Boom time for drugmakers like Johnson & Johnson — Pandemic brings money, fame, and respite from the law.
Drugmakers are finding themselves in an inevitable position. Since the start of the coronavirus crisis, share prices have soared and public criticism has grown muted. However an elaborate cover-up is underway to hide a sordid past.
If there was ever a time for pharmaceutical companies to set right their tarnished public image, it is now.
And, they are grabbing it with both hands. As the world rallies to fight the coronavirus pandemic, CEOs of drug companies are basking in the adulation the healthcare fraternity is receiving around the world. They know that they have a priceless opportunity to whitewash their misdeeds of the past. Case in point: Johnson & Johnson CEO Alex Gorsky. Since the crisis unfolded, Gorsky has been talking up his company’s efforts to develop a vaccine for coronavirus on prime-time TV shows. Strangely enough, J&J’s history of ‘product recalls, scandals, and lawsuits’ hasn’t once come up for discussion. This has raised eyebrows across the nation.
It’s all about image
Given the circumstances, it wouldn’t be far-fetched to say that this PR outreach is part of a clever plan on the part of drug manufacturers to recast themselves as law-abiding ‘good citizens’. They probably have no choice with the law snapping at their heels. This week, Johnson & Johnson announced that it will be pulling its notorious Baby Powder product off the shelves, alleging a widespread misinformation campaign in the media against it.
It is a time of reckoning for the company which has already paid out more than $8 billion in legal penalties so far. Thousands of lawsuits are yet to be heard. Despite the media blitzkrieg, it has mounted, J&J must be fervently hoping for a miracle- one that comes out of a laboratory – namely, a cure for the deadly coronavirus. The odds of that happening are slim but the company would have us believe otherwise. Competitors like Gilead have been actively scouting for partners in developing countries like India and Pakistan to locally produce the anti-viral Remdesivir which recently received fast-track approval as a coronavirus treatment from the US Food and Drug Administration (FDA).
High on taxpayer funds and nothing to show for it, drug companies flatter to deceive.
Milking Covid-19 for every penny
It is worth noting that drug development and trials in the US are generously funded by the federal government, though manufacturers will rarely acknowledge it publicly. The tantalizing prospect of a breakthrough had Gorsky claiming that J&J “had a high probability of succeeding against the COVID-19 virus”. But, the truth is that it’s all a roll of the dice. The media attention seems to be consolation enough for J&J, a company that was a near pariah until late last year.
Feeding the media frenzy also has another payoff: higher stock prices. There has been growing investor interest in pharmaceutical stocks as manufacturers scramble to develop an antidote. On the other hand, lobby groups are hard at work on Capitol Hill, trying to stave off a bill that calls for regulating the prices of drugs. As of mid-2019, lobbyists representing companies like Pfizer and J&J had spent millions of dollars to prevent the bill from being put to vote which now appears more than likely to be the case.
Politics over healthcare
“It is not at all surprising that, with the administration talking about how to control [drug] prices and Congress taking up legislation to that effect, among other things, that the pharmaceutical industry would respond by calling all of their lobbyists to a full-court press.”Senior Researcher Daniel Auble of the Center for Non-Responsive Politics, a Washington think-tank
Among the measures the draft legislation proposes are penalties for manufacturers that inflate prices on treatments for seniors enrolled in Medicare. Also under deliberation is a cap on how much older citizens’ pay out-of-pocket once they hit the co-pay limit of $3,100.
Trump may have played straight into the hands of the drug lobby by making it easier for senior citizens to opt-out of mandatory limits on treatment costs under the program. Though details of the President’s executive order issued in October 2019 to this effect are still unclear, commentators say it portends big cuts to the healthcare budget. Already under fire for grossly mishandling the pandemic, the US administration may also be looking to the drug cartel for a face-saver. In their media briefings, key members of the Administration’s coronavirus taskforce have said that a vaccine “could be available in as little as 12 to 18 months”, a claim rubbished by independent analysts as unrealistic.
Hoping for a stroke of luck
Commercial considerations have led drug makers to neglect developing vaccines for viral infections, offering short-term solutions like antibiotics instead. This strategy is putting millions of lives at risk while adding handsomely to drug manufacturers’ coffers. Drug companies like J&J assert that spin-offs from their past work on vaccines for Ebola, Zika, and other pathogens can aid the development of a potential answer to Covid-19.
Watch: The truth about the Covid-19 vaccine race
Incidentally, the same companies lost several million dollars after the diseases in question all disappeared as quickly as they had spread. Today, humanity’s only line of defense against life-threatening viral infections is a small group of companies, funded by non-profits like the Bill and Melinda Gates Foundation. Unfortunately, none of these firms have the financial muscle to carry out human trials, produce and distribute the drugs they develop.
In a bonanza for J&J, the Trump administration recently announced federal funding worth $456 million to jointly develop a coronavirus vaccine.
The investment will be matched by an equal sum from the latter. Despite the largesse, the Department of Health has said it cannot guarantee that the vaccine will be priced reasonably. Families and communities across America have been practically left at the mercy of the drug manufacturers. Though J&J has been quick to assure the nation that it does not seek profit from an emergency vaccine, it gave no details on its exact pricing strategy.
Given J&J’s infamous track record, there is no telling whether the company will keep its word. While experts are calling for the company to sell its vaccine at-cost, J&J is holding its cards close to its chest at the moment. The drug industry’s chances of redemption in a world afflicted by Covid-19, small as they may be, hinge on the extent to which a prospective cure funded with public money is used for the greater good.