Why the VIG code of conduct fails to put health first

30/7/2020 - Blog - Robin Veenman (former research intern at Wemos and Pharmaceutical Accountability Foundation & master student Political Science at the University of Amsterdam)

Robin Veenman (former research intern at Wemos and Pharmaceutical Accountability Foundation & master student Political Science at the University of Amsterdam)

Earlier this year, the Association Innovative Medicines (or Vereniging Innovatieve Geneesmiddelen – VIG – the industry association for the Dutch branches of innovative pharmaceutical companies) published its new code of conduct. Unfortunately, in a time when high medicine prices are a pressing societal problem, the code omits any mentioning of the pharmaceutical industry’s pricing policy. For my research at Wemos and Pharmaceutical Accountability Foundation, I aimed to find out why, and came to the conclusion that the code is a symptom of a neoliberal system within the pharmaceutical industry, guided by profit maximisation instead of public health.

While it was possible for the VIG to include a statement regarding pricing policy, the association eventually chose not to. I found that this was because the code of conduct was not intended to inspire substantial change in the daily affairs of the VIG. Instead, the code was constructed as a strategic instrument to ward off external regulation and simultaneously restore the corporate image and enhance stakeholder approval of the VIG and its members. The fact that an association representing such a vital sector to society chooses the more financially beneficial option over the socially responsible one is the unavoidable effect of a problematic, neoliberal system in which it operates and benefits from.

Government and the private sector: conflicting goals

The problem with the current system is found within the conflicting goals of the government and the private sector: the aim of the pharmaceutical industry is to maximise its profits, while that of the government is to protect public health. The pharmaceutical industry is one of the most profitable industries in the world, yet insufficient access to medicines remains a considerable problem. This can be explained by the industry’s transformation from an industry of drug production to an investment industry. And as has been illustrated multiple times during the current COVID-19 crisis, with the current business model, in some cases the pharmaceutical industry strives for profit maximisation – which is also demonstrated in the absence of pricing policy in the VIG code of conduct.

The association opted for a private governance initiative to tackle the public criticism directed at the pharmaceutical industry. The development of private governance in itself is a demonstration of global neoliberalism, indicating the ever-increasing power of transnational corporations, bypassing binding and enforceable public regulation or legislation.

From symbolism to sustainibility

My research illustrates why a neoliberal system driven by ideals of capitalism is problematic, especially within the pharmaceutical industry. Due to the industry’s importance to public health and the previously illustrated problematic system that it operates in, symbolic codes of conduct that are guided by profit maximisation – rather than the public interest – are not sustainable. However, can we really expect the industry to change on its own accord? Or has the time finally come for the government to put a stop to this? After all, public health is not a private, but a public good.

Read Robin Veenman’s thesis: The Lack of Pricing Policy in the VIG Code of Conduct

 

Photo: Pixabay

Receive our newsletter

  • instagram
  • linkedin
  • youtube