maker

Purdue Pharma, the company that makes OxyContin and other potentially addictive prescription opioids, has agreed to plead guilty to three felony counts and reached a settlement potentially worth at least US$8.3 billion with the Justice Department.

The deal could clear the way for Purdue to transform from a profit-seeking privately held company into a public trust that serves the public good, as the company has proposed.

But the settlement is subject to the approval of the federal judge overseeing Purdue’s bankruptcy case. And it may not resolve the thousands of lawsuits Purdue faces for its role in creating the opioid crisis. Notably, the attorneys general from 25 states called on the government a week before the Justice Department announced the deal to simply force the sale of the drugmaker to a new owner instead.

I study the history of prescription drugs (and I have served as a paid consultant and expert witness in opioid litigation). Although there are some recent efforts to establish nonprofit drugmakers to help make certain pharmaceuticals more readily available, I know of no historical precedent for a big drugmaker like Purdue becoming a nonprofit public health provider.

But two similarly ambitious efforts to build alternatives to the profit-driven pharmaceutical model during and immediately after World War II suggest the potential limits of how well this arrangement might work.

Antibiotics

Penicillin was discovered in 1928 but did not come into use until World War II. It was the first antibiotic: a genuinely revolutionary class of drugs that vanquished previously incurable infectious illnesses.

Because of penicillin’s importance for the war effort, the federal government played an active role in its development. Federal scientists developed ways to mass-produce it, federal agencies persuaded reluctant pharmaceutical companies to manufacture it and the government’s “penicillin czar” decided which patients would receive the precious drug.

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Despite the high stakes and the faith in centralized planning, no one at that time appears to have even considered the possibility of noncommercial or nonprofit development of antibiotics.

As was the case with wartime goods such as rubber and tanks, private companies with federal contracts made penicillin. As was also the case with other wartime goods, the arrangement was an unqualified success. It dramatically increased production, and allocated the antibiotic so as to best serve the war effort.

For penicillin, as with other goods, federal economic controls quickly faded after the war. As the medical historian Scott Podolsky has observed, drugmakers, freed from government restraints, unleashed an avalanche of brand-name antibiotics whose high-powered marketing campaigns encouraged the overuse and misuse of the new medicines.

Interestingly, the Sackler brothers got their start by selling antibiotics. The Sacklers, future owners of Purdue Pharma, were pioneers of medical advertising who abandoned earlier restraints and advised their sales representatives to see physicians as “prey.”

The Veterans Administration and the Public Health Service sought to keep