NYC, New York, United States. July 7, 2021: Protest at the NYC Hometown Heroes ticker tape parade honoring essential workers. Image credit: Luigi Morris / Shutterstock.

Victor Roy is a physician and author of Capitalizing a Cure. His book, released in late January by the University of California Press, is a crucial examination of marketized medicine in the US. It looks at the structures that define drug pricing and the pharmaceutical industry at large, through a case study of sofosbuvir, a drug for hepatitis C, that was dubbed “the most expensive in the world” when it was launched in 2013. Threading history, sociological thought and scientific knowledge, Roy makes a compelling case for removing the reach of financialized capitalism in health.

Emma Pirnay: By way of introduction, could you tell me about your background? I know you graduated from the University of Cambridge with a doctorate in sociology, and you’re now a physician and Yale fellow. What prompted you to study medicine from a sociological perspective? 

Victor Roy: I’ve always been interested in the social forces that shape health. I grew up living between the suburban U.S. and my parents’ ancestral villages in rural India—my grandfather was a rural family doctor. So I always wondered what different policies and decisions allowed these different opportunities in health to be stabilized or almost seen as a normalized status quo. Along the way, I knew that I enjoyed science and taking care of patients, particularly having watched my grandfather be a family doctor for all those years, but also knew that what was going to allow me to make more change was understanding the forces that aren’t only in the clinic room but are affecting everything that happens with the health of the patients. That’s what introduced me to sociology, through the works of other physicians who had done dual training as doctors and as anthropologists or sociologists.

Pirnay: Moving onto your book Capitalizing a Cure, which is an in-depth examination of drug pricing through a specific case study of sofosbuvir, a drug used to treat hepatitis C. It tells the story of how in 2013, the drug was sold by a pharmaceutical company Gilead after acquiring the patent for it from Pharmasset, and the price rose exponentially, to the point that the drug was dubbed “the most expensive in the world” ($1,000 a pill). For obvious reasons, this garnered public outcry from advocates, political groups, and the media alike. What drew you to this case? 

Roy: Two big things drew me to this case. One was that this was a curative treatment for a patient population and that a large share of these patients was structurally marginalized—patients get hepatitis C through injecting drug use, for example. This was a major public health challenge that could be addressed with curative treatment for patients that really needed it. 

The second big thing I was drawn to was a situation in which the price of drugs was actually rationalized by a number of different actors as being a “normal” or “expected price.” Some would go on to say that because this treatment is curing patients, and this drug is going to deliver so much economic and health value to society, we should pay up. The prices of existing drugs being used for hepatitis C were actually pretty high already and weren’t delivering the same rates of cure. So, when Gilead came out with its prices and the drug, they actually didn’t jack up the price that much. They argued that patients were going to get great value because the rates of cure are going to be really high. Of course, this created a huge political controversy because when you multiply a large number of patients that could benefit from this treatment, as opposed to the prior treatments that were not as good, times that price point, you create a financial and political storm. 

Pirnay: Let’s talk about value. There’s a common claim used by pharmaceutical companies that the exorbitant prices of drugs simply reflect their value—the research and development that goes into producing the drug, or the estimated value of lives saved. Could you explain how value is defined by pharmaceutical companies like Gilead?

Roy: From the perspective of these companies, value is defined by what society is willing to pay. They can justify it, or at least attempt to justify it, through all sorts of data and evidence to say how much health benefit you’re getting by being willing to pay. I think what’s striking about that conception of value is twofold. One, what falls from view is that value is connected to labor—a sense of who actually is involved in the process of investing, making, and developing a treatment. No longer is the price or the politics around the value of the treatment actually connected to that. Empirically, you can’t point to any one figure or set of firms and say, “this is how much it cost to make it.” The second remarkable thing is a very vexing concept to pose because when you have health at stake, societies, and patients are willing to pay as much as it takes. It’s not a luxury good, like a nice car. So that upper limit, then, is the construction of what financial markets expect. 

Pirnay: The concept of financialized capitalism is really at the heart of this book, so let’s move on to that. You use different frameworks and terms to understand drug pricing, although not interchangeably—like financialization, capitalization, and assetization—could you explain what they mean to those who might be unaware?

Roy: The big frame shift I’m hoping that this book helps people understand is a move from thinking about a drug as an object you put a lot of money in to make, sell, and try to recoup the costs of how much it costs to make, to an idea of intellectual property that you own and that you can derive financial benefit from through ownership stake. 

Pirnay: For example, in the preface to your book, you explain how Gilead capitalized on the need to new drugs to lessen the harm being caused by COVID-19, by convincing the government to invest in remdesivir, a drug that cost Gilead about $10 a dose to manufacture–but because Gilead owned the patent, it could charge whatever price it wanted. After weeks of speculation, you write, “Gilead announced its pricing: $2,340  for a five-day course for developed-country governments, including the US Veterans Affairs and Indian Health Service systems, and $3,120 for Medicare and Medicaid as well as all US private insurers.”

Roy: This is a kind of move towards ascertaining knowledge around biomedical research and development that mobilizes a whole circulation of capital through the entire process, where there’s not any one firm that’s saying “we’re taking the ten-year risk to make this.” No, we’re going to own this intellectual property for as long as it makes financial sense for us. And then we’re either going to sell it to another stakeholder or we’re going to make a move that allows us to maximize our return on the given amount of investment we’ve made. That gets into this idea of financialization, where firms aren’t organized on production, they’re organized around ownership and exchange of assets and how to derive as much money as possible through owning that property. That’s how financialization and assetization are connected. The third thing—capitalization—that I, especially in chapter two, talk about quite a bit, is that this is a very normal business practice. It’s the practice of how firms make decisions about what assets are the most valuable to own—they’re making mathematical and quantitative decisions based on models that they have about the future.

Part of what I argue is that by studying how this capitalization process happens, we learn a lot about power relationships. That’s where you study how companies think about what to capitalize on, and how to capitalize at that moment. As a social scientist or a political analyst, you can understand what stakes are involved. That helps us understand why companies invest so much in political lobbying because their circulation of capital depends on them being able to own enough—not only of the intellectual property—but the politicians themselves to drive those prices through the system.

Pirnay: You also talk a little bit about your life and career throughout the book. In one chapter, you describe taking the “Physician’s Pledge,” a modern-day version of the “Hippocratic Oath,” which begins by stating that “the health and well-being of your patient will be your first consideration,” and how structurally, medicine falls short of this ideal. Were there any other formative moments in the writing of this book? 

Roy: In chapter three, I write about being in a health center where I was understanding the implications of the high prices in terms of the care of patients. [At the time] I was in a clinic in Los Angeles where most of the patients were on state-funded, publicly insured Medicaid programs. California had decided to restrict access to the treatment only to those with the most advanced stages of the liver condition known as cirrhosis, leading to only one in 70 patients being able to gain access to treatment. Well into a year after the drugs had been launched, patients with commercial insurance were having a much better time. I was also talking with health workers trying to figure out all these new mechanisms, like how to get through all the paperwork the government was putting before us. Patients would have to be sober from alcohol for six months before getting treatment. [They were] putting in place stigmatizing restrictions, which was frustrating for providers, but primarily patients. 

These forces flow downstream to the very basic interactions that a doctor is able to have. A lot of these concepts are abstractions—trying to come up with justifications that are mostly economic in nature. At the end of the day, I’m a doctor who has really concrete experiences in the clinic room with my patients who are talking to me about their illnesses and their conditions. If I know that there’s something out there that could actually address that, then that to me is where the whole system needs to be revolving around rather than around the conversations that happened between former executives and Wall Street analysts on earnings calls.

Pirnay: You also bring up the future a few times throughout the book, in particular, how “imagined futures” determine the speculative pricing of drugs like sofosbuvir. Can you describe a bit more how the future, as imagined by pharmaceutical companies, is exploited to generate profit?

Roy: This is a really interesting dynamic around financialized capitalism. If you, as a firm, aren’t the one responsible for taking knowledge and turning it into a product, but the one and whole number of financial actors involved, then it is absolutely the case that the way you mobilize significant amounts of capital is by arguing that a lot of money can be made in the future. It mobilizes a number of actors: venture capitalists, biotech firms that become publicly traded on the stock market, and big companies themselves. Not only will the money be made, but there will be a growth in the amount of money to be made in the future. Not only is it about making $10 billion next year, but we can also have this imagined future in which we can make $15 billion the year after that. 

Pirnay: It’s sort of a gamble at the risk of current patients.

Roy: Advocates for the current system would say that it mobilizes a lot of capital for future patients. So part of the exploitation here, one could argue, is that no one wants the future to be grim—people want new and better treatments. One of the big challenges is that health is a deeply moral issue, and so they’re able to actually trade on the ethics of future patients and argue that if we don’t have this system, then the entire thing falls apart. You’re treating the potential incremental improvement in access to the current patient in terms of all future innovations. I think that claim is too strong and is a failure of imagination. That’s one way in which they try to take what we currently have as just the natural, taken-for-granted system that should exist in perpetuity. I think part of our work is to figure out how we can change it for the better. 

Pirnay: In the last chapter of the book, you dive into the structural inequities in drug access. It struck me that Gilead has gatekept drug access for both HIV and hepatitis C—how would you relate this to how they are financialized?

Roy: What’s really interesting about Gilead is that it owns and controls HIV treatments, which are chronic lifelong treatments, as opposed to hepatitis C treatments, which are, in the case of sofosbuvir, curative treatments that you only have to take for three months. By studying a company that owns both a curative and chronic treatment, it makes things really clear about how financialized capitalism interacts with biomedicine. 

One of the things I point out in chapter three is that Gilead makes a boatload of money on Hep C, but that the company’s share price actually dropped after 2015. Why? Because financial actors, such as Wall Street, weren’t happy about the fact that owning a [curative] treatment wasn’t going to generate the constant growth that a recurring treatment you need to take for the rest of your life could. An asset is only valuable if we can create value in that imagined future. When that imagined future doesn’t point toward growth, then you see the key-orienting logic of the entire system. What happens is they start talking a lot more with Wall Street about its HIV treatments and the different ways in which they expect that their treatments will be able to be used for larger patient sizes. In doing that, as long as they have intellectual property protections, they can own and control the growth of the market for the life of these patients’ need for that treatment, which is a much more compelling business case for a Wall Street that expects constant growth.

Pirnay: I want to bring us to the present, briefly, and ask you about recent developments in public health, especially as COVID is concerned. You conclude the book talking about COVID vaccines, and how we’re seeing similar things with Moderna and Pfizer pan out. Recently, the Biden administration made a move towards privatizing COVID vaccines. How can we use your book to contextualize this decision? 

Roy: The decision to let commercial markets take over goes into a bigger argument of how a lot of folks in health policy see the role of the public versus private sectors. There’s the idea that the public sector should be involved in just a few areas [and let] the private sector take care of the rest. First, that’s never really worked out with American healthcare. We see how, I would argue, not only a privatized health care system, but a deeply financialized one and one that is intensifying, has led to a system in which we’re spending way more than any other country while getting subpar outcomes. Second, I’d say that the COVID vaccine case, in particular, is a more prominent example of the public and the government investing a significant amount of money behind something that they don’t create the conditions for getting the fairest and public health-oriented return on that investment. The prevailing way of doing things is “if we don’t commercialize, if we don’t set conditions, then we’re going to scare off private investment.” I think that’s a backward way of looking at things because if the government invests, there will be money to be made. We should decide as a society and as a government through our elected and public officials, whether we’re going to actually take that investment, and do the things that they’re named and that [aligns] with their purpose in the first place. 

I’ll add that a lot of the same analysis around financialization you could do with Moderna and Pfizer is by looking at how they’ve allocated their capital in the past and why for them, it is a big-time winner to have a recurring yearly vaccine. That will be something that is part of the commercial markets that they can charge a pretty high price for and have years into the future.

Pirnay: Do you see any solutions to our current drug pricing system? You mention in the final chapter of the book that there might be a “public option” for drug development—can you tell me more about that?

The notion that I try to develop in the book is not a novel one—it’s been described by many organizers. It’s really the idea that if the public is involved in so many aspects of research and development around treatments, then why not take it to the next step? In many ways, the vaccine case has actually shown the government not only investing in one of the early stages but also helping Moderna do clinical trials and even supporting manufacturing and production. A public option would essentially be the idea of the company and government developing the capabilities to do the full cycle of research and development all the way into manufacturing and distribution. That way, we don’t rely solely on private actors to secure a safe and effective supply. For example, during an emergency, we won’t have shortages and it can ensure more equitable access. 

There’s a new agency that Biden has launched called the Advanced Research Projects Agency for Health. They’re going to be investing in all sorts of cutting-edge and important biomedical innovation projects, but I think the jury’s out whether they’re going to actually set the kind of partnerships, conditions, and even public manufacturing capabilities that might allow that investment to go the full distance. 

Victor Roy MD, PhD, is a physician and sociologist working to achieve health equity through clinical care, scholarship, and solidarity-based efforts.

Emma Pirnay is a freelance journalist and MA student in Creative Publishing and Critical Journalism at The New School.