‘Financial fallout’ in the US biopharmaceutical industry: Maximizing shareholder value, regulatory capture, and the consequences for patients

Abstract

Patients are suffering the consequences of financialization – as shareholders demand high returns from pharmaceutical companies, pharmaceuticals squeeze profits out of top-selling products, and insurers charge higher premiums for limited coverage, the impact of financialization cascades across the value chain to compound the burden of cost for patients. This article offers a novel theoretical perspective and methods for understanding how “financial fallout” has impacted the pharmaceutical value chain, health systems, and patients. Financial fallout describes the cascade of consequences characteristic of and essential to industries reshaped by financialization. It characterizes how the effects of financialization have become so thoroughly engrained in industries and societies as to seem inevitable and how the consequences are also devastating, like the fallout that follows nuclear disasters. The research represented here examines how processes of financial fallout: 1) cascade across the pharmaceutical value chain from innovation to commercialization; 2) are enacted through ‘regulatory capture’ as regulations meant to safeguard the public from the exigencies of the market ultimately serve the interests of industry; and 3) have devastating consequences for patients who need access to life-saving therapies. The analysis is developed through the example of the market for monoclonal antibodies in the US, and the specific case of Keytruda – one of the top-selling monoclonal antibodies marketed for cancer therapy, which generated over 14 USD billion in revenue in 2020 and 17 billion in 2021. It traces how processes of financial fallout cascade down the value chain to impact health systems and compound the cost of care for patients. Financial fallout signals dire trends in providing health services and access to medicines. It diagnoses how our options for saving lives and improving health are overdetermined by and infused with the interests of financial capital.