Deadly Prices – How Big Pharma Feeds Inequality in Europe

She is only three years old, but the process is as routine as if she had done it thousands of times before. On this far too warm spring day, Milda, a little girl with a short ponytail, puts on the pink waistcoat, which looks like a life jacket, without much grumbling. And somehow it saves Milda.

The girl sits down on the white chair in the kitchen-living room of a terraced house in Klaipėda, a harbour town on the Baltic coast of Lithuania. She puts her inhaler over her mouth and nose. “Shaky, shaky?” asks Urté Gyliené, her mother. Milda nods. It’s time to get the mucus out of her lungs. Milda skilfully closes the fastenings.

You have to imagine what happens next as if the girl is sitting on a jackhammer: the waistcoat is filled with air in bursts by a generator and Milda is shaken to the core. Her whole body shakes, her head, chest and legs. For half an hour, until she coughs vigorously. That was it. The phlegm is out. This happens every morning, before nursery, and every evening, before bedtime. 

Milda has a serious hereditary disease called cystic fibrosis. CF for short. Due to a genetic defect, thick mucus forms which is difficult to remove. This leads to constant infections – with viruses, bacteria and fungi. Milda will only just reach adulthood, the doctors said when the disease was diagnosed. 

In Lithuania, where Milda and her parents live, children with CF only live to the age of 18 on average. By then, the lungs are usually so damaged due to the constant infections that they can no longer breathe properly, and only a transplant can help.

Or, in fact, one medicine. 

It’s called Kaftrio and has been authorised in the European Union since summer 2020. Only Milda doesn’t get it.

The life expectancy of patients with CF has increased significantly in countries where Kaftrio is available. “Not giving this drug costs patients an average of 20 years of life,” says Carsten Schwarz, Medical Director of the Cystic Fibrosis Centre at Klinikum West-Brandenburg. “It drives you crazy when you find out that other countries have such wonderful medicines and you are left behind,” says Milda’s mother.

Kaftrio is still not available on prescription in Lithuania. The US company Vertex from Boston, the only manufacturer of so-called CFTR modulators such as Kaftrio, is demanding a price that the health authorities in Vilnius are unable or unwilling to pay. The government currently estimates the annual costs per patient at 175,000 euros. Too much.

“Where you live should not determine whether you live or die,” said EU Health Commissioner Stella Kyriakides last year. All patients in the EU should have “early and equal access to effective medicines”. Süddeutsche Zeitung, NDR and WDR, together with the journalists’ cooperative Investigate Europe, have investigated the fact that this is still just a pious wish. The reporters spoke to people who get even the most expensive medicines on prescription – and to those who have had to leave their home country, go to court or, like Milda, have to wait a long time for them.

It’s all about secret pricing and the political influence of the world’s most lucrative industry. According to a 2021 analysis by international management consultancy EY, pharmaceutical companies achieve an average return on sales of more than 25 percent – no other industry achieves more. 

Every important medicine that exists in one EU country could actually be available in all member states. This is because new medicines in certain categories are tested and authorised centrally by the European Medicines Agency (EMA) in Amsterdam. However, each country has to negotiate individually with the manufacturers whether and at what price these medicines are then sold in pharmacies in the individual countries – and the prices usually remain secret. This gives the pharmaceutical companies enormous power; they can set the price as high as they want each time. 

Illustration: Alexia Barakou

In fact, innovative, patent-protected drugs are becoming increasingly expensive. The manufacturers of gene therapy drugs such as Zolgensma for spinal muscular atrophy or Zynteglo for sickle cell anaemia charge around two million euros per treatment. Hemgenix, used to treat haemophilia, is currently the most expensive drug in the world, costing 3.5 million euros per dose.

The EU Parliament’s scientific service recently wrote that this practice “imposes costs on society in the form of reduced access to medicines, higher prices, poorer health outcomes, a greater need for care and a higher risk of mortality”. This is because if a country’s healthcare system cannot or will not pay the required price, patients there do not receive the best available medicine, or only many years later when patent protection has expired or there are competing drugs. Such drugs are protected from copycat products for eight years.

The flaw in the system: poor countries pay more than rich ones

A research team from SZ, NDR, WDR and Investigate Europe has now succeeded in providing a plausible estimate of the price of CFTR modulators such as Kaftrio, which are so important for cystic fibrosis patients, in nine EU countries. The reporters put together pieces of the puzzle from Vertex’s sales data, data from health insurance companies, purchasing documents, hospital audit reports and patient numbers. The results show publicly for the first time that smaller and poorer countries sometimes pay much more than wealthier countries – and how often the medicines are not available at all in such countries.

More than 180 new medicines were authorised in the EU between 2019 and 2023, but most of them differ only slightly from those that already exist. However, some of the new substances actually have a major additional therapeutic benefit that significantly improves the treatment of diseases. Together with the Cologne Institute for Quality and Efficiency in Health Care (IQWiG), the team of reporters identified 32 drugs for which this applies. IQWiG regularly determines the additional benefit of new drugs and its analyses form the basis for price negotiations between health insurance companies and pharmaceutical companies in Germany. These 32 important medicines include new drugs for cancer, migraines, diabetes, skin diseases and the CF drug Kaftrio, which Milda’s parents in Klaipėda, Lithuania, would like to have reimbursed in order to prolong their daughter’s life. 

Urté Gyliené remembers the exact day when a genetic test revealed that Milda had CF. It was her own birthday, after which she just cried. She and her husband had been trying in vain to have a child for six years. Milda seemed to be a healthy baby in the first few months of her life – until she didn’t recover well from a coronavirus infection. The whole family was infected with Covid-19 in autumn 2020. Everyone soon recovered, but Milda didn’t stop coughing. Then came the diagnosis.

The congenital genetic defect only becomes a problem if a child happens to inherit the disease from both parents. The risk for Milda was one in four. “We were really unlucky,” says Urté Gyliené and quickly adds: “But of course we are still very lucky to have Milda.”

Theoretically, they could also buy Kaftrio for their daughter privately, with a doctor’s prescription from a pharmacy abroad. But they can’t afford that, even though Milda’s father works as a surgeon and her mother works for a marketing agency. It would cost 17,000 euros a month. And in Lithuania, people only earn about half as much as in Germany. Milda’s family has therefore already considered moving to another EU country where Kaftrio is reimbursed. “This is a progressive disease, it gets worse and worse over the years,” says her mother. “My greatest fear is that Milda will suffer and die in my arms.” 

Lithuania, with a population of around 2.8 million, has been part of the EU for ten years. Anyone travelling to this country can still sense a hint of the former Soviet Union, the wide streets, the many flag holders on the houses. The euro has been in force since 2015, which is reflected in the standard of living, for example in the BMWs and Porsches that drive along the cobbled streets of Klaipėda’s old town. But when it comes to access to medicines, the European Union is far, far away. 

When asked, Julijanas Gališanskis from the Lithuanian Ministry of Health confirmed that nine of the 32 drugs on the IQWiG list are missing in Lithuania. The Lithuanian government is currently negotiating the price of a small number of them with the pharmaceutical companies, for example Kaftrio, which Milda so urgently needs. For most of the missing drugs, the companies have not even submitted an application for reimbursement in Lithuania. 

Not only in Lithuania, but in many EU countries important medicines are missing, as research by SZ, NDR, WDR and Investigate Europe shows. According to the research, only in two EU countries, Germany and Austria, are all 32 medicines available. In the Baltic states, around ten are not available. Almost half are missing in Cyprus and as many as 25 are missing in Hungary, where patients in need can apply for reimbursement individually; 25,000 patients tried to do so in 2022. Every tenth application was rejected.

Monika Luty, 27, from Poland, has even changed her whole life for this reason. Like Milda Gyliené, she suffers from CF. Four years ago, her condition worsened dramatically, her lung capacity was only 20 per cent and the young woman weighed 23 kilograms at the time. Monika Luty posted a video online in which she pleaded with the manufacturer Vertex for Kaftrio, which was not available in Poland at the time. “Although I lived in the EU, I was discriminated against because I wasn’t German or of a different nationality,” she says.

With the help of her friends, Luty raised 200,000 euros via crowdfunding and her father sold his car. This enabled her to pay for Kaftrio herself. When she saw how much better she felt with this therapy, she moved to Frankfurt, worked in an office there and from then on received Kaftrio on prescription. “I cried because it was so easy,” she says. However, she also suffered from depression during the therapy, which is a known side effect of the drug. Luty now lives in Poland again, where CFTR modulators are now reimbursed. Would she have made it through the crucial years without Kaftrio? Monika Luty doesn’t know.

According to the research, in Romania alone, six highly effective cancer drugs that have been newly authorised in the EU since 2019 are either not reimbursed by the national health insurance fund or only reimbursed to a very limited extent, i.e. not for all types of cancer for which they have long been used in other countries – too expensive. The government in Bucharest has rejected the demand to double the drug budget, citing the national budget. 

Not everyone knows that you can sue the healthcare system

Bogdan Radu, who does not want to speak publicly about his illness under his real name, can tell us what this means. The businessman, 39, joins us via video from Romania. Radu, short beard, striped shirt, sits in an open-plan office, he travels a lot for work and is now able to do so again.

At the end of 2019, doctors diagnosed him with colon cancer. After surgery and chemotherapy, immunotherapy with the drug Keytruda would have significantly improved his chances. But while this antibody, which targets the body’s own immune cells against the cancer, is the best-selling drug in the world, Radu’s doctor was unable to prescribe it to him. And Radu could not afford the treatment privately; he would have had to pay 2,300 euros every three weeks for two years. 

In the summer of 2023, metastases appeared in his liver and Radu’s life was at risk. The engineer has two children, who are now eleven and four years old. “I wasn’t allowed to die,” he says, “I had to live at least another ten years to see my children grow up.” He seems surprisingly calm as he says this. “I’m an optimist, I always think there’s still an option.”

He hired a lawyer. Oncologist and head of Romania’s national cancer commission, Michael Schenker, says that more and more patients are taking their doctors to court to get the cost of prescribed drugs reimbursed by the national health insurance fund. In 2023 alone, more than a thousand cancer patients successfully went to court and the state had to provide them with the medication because it could demonstrably help them. Bogdan Radu also won.

He has been receiving Keytruda on prescription for a year now. The metastases have shrunk. Radu knows that his chances would have been better if he had been given the medication from the start, but he also knows that many Romanians don’t manage what he has achieved. You have to find the right lawyer and have the courage to fight not only against the disease, but also against the healthcare system. “I’m young, I work in an international company, I speak English, I know how to get information,” he says, “others can’t do that.”

However, the problem is not only that each EU country has to negotiate the price of important medicines itself, but also how this is done.

The pharmaceutical companies pressurise the negotiators of the national health authorities and health insurance funds to sign confidentiality agreements about the content of the discount contracts, known in industry jargon as “managed entry agreements” – meaning that the prices actually negotiated remain secret. Francis Arickx, Head of the Pharmaceutical Policy Directorate at the Belgian state health insurance organisation, gives a vivid description of how this works. “I have conducted a good hundred such negotiations,” he says. “I sat at the table with two colleagues opposite a delegation from the company in question with a whole team of lawyers. It feels threatening and is also somehow theatre.” 

This means that companies can grant large countries with many patients high discounts without the other countries finding out about it – and pay much more money. Or the large countries pay high prices because they can afford them – but these are unaffordable for poorer countries in the EU. 

In the case of Milda’s disease CF, France paid around 71,000 euros net per year for each patient treated with CFTR modulators in 2022, according to the research. In Italy it was 81,000 euros, in the Netherlands 88,000 euros. This is significantly less than the healthcare systems in Poland (112,000 euros) and the Czech Republic (140,000 euros), for example, had to pay in 2022. Even if taxes are possibly included in the Eastern European prices, the price is immense compared to the richer Western European countries. Due to the secrecy between manufacturers and national health authorities, the extent of the disparity in Europe was not previously known. 

Germany is the only country that makes the reimbursement price public: After deducting VAT and a statutory discount of twelve per cent, which the manufacturers have to pay, a Kaftrio patient cost the health insurance funds around 156,000 euros in 2022. This sum is also confirmed by the AOK Federal Association. 

On request, Vertex states that the price estimates for the countries mentioned are “incorrect”, but the manufacturer itself does not want to name any prices. In general, the company states: “Reimbursement prices are not set unilaterally by the manufacturer, but are agreed confidentially with the health authorities in each country.” They are based on “their innovation and the value they bring to the cystic fibrosis community, carers and healthcare systems”. In addition, the revenue from such medicines “funds our ongoing research into other serious diseases”.

Illustration: Alexia Barakou

Pharmacist Martin Hug knows all about the burdens of the healthcare system – and those of patients. He manages the pharmacy at the University Medical Centre in Freiburg and has two daughters with CF himself. 

Hug welcomes us to his flat in a Freiburg suburb for an interview. Since he became head of the hospital pharmacy twelve years ago, the cost of medicines has more than quadrupled, while the number of prescriptions has only risen slightly, says Hug. 

Although he was surprised by the development, he does not believe in “demonising the pharmaceutical industry”, as he calls it. Without their innovations, many patients would be worse off. New drugs for rare diseases in particular may be expensive, but they are life-changing. Emphasising this is important to him, and when he talks about it, he leans forward on the wooden table in his living room as if to push his words. 

Like Milda in Lithuania, Hug’s daughters were also diagnosed with cystic fibrosis as babies; both would probably not have reached adulthood according to the medical standards of the time. They have now been adults for a long time and are living well with the disease. Family photos and colourful drawings hang on the wall in Hug’s flat, where he himself grew up. 

The younger of the two daughters, Maria Hug, sits opposite her father and watches him closely as he talks about the medical details that she knows only too well. She is 27, wears a striped jumper and large round glasses and is currently doing her Master’s degree in cultural studies. 

She has been taking Kaftrio for one and a half years and its predecessor Kalydeco for more than ten years. Today, both medications are usually prescribed together, one is taken in the morning, the other in the evening, because they complement each other in their mode of action. 

Back in the 1990s, the average life expectancy for cystic fibrosis sufferers increased slightly almost every year – even without new medication. Back then, the father remembers, it was said that you could even live to be thirty with cystic fibrosis. But since the company Vertex launched its CFTR modulators on the market, the curve has been rising steeply. In Germany, the life expectancy for CF patients is now 60 years.

Maria Hug has already gone through some “difficult phases” with her illness. Her lungs were so damaged that she would have needed a lung transplant sooner or later without the new medication – the only question is whether she would have received a donor organ in time. And this treatment would also have been expensive, Martin Hug points out. This is often the case with new drugs whose prices seem fantastic at first: you always have to consider how much money would be saved elsewhere. 

Maria Hug used to have severe coughing fits every few minutes. She still keeps a mug on her bedside table to get rid of the phlegm at night. Back then, it was always full in the morning, but now it’s just a dust catcher. “If I work on myself now, do sport and eat right, I actually get fitter and don’t just stay the same,” says Maria Hug and smiles. Her everyday life is no longer determined by the illness: “Suddenly your life is in front of you.”

She has been very lucky, she says, lucky to have two pharmacist parents who know their stuff. And lucky to live in a country where new medicines are reimbursed by the health insurance: “A huge privilege.”

Sharp criticism of planned changes to the law in Germany

This is due to the very special role that Germany plays in the complicated structure of authorisation and pricing on the European pharmaceutical market. Unlike everywhere else in the EU, German legislation guarantees pharmaceutical manufacturers that the statutory health insurance funds initially purchase every drug authorised by the European Medicines Agency (EMA) at the manufacturer’s list price. Only after one year do the experts at IQWiG in Cologne examine on behalf of the health insurance funds whether an additional medical benefit can actually be proven for the drugs. If this is the case, the health insurance funds negotiate the value of the additional benefit with the manufacturers – and a possible discount from the so-called list price demanded up to that point. In the event of a dispute, an arbitration board with equal representation decides, as the law in Germany requires that patients can obtain such effective medicines on prescription in any case. In the end, patients pay – even if the price is very high.

Only if the alleged innovation does not offer any major additional benefit, i.e. it is possibly only a sham innovation, does the price automatically fall to 90 per cent of the price of the comparable therapy. 

Germany also has another special feature compared to other EU countries: The final negotiated price that the health insurance funds pay for a medicine, the so-called reimbursement amount, can be viewed by experts. This should help doctors and hospitals to act economically. And for the other states, the prices they have learnt from Germany so far have been a kind of upper limit for their own negotiations with pharmaceutical manufacturers. 

But that could change soon. 

This is because the German government is currently planning to join the “secret prices” that are common in the EU. The pharmaceutical industry lobby has been pushing for this for a long time. However, seven years ago, when the former health minister Hermann Gröhe from the CDU wanted to overturn transparency in the grand coalition, an SPD health politician named Karl Lauterbach said: “We are living in a time when we need more transparency because both doctors and patients have a right to know the prices of prescribed medicines.” 

Illustration: Alexia Barakou

Today, Lauterbach himself is Minister of Health, and apparently he has had a change of heart. He receives the research team for an interview at the ministry in Berlin. Back then, Lauterbach says, he had hoped “that other countries would publicise the price like we did”, but that didn’t happen. That is why he is now also in favour of secret prices. The minister hopes that this will lead to higher discounts, as the prices for medicines in Germany are currently higher than in any other comparable country. Lauterbach believes that the pharmaceutical industry in Germany, despite its large market, gives so few discounts on its medicines so that other countries do not demand similarly high discounts with reference to Germany. “But we can’t be the paymaster for everyone else,” he says. 

Josef Hecken (CDU) was once Minister of Health in Saarland, but that was a long time ago. Today, he is chairman of the Federal Joint Committee, which decides on the entitlements of people with statutory health insurance. Like the health insurance companies and many doctors’ associations, Hecken, 64, does not have a good word to say about the plans of the traffic light government to maintain secrecy. There is “no economic rationale” for this, he says in an interview with the research team. If nobody knows the prices for new medicines, doctors can no longer prescribe economically because they don’t know which new medicine is the cheaper one, says Hecken. The discounts that Lauterbach is hoping for are in any case “a groundless promise for which there is no evidence”. And they would be immediately cancelled out by the disadvantages of secret pricing.

Former Cypriot Health Minister George Pamboridis says that the secret contracts enable “the industry to abuse its position of power over its customers, the states”. The pharmaceutical companies would play the EU countries off against each other “by locking us in separate rooms”. A small country like Cyprus is being put at a particular disadvantage. When he was a minister, he learnt on the quiet that his health insurance fund “paid double, triple or even five times the prices of other countries”. If medicines are marketed in Cyprus at all: Only in Malta and Hungary are even fewer new medicines regularly available.

In its response to the research team’s enquiry, the Kaftrio manufacturer Vertex also admits that one of several factors in price negotiations with countries is “a country’s ability to finance innovative medicines”. So you have to be able to afford it. 

Milda has now had enough of her vibrating waistcoat in the large living/dining room of the terraced house in Klaipėda. It’s only been 20 minutes when she says she has to go to the toilet. Urté Gyliené is stung by this, she wants to do everything as well as possible, to protect her daughter’s lungs as much as possible. Nevertheless, she cancels the procedure, knowing that she mustn’t put too much pressure on Milda so that she can do well again tomorrow.

Urté Gyliené is fighting with all her might to ensure that her daughter receives Kaftrio before her lungs are so scarred that Milda can barely breathe. She is involved in the self-help organisation “Right to Breathe”, an international association of CF sufferers from all over the world. A few months ago, they travelled to the Vertex headquarters in Boston, released black balloons into the sky and distributed dollars stained with red paint in the reception hall. How many more billions do you need, they asked. What are our children’s lives worth? 

Patients outside the EU also have to fight to be provided with the best available medicines. In the post-Brexit UK, an online petition is underway to prevent the state healthcare system there from removing Kaftrio from the list of reimbursable preparations as planned in order to save money.

The production costs of Kaftrio are only 4 per cent of the sales price. In 2023, Vertex spent around 400 million US dollars to produce the drugs, which the company then sold for 9.8 billion dollars. If Kaftrio were sold for 5,600 dollars per year per patient, it would still be profitable, according to calculations by pharmacologist Andrew Hill from the University of Liverpool, a consultant to the World Health Organisation (WHO). He finds it “outrageous” that the pharmaceutical company negotiates so doggedly over prices and “lets children die” in the process. But Vertex has a monopoly, “so a country only has the choice of buying the drug at the Vertex price or getting nothing, so the children suffer”. 

If the EU acted as a community, corporations would not be able to threaten individual countries

Companies often argue that research costs are high, and by no means every drug is a success. When asked, Vertex (most recent annual turnover of around 10 billion dollars, net profit of 3.6 billion dollars) states that it has invested more than 70 per cent of its operating costs in research and development over the past ten years, with a total of 10 billion dollars being invested in cystic fibrosis research alone. When asked, Vertex also described the stated production costs as “inaccurate”. 

Illustration: Alexia Barakou

In the case of the CFTR modulators, the initial research apparently did not even come from Vertex itself. Rather, the American Cystic Fibrosis Foundation, a non-profit organisation, raised money and used it to support a small biotech company called Aurora. A year later, in 2001, Vertex bought Aurora. “First the taxpayers pay for the invention of new therapeutic approaches, but then we force the inventors to obtain the capital for further commercial development from a kind of mafia that demands extreme returns,” says Anja Schiel, who helps decide the value and reimbursement of new drugs for the regulatory authority in Norway. 

Vertex, on the other hand, states that “all of our approved cystic fibrosis drugs were discovered and developed by Vertex in Vertex laboratories”.

A number of companies are clearly not interested in making their drugs widely available, as the analyses by SZ, NDR, WDR and Investigate Europe show. For example, the cancer drug Breyanzi from the US pharmaceutical company Bristol Myers Squibb is not available in 17 of the 25 countries analysed, tumour patients in 13 EU countries are waiting in vain for the cancer drug Empliciti from the same company, and the breast cancer drug Talzena from Pfizer, of which a pack of 30 tablets costs 1800 euros, is not available to patients in twelve EU countries.

A spokesperson for the European Federation of Pharmaceutical Industries and Associations (Efpia) said in response to an enquiry that there is a “consensus that prices should be based on a country’s ability to pay”. The “reasons for unavailability and delays” are “slow regulatory procedures” and “delays in reimbursement of a new medicine and local decisions by healthcare providers”. When “prices are higher” than “perceived value or affordability”, there is “inevitably a delay in negotiating the price.” 

The solution would be obvious: the EU could, like a real community, negotiate the prices for medicines protected from competition by patents centrally for the entire EU. It would have the market power with its 450 million inhabitants in mostly successful economies, and during the coronavirus pandemic, the EU has done exactly that when procuring vaccines. Until now, pharmaceutical companies have always been able to threaten individual countries with not supplying them if their health authorities do not pay the prices demanded. But the pharmaceutical industry could not afford to stop selling its medicines in the world’s largest single market altogether. 

Urté Gyliené hopes that her daughter will not have to rely solely on the power of the shaking waistcoat in future. The negotiations between the Lithuanian authorities and Vertex could soon be finalised, in which case Milda would also have the chance to get Kaftrio. Her mother says: “Every child in Europe equally deserves a long and happy life.”

*

Editor’s note: Investigate Europe is a non-profit co-operative of journalists from eleven countries who research together and publish the results throughout Europe. Investigate Europe is financially supported by foundations, private donors and readers. These include: Adessium Foundation, Fritt Ord, GLS Treuhand, IJ4EU, Journalismfund Europe, Open Society Foundation, Reva & David Logan Foundation, Rudolf Augstein Foundation, Schöpflin Foundation, Hübner & Kennedy Foundation.

In addition to SZ, WDR and NDR, the Standard in Austria, EU Observer and Alternative Economiques in Belgium, Investigace in the Czech Republic, Eesti Ekspress in Estonia, YLE in Finland, Mediapart and ARTE in France, Reporters United in Greece also report on research into pharmaceutical prices, Partizán in Hungary, The Journal in Ireland, Il Fatto Quotidiano in Italy, Klassekampen in Norway, Delfi in Latvia, 15 min in Lithuania, Gazeta Wyborcza in Poland, RTP in Portugal, Snoop in Romania, Investigative Centre of Jan Kuciak in Slovakia, InfoLibre in Spain and Open Democracy in the UK.

Additional Credits:

A full list of all articles published under this investigation can be found on the groups’ Laureate page.

From Child Labour in the Mines – To Your Electric Car

The original publication of the project is embedded below. Underneath, find the full text.

Gothenburg, Sweden

The hum of voices is rising at the eCar expo in Gothenburg. The future is on full display, radiating an almost magnetic glow.

Smart utility vehicles jostle for space alongside visionary concept vehicles. Established brands undergoing transformation stand next to new ones whose names people have barely learned.

Buzzwords are thrown at visitors:

Innovation

Technology

Sustainability

POLAROID BOX

eCar Expo
Gothenburg, Sweden

People queue to get their hands on the wheel and breathe in the new car scent. Sales reps answer questions about electric performance and acceleration.

But no one talks about the minerals.

END POLAROID BOX

POLAROID BOX

Mica Mines

Bevia, Madagascar

We travel to Madagascar, where 13-year-old Laha and other children mine the mica essential to the electric vehicle industry.

END POLAROID BOX

There is a zero point where the story begins—beyond the winding road through the thickets of cacti.

Across the sandbanks to an almost dried-up river, at the foot of a low mountain rising like a shadow over a scorched plain.

6,054 miles from Gothenburg. 24º56’ south on the map, 46º24’ east. This is where our investigation begins.

The mine shaft glistens below, as if it were a wishing well.

Tiny shimmering particles are stirred up in the wind. They cling like fairy dust to the children.

The mineral they extract is part of the green transition meant to make the world sustainable, yet none of them will have enough to eat tonight.

His voice is high-pitched, his collarbones protrude under his skin. Laha Varivahtse is thirteen years old but looks more like eight.

Now he pulls on the orange headlamp he shares with his siblings – the only equipment they have besides a hammer and a chisel.

Without gloves or a helmet, wearing only a tattered shirt torn by the jagged rock walls, he climbs down into the narrow mine shaft.

“I have to work. Otherwise, we starve to death,” he says.

His bare feet brace against the walls of the hole. He lowers himself down, crawls into the passage, and lets the darkness swallow him.

In recent years, the global hunt for raw materials has intensified. Country after country is being scoured for cobalt, lithium, nickel, manganese, and other minerals necessary for the green transition.

From countries like the Democratic Republic of Congo, come urgent warnings about how the extraction of battery minerals leads to forced labour and people displacement. Meanwhile, back home, the EU drafts laws and compiles lists to secure our supply.

But beyond these critical lists is a mineral of the future that few know about.

A shiny rock, with an almost magical ability to insulate electricity.

Mica, as the mineral is known, is made up of thin aluminium silicates that can be split into sheets. It has long been used in everything from car paint to glossy makeup. It is also found in many everyday items like toasters, coffee makers, and microwaves. 

But it’s the electric car boom that has seen demand for mica insulation explode, driving billions in sales every year.

Each vehicle uses about 10 kilograms. The mica surrounds the battery and prevents it from catching fire.

It is there as a protective shield.

We follow Laha down. The temperature rises while the oxygen level drops. 

After just a few metres, it becomes harder to breathe.

“Sometimes we faint at the bottom,” says Laha.

The rock scrapes against our arms. The dust is everywhere.

As an adult, it is impossible to go deeper. But Laha’s small body can continue. He follows the bluish glow of his headlamp toward the extraction point: about ten metres down into the bedrock and twenty metres sideways.

He has been working here for three years. But Laha remembers another life. How it was before the disaster. 

We count about fifty workers, of which about thirty are children. 

That’s not counting the youngest, the four- and five-year-olds who walk around on the ground looking for pebbles. They all come from the neighbouring village of Bevia.

Strangers are rarely allowed into the mines. But we’ve made contact with a man with family ties here who has organised a special invitation.

The grown men of the village held a ceremony under the big tamarind tree and emptied a small bottle of liquor over the trunk.

They have offered a few welcoming words and expressed hope that our visit might help break the hard times.

Now, we are accepted and free to move around.

The older children chip away at the mica, embedded in the bedrock by the harder stone, calcite.

Malala Vahos, 11, and her older sister Zotontsoaés, 14, have an equally gruelling task. They must descend to the mine’s deepest point, gather the stones, and haul them back up to the surface.

Malala presses a hand to her neck.

“You have to crawl in such an awkward position. Your whole body tenses up, and your back hurts so much,” she says. 

Maybe this is a lucky day after all.

On the way here this morning, she shot a small kibo bird with her slingshot. She holds her fingers tightly around its beak.

The bird rests in her hand without trying to fly away. In a few hours, it will be the family’s lunch.

But for now, Malala must go back down into the mine. She hands the kibo to Sahiratsoaré, 7, who, along with Lydiane, 6, is busy sorting mica stones on the ground, and gives her bravest smile:

“Keep an eye on it now!”

Laha Varivahtse emerges again. Out of breath, with a layer of dust covering his sweaty skin.

He takes a few sips of water and looks out over the mining area, a collection of pits along the slope without any form of fencing.

His eyes are dull and vacant. His empty stomach is taking its toll. All he has eaten in the past day is boiled cassava leaves and cactus fruit.

Laha sinks to the ground, points to his mouth, and says kere.

Hunger. Starvation.

It is the most common word here.

We ask the village elder, Friagna Maka, 60, when they last had enough to eat.

“Six years ago, before kere.” 

Laha and the other children do not know that the mineral they mine is used in electric cars. They have barely seen a fossil-fuel-powered vehicle, apart from the buyer’s truck and the occasional UN jeep.

Laha’s thoughts go to the change that caused the famine.

His fingers snap a small piece of mica.

“If only we had enough food like before, we would have the strength to dig more…”

Six years ago, the rains stopped falling in southern Madagascar. It became dry. Completely dry.

The baobab trees withered. The fields turned into unusable sand. The zebu cattle died of thirst.

The people in Laha’s village survived on cactus fruit. In the end, when things were at their worst, they ate the thorny leaves too.

By the summer of 2021, more than a million people were without food.

Other famines in modern times have been triggered by wars and conflicts. This was the first one where global warming was the main cause, according to the UN.

The tourists we met on the domestic flight from the capital were, like most other visitors, unaware of what had happened, that the green island had turned yellow and brown.

That the holiday paradise had, from one high season to the next, become something else.

The site of the world’s first climate-induced famine.

Laha’s father hands over a cactus fruit. It is bright red like a pomegranate but sour and full of seeds.

The juice stains their mouths, making the children laugh for a moment, but soon the excitement fades.

Tear-filled eyes lock onto us.

Why have we really come here, to their remote village?

Before kere, the villagers lived off the land. They grew beans and corn, sweet potatoes and watermelon. They harvested enough to feed everyone and still had leftovers to take cartloads with their zebu cattle to the market in Amboasary, seventeen kilometres away.

In the second year without rain, a man came to the village and said:

“There is money in the mountain.”

The elders in the village knew that there had once been a mine here during French rule in the 1950s.

On-site, they found abandoned tools, hammers, and chisels. With empty stomachs, they started mining.

Dull hammering sounds rise from the mines.

The sun burns, the mica glistens like shattered glass.

The capital is a three-day bumpy bus ride away. Laha’s village may seem isolated, but nothing happens in a vacuum.

The rich world bears the main responsibility for the drought here, through its emissions. And the same rich world now drives people underground, in the hunt for minerals.

Over the past ten years, mica sales from Madagascar have increased fivefold.

Low prices have meant that for certain types, Madagascar has even surpassed the former largest exporter, India. Almost all of it ends up in China.

In 2023, for the first time, an electric car—Tesla Model Y—was the best-selling car model in the world. Yet this is only the beginning; in the coming years, sales will multiply.

We look into the policy documents of electric car manufacturers. Some list mica as a risk mineral, alongside other critical raw materials. None mention a word about where it comes from.

Small lizards scurry by. Laha swats away a fly. The wounds on his hands sting, but there is no soothing ointment.

He dreams of owning a house and many zebu cattle when he grows up. Malala wants to become a nurse.

They say it as if they were wishing for a charter trip to the moon. Neither of them goes to school.

We bend down, pick up a piece.

Feel the layers. The greasy, shiny surface acts as a mirror.

We are thrown back to the luxurious car showrooms, where the new models cost hundreds of thousands of kronor.

Could the mica piece in our hand end up in one of them?

The villagers get about one krona per kilo. For that price, the stone must be broken from the bedrock with sheer muscle power, hauled up from the hole, sorted, and carried to the collection point more than a kilometre away.

After a day’s labour, a team of four or five children and adults has earned about twenty kronor together. It is not enough for anyone to have a full stomach. 

The village elder, Friagna, lights a hand-rolled cigarette and coughs out some dust.

“The buyer comes here once a month, loads up the stone, and pays. He never asks any questions.”

We note the name of the local company the buyer works for. We suspect that this detail will be important for the tracking that lies ahead.

Radoran.

There are no reliable figures on how many minors die or get injured in Madagascar’s mica mines.

The operations are unregulated. No one has employed the children. No one covers hospital or funeral bills if the mountain collapses.

We ask Laha if he is afraid. He laughs dismissively, just as he has seen his older brother Mosa, 19, do.

“No… But sometimes we get falling stones in our faces and eyes. That’s scary.”

The land belongs to the state. Like many others in the country, the mine has no permit.

That might seem irrelevant—neither the police nor other authorities are anywhere to be seen here. For a starving person, hunger is all that matters.

But it means that prices are kept low and the region misses out on tax revenues that could have been used to build schools and hospitals. Illegally mined mica leaves Madagascar to end up in new, expensive electric cars.

The road to the West goes through China. And the next link in our chain is Radoran’s customers there.

We search through a dozen different online databases that provide customs data and shipping records, using the trade code for mica, 2525.

But we find nothing. China keeps the information secret, and only occasional shipments to other countries are visible.

It is just past eleven in the morning. Laha and the other children have been working for four hours. The silence between the hammer blows grows longer. They are exhausted.

They need to find something to eat.

They set out to look for cactus fruit.

A UNICEF report from last year estimated that at least 11,000 children between the ages of 5 and 17 are exploited in mica mining in southern Madagascar. Many more are at risk of being exploited.

There are no more organised, industrial facilities.

Small village mines are not the exception. They are not even the rule.

They are all that exists. An archipelago of points of no return.

Cyclones rarely used to pass through this part of Madagascar. But climate change has disrupted the patterns, and this past spring, there were two.

The rain poured down. The people in the villages tried to dig trenches, but most of the water rushed away and evaporated.

The famine is less acute now. But still, two million people are in need of emergency aid.

The sun beats down from the sky. The rain clouds, which should be gathering at this time of year, are nowhere to be seen.

We continue searching for Radoran’s customers. We contact exporters, aid organisations, and industry experts. We enlist the help of the Dutch organisation Somo, which gives researchers and journalists access to typically closed records.

But the links in the mica supply chain remain out of reach.

We travel under vast skies. Across expanses of cactus thickets, through forests with peculiar trees found only here.

At times, it feels like traveling into a painting.

Over the years, cobalt and other minerals needed for the green transition have been linked to exploitation, as Aftonbladet has previously reported.

But in many cases, efforts to prevent the worst abuses have made progress. For mica, however, there is still no certification or effective traceability.

“No company that buys mica from Madagascar can guarantee that it wasn’t mined by children. They don’t even know which mine it comes from. Traceability is zero,” says Valéry Ramaherison, a mining expert at Transparency International.

Our thoughts return to the electric car manufacturers. In their policy documents, each of them claims to have zero tolerance for child labour.

How does it all add up?

A sharp crack echoes as the side mirror smacks into a cactus. Our guide signals to slow down. The next mine awaits.

A short climb takes us to the next site. The smell of smoke is in the air—cactus is being burned to feed the zebu cattle.

The stone crumbles, flaking like delicate croissants. The ground shimmers like foil.

About forty workers are busy mining, nearly half of them children.

There is the same lack of tools and protective equipment here. The same desperate hunger.

A boy, around eight years old, with stick-thin arms and a swollen belly, strikes two stones together, trying to release the mica.

He keeps hitting and hitting, but his strength is not enough to break the rock.

Nomea Maro, 16, sits on the ground sorting stones. Her right hand shakes a cut-up plastic bucket, used as a sieve. Her left hand holds her eight-month-old daughter, Francine.

After giving birth, Nomea kept going down into the mine, with her daughter strapped to her back. But Francine cried inconsolably, and eventually, she gave up. Now, she is forced to collect small stones above ground.

Nomea’s lips are cracked, her hands peeling from the labour.

“The worst part is the sand that gets stirred up. Francine gets it in her eyes.”

In recent weeks, she has tried feeding her daughter boiled cassava leaves and cactus fruit because she herself has eaten too little to breastfeed. Now, the baby has developed diarrhoea and started vomiting.

Nomea’s face tightens, the wrinkle between her eyes deepens.

“She needs to go to the hospital. But how?”

The sun rises higher in the sky. It was thirty-two degrees in the car. Now maybe thirty-five, far hotter than usual for this time of year.

The starving boy keeps striking and striking, but the stone remains unbroken.

We step into the shade. The adults talk about the zebu gangs that roam the area. About the increasing plundering in the wake of climate stress.

Francine grabs her mother’s cheek and babbles, momentarily easing the worry.

Madagascar should be a rich country. It has sought-after raw materials and a biodiversity unmatched anywhere else on Earth.

But a small elite rules from the capital, with neither the will nor the ability to break the spiral of poverty. Erosion and overpopulation exacerbate the problems.

There is no refining or processing in the country. The mica disappears—along with the profits.

We look out over the landscape, toward the jagged silhouette of the mountains.

The canvas is torn apart.

This is no idyll but its opposite—the site of abuse.

Article 32 of the UN Convention on the Rights of the Child states that children must be protected from exploitation and from work that is harmful, dangerous, or prevents them from going to school.

The words are written in black and white. Almost every country has signed. Car companies refer to the convention in their sustainability efforts.

Yet, the demand remains. The world keeps buying.

The children follow us in clusters back toward the village, their eyes fixed on us—foreigners—as if there is something we must grasp, something we have yet to understand.

The inbox chimes. What we have been searching for has arrived: an Excel sheet detailing mica exports from Madagascar to China.

In total, there are 576 documented shipments between 1 November 2022 and 30 April 2023 to scroll through.

Radoran, which buys from the child labour mine we visited, accounts for more shipments than any other exporter.

We list the exporter’s biggest customers:

Based on previous reports, we suspect that at least the first company sells directly to end customers in the West. The other two seem to have their own production but also act as middlemen for other Chinese factories.

The walls of the restaurant in Amboassary are covered with posters of overweight white children and an abundance of fruit and food.

Happy childhood, it says.

Aid workers take a break from the nightmare with grilled zebu meat and beer.

The music plays until the power goes out and the full moon becomes the only light.

The only vehicle we encounter on the way to the epicentre of the climate famine is a water tanker. It’s stuck.

People are crowding to drink directly from the leaking stream.

The protective trees have been cut down. The wind sweeps in, carrying sand that blankets the fields, making human life impossible.

There are plans to build a huge water pipeline from a river further north, where the water still flows. Madagascar contributes no more than 0.01% of global carbon dioxide emissions. At several climate summits, rich polluting nations have pledged to fund emergency measures like this.

But the money for the hardest-hit countries is withheld. And the fields of Madagascar remain dry.

The jeep struggles forward, kilometre after kilometre, past barren fields.

The sand gets in through the windows. It sticks in your mouth, grinding between your teeth.

On a patch of gravel no bigger than a football pitch in the community of Ambovombe, we find the people who have lost everything.

When the drought struck, they were forced to sell their animals to buy food. Then the land.

Now they live in tents made of rice sacks and cactus trees, ten in each.

The children gather in clusters. Their noses are running. Everyone has diarrhoea. There is no school for the climate refugees. No medicines. No emergency aid. It is as if we have stepped into a different era.

Sometimes children collapse in an instant, in the middle of play. Or waste away and disappear, quietly, in their sleep.

Her face is covered with the ground bark of the tamarind tree. One morning two weeks ago, Soavinale Same’s six-month-old son lay motionless inside the tent. She shook the little body, but the boy couldn’t wake up.

“God called him back,” says the mother.

She scratches herself, so that some of the mourning mask flakes off.

There is nothing left of the boy. No clothes, no toys. Not even a picture in someone’s phone.

But he was there. The boy who was born, lived, and died as a result of other people’s emissions had a name. Mahatante.

A small shop sells water for 18 kronor a bottle, the price of ultimate luxury, money no one here has.

The dust is swirling.

The red wind is whipping up, already tearing at the tents.

The Mandrare River used to be several hundred metres wide in its last few miles towards the sea.

Now the bridge has lost its purpose.

Over the growing sandbanks, wells are being dug. People walk two, three miles to fetch drinking water.

Children fill yellow twenty-litre jugs and wobble away on bicycles—two in the back, one in front. High above them, birds of prey circle. 

The cycle has been broken. The fields dry up again without water, and the land can no longer feed its people.

Is this an anomaly—or the beginning of something greater, more irreversible?

The sun sinks, vast and orange, more beautiful than anywhere else.

We can’t linger. The trail lies right before us. 

Radoran’s procurement centre is located on the outskirts of Amboassary.

In front of a hangar-like warehouse, three trucks are parked, each with 15 tonnes of hand-mined mica.

A fourth truck rolls in shortly after we arrive. It comes from the famine-stricken villages north of Ambovombe.

A few guys shovel the mica off the truck bed. It rattles, like the sound of falling shells.

The site manager, Maurice Alexandre, 29, is the first person we meet in the mica supply chain who isn’t malnourished.

Unlike the miners, he has a fixed monthly salary of two thousand kronor, a dream here.

“Last year, we were still affected by the pandemic. The Chinese ordered less. But now it’s picking up again quickly,” he says.

The site manager explains that he is aware of child labour.

“What can we do? We don’t have our own mines and can’t control those of others. The important thing is that the stone is thin and hard, like the Chinese want it.”

The buyer, Jean Marie Brindavoine, 35, complains that the villagers are lazy.

“As soon as the UN comes and hands out food, they stop working. Everything halts.”

The site manager nods.

“But now there’s a drought, and they can’t farm. And that’s good for production,” he says.

Flies crawl on the concrete walls.

We think of Laha and the other children. The hunger and the toil, the exploitation that looks a lot like slavery. 

No data on trade between Chinese companies is available, so we decide to contact the companies directly. Instead of identifying ourselves as journalists, we pretend to represent a newly established Swedish battery company looking for mica insulation.

Soon, we get confirmation that both Ningbo Ram and Pinjiang VPI sell unprocessed mica to one of China’s largest manufacturers of battery insulation. This adds a fourth name to our list.

Glory Mica.

Another flatbed rattles.

The next shipment is being prepared. 348 tonnes are already waiting in 964 white sacks in the warehouse. The ship to China will depart soon.

On the last day, the clouds actually start to gather. Rain falls like a mirage.

Our thoughts turn to the resilience of the people. Their pride, their strength, their laughter.

They plant, watch it wither. They plant again.

The container terminal outside the old slave port Tolagnaro is the final stop; a hypermodern facility, built, owned, and operated by the British-Australian mining company Rio Tinto.

Ships unload food aid and load minerals.

Port manager Mary Toerasoa takes us on a bus tour, while guards from the security company G4S check that we don’t take any photos. The truth is, there’s nothing to photograph; the port is an island of modernity and could be anywhere on Earth.

Our gaze turns to the sea. The waves crash in.

Nothing happens in a vacuum, everything is connected.

We examine the list of Chinese companies, cross out the intermediaries, and focus the spotlight on the big companies that buy mica mined by children—Pamica and Glory Mica. The chain does not end here. Two emails are sent. 

Who do you sell to?

We head home, but the answers won’t take long. There’s a sequel—a link to some of the best-known electric car brands in the world.

How the mica is traced to electric car giants

https://www.aftonbladet.se/nyheter/a/jlWAOA/sa-kopplas-tesla-till-barngruvorna-vi-foljer-sparet

51 documented deliveries.

Now, Aftonbladet can reveal the connection between electric car giant Tesla and two major Chinese suppliers who purchase child-mined mica.

Volvo Cars and BMW also do business with one of the companies.

In an investigative report, Aftonbladet has detailed how children mine mica in southern Madagascar.

“I have to work. Otherwise, we starve to death,” says Laha Varivahtse, 13.  

The mineral has long been used in everything from makeup to car paint. However, it’s the ability to insulate electric car batteries that has caused demand to rise rapidly worldwide. From Madagascar, the export of mica has quintupled in the last decade. Today, 11,000 children are estimated to be exploited in the mines, making up half the workforce.

On site, Aftonbladet has been able to document how child-mined mica is sold to the local exporter Radoran. Using export data, we have traced the mineral to two major Chinese mica product manufacturers: Pamica and Glory Mica.

Both companies list several well-known car manufacturers as “partners” on their websites. But these business relationships need to be verified.

For several weeks, we investigated the flows of mica from the companies.

***

China keeps virtually all export and customs data secret. Even within the EU, it is not usually available. But by taking advantage of the transparency of the US, we can map trade to the US market.

With the help of the Dutch organisation Somo, which gives journalists and researchers access to export data, and databases such as Panjiva, we track shipments of mica products from Pamica to the US from 1 October 2022, onward.

Several smaller US electronics companies turn out to be on the customer list. And so is the world’s leading and most famous electric car manufacturer—Tesla.

The company, led by Elon Musk, currently produces over a million cars per year.

In total, we have identified at least eight shipments of mica trays from Pamica to Tesla’s US factories, with a total weight of 68 tonnes.

***

The other Chinese company buying child-mined mica—Glory Mica—is one of the world’s largest manufacturers of battery insulation. And once again, Tesla is a major customer. 

Since 1 October 2022, we can identify 43 deliveries of different types of mica insulation from Glory Mica to Tesla, with a total weight of several hundred tonnes.

***

But Elon Musk’s pioneering company is not the only electric car brand on the customer list.

Swedish Volvo Cars also appears in the data.

During the same period, Aftonbladet can map 11 deliveries of mica sheets from Glory Mica to Volvo Cars’ American factory in Charleston, South Carolina.

Later, it will also be confirmed that a third well-known car brand, which is currently switching to electric power, is buying from the Chinese company – German BMW.

***

We contact Pamica and Glory Mica. Instead of stating that we are journalists, we pretend to represent a newly started Swedish battery company looking for mica insulation.

Pamica does not respond, and shortly after our first email is sent, the English-language website is taken down.

The response from Glory Mica’s programme manager arrives a couple of days later. With some pride, he explains that the company is a major supplier to Volvo Cars’ factories worldwide, and that two years ago, Volvo gave Glory Mica the “Best Supplier” award and last year a “Quality Excellence Award.”

He admits that Glory Mica sources a significant portion of its mica from Madagascar.

“But that doesn’t mean we have ignored possible challenges there,” he writes.

The website links to three different policy documents aimed at ensuring that the company purchases minerals responsibly. How these policies are enforced or what the checks are is not specified.

In a later email, the programme manager admits that child-mined mica cannot currently be separated out:

“There is no established traceability.” 

Both Tesla and BMW state in clear policy documents that they have zero tolerance for child labour. Minerals mined by minors should simply not exist in their cars.

Volvo Cars also rules out business relationships with companies linked to child labour.

“We are not involved in child labour or forced labour, and we do not knowingly cooperate with anyone involved in child labour, forced labour or other unfair and illegal practices,” writes Volvo in its Code of Conduct.

***

Kristina Ullrich works in corporate responsibility at the children’s rights organisation TDH, which seeks to end abuse in the mica mines of Madagascar and India. She urges electric car brands to speak out, rather than hiding behind policy texts.

“Considering how much mica comes from Madagascar and how many car parts it is used in, I can’t imagine any manufacturer claiming to be free of child labour.”

A typical electric car contains about ten kilograms of mica, according to Ullrich. Companies like Tesla need to realise that they are dependent on a mineral that is often mined by children in hazardous conditions. And that the situation is dire.

“No one can do it all. But if every carmaker committed to ten villages, ensuring that adults earned a living wage and children went to school, the difference would be huge. Every day that a child is forced into a mine causes harm.”  

***

Aftonbladet pressured Tesla’s press contacts in the US, Europe and Sweden for several days. The electric car giant returned an email with links to three different policy documents.

Not a single word about mica. And Aftonbladet’s questions are left without answers.

***

In a statement to Aftonbladet, BMW writes:

“We can confirm that Glory Mica is part of our supplier network. According to our purchasing terms, they are required to comply with legal requirements and extensive environmental and social standards, and they must also pass these on to their subcontractors. This also includes a clear ban on child labour.”

***

Despite repeated requests, Volvo Cars declined to give an interview. In a written response, press officer Magnus Holst states that information about potential violations is taken very seriously.

The car manufacturer states that the mica sold by Glory Mica to Volvo does not come from Madagascar, but will not say where it is sourced from instead. 

“For competition reasons, we do not share an exact list of countries of origin. However, we can say that the mica components supplied by Glory Mica are part of our traceability programme, which uses blockchain technology (a digital method of storing and sharing information about the origin of minerals, for example) to track the material throughout the supply chain. This solution helps us ensure the origin of the material, which in this case is not Madagascar.”

The question of how the partnership with Glory Mica aligns with the commitment in Volvo’s Code of Conduct—not to cooperate with companies linked to child labour—is left unanswered.

Shortly after we started contacting the car companies, Glory Mica’s website also went down. However, we will soon have reasons to return to both the Chinese company and Volvo Cars.

Footnote: Aftonbladet has reached out to Pamica and Glory Mica for a comment. The export data is incomplete and may contain inaccuracies.