In an era marked by significant scientific breakthroughs that have led to effective treatments for previously untreatable illnesses, a troubling reality persists: countless individuals in low- and middle-income nations still cannot access vital medications. Central to this issue is a critical question we must address: are pharmaceutical companies worsening health inequalities worldwide?
The Price of Innovation Disparity
Pharmaceutical companies maintain that the high costs of drugs are essential for funding research and development. However, increasing evidence disputes this claim. A 2018 report from Oxfam highlighted that major corporations such as Abbott, Johnson & Johnson, Merck, and Pfizer often shift profits to offshore tax havens, resulting in a loss of about $112 million annually in tax revenue for governments in developing countries. This money could be used to support clinics, train midwives, or provide vaccines in areas that lack resources.
While these companies boast profit margins exceeding 20%, many healthcare systems are on the brink of collapse. For instance, in South Africa, a critical breast cancer medication, Trastuzumab, is priced at $38,000 per year—five times the average annual household income. Similarly, Gilead’s hepatitis C treatment, Sofosbuvir, costs $84,000 in the U.S.—over 3,000 times its production cost.
Patents and Systemic Barriers
The global intellectual property framework, particularly the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, has reinforced these monopolies legally. Although the 2001 Doha Declaration called for TRIPS to prioritize public health, few real changes have been made since. Developing nations that try to produce or import generic versions of crucial drugs often face economic sanctions and political pressure.
Even with the existence of compulsory licensing, complicated bureaucracy and geopolitical influences hinder their effectiveness. The result? Essential medicines remain inaccessible to those in greatest need, a situation that is engineered rather than merely coincidental.
Effects on Vulnerable Populations
Health disparities are more than mere statistics; they represent real-life experiences, particularly for women, girls, and impoverished individuals. As governments lose revenue due to corporate tax avoidance, they often raise regressive consumption taxes, unintentionally placing a heavier burden on the poor. This situation disproportionately impacts women, who already shoulder the majority of unpaid care work when healthcare systems falter. Annually, healthcare costs push 100 million people into extreme poverty worldwide.
Moreover, clinical research tends to focus primarily on wealthier groups. While research on health inequalities in the pharmaceutical sector is slowly growing, it remains a small part of the broader scientific domain. According to a 2025 scoping review, most studies involving the pharmaceutical industry are based in North America and Europe, with little emphasis on critical social determinants of health, such as poverty, education, or housing.
Envisioning a New Approach
Change is achievable, but it requires significant reforms. A promising alternative is the Health Impact Fund (HIF), proposed by philosopher Thomas Pogge and economist Aidan Hollis. Under this model, pharmaceutical innovators would be compensated based on the actual health improvements their drugs provide, particularly for underserved populations, rather than on sales. Medications would be sold at production cost, with companies incentivized by independently evaluated global health outcomes.
Such a framework would promote innovation and ensure broader access, aligning the success of pharmaceuticals with public health rather than solely with shareholder profits.
What Can Be Done?
The evidence is clear: the current pharmaceutical system perpetuates global inequality. However, there are steps we can take to change this trajectory. We need to:
- Demand greater transparency in corporate taxation, drug pricing, and R&D spending.
- Advocate for equitable reforms in intellectual property that prioritize public health over profits.
- Support global initiatives, such as the Health Impact Fund, which reward access and outcomes instead of monopolistic pricing.
- Encourage governments and regulatory bodies to integrate social equity metrics into approval and reimbursement processes.
- Hold pharmaceutical companies accountable through shareholder activism, public advocacy, and legislative action.
The message is evident: health should be seen as a fundamental right, not a privilege. We must confront and change a system that prioritizes profits over people.
Now is the moment to take action—not just to analyze a flawed system, but to create one where life-saving medications are available to everyone, regardless of their location or financial situation.
Let’s strive for a world where health equity is standard, rather than a luxury reserved for the few.