Pharma looking to make huge profits from Covid-19
Fawad Kaiser
The search for treatments and vaccines to curb transmission of the new coronavirus is in overdrive. As the virus spreads illness, death and catastrophe around the world, virtually no economic sector has been spared from harm. The virus has also shone a light on another fatal weakness in health systems: the profit-driven pharmaceutical innovation model that we rely upon to develop life-saving vaccines and medicines.
Yet amid the mayhem caused by the global pandemic, one industry is not only surviving, it is profiting handsomely. Pharmaceutical companies view the Covid-19 pandemic as a once-in-a-lifetime business opportunity. Treatments for the disease and vaccines to prevent it are needed and dozens of companies are vying to make them.
Scores of trials are under way around the world. The World Health Organization identified four of the most promising therapies – including an HIV combination treatment, an anti-malarial and a drug developed but never used against Ebola – for testing in a global trial launched last month. But we cannot pause the search while waiting for the results. The need for new effective agents is too great.
As companies are starting to see the potential for profit, investment has grown; as with almost every drug brought to market, the public sector will play a critical role in funding almost every candidate vaccine and treatment. But there is a huge risk that without government intervention, any vaccine for the virus that causes Covid-19 will be priced so steeply that only rich countries will be able to afford it.
The ability to make money off of pharmaceuticals is already unique, which lacks the basic price controls other countries have, giving drug companies more freedom over setting prices for their products than anywhere else in the world. During the current crisis, pharmaceutical makers may have even more leeway than usual to maximize their profits from the pandemic.
Lawmakers should try to ensure that governments will limit how much pharmaceutical companies can reap from vaccines and treatments for the coronavirus that they develop with the help of public funding. They should demand that vaccines and treatments developed with taxpayer money are produced without giving an exclusive license to private manufacturers.
Among the drugs that were developed with some public funding and went on to be huge earners for private companies are the HIV (human immunodeficiency virus) drug AZT and the cancer drug Kymriah, which Novartis sells for $475,000 per treatment.
Another example of private companies making exorbitant profits from drugs produced with public funding is the antiviral drug sofosbuvir, which is used to treat hepatitis C, stemmed from key research funded by the US National Institutes of Health. That drug is now owned by Gilead Sciences, which charges $1,000 per tablet in United States, which is more than many people with hepatitis C can afford. Gilead earned $44 billion from the drug during its first three years on the market.
While the funding is being negotiated, it would be unacceptable if the rights to produce and market a coronavirus vaccine were subsequently handed over to a pharmaceutical manufacturer through an exclusive license with no conditions on pricing or access, allowing the company to charge whatever it likes and in essence selling the vaccine back to the public who paid for its development.
Yet that is not how the system works. Instead, government grant exclusivity to pharmaceutical companies to conduct later-stage drug development on publicly funded inventions, without requiring that these drugs be widely affordable or accessible. These exclusive licenses allow drug companies to enjoy a monopoly and charge exorbitant prices for medical technologies developed with public funds.
It would be great to have some of the profits from those drugs go back into public research. Unless we regulate the system and are show transparency, we taxpayers will get gouged on a vaccine we paid to produce.
The world needs a system where the public and private sectors work together. This is not about bashing Big Pharma; it is about reclaiming the focus on health and the public interest in an industry that has for too long been driven by profiteering.
The Covid-19 crisis demands that we urgently find vaccines and treatments and do so in a way that fixes some of the fundamental failures of our current system. It is hoped that these lessons will last beyond the current crisis and prepare us better for the next.
We need to apply conditions on research funding that prohibit profiteering from Covid-19, so everyone across the globe who needs treatment can get it. This should be the first step toward a reordering of the pharmaceutical innovation model, away from profit and toward public health.
When it comes to the pharmaceutical companies, how should we judge their response? They, after all, hold the key to ending the pandemic. Yet in one vital respect their behavior has more in common with supermarket hoarders than with neighborhood groups.
Our exit strategy from the global lockdown depends on the development of an effective vaccine, as is well known. A huge effort is under way to find such a vaccine, but we cannot afford to wait the 18 months it might take.