salk and actually worked to eliminate polio by working globally together to eliminate and eradicate polio with smallpox. We worked and led a global coalition through the WHO, with the US leading to eliminate the smallpox. We eradicated it. It’s the only way that we can actually fight a bug, a virus like COVID.

But that’s not the era that we’re in anymore. The pharmaceutical corporations are not scientists, they’re hedge fund guys. They don’t wear lab coats, they wear $6,000 suits. And what they’re good at is telling a story. They paint a picture, they lie about what it is that they do. They take our research, we paid for it. And when we even tried to… we tried to add into the recovery package three, the third recovery package, just reasonable pricing. We didn’t even say that it had to be available to everybody, we just said that they had to charge a reasonable price and they slash and burn fought that and they won, and so we don’t even have a guarantee that they will charge a reasonable price for treatments and vaccines that were developed by taxpayer dollars.

But what Johnson & Johnson, another drug corporation, is doing is they just launched an eight-part mini series talking about the road to a vaccine. This is just a giant piece of corporate marketing. They’re going to obviously leave out the fact that you and I and everyone in this country already paid for it. They’re going to highlight, they’re going to have labs that are not their own. I guarantee it. It’s like their favorite thing to do. They’re not going to be their labs, they’re going to film in some lab for “the” role and make it seem like that’s where all the research is getting done.

Bill Gates had to come in and actually start building laboratory capacity. BARDA, the program I mentioned earlier, got, I think, three billion, I might be off a little bit on that, in stimulus. BARDA is paying for the laboratory setup for vaccines. US taxpayers pay for all of this and all the companies do is package it really prettily and then make outrageous profits.

Marc Steiner: So let’s talk a bit about what can be done. Part of what you do is not just to expose what we’re talking about here, but part of what you do is to kind of really put forth policies that could change the way we do things.

When you just talked about Jonas Salk and polio, I’m an era of that age when polio was just crippling people and people I knew in school were getting sick, and Jonas Salk didn’t become a millionaire for developing polio, he did it because he’s a scientist. As you said, it was a global kind of work together. So let’s talk a bit about now, the 21st century, what you’re proposing could be the way this should be done.

Alex Lawson: I will, and forgive for some like philosophical things here, but Jonas Salk made so much more than money. He might not have become a billionaire, but his name is synonymous with public service, his name is synonymous with a person who put people in front of his own pocketbook. That type of person still exists all over this country and they want to stand together and create a system that works for all of us.

Jonas Salk is not actually the exception, he’s much more of the rule. It’s just that our system right now is driven by these sociopaths on the other side and we just need to take it back from them. And the way we do that is by creating a public pharmaceutical system. Almost all of it already exists. We just put more money into the NIH and we complete that full cycle from basic research all the way through production, and then the drugs are available immediately as generics and any company can compete producing the molecule, but no monopolies for anyone.

It seems radical, but all I’m saying is just do that on the side of the current system. Let the [crosstalk 00:15:31]-

Marc Steiner: [crosstalk 00:15:31]. Alex, let me ask you [inaudible 00:15:33]. So are you saying that we don’t need the pharmaceutical industry to manufacture and distribute drugs, that that’s unnecessary?

Alex Lawson: Basically unnecessary. So we can have Elizabeth Warren and Jan Schakowsky have a bill for public manufacturing, and that means two different things. You can have a facility where you have government workers actually manufacturing, and we can do that, and DOD, they do it all the time in the defense sector. But it also just means contracting with corporations, right?

So it’s like, again, if you look at defense, the DOD contracts with a corporation, but the corporation doesn’t end up owning the tank that they build. The US government owns the tank, the corporation builds it. So you could do something either/or or both of those for manufacturing. And then in terms of distributing, as soon as you get rid of the monopoly, you allow all of the generic producers, and anyone who takes a pharmaceutical knows what a generic is. Right? It’s available in your pharmacy just like the branded drugs are, it’s just much, much, much cheaper.

So we don’t have to worry that somehow the system would fall apart because we’re talking about using the system as it is, just removing that one part where we give the monopoly to these corporations to charge whatever they want. You remove the monopoly power and the system keeps going. In fact, innovation will increase because there won’t be an incentive to just create yet another Viagra, there’ll be an incentive to create cures for diseases. There’ll be incentive to create new treatments and vaccines, preventative stuff, and there will be market competition. It’s all going to be done by these companies who produce the drugs generically and then market them.

And just in case there were a market failure, it is also extremely possible for the government to step in and produce drugs through government manufacturing if there is a shortage. And in fact, we should be doing that right now, because the idea that the shortages would happen in the new system is silly because the shortages happen right now. You can go to the FDA’s website. There’s the FDA shortage list.

When a corporation does not see a way of making oodles of money, they don’t put any effort into making sure that people can get the drugs that they need. If it’s done as a public service in a public pharmaceutical system, then the purpose of it will be to ensure that people get the drugs that they need. It is not a radical idea. In fact, it’s generally been the way that drugs and medicines have existed for the most part of modern history. It’s only since the 1980s that we’ve made this really wrongheaded move to say that pharmaceuticals and vaccines and others are market goods that we should hand over to corporations to profit on.

It’s good when it comes to like a candy bar, like how much are you willing to pay for this candy bar versus that candy bar? But when it comes to your life, or the life of your child or someone you love, how much are you willing to pay for the drug that keeps you or your loved one alive? And the answer is everything that you’ve got. So we can’t give companies that power to hold our health and our lives hostage for profit.

Marc Steiner: Well, Alex, awesome. Once again, thank you for joining us here on Real News. It’s always a pleasure and I really appreciate the, I think we all do appreciate the work that you do, social security works, to fight for justice in this area and looking forward to have many more conversations as we follow what happens with COVID-19 and how they roll these things out for the benefit of the people, not for profits. We hope. So, thank you again.

Alex Lawson: Thank you so much for having me.

Marc Steiner: Our pleasure. I’m Marc Steiner here for The Real News Network. We’re going to stay on top of COVID-19 and all of the aspects. Stay with us. Let us know what you think. Take care.