The great challenge of a billion dollar industry | Society

A pharmaceutical laboratory in Moscow on August 6, 2020, involved in the development of vaccines against covid-19.
A pharmaceutical laboratory in Moscow on August 6, 2020, involved in the development of vaccines against covid-19.Andrey Rudakov / Bloomberg

The coronavirus crisis has changed many things, also in the pharmaceutical sector. Until now, big companies were not very interested in vaccines: the research is long and hazardous, poor countries need many but can pay very little for them and they are usually used only once or twice. The benefit is in the drugs that are taken daily in developed countries: treatments against cancer, cardiovascular or autoimmune diseases. You just have to look at the list of the best sellers in the sector in 2019: six of the 10 that brought the highest turnover to their companies are for treating cancer. With the pandemic, this opaque sector, with some bad press due to the exorbitant prices of some of its drugs, has an opportunity to redeem itself before the public opinion. The whole world looks at pharmaceutical companies and sees in them the way out of a crisis that has left almost 2.25 million deaths and a 4.2% drop in world GDP. In less than a year, they have discovered, tested, and mass-manufactured several safe and effective vaccines.

“The reputation and the very business of large pharmaceutical companies are at stake,” state Suerie Moon and Adrián Alonso Ruiz, researchers at the Graduate Institute, in an article published in the magazine Foreign policy. Until now, companies had been tightening the chord with the prices of therapeutic novelties in Europe and the United States. A recent example is that of the latest generation drugs that cure hepatitis C. In 2015 and 2016, their high cost, of up to 100,000 euros per patient, led to them being distributed with a dropper to patients. “The COVID-19 pandemic has posed a tough dilemma for the industry: they can try to restore their good public image by providing most needed innovations at an affordable price for all countries, or seek a profit shower, as expected by the financial markets, which would lead to accusations of profiting from the pandemic ”, they add. Several of the companies now on the lips of the world for their successes with the vaccine have a recent past full of lawsuits, compensation and fines. At the end of last year, three investigators published in JAMA magazine a compilation of fines imposed only in the United States for illegal activities. It is led by GSK, Pfizer and Johnson & Johnson, and the Swiss Novartis also appears in tenth place.

The global pharmaceutical sector moved 1.25 trillion dollars (1.11 trillion euros) in 2019, according to Statista data, practically the equivalent of Spanish GDP. By turnover, the leaders in the sector are the Swiss Roche, the combined AstraZeneca and Gilead, Pfizer, MSD, Novartis and GSK. Of the 12 with the highest income, seven are American, two Swiss, two British and one French. Both Johnson & Johnson and AstraZeneca have publicly pledged to sell the vaccine at a price that covers only production costs, but both have specified that this will be the case during the first phase of the pandemic. They could raise the price later. But they may also have to adjust their expectations for the competition that the next approved vaccines will bring.

The recent complaints by European parliamentarians for the opacity of the agreements between the laboratories producing the vaccines and the European Commission has surprised more than one. When it comes to public money, how can it not be known how much each dose costs and how much will be delivered each month? The truth is that, unlike any other contract or public tender, agreements with the pharmaceutical sector have a long history of secrecy. Governments and laboratories sign confidentiality agreements, so that the public never knows the prices that health systems pay for drugs. The transparency laws of many countries make an exception for the economic and commercial interests of companies, which must be weighed against the public interest in deciding whether a piece of information is made public. In the case of pharmaceutical companies, opacity usually wins.

The World Health Organization approved in 2019 a resolution in which it asks to facilitate transparency in the prices that administrations pay for drugs. “But practically nothing has progressed,” says Marcela Vieira, a researcher in public health and access to medicines at the Center for Global Health, an institute based in Geneva (Switzerland). The companies argue that secrecy allows them to negotiate better prices with countries, so that the richest pay more, and the poorest pay less. But this is not always the case, Vieira recalls: “Sometimes we see that low-income countries are paying more than others with higher income.”

Nor is there any transparency in research and development data. How much do pharmaceutical companies really spend to develop the drugs? A thorny issue, since in many cases large companies buy promising drugs, which have already produced positive results in the laboratory of universities, public research centers or small biotechnology companies, and continue to develop with clinical trials. This is not exactly the case with the Pfizer and BioNTech vaccine, because the American giant and the modest German biotech company teamed up already in March of last year, at the beginning of development, but it does exemplify how to bring the discovery of the technology to fruition. it usually requires the input of the big players in the industry. That’s why Germany’s CureVac has partnered with Bayer, which has never produced human vaccines before. Another characteristic of the sector: there are more and more mergers. AbbVie bought Allergan last year; a little earlier it was Bristol-Myers Squibb who took over Celgene. And in January 2019 Takeda bought Shire. And for months, there has been talk of what would be the largest merger in the history of the pharmaceutical industry: AstraZeneca and Gilead.

With the vaccines against the coronavirus, the question of public financing has returned to the table. At Gavi, the Global Alliance for Vaccination and Immunization, they are clear that it should at least translate into the money that governments pay later to get the doses. “Our expectation is that when public authorities have contributed by financing the initial risk of research, development and manufacturing capacity – thus alleviating the risk for companies of normal development – this has to be reflected in the price of vaccines. ”, Says a Gavi spokesperson. The alliance, whose main funder is the Bill and Melinda Gates Foundation, assures that it “appreciates and applauds” the efforts of several companies that have announced that the price of their vaccines will be “the one that maximizes access and puts people above of profit ”.

An example of public investment is BioNTech. In September the German government funded the company 375 million euros to accelerate development and improve manufacturing capacity in Germany. The Merkel Executive also injected 300 million in CureVac. But the pharmaceutical company that has received the most resources from the public sector has been AstraZeneca. The Advanced Biomedical Research and Development Authority (Barda) allocated 1,089 million euros to him. Ellen ‘t Hoen, a lawyer specializing in intellectual property and researcher at the University of Groningen (Holland), has examined the contract that the European Commission signed with CureVac – it was published with several data crossed out – and concluded that Brussels is not meeting the objective that He said that he would defend the agreements with the pharmaceutical companies: defend the common public good and public investments. The companies have exclusive rights to the vaccines and hardly any intellectual property is being shared.

Michael Stolpe, a researcher specializing in health economics at the Institute for World Economics in Kiel, Germany, believes that the value that society will obtain from vaccines “will exceed by several orders of magnitude the private profits that their developers can obtain.” It refers both to the lives saved (and the suffering, the disease, the pressure in hospitals …) and the fact that vaccination will allow the lifting of the confinements that weigh down most European economies. “Even BioNTech-Pfizer and Moderna vaccines, which are apparently the most expensive, are actually cheap when compared to the true value to society of the immunity they generate,” he adds.

Regarding the problems of the European Union with Pfizer and AstraZeneca, which announced reductions and delays in the shipment of doses, Vieira assures that he does not understand why the investment of “tons of public money” does not translate into establishing conditions and executing them where appropriate. For example, governments could set a maximum selling price. Or in case of agreeing in the contracts to deliver a certain quantity, and the pharmaceutical company does not comply, they should be able to license the patent so that another company can produce the drug. The companies have had the upper hand in one of the most delicate moments of the pandemic, the beginning of the vaccination campaign. Governments, Vieira sums up, “are not exercising all the power they could”, perhaps “for fear that if they do so they could get even fewer vaccines.”

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