The company that makes OxyContin could become a ’public trust’ – what would that mean?
▻http://theconversation.com/the-company-that-makes-oxycontin-could-become-a-public-trust-what-w
Purdue Pharma, which makes OxyContin and other potentially addictive prescription opioids, has declared bankruptcy. It’s also facing thousands of lawsuits for its leading role in creating the opioid crisis.
The company is trying to reach a broad settlement with the many jurisdictions now suing. The settlement it’s proposing would transform the company from a profit-seeking privately held company into a “public beneficiary trust” that serves the public good.
I study the history of prescription drugs. Although there are some recent efforts to establish nonprofit drugmakers to help make certain pharmaceuticals more readily available, I know of no historical precedent for a big drugmaker like Purdue becoming a nonprofit public health provider.
But two similarly ambitious efforts to build alternatives to the profit-driven pharmaceutical model during and immediately after World War II suggest the potential limits of how well this arrangement might work.
By all accounts, the new trust would be a for-profit entity. Indeed, profits from continued sales of pain medicines like OxyContin and addiction treatment medications like buprenorphine and naloxone – estimated by Purdue to be up to US$8 billion per year – are crucial as the “payment” Purdue is offering to compensate the public for the company’s share of the costs of the opioid crisis.
In other words, to achieve its mission, the new Purdue would have to pursue profits just like the old Purdue. And since all pharmaceutical companies officially declare themselves to be dedicated to serving the public good, how different would it really be?
Then, too, the new trust would still be Purdue Pharma, a company with a well-entrenched culture of maximizing sales and profits even as the opioid crisis grew. One could make a credible case that Purdue’s innovations – the “value” it brought to the table – were not related to any special therapeutic breakthrough in the drugs it developed but instead lay in its genius with marketing these products.
I can see why it is tempting to be excited about the prospect of a new public-benefit trust devoted to addressing addiction.
But for this proposed arrangement to make sense, Purdue would need the tools and expertise required to pursue a radically different mission than it was designed to serve. And history does not offer much assurance that isolated public-sector and nonprofit drugmakers can make a big difference in a pharmaceutical system designed for and powered by profit.
