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A service for political professionals · Saturday, July 11, 2020 · 521,449,671 Articles · 3+ Million Readers

Let's Not Let Drug Companies Hold Us Hostage When Pricing A Covid-19 Vaccine

June 15, 2020

By Joe Rothstein

When I was a child, the disease people feared most was polio. Polio didn’t savage populations the way covid-19 is doing now, but tens of thousands of children in the United States would fall ill with it each year, along a not insignificant number of adults. Most notably, one of those adult victims was president-to-be Franklin D. Roosevelt, when he was 39 years old.

Major polio outbreaks would start around Memorial Day and tail off about Labor Day. During summers, we feared going to movie theaters or swimming pools. No one knew what caused polio, but we did know it could strike without warning anywhere and everywhere.

Finally, in 1953, Dr. Jonas Salk announced that his research team had developed a polio vaccine. It was so effective, within a few years polio had virtually disappeared in the U.S. In the early 1960s, Dr. Albert Sabin’s research team introduced an oral polio vaccine, one that was much cheaper than Salk’s and easier to administer. For the next 30 years, Sabin traveled the world, promoting the vaccine’s use.

Salk and Sabin followed two different paths to get to the same result—near eradication of a dangerous viral disease. For much of that time they were rivals. But they had this in common: neither patented their vaccines. Salk, in an interview, said it would be like “patenting the sun.” A Forbes magazine analysis estimated that a patent would have been worth $7 billion to Jonas Salk.

Sabin waived off every attempt at exploitation by pharmaceutical companies because he wanted to keep the price low enough to guarantee the most extensive spread possible for the world’s protection.

I thought about this piece of history the other day while reading a Washington Post story about a corporate entity by the name of Ridgeback Biotherapeutics. In March, Ridgeback, owned by a wealthy hedge fund manager, licensed an experimental coronavirus pill from Emory University. The pill was invented by university researchers with $16 million in grants from U.S. taxpayers. Two months later, Ridgeback sold exclusive worldwide manufacturing and distribution rights to pharmaceutical giant Merck.

Ridgeback has no laboratories of its own, and no facilities for manufacturing a drug. Essentially, Ridgeback played the role of house flipper, flipping the license from Emory to Merck. How much did Ridgeway pay Emory? How much will it receive from Merck? No one will say. None of our business. We’re just the taxpayers who made the drug possible. And, if the drug makes a fortune as a vaccine to prevent covid-19, we’re the users who will pay big bucks for that protection. Merck will argue that the price only reflects all the research costs required for the company to develop it. That won’t be true. It seldom is.

The pattern is all too familiar.

The antiparasitic drug Daraprim, which helps HIV victims, once cost $1 a pill. Then CorePharma bought the marketing and distribution rights for the U.S. from GlaxoSmithKline and raised the price to $13.50. A few years later, CorePharma sold the U.S. rights to Turing, which raised the price to $750 a pill.

The first covid-19 drug to reach the market is Remdesivir.In early trials, Remdesivir has been successful in cutting patient recovery time and seems to have had some success in reducing fatalities. The pharmaceutical giant Gilead is distributing Remdesivir for free during the current trial period and has yet to set a price for it. But based on industry rumblings, that price is likely to be in the thousands of dollars for an individual course of treatment.

It’s worth noting that Remdesivir, based on hepatitis C research, was developed with at least $70 million in public investment. Pharmaceutical companies have made an estimated $70 billion from hepatitis C drugs. When Gilead launched its hepatitis C drug Sovaldi, the price was $1,000 a pill, or $84,000 for a full course.

Salk and Sabin are cited as examples here because their dedication to the public interest was so extraordinary. Their polio vaccines were developed largely through public charitable contributions in what seems like a world apart from where we are now.

The giant corporations that now control the pharmaceutical world are profit-making machines, with vast marketing and advertising budgets, huge political lobbying operations, and shareholders who need to be appeased with each quarterly financial report. As a result, taxpayers become the venture capitals without reaping the rewards.

People who need the drugs too often find the cost too steep a hurdle to climb, even when their lives and physical well-being depend on them. Like insulin users. Twenty-five percent of U.S. diabetic patients who need insulin medication say they can’t afford the $340 per vial price. That’s not a problem in Canada, where the same medication is 90% cheaper.

What’s to be done? The answer is pretty obvious, isn’t it? Cut out the middlemen. There’s no reason the NIH or another designated public health body could not conduct the public trials needed to test the drugs it develops for safety and effectiveness. And once a new drug has proven itself, it could be part of the inventory used through Medicare, Medicaid and other public health channels without the massive advertising and promotional campaigns the private companies now deploy.

If private companies want to license the drugs developed at taxpayer expense, so be it. But the public share of the profit should be considered no differently from that of a private investor. The profits could be plowed back into more medical research.

With such a system, the public could be more secure about the results of clinical trials, instead of merely using drug company data. Priorities for research would be established more in line with the public interest than with the mass marketing interests of the companies. Drug flippers like Ridgeback and price gougers like Mylan (remember the outrageous price increases for life saving medications like EpiPens?) would be out of business. There would still be room for the for-profit drug companies, but they would share those profits more equitably with the taxpayers who put up the cost for the basic research.

It's not complicated. But it is a political mine field for those in office who have been reluctant to cross it. Maybe until now.

The coronavirus and its economic destruction have the political class thinking more seriously about the need for big structural change to make things better. Reforming the pharmaceutical system should be near the top of that list.

(Joe Rothstein's latest political thriller, "The Salvation Project," is available from all on line book sellers and most independent book stores. Questions? Comments? Joe Rothstein can be contacted at jrothstein@rothstein.net)



Joe Rothstein is editor of U.S. Politics Today. His career in politics spans 35 years, as a strategist and media producer in more than 200 campaigns for political office and for many political causes. He was a pioneer in professional political consulting and one of the founding members of the American Association of Political Consultants. During his career Mr. Rothstein has served as editor of the Pulitzer Prize-winning Anchorage Daily News and adjunct professor at George Washington University's Graduate School of Political Management. He has a master's degree in journalism from UCLA.