Dana Brown: Consider option of having the public own firms making generic drugs

Via OtherWords.org

It’s an all too familiar story. A company with some of the best-paying jobs around and a vital anchor for the community decides to engage in “restructuring” to “maximize long-term value creation.”

In other words, it closes down and lays off its workers in pursuit of bigger profits.

But the late July closure of the Viatris pharmaceutical plant in Morgantown, W.Va. — which employed close to 1,500 people and was the largest remaining generic-medications plant in the U.S. — is particularly galling. [There are several generic-drug companies in New England.}

West Virginia Gov. Jim Justice echoed a sentiment shared across the political spectrum when he said on August 4, “I think it’s pitiful, pitiful, absolutely pitiful that our federal government at this time, with something as critical as pharmaceuticals are to our citizens, is just deciding to sit on the sideline and let this catastrophe happen.”

The closing was uniquely preventable — if there had been federal or state action premised on prioritizing protecting public health and economic wellbeing over short-term shareholder returns. We had the tools. All that was lacking was the boldness and the political will to use them.

The chain of events started in 2020 when the plant’s then-owner, Mylan (run by Heather Bresch, West Virginia Sen. Joe Manchin’s daughter), merged with Upjohn to form a new company, Viatris, creating the largest generics company in the world. Not long after, Viatris announced a “restructuring initiative” that included shuttering some of its plants, including the Morgantown facility.

The Steelworkers local representing many of the plant’s workers began petitioning both the incoming Biden administration and state officials to keep the plant open. Their key argument was its role in the country’s pharmaceutical supply chain, particularly in the context of the COVID-19 pandemic. The plant produced 18 billion doses of low-cost generics a year — including many essential medicines paid for through various federal programs.

A letter to the Biden administration signed by the Steelworkers and about 40 other health-care and advocacy groups (including The Democracy Collaborative, where I work) called for using the Defense Production Act to stop the closure of the plant.

One of President Biden’s first executive orders called for using the law if necessary for “acquiring additional stockpiles, improving distribution systems, building market capacity, or expanding the industrial base.” But the Biden administration, like the Trump administration before it, did none of these things in Morgantown.

Keeping the Morgantown plant open would have been a clear case of assuring local distribution and manufacturing capacity for an essential good: medicine. The designation that the plant already has from the Department of Homeland Security as critical infrastructure underscores that.

Overlooked was the opportunity to explore a public-ownership option in pharmaceuticals. Public enterprises are free from profit constraints and can instead define their bottom line based on what they contribute to public health, scientific advancement, and local economic resiliency.

The gains for our communities would be massive: Reliable access to affordable generics helps keep people out of hospitals and in jobs, schools, and community service roles. Generics dramatically reduce our overall health care costs. Plus, the manufacturing plants are vital economic engines as well as hubs of home-grown intellectual capital.

It is encouraging that a public institution, West Virginia University, announced talks with Viatris to acquire the plant, but that was after hundreds of highly skilled workers were needlessly laid off, most of whom cannot wait to see if a deal is struck before looking for new jobs.

What we really need in the face of continued outsourcing and offshoring is a real industrial strategy that includes public ownership — and puts community health above the demands of absentee shareholders.

Dana Brown is director of The Next System Project at The Democracy Collaborative, “a research and development lab for the democratic economy.”