The parasite of Big Pharma

2018-07-01 06:26

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We hear stories in the healthcare industry that are heart-breaking – children in need of surgery who can’t get treatment because their parents can’t afford insurance, or citizens having to smuggle drugs from other sources because they are not available at a healthcare facility. How is it that healthcare, such a fundamental right in life, becomes so difficult to obtain for the poor?

I don’t believe the answer lies in the current debate around whether the public health sector is in crisis or not. Nor does it lie in whether the minister of health is removed or not.

The quest for the almighty rand is at the heart of the debate. Healthcare is a multibillion-rand business. Everyone from insurance and pharmaceutical companies to hospitals and medical device manufacturers pulls in large profits, often at the expense of the patients they’re supposed to be helping.

In 2010, the World Health Organisation outlined 10 leading causes of health system inefficiency grouped into five categories: human resources, medicines, health services, system leakages and intervention.

The public health pharmaceutical business is worth R17bn (2014/15) per annum for the 79% of the population (about 44 million people and 41% of rural people) that is uninsured. The procurement of medicines is centralised at the national department of health, using market intelligence to get value for money. Medicines are delivered to various medical depots in various provinces.

When pharmaceutical companies included in the national contract do not deliver to medical depots within the agreed delivery times, buyouts occur. In these cases medicines are procured by obtaining three quotations from other suppliers to address the shortages caused by the late or non-delivery of pharmaceuticals.

In November 2016, the Auditor-General (AG) released a report on a performance audit to provide insights into the pharmaceutical value chain. This included planning, storing and distribution of medicines to patients.

Lo and behold, among the shocking findings the AG discovered is what I choose to call corporate theft and pillage of the public health purse. The AG reported that when provinces buy outside the national contract, pharmaceutical companies hike their prices as much as 7 512%. Remember, this buying out of contract happens when there is late or non-delivery by the contracted supplier.

For example; a wound dressing that normally costs R18.16 under a national contract ends up costing R148.20 (716% difference). Dopamine injections, used to treat certain conditions that occur when in shock – which may be caused by heart attack, trauma, surgery, heart failure, kidney failure or other serious medical conditions – cost R2.98 under a national contract, but would be bought at R39.96 (1 241% hike) out of contract.

Another example is that of Risperidone tablets for mental conditions. These would cost R4.29 under a contract but are sold at R326.54 (7 512% difference) on buyout.

Have we lost sight of our basic humanity? If that’s the case, I can’t help but be depressed about the whole thing – enough to make me wonder why I’m in the business that I’m in.

Healthcare has been turned into a capitalist business in America and here. If healthcare, which is a basic human right, can be rigged like this, what human necessity will be next?

In Europe, governments control prices in various ways. Britain, for example, has the strictest system, refusing to pay for medicines that fail to meet a threshold of cost effectiveness. But in America, and here in South Africa, companies set whatever official price they like.

The AG believes that the problem can be resolved if the buyouts are kept to the minimum. However, I believe this a matter that demands collective condemnation from all people, especially the poor who are directly affected. It must be exposed for what it is: corporate pillaging from the poor!

We need to understand that the balance of class forces is not only crucial to patterns of ill health and death, but also to the solution. We know from history, for example, that war and revolution can radically change patterns of health, illness and health service delivery, and often in a remarkably short time. Deep-rooted problems do not disappear overnight, but they can be confronted in new ways.

We know that rather than lower prices, the parasitic market helps raise them.

This is reinforced by their view that the prevailing drug prices in South Africa are inflated artificially through the elaborate system of bonuses, discounts, rebates and other perverse incentives that lead to the dispensing of more expensive drugs, and irrational use of drugs.

These perverse incentives add an additional 50% to the final cost of the drug. The national health department believes that South Africa is among the world’s top five most expensive medicine markets.

There is a hidden consequence to this system: an unfolding crisis in healthcare, driven by the greed of pharmaceutical corporations whose profit-seeking model is failing. It’s no surprise the cost per person of health is R3 332 (Stats SA, 2016).

Will healthcare be the next profit-fuelled investor bubble? We must call on health professionals to heed the warnings from the economic crisis and, rather than stand by while a crisis unfolds, act now to redirect increasingly market-oriented health systems to serve the common good.

The deteriorating state of public healthcare means that an increasingly large percentage of citizens are being driven to despair for their medical needs. Public health professionals and activists have a duty to speak out.

Too many public health professionals leave important decisions to politicians and economists, assuming they must know what they are doing. But now we know that they do not. A different solution is needed that prioritises health and social wellbeing.

Activists and professionals are as well equipped as anyone to propose solutions to the problems facing the health system. We must start looking at how we can change what is happening in healthcare and then apply the lessons more broadly. At least this will be a start.

The real solution has to be a radical one, but this cannot be achieved by shouting from the sidelines. A battle against the parasitic pharmaceutical industry and the crisis it is fermenting in public health has to be fought at all levels: to sustain and improve conditions, to oppose profiteering at the expense of the poor, to expose the accomplices in this criminality, and to fight for affordable public health.

This can lay the basis for a decent society that will also be a healthy one, one in which social inequality will no longer give rise to unequal healthcare and unequal deaths.

- Maxon is a master of philosophy: development finance student at Stellenbosch University


Do you think we should be taking a closer look at how our health system benefits pharmaceutical companies?

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