Drug Deals: Publish Big Pharma’s Covid Supply Data

If anyone thought addressing the pharmaceutical industry’s shadowy practices had become a lower policy priority as it emerged as medical hero, recent international struggles with the Covid vaccine rollout may prove that compelling corporations to publish data (tracking both supplies and prices) is more critical now than pre-pandemic and pre-election. Is the Europe Union flashing caution signs about “red state” & “blue state” dynamics for vaccine prioritization in the U.S.? Photo by Boston Public Library.

Amid criticism for a slower than expected COVID vaccine roll out, the First Minister of Scotland, Nicola Sturgeon, advised today (Jan. 28, 2021) that she will publish on her public site the amount of supply that she receives from pharmaceutical companies. The disclosures could reveal that some areas in the United Kingdom negotiated better price deals and supply contracts, while others languish lower down on distribution lists. Why have the 50 states and territories of the United States not yet done the same? Not tired of the excuses?

Not so long ago, media outlets, such as Forbes, reported that on Sunday, September 13, 2020, President Trump signed a “’most-favored-nation’ executive order to reduce U.S. drug prices. It instructs federal officials to set pharmaceutical reimbursements under Medicare Parts B and D equal to the lowest prices paid in other developed countries, including Canada, the United Kingdom, and France.” Trump received heavy criticism from both the Left and Conservatives.

Sometimes timing is everything. Before announcements of Covid vaccine discoveries and their confirmed efficacy, pharmaceutical companies filed lawsuits to enjoin the Order’s execution. After a federal district court in Baltimore issued a nationwide injunction, the President’s proposal was destined to wind its way through the courts. “The case is hardly trivial, the judge said. ‘This case deals with a regulation that would for the first time implement the use of a price control mechanism not provided for by Congress.’”

That suit was filed and decided after the 2020 election. However, the Trump Administration had been combating the industry pre-election, including a similar effort to compel companies to disclose prices in their TV advertisements.

Now, there is a new administration. Yet, as we have been thrust into a historic public health event, the rapid-fire development of novel vaccines, and burgeoning concerns over distribution allocations of the new drugs by a different cadre of government officials (“science first”), where has the issue of transparency and public data gone?

The new administration does have the option to restore the White House’s focus on Trump’s strategy of “international reference pricing.” One analyst suggested:

Covid vaccine purchasing is essentially a series of “trade deals” — the drug trade. Scotland’s Minister, Nicola Sturgeon, is facing tremendous political pressure, as Big Pharma (U.S. based) is claiming confidentiality to protect against eliminating their price negotiation advantages. Also, other larger and more economically developed countries in the European Union, including the United Kingdom, worry that such disclosures could upend good deals they had already locked in for their own populations. Is Britain even legally bound to address other nation’s needs post-Brexit, as it (perhaps necessarily) disentangled itself from the bureaucracy inherent in multi-national, multilateral contract formation, let alone when it is life or death?

Sturgeon is demonstrating bold courage by accepting the fire directed at her for daring to publish industry data that affects the very lives of hundreds of thousands under her political charge. Notably, she is taking a page from President Trump’s treatise to orchestrate the “art of the deal.”

When President Trump endorsed a plan for the U.S. to bring down pharma costs across the board, like Sturgeon, he encountered a quagmire of political and global financial interests. Their lobbyists sidelined the initiative with judicial intervention. Multinational corporate and lobbying “might” is already mustering political forces against Sturgeon.

As the example of Scotland shows us, pharmaceutical companies may work out private commercial deals, perhaps including exclusivity or “first in line” agreements, that do not favor equitable access on a fair schedule for Covid vaccine delivery. Moreover, the issue of price has faded into the background, as most pharmaceutical developers have advised they will not stand to make a profit on the Covid vaccinations. That presumed “socially-altruistic” factor, however, does not inform us of whether we have secured relatively equitable pricing structures, or whether our supply comes at far greater cost to the national treasury than paid by other areas of the world, even if they can financially afford the difference.

And then there is the issue of allocations to individual states within the U.S. — who gets what when?

Now that the 2020 election dust has settled, and the Democrat Party secured both Senate seats in Georgia, the fate of price indexing and industry transparency may lose ground to other strategies. One party controls the White House, Congress, and the Governor’s Association. And in the states themselves, as we discuss below, knives are still out.

Does Blue State, Red State Divide Parallel the European Union?: Vaccines

Like Europe Union, will we end up with some states with transnational purchasing pipelines (urban, industrialized, Northeast, NY & MI, “blue”) getting better deals than other states (rural, agrarian, South, MS & IA, “red”)? Photo by Dave Hoefler. Follow @ johnwestrock.

Already, we spy a potentially pernicious and portentous paradox with the stance of the Democrat Party leadership surrounding the national system of Covid vaccine distribution. Could the U.S.’s “Blue state”/”Red state” divide soon resemble the fragmented purchasing and distribution power of the European Union, as follows?

Decentralization: Blue State Position Now

Curiously enough, now Governor Cuomo of New York wants the Biden Administration to authorize U.S. states to buy Covid vaccines direct from Big Pharma manufacturers in order to bypass red tape embedded in a behemoth federal bureaucracy. Cuomo’s request is being heralded as “rare,” and media reports on his request for a decentralized and “broader collaboration model” splash his photo grandly, as if to underscore it as “leadership.” His request to Pfizer and the White House was joined by Democratic Party governors from MI, WI, and MN.

Centralization: Blue State Position Then

Yet, it was Cuomo, as Chair of the U.S. “National Governors’ Association,” and several other blue state governors who frantically and relentlessly criticized the Trump Administration last year for “forcing” states to buy ventilators direct from manufacturers — for the same reason. (Note, again the grandiloquent media photographs of Cuomo, as he took the exact opposite position.)

Location, Location, Location

Truth is that location matters — always. According to pharmaceutical industry commentators, the top 10 hubs for the industry’s production and research are necessarily situated in industrialized, urban locations.

With the pharma industry’s headquarters, operations, and personnel in their midst, several “blue states” already have distinct, undeniable advantages in the race for the cure. Photo by Yeshi Kangrang. Follow @ omgitsyeshi.

According to the above blog, the 2016 round up were: Boston (#1), San Francisco (#2), New Jersey (#3), San Diego (#4), Maryland (#5), Philadelphia (#6), Seattle (#7), Los Angeles (#9), and Chicago (#10) as nine of the top list.

The commentators then advised, “Hands down, the best states for landing a job in the pharmaceutical and biotechnology industries [in 2016] are Massachusetts and California. Already living in one of these states? Consider yourself lucky, especially if you are currently seeking employment in the pharmaceutical and biotechnology industries as there are an abundance of growth and career opportunities.”

Raleigh-Durham, NC (ranked #8) was the final location on the 2016 list. In the recent 2020 general election, the group of nine clearly and emphatically consisted of “blue voters.” NC was the outlier voting for President Trump.

But, wait. Raleigh is situated in Wake County. Both Durham and Wake counties voted blue: Durham County (18.1% Trump / 80.7% Biden) and Wake County (35.9% Trump / 62.5%Biden). So, ten for ten, the pharmaceutical industry physically sits within “blue control.”

Undeniably, with the pharma industry’s headquarters, operations, and personnel in their midst, several “blue states” already have distinct advantages in the race for the cure. Manufacturing and research facilities, experts, protocols, compliance regimes, relationships with local state and county public health officers, university labs, transnational procurement pipelines, charitable investments in local community organizations that foster trust, distribution infrastructure, banking financial relationships, etc., etc. Likewise without question, should these corporations subsequently encounter any windfall profits from manufacturing these global medicines, including any negotiated side letter deals for prioritization by other countries, it is the blue states in the U.S. that will reap the rewards through state taxation.

Granting governors in these geopolitical subdivisions additional, independent power to direct the vaccine drug traffic — without price and distribution transparency for all to see, does by dose —may result in the same disquieting inequities percolating in the European Union.


When the Trump Administration maintained a decentralized system for buying ventilators, there was a fair measure of price transparency. The input and purchase costs for the mechanical equipment was not a closely guarded business secret. Our states already had a procurement history with the manufacturers who fed their respective localized stockpiles. By contrast, the Covid vaccine formulas of respective pharmaceuticals are novel and highly proprietary. If governors want a decentralized vaccination procurement system, it is more likely that obscure pricing structures will lead to inequitable (and inflated) pricing models. We may also see the more wealthy and populous states garner advantages, such as prioritization schedules, that may not be related to medical need or equitable allocation.

Hence, like Europe, will we end up with some states with transnational purchasing pipelines (urban, industrialized, Northeast, NY & MI, “blue”) getting better deals than other states (rural, agrarian, South, MS & IA, “red”)?

What do you think: Should the public push to enact Trump’s “most favored nation” pharmaceutical strategy, or is there a better way?

[Update Jan. 31, 2021]

We are updating our discussion because of a news story released by Reuters yesterday (Jan. 30):

According to Reuters, the EU admits it made a “mistake” by invoking emergency powers to restrict vaccine exports to Britain and parts of Ireland that are under British governance. UK & Ireland protested the move, leading to a reversal and mea culpas. So, now it is Britain that was on the receiving end of proposed inequitable vaccine distribution plans by regulatory officials in the EU.

However, Britain has also been out ahead of the EU in distributing vaccines. Reuters reports that apparently their accelerated pace may be due, at least in part, to Britain’s deals with AstraZeneca, a British-Swedish vaccine manufacturer, as well as deals to import vaccines from U.S. based Pfizer. According to the Reuters article:

There is something to be learned in America from these ongoing international developments. Without transparency, fragmented buying of scarce resources naturally leads to leveraged deal-making. As we had pointed out in our Jan. 29th article above:

Notably, it may no longer be the case that U.S. vaccination allocations are dictated by population density.

Events across the pond emphasize it is important for all U.S. states to ask Big Pharma to disclose publicly information relevant to government plans to reach all of America (including any side letter agreements, pricing, and reasons for any distribution disparities), especially if states are demanding independent purchasing authorization. Pharmaceuticals may be private companies, but they are now leading one of the most expansive public health operations in our nation’s entire history.



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