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]]>AstraZeneca’s COVID-19 vaccine has not turned out to be the PR success story the company had hoped, with legal wrangling over its supply dominating the headlines. Nevertheless, CEO Pascal Soriot says his company should be proud of selling its vaccine on a not-for-profit basis and he will hope that this will be remembered in the future. Whatever comes to pass with the vaccine (and it is by no means certain that the company will not make huge profits from it in future years), let’s not forget why AstraZeneca needed some good PR. Like its big pharma peers, the company has a long list of scandals its management would rather we forgot. Here we remember six of them. For a longer list, read reports from US organisations Corp-Research, Good Jobs First and Drugwatch.
You can read the rest of our Vaccine Capitalism series here.
1961: One of the most infamous of all drugs, Thalidomide is mainly associated with West German pharmaceutical company Chemie Grünenthal GmbH, but AstraZeneca’s predecessor company Astra (which later merged with Zeneca Group to form AstraZeneca) manufactured and sold it in Sweden. When given to pregnant women Thalidomide caused the deaths of many infants and severe disabilities in those who survived. Marketed under the name Neurosedyn, it affected 180 Swedish children during the 1960s. The babies were born with severe disabilities and a third died soon after birth. According to a report on Radio Sweden, Astra settled with victims and their families in 1969 and agreed to pay damages, but never admitted any guilt.
2002: Multiple patients suffered a form of pneumonia and some died from taking Iressa, AstraZeneca’s lung cancer treatment drug. According to the Japan Times, of the 7,000 people that took the drug in the country, about 160 died of interstitial pneumonia, believed to be a side effect of the drug. The company was forced to apply a clearer warning label regarding the danger.
2003: A man committed suicide during an AstraZeneca-funded drug trial that was accused of grossly unethical practices. The company was trying to show its new antipsychotic drug – Seroquel – was better than the existing generic version, hoping that a new patented drug would bring bumper profits. But in the trial, Seroquel was found to perform worse than the existing drug and to cause undesirable side effects, including the increased the risk of weight gain and diabetes. Tragically, one man – Dan Markingson – committed suicide during the trial. He had been recruited to it despite experiencing psychosis so acutely that he had repeatedly been judged unable to make medical decisions for himself. His mother made numerous attempts to pull him out of the trial due to the deterioration of his mental health. The case generated international outrage over his treatment by the University of Minnesota, which conducted the trial, and led to the passing of a new law in 2009 by the state legislature. For more on this, read a heart-breaking, detailed account here.
2005: A study by Tufts University found that Crestor, a cholesterol drug by AstraZeneca, could cause kidney failure and other side effects. The rate of kidney damage was found to be 75 times higher in some patients taking Crestor compared to other statins (drugs used to treat cholesterol). The previous year, the Public Citizen’s Health Research Group, a USA based watchdog, had called for an investigation of AstraZeneca for reporting these side effects months later than required. In the wake of the study, the company was forced to publish warnings about these side effects. Despite campaigning by concerned groups, the drug remains on the market.
2010: Another scandal involving Seroquel saw AstraZeneca fined $520 million for the way it marketed its antipsychotic drug. The acting U.S. attorney for the Eastern District of Pennsylvania said elderly people, veterans and prisoners were treated as “guinea pigs”. According to ABC News, the company paid kickbacks to doctors and promoted the drugs for a variety of illnesses for which it had never been tested, including Alzheimer’s and depression. The drug was also prescribed to children even though it had not been approved for their use.
2016: AstraZeneca was fined $5.5 million by the US government for bribing doctors in China and Russia. Health website Statnews reported that the US Security and Exchange Commission (SEC) charged that AstraZeneca sales and marketing staff, along with “multiple levels” of company managers at subsidiaries, “designed and authorized several schemes” to convey gifts, conference expenses, travel and cash, in order to influence purchases of AstraZeneca drugs.
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]]>You can read the rest of our Vaccine Capitalism series, including analysis of how much money Pfizer may make from its vaccine, here.
1986: Pfizer had to withdraw an artificial heart valve from the market after defects led to it being implicated in over 300 deaths. The US Food and Drug Administration (FDA) withdrew its approval for the product in 1986 and Pfizer agreed to pay hundreds of millions of dollars in compensation after multiple lawsuits were brought against it.
2003: Pfizer has long been condemned for profiteering from AIDS drugs. In 2003 for example, it walked away from a licencing deal for its Rescriptor drug that would have made it cheaper for poorer countries.
2011: Pfizer was forced to pay compensation to families of children killed in the controversial Trovan drug trial. During the worst meningitis epidemic seen in Africa, in 1996, Pfizer ran a trial in Nigeria their new drug Trovan. Five of the 100 children who took Trovan died and it caused liver damage, while it caused lifelong disabilities in those who survived. But another group of 100 children were given the conventional “gold standard” meningitis antibiotic as a “control” group for comparison. Six of them also tragically died because, the families said, Pfizer had given them less than the recommended level of the conventional antibiotic in order to make Trovan look more effective.
2012: Pfizer had to pay around $1billion to settle lawsuits claiming its Prempro drug caused breast cancer. Prempro was used in hormone replacement therapy, usually for women going through the menopause. The settlements came after six years of trials and hardship for the women affected.
2013: Pfizer paid out $273 million to settle over 2,000 cases in the US that accused its smoking treatment drug Chantix of provoking suicidal and homicidal thoughts, self harm and severe psychological disorders. Pfizer was also accused of improperly excluding patients with a history of depression or other mental disturbances from trials for the drug. Later, in 2017, a coroner in Australia ruled that the drug had contributed to a man’s suicide. The man’s mother campaigned to change the label on the drug.
2020: Pfizer reached an agreement with thousands of customers of its depo-testosterone drug in 2018 after they sued it for increasing the likelihood of numerous issues, including heart attacks.
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]]>Telling the story of the search for the COVID-19 vaccines puts capitalism under the microscope. It is a story that helps us to zoom in on why the pharmaceutical industry is set for one of the biggest profit windfalls in its history. And it magnifies our view of the commanding role of the capitalist state in a process that the likes of Boris Johnson present as driven by corporate ingenuity and naked competition – but in reality is driven by our wealth and by scientific knowledge that is part of the commons.
As we get to the end of the story, we find out that the search for the vaccine is not really a search for a cure at all, but a search to avoid dealing with the causes of the virus.
In April 2018, long before COVID-19 emerged from the zoonotic swamp, a report by Goldman Sachs analysts proposed that providing a “one shot” cure for diseases could never be a “sustainable business model.” Noting the advances made in gene cell therapy and gene editing – advances that paved the way for the COVID-19 vaccine – they said (with more than a hint of regret): “such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies”.
The Goldman Sachs analysts were only saying what everybody in the drug business knows: there is much less money in preventative medicine and vaccines than there is in treatment for chronic conditions. Until this virus came along, it was much more profitable to keep people with chronic conditions ill than to actually cure them. And, as the Prime Minister rightly says, Big Pharma follows the money. In 2019, the global vaccines’ market size was $47 billion. Sales of just four ‘treatment’ drugs matched this volume of sales (Humira, used to treat rheumatoid arthritis; Keytruda, the cancer treatment; Revlimid, used to treat multiple myeloma and Opdivo, also a cancer treatment). Before 2020, the vaccine industry was a classic oligopoly: four big players accounted for about 85% of the market (GlaxoSmithKline, Sanofi, Merck and Pfizer).
The concentration of power in the industry, and its constant benchmarking with the lower risk business model that shapes the rest of the industry explains why earlier coronaviruses SARS 1 and MERS had no vaccine. With both viruses, tests were initially conducted on animals but not on humans. As the virus died out, so did the research. The Ebola vaccine – largely funded by WHO aid – was finally approved in 2019, a full 6 years after the start of the epidemic in West Africa. The Zika virus is currently undergoing clinical trials, but no vaccine is expected on the market soon.
There can be little doubt that racial capitalism and geo-economics has shaped our response to this virus. Previous viruses did not threaten our economy. Contrast the costs of Ebola to West African countries (estimated at over $50 billion) and the costs of the 2015 Zika virus outbreak to Latin America and the Caribbean (estimated at $18 billion). The most advanced economies stand to lose at least 4.5% of GDP as a result of this pandemic, as cost to production that is estimated at $28 trillion. This is counted in the trillions. The COVID-19 vaccines were needed to save the people of the Global North (and of course our economic system).
Indeed, equity held by the richest investors jumped in value at key stages in the vaccines’ development. The first of the vaccine trials published hopeful results in early August. By the end of the month, the world’s stock markets were reporting the best August in decades. The ongoing recovery in shareholder value through the last quarter of 2020 encouraged by the imminent vaccine roll-out also saw hedge funds reporting the biggest gains in more than a decade.
The vaccines developed to deal with COVID-19 have undoubtedly given us a unique springboard to develop other vaccines in future. Yet this does not make up for years of neglect. We started from a low knowledge base about COVID-19 precisely because the big four had calculated that developing vaccines for the earlier coronaviruses was not worth the portfolio risk.
Our earlier Vaccinating Capitalism report on the profits being made by the main vaccine producers shows how this time portfolio risk was taken out of the equation. The reason the COVID-19 vaccines arrived at such warp speed is that the risk model changed overnight. Indeed, the normal risks associated with vaccine development were almost completely removed from investors. First, research and development, combined with direct subsidies, were mobilised on an unprecedented scale. Second, governments used our money to place the biggest drug advance orders in history and remove all market risk from future sales. Those two things prompted an unprecedented single-purpose investment in the sector. This unprecedented investment will, of course, be followed by unprecedented profits.
The development of this vaccine is part of a vast system of public subsidy that deceives the public into thinking that it is private capital in the form of Big Pharma that saves us through its innovation. Yet perhaps the biggest subsidy to those companies is hidden.
Universities provide trained scientists, a foundation of knowledge that has been built up over hundreds of years. It is in universities that the rules for clinical research are developed, and it is university researchers who establish the system of peer review and publish results in academic journals. Universities make the largest social contribution to verifying and disseminating scientific breakthroughs. It is knowledge that we hold in common. Part of the ‘commons’ it may be, but in economic terms, this knowledge production counts as an ‘externality’: an invisible subsidy that never shows up on a corporate balance sheet.
The infrastructure that produced the vaccines was nurtured in publicly funded universities, in public institutes and in heavily subsidised private labs. When we recognise this, we realise that it is we who are saving Big Pharma from its failure to develop an effective vaccine against similar viruses in the first place.
Most infectious disease experts expect that new viral diseases resulting from zoonotic ‘spillover’ – moving from animals to humans – will become ever more frequent occurrences. SARS-Cov-19 is not the first case, and we are likely to face many more. There are difficult issues that we need to face regarding this unprecedented vaccination programme: how it allows governments to avoid tackling the root causes of SARS-Cov-2, and indeed may help weaken our defences against the next pathogen that spreads from animals to humans.
We know some of the main drivers of spillover. One is deforestation. New pathogens are released when land that has been left relatively un-touched is cleared for development and industrial use by humans. Once wild animals carrying those pathogens are displaced, the pathogens then need to maximise the opportunity to ‘leap’ from one species to another in a process of genetic drift. This is not an easy process. But, as writers like Rob Wallace have been warning us for years, large scale industrial farming can vastly increase the chances of a virus mutating into a form that can make the leap. Once it is in the human pool, it finds its most fertile conditions in closely packed workplaces like factories, warehouses and call centres.
The problem is that it is not just us who are being vaccinated but capitalism itself. The danger is that the vaccines will merely provide a short-term “technofix” which helps ensure the survival of the system that keeps on killing us.
The entire public funding effort – furlough, government loans, suspension of the normal regulatory rules – has had one primary aim: to keep corporations on life support. Some of our most damaging and irresponsible corporations have been kept alive by public funding, often in ways that have allowed them to sack workers, rip-off customers, and profit from intensifying poverty. Meanwhile, the Covid crisis (despite all the celebratory news about falling pollution levels) has also been used to weaken efforts against climate change. Corporations in Europe and North America have taken the opportunity to lobby hard – with some success – for environmental deregulation and further weakening of Paris Agreement targets.
The development of the vaccines will save many lives, but there is a price to pay. The profit-maximising, risk-minimising model ensures that we, not the corporations, will ultimately end up paying the financial costs. But there is an even higher social cost that might be paid. If we don’t deal with the root causes of the problem, and simply continue to reproduce the same uncontrolled conditions of capitalist development and industrial farming, then we will keep being exposed to more and more zoonotic pathogens long after we have got rid of this one.
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]]>Here we look at the three leading vaccines now approved in the UK and Europe: those made by BioNTech and Pfizer, Astra Zeneca and Oxford University, and Moderna. Just how much money are the companies behind them going to make? How have they been supported by the public sector? And whose pockets will the money end up in?
BioNTech/Pfizer: estimated $4 billion profit, after sales of $15 billion. Pfizer says it already has orders for at least $15 billion worth of vaccines, at around $19 a shot. According to the Financial Times, the profit margin could be close to 30% this year. Unashamedly working to maximise profit, Pfizer is reportedly driving a hard bargain when negotiating sales with both richer and poorer countries.
Moderna: estimated $8 billion profit (i), after sales of $18.4 billion. Moderna says it is on track to produce at least 700 million pre-ordered vaccines in 2021. Moderna’s jabs are the most expensive, between $25 to $37 a shot and the company says the cost of producing its jabs will be as low as 20% of sales.
Oxford/AstraZeneca: unknown profit, after forecast sales of $6.4 billion in 2021. It is selling at the cheapest price (for now) and they have promised to produce at cost without making a profit “during the pandemic”. But what does that really mean? One leaked contract seen by the Financial Times suggests they could declare the pandemic over and hike prices at any time from July. And AstraZeneca’s contract with Oxford University reportedly allows the company to make as much as 20% on top of the cost of manufacturing the jabs. In another sign of the limits of the “at cost” pledge, poorer countries including Bangladesh, South Africa and Uganda all appear set to pay more for the vaccine than the EU.
NB: The vaccines are being bought by governments around the world in advance bulk orders. Those profit figures, therefore, come overwhelmingly from sales to public authorities. As we see below, governments also massively subsidised the vaccines’ development. So the public sector is paying twice over: first to fund research, next to buy the results at inflated prices.
This is anyone’s guess. Given the amount of vaccines in development, competition may keep costs down. But if some prove more effective than others, and COVID-19 jabs become a regular event with annual boosters as for flu vaccines, the profits could keep rolling in for years to come. And once the pandemic’s intensity dwindles, all companies may feel free to hike prices further. For example, Pfizer’s chief financial officer told analysts the current price is “not a normal price, like we typically get for a vaccine — $150, $175 per dose. Let’s go beyond a pandemic pricing environment, the environment we’re currently in: obviously, we’re going to get more on price”.
Exact figures are corporate secrets, but it seems likely they each cost around $1 billion to develop. Initial research for a new epidemic vaccine may cost an average of $68 million – though the COVID-19 jabs were developed much quicker. But the main cost is running large scale “Phase 3” trials – for the COVID-19 vaccines these have been bigger than usual, with tens of thousands of volunteers.
The vaccines are a massive PR coup. The companies have become household names, and in a good way. That’s quite a turnaround for an industry that was reviled like few others after decades of profiteering. Whether the vaccines could have been produced in a more accessible, fairer way is only now starting to enter public debate, at least in the UK.
The science that underpins the company’s COVID-19 vaccines may also be put to use to treat – and profit from – other diseases. Moderna hopes its mRNA technology can be used to treat cancer, the most lucrative pharma ‘market’. Vaccitech, mentioned above, is raising huge amounts from investors on the hope its COVID-19 tech can be used to treat hepatitis and MERS. Development of the science has likely been helped by ‘road-testing’ through the vaccine roll-out.
BionNTech/Pfizer: Research was done by BioNTech, a German pharma research company. Pfizer came in as partner once the vaccine was ready for trials.
Moderna: The vaccine was “co-developed” by Moderna and US government scientists working for the National Institute of Health (NIH). There is some mystery over the exact roles of the NIH and Moderna, just who owns the intellectual property – and why the US government has apparently allowed Moderna to keep all the profits.
Oxford/AstraZeneca: Oxford University scientists at its Jenner Institute and Oxford Vaccines Group, led by Professors Sarah Gilbert and Adrian Hill.
The companies’ spin presents the COVID-19 vaccines as a triumph for corporate science. In fact only one of the three leading vaccines, the BionNTech/Pfizer one, was developed by the private sector (making money from the inventions of others is a classic big pharma play – read our explainer here). Also: all the teams benefited from initial research by the Shanghai Public Health Clinical Center, which published the first genomic sequencing of the COVID-19 virus freely on the open source site virological.org.
Oxford first considered allowing a range of manufacturers to produce its vaccine without selling exclusive rights to any corporation. But, according to the Wall Street Journal, senior executives at the university, along with major funder the Bill and Melinda Gates Foundation, argued they couldn’t manage a “global roll-out” without the help of big pharma. The university initially entered talks with US pharma giant Merck, before eventually signing with AstraZeneca in April 2020. The deal involves a full license to produce and sell the vaccine in return for $90 million and a 6% share of future royalties, which the university says will be reinvested into medical research. Vaccitech Ltd, a private “spinout” company whose directors include Professors Gilbert and Hill, will get 24% of the university’s cut.
BioNTech/Pfizer: €465 million (around $550 million). Research was funded privately. But they received a €100 million development loan from the European Investment Bank, and a €365 million grant from the German government, to help with manufacturing.
Oxford/AstraZeneca: around $1.3 billion. The vaccine came out of long-term research at Oxford University funded by the UK government and others. The government contributed over £87 million more to develop the new vaccine in early 2020.ii The US added up to $1.2 billion more as part of its “Operation Warp Speed”.
Moderna: over $955 million. US government funding included: an undisclosed amount for phase 1 trials in March 2020; $483 million in April for phase 2 and the start of phase 3 trials; another $472 million to expand phase 3 trials in July. Moderna also got a $1 million donation from Dolly Parton.
As well as these research subsidies, the companies received huge pre-orders from governments even before their vaccines had been approved for use. The US government for example made massive $1.95 and $1.53 billion pre-orders of the BioNTech/Pfizer and Moderna jabs through its Operation Warp Speed.
Pfizer/BioNTech: Profits are split 50/50 between the two companies.
Shareholders will receive ‘dividends’ – cash paid out from company profits. Pfizer’s main shareholders are global investment funds: especially Vanguard Group (7.6%), State Street Global Advisors (5%), and BlackRock (4.9%). Run by some of the world’s richest, most powerful people, such as Blackrock CEO Larry Fink, between them this “giant three” control approximately $20 trillion of the world’s assets. Meanwhile, Pfizer’s CEO Albert Bourla made headlines selling £4.2 million of Pfizer shares the day it announced its vaccine worked.
BioNTech is generally presented as a rags-to-riches success story for two immigrant doctors, the husband and wife team of Uğur Şahin and Özlem Türeci. The vaccine has made them billionaires. But the company’s main owners, who owned around 50% last year, are the biotech investor twins Thomas and Andreas Struengmann. They made their first billions from generic medicine company Hexal they set up in the 1980s, then sold to Novartis in 2005.
Moderna: Shareholders include chairman Noubar Afeyan (14% share at start of pandemic), CEO Stéphane Bancel (9%), and professors Timothy Springer (Harvard) and Robert Langer (MIT). They have suddenly gone from directors of a loss-making company to multi-millionaires. Moderna shares have massively increased in value during the pandemic and Bancel in particular has sold off chunks of his holdings in recent months, taking out millions in cash. Moderna listed on the stock exchange in 2018 and its biggest institutional investor is Scottish investment fund Baillie Gifford, which has been buying up more shares recently and now has over 11%. The US giants Vanguard and BlackRock are next, with 5.7% and 4.1% each. One mystery over the Moderna vaccine is if any money will go back to the US government who “co-developed” and funded it.
Oxford/AstraZeneca: AstraZeneca, headquartered in London, is a global megacorp owned by the same big investment funds as Pfizer and others. At the end of 2020 its three biggest owners were BlackRock (7.5%), Wellington Management (5.2%) and Capital Group (4.3%).
According to the Wall Street Journal, Oxford University stands to get 6% of future royalty payments. 24% of those will be passed on to Vaccitech Ltd, a “spinout” private company whose directors include vaccine researchers Professors Gilbert and Hill. They each own around 5% of Vaccitech’s shares. The main shareholder (46%) is an investment company called Oxford Sciences Innovation (OSI), set up by the university to channel capital into its spinout businesses. OSI has numerous shareholders besides the university itself – including Google Ventures, Huawei, Chinese pharma company Fosum (which also owns shares in Moderna), the sultanate of Oman, as well as banks and private equity funds.
The initial research that sequenced the COVID-19 genome and kick-started the vaccine race was published open source, free for all to use. Imagine if vaccine research was also published openly and without patents, so that all manufacturers, including in the global south, could produce what they need at cost price. How many lives could that save? But that would threaten the profits and property rights of some of the world’s most powerful companies and investors.
iBased on current consensus (i.e., average) analyst forecasts of Moderna earnings (profit) for full year 2021, with the COVID-19 vaccine their main product. These are external predictions – but the other points discussed here make them seem reasonable, in comparison with Pfizer’s stated internal prediction.
iiThe vaccine was based on work on MERS carried out by the Jenner Institute, which had been funded by the UK Government’s UK Vaccines Network from 2016. After the COVID-19 genome was released open source, this technology was then “rapidly repurposed”, backed by £2.6 million of government funding in March 2020 for preclinical trials and manufacturing research. The UK provided a further £20 million in April for clinical trials, and another £65 million more in May.
Our vaccine profits infographic poster is available here
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]]>With some of them becoming household names in the UK with the mass vaccine roll-out, we have made this short guide to help people understand the industry and just how it makes money from our health (see also: our breakdown here of the profits big pharma companies are set to make from the COVID-19 vaccines).
One of the biggest problems with a system that directs medical research towards profits rather than needs is that R&D funding is channelled to those products that can make pharma companies the most money. The best prospects are drugs targeted at patients who are high-value and who will use the drugs long term. Best of all are patients in the US, where prices are highest, and with chronic conditions requiring repeat prescriptions. Or, as in the case of opioids like Oxycontin, where the drugs are highly addictive. On the other hand, one-shot vaccines for epidemics that mainly affect poorer countries are the classic example of a bad business prospect. Thus vaccine research was relatively neglected until last year – when COVID-19 suddenly became a rich country issue, and state funding poured in.
Pharma companies hold patents – licenses guaranteeing their “intellectual property” rights – on new medicines. This means no one else is allowed to produce the drug without their permission for the life of the patent, which is 20 years in most countries.
The theory of free market capitalism is that if one company makes high profits, then others will come in and make the same thing but cheaper, pushing down prices and profits. But the pharma industry is no competitive market. Patents mean that pharma companies have legal monopolies on particular drugs: because no other company can undercut them, they can set high prices and make big profits.
The intellectual property system is enforced by governments worldwide under the TRIPS agreement, which is one of the key documents of the World Trade Organisation (WTO). Some states are more ardent enforcers than others. The US is particularly well-known as a strong defender of companies’ intellectual property; the EU is not far behind (see this recent report by Corporate Europe Observatory).
Governments including India and South Africa, along with NGOs such as Medécins Sans Frontières, have called for vaccine patents to be waived during the COVID-19 pandemic. This could allow poorer countries to start manufacturing their own vaccines at cost price – rather than wait until 2023 for pharma corporations to meet their orders. The idea is being strongly opposed by the US, EU, UK and other rich countries.
How do pharma industry supporters justify a system that denies affordable drugs to billions of people? The argument is that this is the only way to cover research and development (R&D) cost for new drugs. The main US industry lobby group Pharmaceutical Research and Manufacturers of America (PHRMA) says: “On average, it takes 10-15 years and costs $2.6 billion to develop one new medicine, including the cost of the many failures.” Without patents, they say, rivals could just copy their recipes and no one would ever bother to develop new medicines.
Drug companies on average spend about 20% of all their sales revenue on R&D.ii This is indeed high compared to other industries: only the aviation and space industry is more R&D intensive. But even so, sales cover costs many times over. Once drugs are on the production line, the actual manufacturing costs are tiny compared to often sky-high prices (unlike spacecraft, which are quite expensive to produce). Which explains that 20% profit margin.
Insulin usually costs less than $6 a vial to make, but sells for as much as $275 in the US (one example given by the campaign group Patients for Affordable Drugs). In Europe, pharma giant Gilead charged an average of €55,000 for a 12 week Hepatitis C treatment – when pills cost less than €1 per pill to manufacture. Such extreme examples illustrate a general pattern. One academic study found US pharma companies have an average 71% “gross profit” margin on drug sales – the money they make from a drug after the cost of producing it, but before company-wide costs such as marketing, taxes or executive bonuses.
The pharma companies argue they have to bear the risk of developing experimental drugs that never make it to market. For example, the average cost of a new cancer drug has been estimated at $648 billion. The $2.6 billion figure cited from PHRMA above is actually a “risk weighted” estimate which “includes the cost of many failures”. If a pharma company invents 10 drugs costing $260 million each, but only one gets approved, then it has cost $2.6 billion overall to produce one it can sell.
Except that isn’t what happens. The reality is that major pharma companies only “invent” a handful of the drugs they patent and sell. In 2019, PHRMA’s member companies only spent $13 billion on preclinical research – most of their R&D spending goes on later stage development trials, after drugs have been discovered. An analysis of two Big Pharma giants shows that Pfizer only developed 10 out of 44 best-selling drugs “in house” (23%) – and Johnson & Johnson only developed 2 out of 18 (11%). The “innovation” largely happens in university and government labs, or in those of smaller research companies.
And a lot of it is state-funded. The US National Health Institutes, the main (but not the only) government medical research body, gives $39.2 billion a year to universities, medical schools and other research organisations.
Once the drugs have been found, the pharma giants step in – to buy up a license, or a whole company – once the drug has already proved itself through initial tests. (See also: recent US report on this.) The COVID-19 vaccines are classic examples.
The pharma industry is powerful, with a lot of friends in high places. In the US, the country with the world’s highest drug prices, pharma spends more than any other industry on lobbying. Over 22 years pharma companies and industry groups have spent $4.45 billion on lobbying US politicians – almost twice the amount of the next highest spending industry, insurance. According to OpenSecrets, the industry has over 1,450 lobbyists working for it, 66% of whom are former government employees. And this is just the most public, officially declared, face of pharma’s political influence – it just scratches the surface of a grubby world of political donations, board positions, “revolving doors”, and more.
A report by Corporate Europe Observatory details how the EU has become a “complacent or complicit” tool defending pharma property rights. The price tag seems to be cheaper in Brussels: the top ten pharma companies spent up to €16 million on lobbying there in 2019. In the UK, stories have emerged such as the industry funding patient groups to help lobby for new drug treatments; or NHS England commissioning research for its purchasing strategy from a lobbying group funded by the industry.
And of course, these governments are also major big pharma customers: they pay out billions of their taxpayers’ pounds to buy the companies’ drugs.
Bad Pharma – Ben Goldacre. Very detailed survey of pharma industry malpractice, particularly looking at issue of who trial results are systematically fiddled.
Pharma – Gerald Posner (2020). A journalistic history of the pharma industry (mainly US) and its crimes.
US Government Accountability Office (2017) report on US pharma industry, gives a useful overview of main issues.
Patients for Affordable Drugs – US campaign group
Corporate Europe Observatory – reports on pharma industry politics in Europe
Notes
i A 2017 US government survey looked at the profit rates of the top 25 drug companies there over ten years. It found they averaged 15 to 20% over the period – as opposed to 5-9% for the top 500 companies in other industries.
ii PHRMA says its US members spend “over 20%”
Industry report Evaluate Pharma estimated 20.9% globally for 2017
In 2014-17 the biggest US listed pharma companies, members of the S&P index, spent on average 16%.
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]]>The post #CoronaCapitalism: six ways capitalism spreads the crisis appeared first on Corporate Watch.
]]>This article looks at a few ways the economic system we call capitalism has been fundamental in spreading the virus – and in fostering a wider crisis of panic, repression, and looming poverty. And this is by no means a complete list. The general point is that capitalism, based on prioritising profits over people’s lives, is incapable of serving our health and well-being. To care for each other now and in the future, can we use our anger to fight for change?
Feature image above: occupation of Deutsche Bank owned building to create a mutual aid hub in Chicago, US
1. Industrial agriculture incubates new viruses
COVID-19 didn’t appear out of the blue. It is just the latest pandemic linked to industrial agriculture, and in particular the mass-scale production and sale of meat.
In this case, the disease has been traced to the Wuhan seafood market and to China’s “wild animal” trade, also implicated in the 2003 SARS pandemic. However, as biologist Rob Wallace, author of Big Farms Big Flu, makes clear: “this is no Chinese exceptionalism […] The U.S. and Europe have served as ground zeros for new influenzas as well, recently H5N2 and H5Nx, and their multinationals and neocolonial proxies drove the emergence of Ebola in West Africa and Zika in Brazil.”
The common factor is profit-driven intensive meat farming. “Zoonotic”, or cross-species infections from animals to humans, count for the majority of new human pathogens. Wallace identifies at least two common origin patterns. One is a leap from intensively farmed animals such as cows, pigs, chickens – as in the recent avian and swine flu pandemics. As he puts it:
“You couldn’t design a better system to breed deadly diseases. […] Growing genetic monocultures of domestic animals removes whatever immune firebreaks may be available to slow down transmission. Larger population sizes and densities facilitate greater rates of transmission. Such crowded conditions depress immune response. High throughput, a part of any industrial production, provides a continually renewed supply of susceptibles, the fuel for the evolution of virulence.”
Covid-19, like SARS or Ebola, appears to belong to the other pattern – in which the virus leaps from non-domesticated species. But again, capitalism plays a key role. The Chinese economy’s rapid growth drive and marketisation in the 1990s included corporate consolidation of agriculture, alongside major deforestation and destruction of biodiverse habitats. As smaller farmers were squeezed out of traditional livestock farming, one state-promoted strategy was to move into intensive breeding and farming of captive “wild” species. This led to further incursions into remaining forest areas and to new zoonotic infections, which can then spread rapidly through high-volume markets like Wuhan.
NB: see also this more detailed account by Wallace and other authors in Monthly Review; and this in-depth essay by Chuang journal examining how these factors played out in Wuhan and China.
2. Big Pharma diverts medical research
We still know relatively little about COVID-19 and its impacts. Although obviously dangerous, research is inconclusive as to precisely how virulent it will turn out to be, or how it can best be combated. But some issues are clear enough. One is the absence of drug treatments: no vaccine, and a lack of proven antiviral treatments.
Respiratory infections are well known to cause harm. So why is medical research so far behind on this area?
Much medical research is led by profit-chasing corporations – along with the universities and foundations they sponsor. One issue with the capitalist research model is that, because drugs are high value property, research data is guarded as “commercially confidential” rather than being shared for all to develop.
Another big problem is that drugs targeting respiratory viruses just aren’t that profitable. Adrian Hill, the professor who led UK research on the Ebola virus, has condemned the pharma industry’s “market failure” to tackle that pandemic in Africa. He explained in an interview with the Independent in 2014:
“Today, commercial vaccine supply is monopolised by four or five mega- companies – GSK, Sanofi, Merck, Pfizer – some of the biggest companies in the world. The problem with that is, even if you’ve got a way of making a vaccine, unless there’s a big market, it’s not worth the while of a mega-company …. There was no business case to make an Ebola vaccine for the people who needed it most.”
In a recent interview, Mike Davis – author of The Monster at Our Door: the Global Threat of Avian Flu – calls the problem: “Big Pharma’s abdication of the research and development of new antibiotics and antivirals.” He says:
“Of the eighteen largest pharmaceutical companies, fifteen have totally abandoned the field. Heart medicines, addictive tranquilizers, and treatments for male impotence are profit leaders, not the defenses against hospital infections, emergent diseases, and traditional tropical killers. A universal vaccine for influenza — that is to say, a vaccine that targets the immutable parts of the virus’s surface proteins — has been a possibility for decades but never profitable enough to be a priority.”
So in the US, as reported by Bloomberg, venture capitalists have poured $42 billion into drug development in the last three years. Nearly half of that has flooded into potentially lucrative treatments for cancer and rare diseases. Only 5% went into drugs that prevent infections.
3. Markets decimate public healthcare
It started with a virus, but it’s the failure of our healthcare systems that have made this a serious health crisis. As well as lack of drugs, we can add the shortage of key equipment from testing kits to ventilators, down to masks and other basic protective clothing. And the shortage of hospital places, of doctors and nurses to treat people with severe symptoms. Whatever the real scale of the pandemic turns out to be, one thing is certain: because of these shortages, people will die.
Again, none of this comes as a surprise. In the UK, there have been repeated warnings, including the 2016 “Exercise Cygnus”, that the NHS couldn’t cope with a new pandemic. In fact, the NHS is in continual “winter crisis”: overwhelmed ICU wards and images of patients dying in the corridors are not extraordinary but regular events. With hospitals already at full stretch, it only takes a slightly more aggressive virus to turn this “normal” crisis level into something even worse.
This is not just a UK issue. In Italy, for example, the healthcare union USI identifies recent cuts of “43,000 workers (which means the loss of 70,000 beds, including 3,000 in intensive care).” They write that continuous funding cuts have:
“led to a widespread collapse of the healthcare system. As a result, access to treatment has been reduced for an increasing number of people. Today it is the coronavirus, tomorrow it could be another virus or even any trivial disease: to maintain only Essential Levels of Care (ELC) is to sign a death sentence.”
In the UK, the number of hospital beds has halved in 30 years. There are less than 3 hospital beds per thousand people and only 7 Intensive Care places for every 100,000 people.i Hospital places are just the most obvious indicator – all the same points could be made about testing facilities and other resources.
These health shortages are entirely avoidable: the UK and Italy are richer than ever before. The basic problem is that capitalism does not prioritise collective healthcare: the services we do have are concessions that people have won and defended through decades of struggle against “market forces”. In recent years, these victories have been eroded by privatisation and “austerity”.
In England for example, successive governments have failed to give the NHS the money it needs to care for a growing and ageing population. The other issue is where the money goes – much of it returns to corporate pockets. Here are just three examples of NHS profiteering:
4. Work makes us sick
A well-prepared health system might respond to the virus with wide scale testing, plus hospital care for those hit by severe symptoms. Instead we get a brutal last-ditch measure: mass lockdown. Medics hope this can slow the pandemic so that fragile health services aren’t overwhelmed. Many governments are happy to seize the opportunity and race through new police state powers.
But here too, the capitalist drive for profit takes precedence. Even as police and public outrage target “irresponsible” individuals taking some air, workers are still being crowded into factories, building sites, and tube trains.
The European corona epicentre so far has been Lombardy, Northern Italy. This is Italy’s “industrial heartland”: the home of steel mills, car plants, textiles factories, and in total over one fifth of all Italy’s GDP. Lombardy was placed under the first quarantine measures on 1 March, and went into deep lockdown on 7 March, with people confined to their homes other than for “essential” activities. These measures then went nationwide on 9 March.
But there were no rules against the most obvious transmission sites of all: workplaces. Car factories and fashion sweatshops kept on going through the lockdown. This only changed on 21 March when the government finally ordered closure of “non-essential” workplaces.
While shouty Italian mayors berated joggers, workers were taking action against being forced to turn up in corona conditions. Wildcat strikes began on 12 March, and spread across Italy the next day. Workers are up against the employers’ confederation Confindustria, which has lobbied hard to keep the factories open. Despite the 21 March decree stopping “non-essential” work, calls for a general strike continue – even from the country’s three biggest unions. They argue that the “essential” rules are full of loopholes: making machinery for the tobacco industry is included, for example.
In the UK, much the same drama played out with a two week delay. The government ordered people to “stay at home” on 23 March – with the big exception being if you have to go to work. On 24 March, as building workers walked out of a 1,700 person site in Middlesborough, the housing minister tweeted: “If you are working on site, you can continue to do so. […] Outside of work, remember to #StayHomeSaveLives.”
As anyone who’s ever worked in construction knows, and has been widely pointed out on social media, the idea of observing “social distancing rules” on building sites is a bad joke.
Like Italy’s manufacturing bosses, the British building industry has political influence. At the top are a handful of big contractors – many close to the Conservative Party, and with a shady record of ignoring safety issues and blacklisting organising workers. In the manufacturing sector, too, we get stories about companies like William Cook Rail or Wren Kitchens, major Conservative Party donors refusing to shut down.
So, which are more dangerous, parks or workplaces? We haven’t seen any research assessing that. What we do know is that, in capitalism, “essential” is a close cousin of “profitable”.
5. Click-hungry media feed panic
Corona is a healthcare crisis, but it has also become something more: a crisis of fear. The 24/7 feed of anxiety through our TV, computer and phone screens has created a social panic of unprecedented scale and speed. This has spiralling impacts on billions of people’s mental, social and material well-being, and is used by governments to justify brutal power grabs.
Here are a few basic observations about media coverage of coronavirus:
While capitalism isn’t the only force shaping these patterns, profit is again a crucial factor. Psychologists point out how “our minds like to jump to threatening headlines with big, alarming numbers”. But if that’s true, it isn’t simply a settled fact of human evolution – it is actively used and reinforced by the dominant media business model.
Most major media platforms have a financial model based on advertising. Advertising revenue depends on audience, meaning attracting the maximum possible views and “hits”. While this has been the case since the birth of the popular press in the 19th century, online technologies have accelerated the feedback loop between content and “clicks”.
The well-known market leader is Facebook’s algorithmic News Feed Editor, which automatically selects and targets news. More “traditional” media outlets, including state-backed broadcasters, now also have to compete with the social media giants and adopt their methods – or lose even more of their market share and relevance.
The upshot of this profit imperative is a constant and rapid bombardment of the most click-worthy images, figures, tragic anecdotes, and “hot takes”. We are left swimming in numbers, information, and anxiety, with no space for reflection and critical thinking. And if we’re unable to sort through the noise and form our own informed and considered views, all we can do is trust and obey the authorities.
6. Gross inequality threatens lockdown poverty
Now the corona crisis is mutating into an economic crisis, as lockdown measures shut “non-essential” production, travel and consumption. In itself, switching off much of the capitalist economy is no bad thing: we really don’t need all the disposable plastic crap it churns out; wildlife, forests, and oceans could do with a breather. The problem is not “the economy”, but that billions of people rely on wages to eat and live.
Capitalism has created the most unequal society in human history: billionaires with unimaginable wealth, billions on the breadline. The lockdown affects us very differently depending on where we are in this pyramid.
To the rich, “stay at home” is no great hardship. For online professionals, or better off workers with permanent contracts, recipe swaps and yoga classes can take the edge off the frustration. To low-income, precarious and informal economy workers, it means the threat of unemployment and impoverishment. And as the crisis spreads to countries without welfare and healthcare safety nets, many millions will be hit.
In India, as Arundhati Roy writes, Modi has “borrowed the playbook from France and Italy” to impose a rapid lockdown on 1.38 billion people. In this context:
“The lockdown worked like a chemical experiment that suddenly illuminated hidden things. As shops, restaurants, factories and the construction industry shut down, as the wealthy and the middle classes enclosed themselves in gated colonies, our towns and megacities began to extrude their working-class citizens — their migrant workers — like so much unwanted accrual. […] The lockdown to enforce physical distancing had resulted in the opposite — physical compression on an unthinkable scale. […] The main roads might be empty, but the poor are sealed into cramped quarters in slums and shanties.”
In the rich world the curfew is, so far, largely maintained by agreement and social pressure. In India, where quarantine may mean starvation, it requires widespread “beating and humiliation” by police. In Kenya, one case of police enforcing lockdown by the lethal shooting of a thirteen year old boy has already been widely reported.
But here in Europe, too, when it comes to the margins of society – migrants, prisoners, the homeless – “stay at home” takes on very different meanings. We have already seen evictions and mass arrests in Athens, round-ups of refugees in Calais, at least eight dead in prison riots in Italy, as barbed wire fences go up around migrant accommodation in Croatia, and the army imposes quarantine on Roma settlements in Slovakia.
Conclusion
This crisis is developing on multiple levels. The pandemic itself is just one. Then there are wider psychological and social impacts of continuing fear and isolation. There are political impacts as governments take advantage to rush through new powers. And there are the looming material impacts as millions are threatened with poverty and violent repression.
On all these levels, capitalism is a big part of the problem. The virus kills, and responses to it by states and corporations could kill many more. Many of these deaths are avoidable. We live in an age of enormous wealth, where vast amounts of human labour and natural resources are directed to produce trillions of dollars worth of anything from smart phones to fighter jets. These resources could be used to safeguard the health and wellbeing of all.
To quote Arundhati Roy again:
“Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.”
iTo put these numbers in context, Germany has more than 8 hospital beds per 1,000, and 29 intensive care beds per 100,000 – four times the UK figure. While of course Germany is also a capitalist economy, one factor here is arguably the relative strength of German social resistance to the aggressive neoliberal strain of capitalism that has rolled back health and welfare concessions in the UK and other countries in recent decades.
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]]>Do you want us to look into a company exploiting its workers or profiting from the corona crisis? Get in touch at contact[AT] corporatewatch.org.
The corona crisis may have smashed stock markets and halted economic growth but for some it’s a great business opportunity. Here is a quick round-up of some recent corona profiteering stories, with some thoughts at the bottom about broader structural issues to keep in mind at the same time as getting angry at the obvious ‘baddies’.
Rising pharma
While small-time spivs make a quick buck selling tissues or face masks at inflated prices, the big money is in the race for vaccines. One of the drugs being tested as a possible Covid 19 medicine is chloroquine, an anti-malarial drug produced by (among others) the US company Rising Pharmaceuticals. According to a report in the Financial Times, Rising massively hiked the price of its chloraquine as the corona scare began:
“On January 23, according to data from research firm Elsevier […] the drug price rose 97.86 per cent to $7.66 per 250mg pill and $19.88 per 500mg pill”.
In response, Rising said the price rise was “coincidental” and that it restored the old price once it realised that the drug might be in demand because of the outbreak. Just three months ago, Rising had admitted price fixing in a case in Pennsylvania and agreed to pay $3 million in fines and restitution.
There is a major issue brewing behind this story. In capitalism, choices about what drugs are developed and produced are driven by their profit potential. As a result, public health resources are drained by the high prices charged for patented medicines, which corporations justify as the rewards they need to incentivise research. But also, research into less profitable medicines is underfunded – and this includes the kind of antiviral drugs needed to fight coronavirus.
So in the US, as reported by Bloomberg, venture capitalists have poured $42 billion into drug development in the last three years. Nearly half of that has flooded into potentially lucrative treatments for cancer and rare diseases. Only 5% went into drugs that prevent infections.
If the corona crisis pushes up relevant drug prices that might encourage more corporate research. But it would also mean further haemorrhaging of health service funds into investors’ pockets.
Scandalous speculators
A political scandal broke in the US on 19 March with revelations that a number of senators took advantage of confidential corona warnings to dump shares. At least three senators sold shares in companies set to be negatively affected by the corona crisis after attending a classified Senate Health Committee briefing back in January.
In the UK, Private Eye reported on London-based hedge funds who have made millions in recent weeks by betting on falling share prices. One of these is Odey Asset Management, run by multi-millionaire Crispin Odey, Rupert Murdoch’s former son-in-law and major backer of Boris Johnson and Brexit.
Another hedge fund that has reportedly “made a killing from shorting Britain’s travel and leisure sector” is Marshall Wace, run by two other high-profile and politically active multi-millionaires, Paul Marshall and Ian Wace.
The lockdown delivery boom
These short-selling millionaires bet against the shares of companies in corona-hammered sectors: for example, travel companies, restaurants, and real estate investment. But some other industries, such as online retail and delivery, have much better prospects in a locked-down world.
As has been widely reported, that delivery boom means busy days and nights for workers – but what if those workers get sick? Amazon workers talk of being pushed to do overtime, and lack of guaranteed sickpay. In an open letter to CEO Jeff Bezos on 17 March, New York warehouse workers wrote:
“We have seen an increase in the volume of such goods, placing a greater strain on workers. Yet despite larger workloads, Amazon continues to enforce and raise productivity quotas. At the same time, many workers have been shocked to discover the company has been illegally denying them paid sick leave.”
The company says it will pay for people who test positive for the virus – but of course many people cannot get tested. The workers’ demands include hazard pay, childcare, paid sick leave for all and warehouse shutdowns if the virus is detected.
In the UK, Deliveroo workers organising with the IWGB union have written to the company’s CEO Will Shu with demands including “full pay for self-isolation”, regular virus testing, and supplies of protective equipment.
The IWGB has also reported that medical couriers working for The Doctors Laboratory (TDL), whose work includes transporting COVID-19 specimens, have been told they will only get the statutory £94 a week sick pay if they are ill at work. When we investigated TDL in 2018, their boss had made £1.6 million in a single year.
This is an anxious time for precarious workers. But as their work becomes increasingly valuable, many are organising for better pay and conditions. Delivery workers’ struggles could become a key front in the battle over how societies respond to this crisis.
The construction cartel keeps going
On 23 March Boris Johnson announced the UK was going into lockdown, following France, Spain and Italy in enforcing people staying in their homes except for “essential” trips. The announcement was no surprise, following days of building pressure in corporate and social media to police “stay at home” guidance.
But while public outrage focused on irresponsible millennials hanging out in parks, the main spaces where people are still physically gathered are workplaces, as well as rush hour public transport used by people going to work. Nor does everyone has the option to work safely from home. As construction trade unionist and Blacklisted author Dave Smith wrote on twitter:
“No social gatherings of more than 2 people outside. But it’s perfectly fine for tens of thousands of construction workers to meet up on building sites that are still open all around the country. Pay the Self-Employed #ShutTheSites”
“The UK construction industry is run by a cartel of major contractors who have repeatedly been found guilty of putting profits before workers health and blacklisting those who complain about safety.”
“If you are working on site, you can continue to do so. […] Outside of work, remember to #StayHomeSaveLives”
Who feels the pain?
Certainly, plenty of businesses are losing money. The big question is: who will feel the pain as workplaces close? For many bosses and investors, the imperative is to protect their own assets and pass the hit onto workers.
Some news stories in the last week have highlighted a few “rogue” bosses. Britannia Hotels, dubbed Britain’s “worst hotel chain”, hasn’t improved its reputation after sacking more than a dozen workers and ordering them to immediately leave their accommodation in its Coylumbridge Aviemore Hotel in Scotland.
According to Companies House records, Britannia Hotels’ main owner is still founding director Alex Langsam. Langsam made the Sunday Times list of the UK’s 500 richest people in 2016 with a fortune of £220 million. He was dubbed the “asylum king” by the Daily Mail for his sideline slum landlord business, housing refugees under the government’s asylum housing contracts.
Is Britannia a hard-pressed business forced into letting staff go? Hardly. Looking at Britannia’s most recent accounts, Britannia made a profit of £15.7 million for its owners in 2019 and £17 million the year before. Its total annual wage bill is £33 million. So Langsam could cover his workers’ wages for six months from just last year’s profits.
Another recent rogue is Richard Branson – now even taking flack from Conservative MPs after telling Virgin airline staff to take unpaid leave for two months. As one Tory pointed out, if Branson collected just 2% interest on his £3.8 billion net worth, that alone would make him £9.9 million over eight weeks – more than enough to cover sick pay for his airline workers.
It’s also worth noting that Branson has a particular role in the corona healthcare crisis as one of the UK’s biggest NHS profiteers. His Virgin Care business had already won over £2 billion in contracts from the gradual privatisation of the NHS by 2017. Branson himself is presumably safely secluded on his Bond villain-style Caribbean lair, Necker Island.
Heroes, villains, and the big issues behind
In standard media coverage of corona capitalism, Bezos or Branson stand in contrast to responsible capitalists who play their part in our collective fight against corona.
The big example in the UK so far has been the media’s praise of the weapons and car industries for agreeing to help build ventilators. As the Daily Express puts it, BAE Systems, Rolls Royce Aerospace and others are “rallying round as part of the Government’s ‘wartime’ effort to build ventilators and other vital medical equipment”. Specific information on what they will contribute is “confidential”.
It’s still early days for sure, but already one big corona capitalism PR narrative seems to be emerging. Corporations “rally round” to help the nation’s “war effort” – except for a few bad apples who let the side down.
Those rogue bosses are named and shamed but, unlike lesser individuals caught breaking quarantine, they are unlikely to face any real consequences. There’s no call to actually commandeer Britannia’s hotels or Branson’s billions for the “war effort”.
Above all, this PR line steers us well clear of the structural issues that help make this crisis. It says nothing about the pillaging of healthcare systems like the NHS by drug companies, private health profiteers, PFI contractors, banks and investment funds. Certainly not about the market economy that ravages the earth to build up incredible wealth and resources for some, while others die for lack of care.
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]]>Debbie Vincent, an animal rights activist from the Stop Huntingdon Animal Cruelty (SHAC) campaign was sentenced to six years in prison for conspiracy to blackmail after a five week long trial at Winchester Crown Court. She was also given an Anti Social Behaviour Order which means she can be arrested if she protests against or contacts Huntingdon Life Sciences (HLS) or its business partners for a further five years after her release from prison.
Today Debbie Vincent, an animal rights activist from the Stop Huntingdon Animal Cruelty (SHAC) campaign was sentenced to six years in prison for conspiracy to blackmail after a five week long trial at Winchester Crown Court. She was also given an Anti Social Behaviour Order which means she can be arrested if she protests against or contacts Huntingdon Life Sciences (HLS) or its business partners for a further five years after her release from prison.
The sentence should serve as a wake up call to anti-capitalists of the need to offer solidarity to those who have been singled out for repression because of their involvement in effective resistance to corporate power.
A press release from the Blackmail 3 support campaign quotes Debbie: “I have been made an example of because I put myself up as a public face of Stop Huntingdon Animal Cruelty and for believing that such places as Huntingdon Life Sciences should be resigned to the history books.” “In some ways I’m really not surprised I was found guilty, as I don’t believe anyone can get justice when faced with a political conspiracy charge and the huge resources of the state and multinationals against me. I will always have hope and will always continue to try my best to make the inhabitants of this planet more compassionate to all and try to make the world a better place for all.”
What we are seeing is a coordinated campaign against animal rights activists in an effort to silence dissent,” said Adrian Shaw of the Blackmail 3 Support Campaign. “This is the third conspiracy to blackmail trial in the UK involving people accused of campaigning against Huntingdon Life Sciences.”
Corporate Watch spoke to Debbie prior to the sentencing. She said: “What is scary in this world is oppression and injustice, when people hurt people, animals and nature. What is beautiful in this world is resistance, when people say ‘enough is enough’ and act. Oppression and injustice are everywhere, but so is resistance. Because some people know that if you fight you might lose, but if you don’t fight, you’ve already lost.”
The campaign
SHAC was set up in 1999 with the aim of closing down Huntingdon Life Sciences (HLS). HLS is one of the largest contract testing companies in the world. They keep about 70,000 animals on site at their lab in Huntingdon. According to SHAC, “HLS will test anything for anybody. They carry out experiments which involve poisoning animals with household products, pesticides, drugs, herbicides, food colourings and additives, sweeteners and genetically modified organisms. Every three minutes an animal dies inside Huntingdon totalling 500 innocent lives every single day.”
SHAC’s tactics have been groundbreaking for direct action campaigns in their targeting of the network of companies with business relationships with HLS: from its customers to its service providers and from its suppliers to its investors. To read an analysis of the SHAC model of campaignining click here.
Over the years SHAC has published details of the companies doing business with HLS on its website and has encouraged people to persuade these companies to cease their business with HLS. The SHAC website is clear that it is not encouraging people to break the law. SHAC contacts the companies and tells them that they will remain listed on its website until they cease doing business with HLS. Hundreds of companies have ceased trading with HLS. View a list here.
HLS have been infiltrated and their practices exposed several times. To read undercover exposes of animal abuse at HLS click here.
The arrests of the ‘Blackmail 3’
In June 2012 European arrest warrants were issued in the UK for two activists in Holland, who will be referred to as SH and NS in this article.
On 6th July 2012 Debbie Vincent, who had been targeted by the police for many years for her involvement in the SHAC campaign, was arrested and detained on suspicion of conspiracy to blackmail. Her home address was searched. On the same day SH and NS were arrested and premises in Amsterdam were searched. Debbie was charged in July 2012 with conspiracy to blackmail, an offence under the 1977 Criminal Law Act. The British police have sought the extradition of the Dutch activists and the Dutch courts granted it. However, until now there is an ongoing dispute over the extradition as the lawyers for one of the Dutch defendants have demanded an undertaking from the British Secretary of State that he would serve his sentence in Holland if he was convicted.
The charge placed by the Crown Prosecution Service (CPS) against Debbie was conspiring with 16 named people, including the two Dutch activists, and unnamed others “to blackmail representatives of companies and businesses and other persons” “by making unwarranted demands, namely to cease lawful trading with HLS, with menaces and with intent to cause loss to another.” The 13 other ‘co-conspirators’ have already been jailed for conspiracy to blackmail, at trials in 2009 and 2010 for a total of almost 70 years between them. For many of them the only evidence presented was involvement in lawful campaigning against the company and association with those involved in direct action. The use of the charge of blackmail against Debbie is another example of the twisting of the law to repress grassroots dissent against powerful corporations.
Blackmail?
The events relied on in Debbie’s case were that in 2008 and 2009 actions were carried out in France, Belgium, Germany and Switzerland against Novartis, EuroNext, Schering Plough, BDO, AstraZeneca, Fortress and Nomura, all companies with business relationships with HLS. The actions included setting fire to directors’ cars, company buildings and, in one case, the holiday hunting lodge of Daniel Vasella, Director of Novartis. Graffiti was daubed on directors’ homes overnight and the ashes of Vasella’s mother were stolen from the family tomb. However, in the words of Michael Bowes QC, the prosecutor in the case: “There is no evidence that Ms Vincent was present at the scene of any of the attacks, or incidents in Europe. There is no evidence that she was outside of the United Kingdom at the time of any of these attacks”. Instead the Crown Prosecution ‘Service’ (CPS) claimed that Debbie was guilty of involvement in a ‘conspiracy to blackmail’ involving those actions.
The CPS claimed that there was evidence linking SH and NS to some of these actions. However they were not the ones in the dock. The prosecution argued that Debbie had been in phone contact with SH and NS and had attended the 2009 Animal Rights gathering in Oslo that they also attended.
But the case went much further than that. The CPS argued that the SHAC campaign itself, in publishing details of companies on their website and encouraging people to protest against them, was guilty of blackmail. The effects of this legal ‘logic’ have broad implications for anti-corporate activists. For example, during the movement against apartheid in South Africa activists published details of companies like Barclays Bank and encouraged people to protest against them until they pulled out of South Africa. Was this an act of blackmail? Do campaign groups who publish the names and addresses of companies involved in fracking and encourage people to protest against them run the risk of convictions for blackmail?
Is activist security a crime?
The CPS’s case summary says that “Debbie Vincent has taken steps to conceal her criminality by the use of encrypted computers (she has failed to provide the encryption codes despite being known to have been using a totally encrypted computer shortly before it was seized). Encrypted storage media was found hidden behind the kickboard of kitchen units at her address”. In highlighting this, the prosecutors were implying to the jury that Debbie had something to hide. The implication that the taking of lawful steps to protect privacy in the context of a concerted police campaign to monitor, criminalise, arrest and imprison activists seems laughable. However, it is a well rehearsed argument in animal rights cases.
The set-up
The prosecution had evidence that Debbie had contacted the directors of Novartis after the direct action against the company had taken place. However, they had no evidence linking Debbie to the direct action itself apart from the circumstantial links to NS and SH. In order to try and strengthen their case, the police worked with Novartis to try to entrap Debbie and another SHAC activist (who was also arrested but had his charges dropped, he will be referred to in this article as ‘X’) into admitting links to the robbing of the Vasella grave.
SHAC had emailed Novartis, requesting that they cease dealing with HLS. Andrew Jackson, Global Head of Corporate Security at Novartis, replied and requested a meeting with the campaign. Jackson said that this meeting would be to discuss the issues raised in the email from the campaign. Debbie and the other activist arranged to meet representatives of Novartis at the Le Meridien Hotel in Piccadilly on 10th March 2010. Unknown to them, the company had arranged with the police to bug the meeting, and one of the people they were due to meet was an undercover officer, using the alias ‘James Adams’, who was masquerading as a Special Contracts Manager for Novartis. The activists were swept for bugs at the beginning of the meeting and each time they went to the toilet. They were told that the meetings were strictly confidential. After the meeting Adams got in touch with SHAC again and said that “certain things are outside the parameters of the dialogue” and asked Debbie and ‘X’ to set up another meeting, encouraging them to communicate with him via PGP email encryption. ‘Adams’ was eager to communicate directly with Debbie and ‘X’ rather than through the campaign. The clear intention was to coax the activists into offering to secure the return of the Vasella remains.
Throughout the discussions in the meetings with Novartis, Debbie was clear that SHAC had no idea who took the remains and had no control over them. ‘Adams’, the undercover officer, took the lead during the conversations with Debbie. According to Debbie, he asked “leading questions about whether we were the right people” to talk to. Debbie’s notes of the conversation record her as saying: “We’re taking a risk the way the legal system is in this country to meet with you… [X] and I are painfully aware that going to these meeting with Novartis puts us in the spotlight, puts us at risk…” A representative of Novartis then says: “This is a confidential process…” In a later email to the company, Debbie said that she had spoken to some of the activists conducting demonstrations against Novartis and confirmed that they had agreed to stop protesting should Novartis end its contract with HLS.
Soon after the second meeting with Novartis Debbie met ‘James Adams’ on the underground, as if by chance. In fact he had followed her onto the train. He tried to broach the issue of the Vasella remains again but Debbie refused to discuss the issue.
Targeting of activists by political police units
The arrest and prosecution of Debbie, and cases against animal rights activists more generally, are overseen by specialised political police units designed to protect corporations from public anger. In 1999 the National Public Order Intelligence Unit (NPOIU) was set up following the publication of a Her Majesty’s Inspectorate of Constabularies report, which claimed that some protest groups “have adopted a strategic, long-term approach to their protests, employing new and innovative tactics to frustrate authorities and achieve their objectives”. The NPOIU has been responsible for planting undercover officers in protest movements.
Debbie regards the use of undercover officers against her as a “sting operation”. She said she believed that Adams was “clearly part of National Domestic Extremism and Disorder Intelligence Unit”, formerly the National Domestic Extremism Unit, “who are just a re-branding of the Special Demonstration Squad and National Public Order Intelligence Unit” and that “there is now a 25 year history of unaccountable practice by a secretive and unaccountable police unit”.
Specialised political police units aim to criminalise and imprison activists and neutralise political movements that pose a challenge to corporate power or other aspects of the current system.
‘Decapitating’ the ‘leaders’
The strategy of the police units involved in overseeing Debbie’s case is explored in the January 2013 edition of the European Journal of Criminology. It includes an article by John Donovan and Richard Timothy Coupe. Donovan is employed by the Metropolitan Police ‘Service’. The article encapsulates the police and CPS’s approach to the SHAC campaign as one of “leadership decapitation”: “Police agencies combating terrorist or organised crime groups principally employ intelligence-led activities (Innes et al., 2005) and covert investigative techniques for identifying group participants and linking them to criminal activities. These involve human surveillance, informants and under-cover officers, as well as covert, electronic techniques, including wire-tapping, to monitor incriminating communications and understand member roles and ties in criminal networks, such as the Neapolitan Camorra (Campana, 2011; Campana and Varese, 2012). As well as the arrest of members of terrorist groups who commit or plan crimes, leaders and upper echelons have been specifically targeted in order to ‘decapitate’ and weaken or terminate groups (Cronin, 2009; David, 2002; Jordan, 2009; Price, 2012), an approach still emphasised in counter-insurgency doctrine (Hauenstein, 2011). This was the approach adopted by UK police in seeking to disrupt and terminate SHAC’s campaign of intimidation.”
The CPS’s case summary claimed that Debbie was the representative of SHAC in the UK. Alistair Nisbet, the Senior Crown Prosecutor in the case, said: “Following the conviction of SHAC’s main leaders in 2008, Debbie Vincent’s role within the organisation grew. She became the public face of SHAC”. Of course, the police’s notions of leaders within the SHAC campaign betray a fundamental lack of understanding of horizontal organising by protest movements. Nevertheless, this tactic of painting individuals as leaders and targeting them is the strategy behind the police efforts to railroad Debbie and other activists to prison; an organised attempt by the police to neutralise a political protest movement through the twisting of the law to imprison those who the authorities label as ‘leaders’.
Media greenscare
So why aren’t more people rallying to support Debbie and other SHAC campaigners? One reason is the police’s attempts to discredit the movement in the media and thus to limit public solidarity for those under their cosh. In the past, mainstream media scare-stories about animal rights and environmental campaigners have been found to have been fabricated by political police units – see here. During Debbie’s case the media coverage was deeply offensive, defamatory and discriminatory, focusing on the fact that Debbie had undergone gender reassignment. The Mirror’s headline was “The boy who grew up to become a woman of terror” while the Daily Mail ran with “Sex-change soldier who became an animal rights terror commander” and made the unsubstantiated claim that Debbie had “been attacking animal testing labs for over ten years”. Debbie has already made a successful claim to the Press Complaints Commission and forced the Mail to amend an article which erroneously linked her to the Animal Liberation Front and linked SHAC to a previous blackmail case against the Save the Newchurch Guinea Pigs campaign. This defamation in the press is undoubtedly stirred up by police press releases, aimed at generating a negative image of animal rights campaigners in the media in order to limit public support for the movement. It is of utmost importance that anti-corporate campaigners are not taken in by this spin, which is designed to protect corporate profits, and to stand in solidarity with those experiencing repression.
Protecting corporations from dissent
Pharmaceutical companies that are facing public anger over their activities have seized on Debbie’s conviction to further restrict protest outside their premises. After the verdict in the trial, Novartis applied for a strengthened injunction under the Protection from Harassment Act (PHA) of 1997 against animal rights protesters. It was granted on 14 April 2014. The harsh terms of the injunction were requested, by notorious corporate lawyer Timothy Lawson Cruttenden, on the grounds that there could be a “backlash that occurs after the sentence”.
The PHA Act was drafted and made its way through parliament as a provision designed to protect vulnerable people from harassment. Before the law was passed, the media had been evoking emotional accounts of the effect of stalking and the need to protect vulnerable individuals. The Act was never portrayed as a law designed to protect corporations and restrict protest. Yet, that’s exactly what its being used for.
The new conditions put in place by Novartis are an interim measure and will be examined at another court hearing. The interim injunction has been made against ‘persons unknown’ but potentially affects anyone demonstrating against Novartis. It restricts demonstrations to six people or fewer, in designated protest zones, with no amplified sounds, and forbids face-coverings or blood-splattered costumes. Anyone deemed to have breached the conditions can be arrested and may face up to five years in prison. However, last year a test case at the Old Bailey of two SHAC activists put into question the practicality of prosecuting activists arrested under PHA injunctions. See this Corporate Watch article for details of the case.
Solidarity needed
Debbie’s conviction is part of an ongoing campaign of repression against the UK animal rights movement. A further seven SHAC activists have been charged with ‘conspiracy to interfere with the contractual relations so as to harm an animal research organisation’ under Section 145 of the Serious Organised Crime and Police Act (2005). The charges relate to demonstrations against companies with business relationships with HLS. They are due to appear in court later this year.
For more information on the ongoing repression of UK animal rights activists see the website: www.stopukrepression.org
When we asked Debbie if she would need any particular support from people if she got a custodial sentence, she replied: “Practically, I’m not sure what my needs will be in prison, it will depend to a degree to where I go. I’m pretty sure I’ll be able to cope, but being isolated from nature and friends will be the worst part. I will try to make the best of the bad situation, it’s all a bit daunting and new. The whole charge and court case are still amazingly surreal.”
“Keep on campaigning against all oppression and capitalist domination. Don’t be afraid to speak out and never apologise for trying to make a difference and caring.”
To see a list of imprisoned animal rights activists worldwide click here.
Update: We have just heard that Debbie has been taken to Bronzefield Prison. Her prisoner number should be available soon.
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]]>An animal rights activist has been convicted of conspiracy to blackmail after 5 weeks on trial at Winchester Crown Court. Debbie Vincent of the Stop Huntingdon Animal Cruelty (SHAC) campaign was accused of blackmail on the basis that SHAC pressured companies to end their business relationships with Huntingdon Life Sciences, Europe’s largest animal testing laboratory.
The case is the latest development in the use of blackmail laws against animal rights activists. In 2010 seven SHAC campaigners were handed sentences of up to 16 years in prison for ‘conspiring’ to blackmail companies not to do business with HLS. Debbie was accused of being part of the same ten year ‘conspiracy’ as the previous defendants, from 2001-11, despite the fact that there was only evidence that she had been involved in the campaign from 2005. Police had bugged a house used by SHAC campaigners for an eight month period in 2005 and put those going in and out under surveillance. Much of the case against Debbie was on the grounds of guilt by association with the defendants convicted in 2010 and with unnamed people. The twisting of blackmail laws in this way has broad ramifications for the right to express dissent in the UK. The law is being used to intimidate people who are attempting to resist against corporate power. The logical extension of the use of the law in this way is that any campaigner who pressures a company to end its practices could be targeted. The prosecution argued that SHAC had posted details of companies on their website and encouraged people to protest against them. The CPS claimed that this amounted to blackmail, despite the fact that the SHAC campaign stipulated on its website that protests should be lawful. In the second week of the trial, after the defence demanded that the Crown Prosecution Service (CPS) give full disclosure of the papers at their disposal to the defence, it was revealed that an undercover police officer, using the alias ‘James Adams’ had masqueraded as an executive for Novartis and met with Debbie and another activist from the SHAC campaign to discuss Novartis’ dealings with HLS. It seems that the police and Novartis were trying, unsuccessfully, to link the two activists to illegal direct action. Several officers from the National Domestic Extremism Unit gave evidence at the trial. The NDEU is a specialist police unit which aims to target activists involved in direct action campaigning. For more information on the UK’s political police units click here.
Debbie is due in court for sentencing on April 17th. The CPS have indicated they intend to apply for an Anti Social Behaviour Order (ASBO) to come into effect on her release which will restrict her movements. In 2010 indefinite ASBOs were granted against four convicted activists banning them from ever protesting against animal experimentation. The case is part of an ongoing campaign of police repression against the SHAC campaign. Seven SHAC activists have been charged with ‘conspiracy to interfere with the contractual relations so as to harm an animal research organisation’ under Section 144 of the Serious Organised Crime and Police Act (2005). The charges relate to demonstrations against companies with business relationships with HLS. They are due to appear in court later this year A Stop UK Repression campaign has been set up to support animal rights activists bearing the brunt of this latest state crackdown on anti-corporate dissent. The campaign’s website reads “In an atmosphere of increasing repression against activists and the criminalisation of effective campaigns, it is important that we show our solidarity for those involved and form a strong network to support the UK animal rights movement.” More details at: www.shac.net
www.indymedia.org.uk/en/2014/03/515954.html
www.stopukrepression.org/?page_id=75#
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