In September 2019, the Gallup polling organization released results of its annual survey of how the American public views 25 business industry sectors in the U.S. economy.
With data drawn from Gallup’s annual Work and Education poll, the biopharmaceutical industry was ranked last with a net positive rating of -31, unseating the federal government (-27), the least positively viewed industry in 2018.
The biopharmaceutical industry has never been ranked this low since Gallop first polled on industries in 2001 — having earned a +4 positive rating among Americans as recently as 2014.
The biopharmaceutical industry has been ravaged by negative publicity in recent years, ranging from sharply raising prices on older drugs, to the intense coverage of the industry’s complicity in America’s opioid epidemic, to tying company CEO pay to high drug prices and high profits.
For instance, in 2019, American consumers faced multiple triple-digit drug price increases, including one of 879 percent for a generic version of the antidepressant Prozac.
Furthermore, in October 2019, drug distributors AmerisourceBergen, Cardinal Health and McKesson and manufacturer Teva Pharmaceutical reached a $260 million settlement with two Ohio counties to avoid the first federal opioid trial that was set to begin in Cleveland.
Finally, a study by Bentley University researchers, and published recently in the JAMA Network, found that 35 biopharmaceutical companies had significantly greater median annual profits (a 39.1 percent difference in gross profit margin) than the 357 S&P companies analyzed in the study.
In the short term, the biopharmaceutical industry is seriously in need of a burnishing of its tawdry reputation. The terrible COVID-19 global health pandemic offers the U.S. biopharmaceutical industry an opportunity to substantively step up to meet the public health challenges now confronting the nation.
There is accumulating evidence that the biopharmaceutical industry is meeting that challenge.
According to recent data from PhRMA, the national association representing biopharmaceutical companies, as of April 8 the industry is conducting 303 clinical trials for COVID-19 treatments and seven clinical trials testing six COVID-19 vaccine candidates, with more than 40 of these clinical trials taking place in America.
PhRMA also reports that there are 45 late-stage phase IV clinical trials of post-marketing studies of an approved treatment for COVID-19, and two later stage phase III clinical trials for a preventive vaccine, potentially leading to a universal vaccine for COVID-19 in 2021.
In the long term, the coronavirus pandemic has revealed to Americans a glaring national security over-reliance on a global manufacturing supply chain embedded in China. For example, 97 percent of all antibiotics and 80 percent of the active ingredients in antibiotics are manufactured in China.
According to Rosemary Gibson, a senior adviser at the Hastings Center, an independent bioethics research institute and think tank based in Garrison, New York, the United States is losing its ability to manufacture generic drugs because Chinese pharmaceutical manufacturers “dumped” low-price drugs into the global marketplace, resulting in U.S. (and other countries) manufacturers exiting the generic pharmaceutical manufacturing sector.
As Gibson, a co-author of the book “China Rx: Exposing the Risks of America’s Dependence on China for Medicine,” explained to lawmakers on Capitol Hill in November 2019: “Supplies can be withheld. Medicines can be made with lethal contaminants or sold without any real medicine in them, rendering them ineffective.”
In the summer of 2019, the U.S.-China Economic and Safety Review Commission warned of American reliance on China for life-saving drugs, cautioning of “serious deficiencies in health and safety standards” in Chinese pharmaceutical manufacturing facilities.
Moreover, as the rhetoric between China and the United States over COVID-19 heated up in March 2020, Chinese state media raised the specter of using China’s pharmaceutical leverage to block critical components and supplies for dependent U.S. drug companies and send America into “the hell of a novel coronavirus epidemic.”
This statement illustrates how a weaponized supply chain can bring America down by disrupting access to essential drugs. Repatriation of U.S. pharmaceutical manufacturing back to America is dangerously overdue.
Of the top 10 biopharmaceutical companies ranked globally by total revenue in 2018, six are U.S.-based firms: Pfizer (1), Johnson & Johnson (3), Merck &Co. (5), AbbVie (7), Amgen (8), and Bristol-Myers Squibb (10).
To enhance a flagging reputation, these industry leaders, in collaboration with PhRMA, should voluntarily embrace the re-shoring of American biopharmaceutical manufacturing from China, thereby eliminating this potentially lethal “chokepoint” in America’s global pharmaceutical supply chain.
To encourage this manufacturing repatriation, National Economic Council Director Larry Kudlow recently suggested a “bring back manufacturing” proposal with 100 percent tax deduction (expensing) for U.S. manufacturers to relocate their manufacturing supply chains out of China and back to the United States.
In the future, this decision will no longer be a corporate strategy option, but a national security imperative demanded of the biopharmaceutical industry by the American public and their elected representatives in Washington.
