'In the Name of Transparency: Organizing European pharmaceutical markets through struggles over transparency devices' by Susi Geiger and Théo Bourgeron in (2023) 44(11) Organization Studies comments
The controversies surrounding the heavily redacted contracts between the European Commission and Covid-19 vaccine producers have highlighted ‘transparency’ as a hotly debated concept in the pharmaceutical market. We combine research on transparency with literature on the organization of markets to investigate how such struggles over competing visions of transparency end up shaping markets and their politics. Focusing on the case of the European pharmaceutical market, we demonstrate how market transparency was implemented through devices that enacted specific visions of transparency and produced distinct market organizations over time: transparency for states (until about 1990), transparency for corporations (ca. 1990 to 2010) and transparency for state coalitions (since 2010). We discuss how the specific instrumentations and materializations of such visions of transparency play a crucial role in market politics. This debate also highlights why engaging in controversies over transparency has become increasingly important for those contesting the market status quo – in pharmaceutical markets and beyond. ...
Why aren’t markets more transparent? During the Covid-19 pandemic, this issue was a lively point of debate as activists and politicians questioned the opacity in which Covid-19 treatments and vaccines were ordered, priced and distributed (Centre for Global Development, 2021; Londeix & Martin, 2022). In May 2019, a few months before the virus started to spread, a resolution had already been passed at the World Health Assembly (WHA, 2019), which ordered member-states to ensure transparency in pharmaceutical markets. Making visible a push for transparency by state actors themselves, the resolution aimed to reduce the spaces of opacity in which high prices for medicines were said to proliferate (Shaw & Mestre-Ferrandiz, 2020). Yet, while states, corporations and civil society all agreed on the benefits of ‘more transparency’, its very definition was a contested one. Shortly after the WHA, a pharmaceutical spokesperson published a column suggesting an alternative vision of transparency, one that focused on making the decision-making processes of payers more transparent to corporations (Roedinger, 2019). How do such contestations around visions and definitions of transparency act to reorganize markets, and to whose benefit?
Once the exclusive concern of stock market regulators and neoclassical economists looking for markets emanating ‘correct’ informational signals, transparency has become a ubiquitous issue in public debate in markets ranging from pharmaceuticals, capital markets, international trade, raw materials and housing to food (BEUC, 2018; EPHA, 2021; Transparency International, 2016). This practical concern over market transparency as a governance ideal arises at a time when organization studies have started to illuminate how the notion of transparency is put to use by policymakers, civil society and corporations (Hansen & Weiskopf, 2021; Heimstädt & Dobusch, 2020; Reischauer & Ringel, 2023; Weiskopf, 2023). This research highlights the constitutive qualities of transparency, where ‘transparency as a form of ordering’ (Flyverbom, 2015, p. 168) shapes organizations and actor conduct.
We transpose this constitutive view of transparency into the context of markets, demonstrating how shifting meanings of transparency have concrete organizational consequences as they become translated into socio-material market arrangements. We highlight that visions of transparency are materialized through what Harvey, Reeves and Ruppert (2013) called transparency devices, and we investigate the role that these devices play in the organization of markets. Our study contributes to research that moves beyond normative views of market transparency (Roscoe, 2022; Roscoe & Willman, 2021) by analysing the struggles that occur around competing visions of transparency and, crucially, by tracing how these struggles shape markets.
Investigating such struggles, we claim, is vital to understand market politics. Focusing on the evolution of the European pharmaceutical market, we highlight how the strategic deployment of arrangements that promote selective visions of transparency is a key mechanism to reorganize markets and direct funding to specific actors. In this perspective, a lack of transparency is not the outcome of ill-designed markets – in the pharmaceutical market at least, our investigation shows how (shifting) definitions of transparency were carefully organized with political objectives in mind. Our paper highlights certain moments in time in which transparency assumed a ‘post-political’ role in markets. In post-politics, superficially consensus-based regulatory norms such as transparency are used to ‘hide fundamental differences in interests and power resources’ behind technical settlements (Garsten & Jacobsson, 2013, p. 422; Wilson & Swyngedouw, 2014). In our case, such settlements worked to conceal fundamental conflicts between corporations, states and patients. However, by focusing on transparency’s technical implementation through devices, we also expose the politics around this post-political concept, emphasizing how it has become not only a consensual key organizing principle but also a technocratic battlefield for promoting alternative market organizations. By highlighting these market politics, our discussion offers insights into how civil society and state activists currently reclaim transparency to challenge the market status quo, in pharmaceutical markets and beyond.
'Building the weak hand of the state: tracing the market boundaries of high pharmaceutical prices in France' by Théo Bourgeron and Susi Geiger in (2022) 27(5) New Political Economy 837-850 comments
Prices for new medications have strongly increased over the last decades, reaching levels that could endanger healthcare insurance systems. Focusing on the French case, this article builds on the structural approach of business power and investigates how this situation results from the construction of market boundaries that created unassailable spaces for high pricing. Starting from the 1990s, it traces how high drug prices relied on the construction of a market setting first designed to increase pharmaceutical prices, in which the negotiating position of the state was deliberately weakened. But the politics of maintaining such high drug pricing quickly required reshaping the boundaries of the pharmaceutical market and concentrating the favourable negotiation framework on a small number of innovative medicines. Most recently, the spiralling of prices for these medicines have necessitated yet another revisiting of these market boundaries. High drug prices do not result from direct business power by the pharmaceutical sector; rather, the pharmaceutical sector depends on boundary-work performed in cooperation with state institutions to carve out domains for favourable market pricing. Emphasising the politics of this boundary-work thus ultimately also signals its potential reversibility.
In 1989, the French Minister of Health was defending its ‘New Pharmaceutical Policy’ bill. This bill was essential, he argued, because it would ‘ensure the conditions of growth for the pharmaceutical industry’ by rebalancing the negotiations between pharmaceutical companies and the state, allowing the former to obtain higher prices to be competitive on the European single market. In 2019, Chantal Delorgey, the head of the French health agency Haute Autorité de la Santé (HAS), was wondering whether the relationship between public payers and pharmaceutical manufacturers had become too unbalanced (EPHA 2019). This time, pharmaceutical firms were accused of being in the strong position, building their negotiating power on a market structure that pushed the prices of new medicines to unsustainable highs. This article draws up a history of what happened in the intervening 30 years and describes the intense institutional construction that has shaped the positions of public payers and private firms in the French pharmaceutical market over time.
Digging into this history reminds us that current high prices for medicines result from political struggles mediated by contested market mechanisms. High prices have become an integral part of the pharmaceutical business model, allowing manufacturers to sustain high levels of profit (Froud and Sukhdev 2006). Past research has investigated how these levels of profits allow pharmaceutical firms to adopt a financialised business model that involves the reconfiguration of biochemical compounds, intellectual property, clinical trials, and the pharmaceutical ecosystem towards profit-making (Dumit 2012, Rajan 2017, Lazonick et al. 2019, Bourgeron and Geiger 2022). These value-extraction strategies fundamentally rely on pharmaceutical companies’ ability to achieve high prices for their pharmaceuticals (Roy 2020), with some analyses predicting how an imbalance between states and multinational pharmaceutical companies may ultimately jeopardise universal access to medicines even in high-income countries (Tansey and Ainger 2019, EPHA 2020). This makes it crucial to understand the political economy determinants of high drug prices, an issue that has not been the topic of much scholarship, despite significant interest in pharmaceutical prices in general (Busfield 2006, Nouguez 2016, Nouguez and Benoît 2017) and in specific cases of high drug pricing (Roy and King 2016). Building on structural approaches of business power, we draw up a political economy of high drug prices by outlining, through the case of France, how their construction results from intense market boundary-work by policymakers and pharmaceutical companies. In our analysis, the weak negotiating position of European states results from the deliberate action of public authorities, who endorsed successive reforms of the boundaries of the pharmaceutical market aimed at replacing direct support to pharmaceutical firms through state aids with indirect support through prices, facilitated by favourable negotiation frameworks. This however loosened the state’s control on pharmaceutical companies and led to disputes over which medicines should enjoy such high prices. As healthcare activists and budget holders all over the EU struggle to maintain universal access to medicines, our perspective is crucial to map the boundaries of high pharmaceutical prices and understand where contestation opportunities lie.
This article proceeds as follows. We first elaborate on the difficulties raised by high drug prices and explain how this calls for a conceptual background that combines a structural approach of business power with an attention to how the boundaries of markets are transformed. We then detail our methods and the complicated landscape of pharmaceutical price negotiation in France. This brief overview is followed by our historical study. It shows how the initial construction of pharmaceutical prices as market-based prices aimed at weakening the state in the negotiations with companies to help French manufacturers compete at the European level (1989-2003). It then highlights the boundary-work that led this market to be split into differentiated markets, where some medicines were allocated low prices through administrative procedures and others enjoyed favourable market pricing (2003-2011). Finally, it describes how high prices for innovative medicines negotiated through markets have become unsustainable for public payers, leading to further boundary-work and proposals to implement administrative caps on the highest-priced medicines (2011-2020)
