Mergers that Kill

Luís Ángel Fernández Hermana - @luisangelfh
8 May, 2018
Editorial: 199
Fecha de publicación original: 25 enero, 2000

Health is not contagious

Despite the jubilation that accompanies all mergers of industrial giants, there are some that are more important than others. And what matters most is not the astronomical sums they entail, but something much more basic and mundane, namely, our perception of the world we live in. The media had a field day with the AOL-Time Warner matrimony, fearful, perhaps, of the glimpse of the future it provided. And we were forced to share their feelings thanks to their overwhelming generosity. A week later, not even a tenth of that coverage has been spent on a no less spectacular merger which is clearly much more significant: Glaxo Wellcome and SmithKline Beecham fused to form the world’s top pharmaceutical company and the fourth largest industrial group on the planet with a market value of some 30 billion pesetas. Between the two of them, they control 7,3 of the pharmaceutical market (44% out of the nine most powerful). Their investment priorities decide who is cured and who dies, depending on where they live, because they just happened to be born in the wrong place where chemist shops are not available.

There are mergers that add to entertainment value, or that threaten the freedom of expression of some people. And then, there are those that kill or shorten life-expectancy. More than 85% of world investment into health research and development is concentrated in the OECD countries. And this research is aimed at palliating the diseases of that fifth of the world’s population. Less than 15% of the rest of the budget is spent on alleviating the miseries of the five thousand million others, and that’s quite a thought. Included in this percentage are the 300 million people that need hospital care every year for malaria, the million and a half who die of the same disease and the millions of children with infectious and respiratory diseases –the second largest cause of death in the world after the former — . And then, of course, there is AIDS which is decimating the youthful work force in Africa.

Glaxo and SmithKline together represent a 625,000 million pesetas annual research budget. Moreover, they will now be the leading figures in four of the five most important categories in the pharmaceutical industry: central nervous system, the respiratory tract, the digestive and metabolic and anti-infectious apparatus. The last three are responsible for most deaths and incapacitation in developing countries. But not even a sustained economic growth of over 10% for 15 years would guarantee the availability of these pharmaceuticals in their hospital dispensaries. They are just too expensive. Or too specific: they cure things that these countries do not yet suffer from. They need to eat more and worse to be candidates for these remedies. What these countries need are other kinds of pharmaceutical strategies, non-existent so far or quashed by the dominating imperatives of a handful of corporations. And when these have coincided with those of industrialised nations, as in the case of AIDS, these corporations have even been known to try to withdraw useful medicines because their patents have been about to expire.

Has the Internet got anything to say on the matter? Well, yes, much more than the big mega-transnationals may imagine. Their marriages are forced, imposed on them because of their need to share the only wealth they have: protecting their patents which are running out and expanding their intellectual property rights over the genomic, the new promised land of the pharmaceutical industry which is choking on its own vomit. Either they convert the human genome into a factory for patentable drugs or the future will be as clear to them as that of the media world after the AOL-Time Warner fusion.

However, as other industrial giants start to experiment in their respective fields, the world is fragmenting and the little people are starting to pop up all over the place. The merger strategy means casting off all sorts of activities that are no longer worthwhile for the big corporations and they, for the time being, can be taken on by small companies for the first time. So, while big companies accumulate bureaucracy and scientific depression as a result of their growing dependence on the world of universities and the hyperactive initiatives which are the spinoffs of academic activities, the Net is reducing the marketing, advertising, distribution and sales costs of small companies. Economic niches are created now as quickly as they disappeared before, with their consequently serious effects on the health of whole populations.

Javier Villate, in a stimulating article on the merger of AOL-Time Warner published in today, suggests that this clash between the few big ones and the millions of little ones is a kind of raison d’etre for the Internet. The question, as always, is one of perception: what part of the landscape we choose to look at and what we find there that concerns, encourages and drives us into action. As The Economist put it, we don’t know yet if big is beautiful in the pharmaceutical world, and it emphasises that since 1970 no fusion between companies of this sector has worked as yet. At the same time, for the first time the market is reaching hitherto unexpected levels of capillarity thanks to the Internet. Where before, it seems, huge sums of money were needed to invest in supplying primary health care, now there are other possibilities even for pharmaceutical research and development, as well as for innovative public health policies in developing countries. Fields that the market ambitions of pharmaceutical companies have applied scorched earth policies to for decades.

Translation: Bridget King