How Public-Private Partnerships Are Killing Us

regulators, handcuffed, public private partnership
Reading Time: 15 minutes

The FAA’s decision allowing Boeing to do its own safety assessments — while the company president told President Trump that all was fine with the 737 Max — raises serious questions about the effectiveness of regulatory agencies charged with protecting our health and safety.

In another critical public health area, the government has virtually partnered with the pharmaceutical industry to deal with the opioid crisis. It’s a lot like asking the arsonist to help put out the fire he started.

According to Jonathan H. Marks, a bioethicist at the Penn State University, and our guest on this week’s WhoWhatWhy podcast, this is a troubling and dangerous trend that’s become more pronounced in recent years.

He reminds us of how and why the government was so slow to respond to the faulty ignition switches in many GM cars, why exploding gas tanks went unrepaired, why tobacco deaths went unchecked for so long, and why government fails to take climate change seriously.

The reason in each case: The government’s regulatory agencies felt the need to work with business in public-private partnerships. This has cost the lives of thousands.

Marks says much of this was based on the misguided idea that we needed less conflict between the public and private sectors, and that by working together, more could be accomplished. Marks contends nothing could be further from the truth.

He argues that, even in the face of campaign donations and lobbying efforts, conflict between government and corporations needs to be maximized, and that only when companies are profoundly unhappy with the regulators, is it clear that regulators are doing their job. It’s something to think about before getting on a plane, or taking that next prescription.

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Full Text Transcript:

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Jeff Schechtman: Welcome to Radio WhoWhatWhy. I’m Jeff Schechtman. The story of the fox guarding the hen house is one of our most understood and accepted allegories. The recent stories about how the FAA outsourced more and more authority to Boeing to safety check their own systems on the 737 MAX is perhaps the penultimate expression of that. However, there is another more profound area where this is taking place. One, that like flight safety, impacts our health and our public wellbeing. Another case where an industry is both creating a problem and then trying to find a solution. A little like the arsonist, volunteering to help fight the fire.
  The pharmaceutical industry and the opioid crisis stand front and center in the pantheon of ill-advised government and corporate partnerships. A partnership that has so far taken over 200,000 lives. Just how this partnership happened, how it has failed to serve the public and the insidious ways that it has been sold to us are lessons we best quickly heed.
  Understanding this has been the work of my guest, Jonathan Marks. Jonathan Marks is the director of the bioethics program at Penn State University. He’s held fellowships at Harvard, Georgetown and Johns Hopkins. His writings have appeared in The New York Times, The Times of London, The L.A. Times, and in a variety of academic journals. His TED Talk in praise of conflict has well over a million views. And it is my pleasure to welcome Jonathan Marks here to talk about The Perils of Partnership: Industry Influence, Institutional Integrity, and Public Health. Jonathan Marks, thanks so much for joining us here on Radio WhoWhatWhy.
Jonathan Marks: Thank you so much for having me.
Jeff Schechtman: One of the things you talk about is that we often conflate common good with finding common ground. Isn’t it more than that in most of these cases. Isn’t it really about the corporate economics that are at play in many of these situations?
Jonathan Marks: Certainly corporate economics plays a large role, but often the way that relationships between government and industry, between the academy and industry and others are sold to us is on the basis of common ground. The argument is we should do our best to do what’s achievable. That means looking for common ground with industry. And I argue that that’s profoundly problematic because the common ground is not the same as the common good, which is often assumed. So if you want to try and address a problem like the obesity crisis, like the opioid epidemic, partnering with industry, achieving common ground with industry means necessarily putting off the table measures that might solve the problem, but that industry wouldn’t agree to because they see them as being inimical or threatening to their short term commercial interests.
Jeff Schechtman: Isn’t the opposite of that, though, kind of protracted conflict that goes on between regulators and industry, sometimes resulting in more damage being done while the fight continues?
Jonathan Marks: So as I say in the Ted talk, which you highlighted in your intro, it is often assumed that conflict is inherently bad and that compromise is inherently good. And I challenge that. I say no. In the case of conflict, it depends who’s fighting, why they’re fighting and how they are fighting. And compromises can be deeply problematic. Especially when you and I agree to do something that harms other parties that one of us has an obligation to protect. And I argue that the duty of regulators is indeed to remain in relationships of tension, struggle, and sometimes direct conflict with the regulated. If a company isn’t complaining about its regulators, you have to worry about whether it’s regulators are doing their job.
Jeff Schechtman: Does it matter though, that the regulators often are not as effective at telling their story, at communicating with the public?
Jonathan Marks: Well, I think one of the responsibilities of government bodies and the public health agencies and regulators and the like is indeed to communicate effectively about what they are doing. But I think it’s a mistake to conflate public trust and whether or not an agency or regulator is actually fulfilling its mission and purpose. Sometimes we trust institutions that aren’t doing their job and that is problematic. Indeed, you mentioned in your introduction, the recent airline issue and the FAA and Boeing. And if we trusted FAA, and FAA weren’t inspecting aircraft, that’s something to worry about.
Jeff Schechtman: To what extent though, do we often not know what the problem is until it reaches a crisis point? And where does that responsibility lie?
Jonathan Marks: So I have some concerns about the way in which we allow things to descend into crises. And this actually highlights the way in which there’s a tension between what government agencies should be doing and what corporations do. So let me give you an example. A company might say, “Look, pain management is a major problem. We’d like to work on developing a potential pharmacological solution, a new drug, a new opioid. And we’d like you, the government, to partner with us.” Well, that can result in a really acute tension when it transpires that the drug is more addictive or toxic over time than was anticipated and less effective. And that’s where the interests of the drug company diverge from those of a public health agency. But if they’re collaborating, then those concerns are likely to be suppressed. And then you end up with a crisis, when nothing is done until the evidence becomes overwhelming.
  We now are paying attention to the opioid crisis, but this is a crisis that has been two decades in the making. And one of the reasons why it became a crisis is because public health NGOs, physicians, public health agencies had deep relationships with pharmaceutical companies.
Jeff Schechtman: Once the crisis becomes so serious, however, as we’re seeing with the opioid crisis, for example … And even in the case of Boeing and the FAA. At a certain point, does the crisis gets serious enough that to unwind it, it takes the best efforts of both the corporation and the government working together to be able to solve it?
Jonathan Marks: So I certainly think we need to understand what goes on within corporations. But it is not necessary to partner with corporations in order to do that. We can hear from corporations in Senate hearings, in open consultation procedures. They have opportunities there to make representations about what they were doing and why. But that is a far cry from making the claim that it is necessary for government to partner with corporations. And I would argue that it’s this partnership paradigm that has got us into the mess we’re in now. Which is why we have, as you pointed out in your intro, more than 200,000 deaths related to opioids since the late 90s. And why we haven’t had any major successes in relation to another public health challenge, the obesity epidemic.
Jeff Schechtman: And one of the things you talk about is the relationship of the soda industry, for example, regarding the obesity epidemic. Talk about that.
Jonathan Marks: Yeah. So obviously the soda industry wants us to think about their products in a particular way. They want us to think that their products are not responsible for the obesity epidemic. Even though there’s a body of epidemiological evidence that suggests that, even controlling for all other factors, sugar-sweetened beverages play a major role in obesity as a public health challenge. They want us instead to think about personal responsibility. They want us to think of what they call energy balance. In fact, there are commercials funded by the American Beverage Association running on our television stations right now saying, “We hear you, we hear you. It’s all about energy balance. And we’re selling small cans,” and all the rest of it. But these are all damage limitation exercises on the part of the soda industry because I think the tide is beginning to turn for them.
  And what happens is the reason why we end up in crises, is because the business model of most corporations from tobacco through to opioids, airlines and the soda industry is to cast doubt as far as possible on the evidence raising concerns about the health and safety of their products, during which time they continue to reap the profits. And then when the house of cards all comes tumbling down as it often inevitably does, well, they’ve had their billions of dollars in profits in the case of the opioid industry in the interim. And the financial penalties rarely make a dent in the huge profits that these corporations have already made.
Jeff Schechtman: What do we learn from examples where it works well? And I suppose the penultimate example is looking at Johnson and Johnson and the Tylenol episode where the corporate responsibility won the day. Talk a little about that.
Jonathan Marks: So yes, the Johnson and Johnson Tylenol case is often cited as an example of exemplary corporate behavior, where when the company’s product had been tampered with it did not hesitate in terms of pulling it off the market. But there are many, many counter-examples. And indeed, as you will note, the president of Boeing, CEO of Boeing, called up Donald Trump before the planes were pulled from the air in the US and assured the president that he had confidence in his products. He didn’t pull the plug, essentially. And indeed one can see the same practice with General Motors and the faulty ignition. There was an effort to hide rather than to address the problem. But lest we make Johnson and Johnson the paragons of virtue, I should point out that Johnson and Johnson and its subsidiaries are also in the business of manufacturing opioids. And they too are defendants in a number of claims currently being brought in courts all over the country for their problematic marketing practices.
Jeff Schechtman: Is there a danger that if there is not a greater cooperation between regulators and companies, that the companies will be even more insidious in trying to hide problems when they discover them?
Jonathan Marks: So I’m not saying corporations will never do the right thing, but what we need is a regulatory framework to ensure that they do the right thing. And the best argument is not to say, “Well, tension between regulators and companies is going to make companies even more determined to hide what they’re up to.” The best response to that claim as we have to give regulators better powers of oversight so they can ensure if the corporations are in fact doing the right thing and not trying to hide problems. There are huge economic incentives for Boeing to hide problems about the 737 MAX 8. There were huge incentives for the opioid industry to try and downplay concerns about addiction and abuse risks. The only way we can address these powerful economic incentives is to have regulators who are empowered to inspect and have oversight and challenge corporations when they do not act in our best interests.
Jeff Schechtman: Talk a little bit about how we do that in a way in which it seems like regulators are always playing catch up, particularly given the speed at which business moves today.
Jonathan Marks: So one of the problems is that often we don’t think far enough ahead. But the best way of ensuring that that happens is to make sure that regulators are well funded, right? We have, in the US, a culture that sees regulation as somehow inherently problematic, as somehow inherently threatening. And of course we have to tell a more persuasive story about what it is that regulators do. We’ve created corporations to act in their own commercial interests and we should expect them to do so to the full extent of the law. But we need regulators to be guardians of the public good. Regulators need to make sure that we are protected when powerful commercial interests lead corporations to do things that will be harmful to us.
Jeff Schechtman: Of course, the overlay to all of this, which we haven’t talked about yet, is the role that money plays, the role that lobbyists play and that campaign contributions play, with respect to members of Congress in particular. Talk about that.
Jonathan Marks: So what I argue in the book is that we have to look at the broad set of strategies of influence the corporations use. And as I say, we should expect them to engage in strategies of influence to the full extent that the law permits. So to the extent that the law permits lobbying, campaign contributions, public-private partnerships and the like, revolving doors, all these are strategies for corporate influence. But what I argue is that governments need counter-strategies. They need to develop their own systemic plans to insulate themselves from influence. Corporations develop strategies to totally transform the market 10, 20 years out, right? Most of us hold smartphones in our pockets as a result of a corporate strategy. What we need are governments to develop these counter-strategies to ensure that they can insulate themselves from industry influence and do their job, which is to protect the public good, including public health.
Jeff Schechtman: Are regulators, are government capable of doing that, do you believe?
Jonathan Marks: So I do believe they are capable of doing that. And we do see examples of governments doing just that. So if you look, for example, at the state’s attorneys general within the US. They meet regularly, for example, combat the practices of predatory lenders and credit card companies and mortgage companies who are exploiting individuals. They have collaborated and are collaborating in litigation now, against companies who have aggressively marketed opioids while downplaying the risks of addiction and abuse. So there are some good models for governments performing the job.
  But here’s the one thing I would say is that instead of defaulting, as public health agencies often do, to collaborating with industry, the very people who’ve often created or exacerbated the problems that governments are trying to solve, they should instead, as public bodies, be thinking of collaborating with other public bodies. So that would be, as I say, the state’s attorneys general collaborating together, local health authorities collaborating with state and federal authorities and perhaps even with the World Health Organization, to solve problems. So in other words, pooling resources with other entities that have a public mission, that share a goal of protecting the public and the public health and the public good rather than partnering with industries whose mission is obviously to make a profit from the sale of goods and services and make a return for their shareholders.
Jeff Schechtman: Is part of the argument that public-private partnerships in general are problematic, or only when it involves regulation that concerns health and safety?
Jonathan Marks: So I focus on examples in the public health domain, but I think we need to think more critically about the public-private partnership paradigm more broadly, and where the benefits and the burdens of this practice tend to fall. And I don’t particularly work on this, but I have colleagues who work on public transportation infrastructure and agreements in which many of the burdens fall on the public partner and the profits fall on the shoulders of the private partner. But I think in the area that I’ve focused on in public health, there’s a compelling case for saying the paradigm should be arm’s length relationships from corporate actors with an extremely compelling case being made for anything other than that. Rather than the current situation, which is a default of partnership. And I think that default is deeply problematic. If public health agencies and regulators intend to protect both their integrity and their reputation, they’re going to have to make a compelling argument as to why these relationships are necessary. And in my view, they cannot justify that as a default practice.
Jeff Schechtman: Is there an important role though, that the corporate sector can play in this process? Rather than just being the subject of regulators.
Jonathan Marks: So look, as I say, and I also wrote an addition to the book, a recent article in The Conversation, which is picked up by Salon and others. And I was talking about the opioid crisis in that piece. And it’s clear that we need a richer set of tools to address the public health problem of pain management. And I don’t deny that some corporations might be responsible for developing pharmacological interventions, new drugs that are less problematic than the existing body of drugs, that might help address chronic pain management. But that’s a very different story from saying that government should be partnering with these entities.
  On the contrary, what we want is government to be in the position to ensure that when pharmaceutical companies make claims about the efficacy of their new products, that those claims are indeed justifiable. And that the drug is as effective as the companies say. And the drug is as safe as the companies say. And that can only be done by public health agencies when they assume the mantle of a regulator rather than partner. And my other worry about partnering with, say, the pharmaceutical company and trying to solve the obesity epidemic, is the focus becomes on more drugs. But more drugs to combat people who’ve already developed opioid addiction. More drugs, supposedly less addictive than the existing ones. But if we really want to address pain management and the opioid epidemic, we have to look at all potential solutions, including those that do not involve pharmaceuticals.
Jeff Schechtman: Why has it been so difficult for this message to reach the public, even in spite of 200,000 plus deaths, even in spite of the reporting recently with respect to Boeing and the 737. Why is it so hard for this message to reach the public, do you think?
Jonathan Marks: I think one of the reasons is that people just don’t see it. In the book I begin with a little parable from David Foster Wallace’s commencement address at Kenyon College, where two fish are swimming in the water. And an old fish swims by and says, “Morning boys, how’s the water?” And they just smile nervously and wait until the old fish has swum off. And then one young fish turns to the other and says, “What’s water?” The partnership paradigm is the water that policymakers have learned to swim in. Many of them have not seen it as problematic. The purpose of my book is to flag why it’s problematic and to explain why it’s problematic. But also there are clearly other policymakers that see that it’s problematic, but they feel they can’t do anything about it. So they take the money from industry to great public acclaim and celebration and then keep their reservations to themselves. And I’m arguing the time has come to be honest and public about the reservations and concerns that these kinds of relationships should legitimately generate.
Jeff Schechtman: Is there value in the way in which corporations – I mean, we could use the soda industry as an example – at least help call attention to a problem even if they’re not doing anything to solve it.
Jonathan Marks: Well, I think we have to be very wary about how corporations frame the problem. So I’ve heard people from the soda industry say, “Well, none of us want our children to be obese, but really it’s a problem of energy balance. Calories in, calories out.” So that’s a framing that is very favorable to the interests of their industry. I think what we have to be very wary about is ensuring that our public health problems and solutions are not framed simply in ways that are compatible with the interest of corporate actors. If we’re serious about tackling obesity, we have to recognize that it is a problem that involves a number of major food companies and soda companies and the food system and the way in which their commercial practices are shaping the food system. And if we leave it up to companies to flag problems, those problems are going to be framed in ways that are not threatening to their commercial interests.
Jeff Schechtman: Would you argue that the same problem has been taking place for years with respect to the oil and gas and energy industry and climate change?
Jonathan Marks: Absolutely. And you can see the same sort of practices across a variety of sectors from oil and gas to food and soda to pharmaceuticals. They give money to community organizations. In the case of pharmaceutical companies, to patient advocacy groups and the like. They basically cultivate goodwill at the grassroots in order to diffuse criticism of corporate practices. They fund research in order to cast doubt on public health concerns or environmental concerns about the nature of the practices. So yes, we see these practices across a multiplicity of sectors and there are people like David Michaels in his book, Doubt Is Their Product, that show these practices across a variety of sectors from energy, oil and gas on the one hand, through to pharma, tobacco, food and soda on the other.
Jeff Schechtman: Jonathan Marks, The Perils of Partnership: Industry Influence, Institutional Integrity, and Public Health. Jonathan, I thank you so much for spending time with us.
Jonathan Marks: Thank you so much for having me. It’s been a pleasure.
Jeff Schechtman: Thank you. And thank you for listening and for joining us here on Radio WhoWhatWhy. I hope you join us next week for another Radio WhoWhatWhy Podcast. I’m Jeff Schechtman. If you liked this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.

Related front page panorama photo credit: Adapted by WhoWhatWhy from OpenClipart-Vectors / Pixabay, FDA / Wikimedia, FAA / Wikimedia, DHS / Wikmedia, and EPA / Wikimedia.

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2 responses to “How Public-Private Partnerships Are Killing Us”

  1. Steve says:

    In the industry I most report on, broadband, partnerships between small privately owned carriers and the communities they serve are common. They offer real competition to national carriers, and do not have to meet Wall Street profit goals. Often they are the only way a community can be served. But the deals require strong prenups and careful modeling ahead of time to negotiate on an equal footing. A gaggle of truly public-interest organizations has grown up to help.

  2. a.hall says:

    Here in the UK we have our Tory/ Gordon Brown PFI (Private Finance Initiative) where the Government and Private Finance combine to rip off the taxpayer with inflated maintainance contracts for schools, colleges and hospitals. These PFI contracts do not appear on the Chancellor of the Exchequer`s Budget. They are under-the-counter deals registered in tax havens. The initial iartners quickly sold on their contracts to their buddies in the City of London.