Public Pharmaceuticals

The global medicines market is dominated by large private drug companies responsible for a decline in meaningful innovation as well as skyrocketing prices, recurring shortages, troubling safety issues, and corruption in the institutions that are supposed to regulate them. These trends are harmful to our health, economies, and democracies—and they are inevitable outcomes of an industry driven by profit-maximization.

So-called “Big Pharma” companies spend less than onefifth of their revenue on research and development, but half of their revenue on marketing. Many also regularly distribute more than 100 percent of profits to shareholders by selling off assets, taking on more debt, and downsizing production—inefficient and extractive practices in an industry we depend on for our health and wellbeing.

To get different outcomes, we need a different design. Democratic, public ownership of pharmaceutical institutions at scale would remove the profit motive and help reclaim medicine for the common good. Public ownership of pharmaceuticals can exist at any or all points in the supply chain, from research for new medications to manufacturing and distribution services. Since they are not beholden to shareholders and have some insulation from market pressures, they can focus on goals other than maximizing profits—like contributions to public health, scientific advancement, and local economies.

From Massachusetts to the UK, Thailand, India, and beyond, there are many existing examples of states turning to public ownership of pharmaceutical companies in efforts to combat high prices, medicine shortages, and political interference by multinational corporations.

Since 1960, Cuba’s entire pharmaceutical sector has been public. It produces both low-cost generic drugs and first-in-class discoveries, while providing thousands of good jobs and educational opportunities in the national economy. Known principally for its innovations—like the world’s first lung cancer and meningitis B vaccines—the industry also manufactures most of the domestic supply of medicine and shares its technology with numerous low and middle-income countries, lessening those countries’ reliance on Big Pharma to meet healthcare needs.

When properly resourced, Public Pharma can lower drug prices, reduce inefficiencies, and ensure broad, equitable access to new drugs. Public control of manufacturing, wholesale distribution, or retail pharmacies can serve as the basis for large-scale investments in public health, creating educational opportunities and decent jobs and increasing resilience in supply chains. South Korea, for instance, supports small and medium pharmaceutical companies with publicly owned manufacturing facilities, which generate local jobs and purchasing power that broadly benefit the economy.

Public Pharma can also assure that medications most essential to public health are prioritized for development. State-owned pharmaceutical companies in both Cuba and Brazil operate with explicit mandates to develop medications ignored by the market, like those for neglected tropical diseases, while Big Pharma companies prioritize medications that generate the most profit—often copies of existing products.

Public Pharma can contribute to the creation of a biomedical commons in which life-saving technologies, and the information needed to produce and improve upon them, are treated as collective resources for all of humanity. Large-scale public ownership and control of the benefits of pharmaceutical innovation, for instance, could help facilitate programs in which the wealth created by the industry could prioritize serving historically marginalized communities, rather than perpetuating neglect in the name of business imperatives. Public Pharma is a vital tool for reorienting the purpose of health care from profits to human needs.

Successful examples from around the world can inform the design and development of a robust Public Pharma sector for any country. Sweden’s state-owned Apotek Produktion & Laboratorier AB has found a niche in specialty pharmaceutical manufacturing, selling products to dozens of countries, and directing any profits it earns to its only shareholder: the Swedish state. China and India’s stateowned drug companies have long produced a significant portion of the world’s supply of active pharmaceutical ingredients. Brazil’s state-owned labs produce more than 100 essential medications that allow its national health service to offer free and reduced-price medications to low-income patients.

Around the world—even in the United States—public sector labs were historically responsible for the development of most vaccines. Insulin as a treatment for diabetes was developed in a public lab in Canada and the subsequent sale of the rights to produce insulin to private US manufacturers remains a powerful cautionary tale about the harm that can happen when privatizing public goods. Despite being a century-old drug, insulin prices in the US have skyrocketed in recent years as the three companies that control virtually the entire insulin market make small tweaks on their products in order to take out new patents and continually raise prices. This trend has produced a uniquely American epidemic of cost-related deaths because of people rationing insulin.

Because of the US’s outsized role in global trade talks and the utter dominance of its Big Pharma firms in the global medicines market, developing a public pharmaceutical industry in the US in particular would be decisive in global efforts to roll back Big Pharma monopolies and reclaim medicine as a public good. It would reduce regulatory capture and shrink corporate lobbying, opening up political space for much broader input into the priorities and outputs of this critical industry. With democratic, public-sector institutions innovating and producing medications at scale, Big Pharma’s interests would no longer dominate, and public institutions would have incentives to cooperate instead of competing in times of public health crises.