[Ip-health] Stat: Gates Foundation will provide $120 million to ensure generic production of Merck’s Covid-19 pill

Thiru Balasubramaniam thiru at keionline.org
Wed Oct 20 03:12:34 PDT 2021


Gates Foundation will provide $120 million to ensure generic production of
Merck’s Covid-19 pill

By Ed Silverman  Oct. 20, 2021

The Bill and Melinda Gates Foundation will work to expand access to
molnupiravir, an experimental treatment for Covid-19.MERCK

As concern mounts over access to Covid-19 remedies, the Bill & Melinda
Gates Foundation is committing up to $120 million to accelerate production
of generic versions of an experimental Merck (MRK) pill to treat Covid-19
that would be available to dozens of low-income countries. But the effort
was greeted with mixed reactions by patient advocates.

The Gates Foundation plans to provide different types of incentives so that
eight generic manufacturers, all of which have already signed voluntary
licensing deals with Merck, will be positioned to produce a sufficient
quantity of the drug, called molnupiravir, as quickly as possible. The goal
is to convince the generic companies to ready their facilities rather than
wait to gauge demand for the pill — which early data suggests could reduce
hospitalizations and deaths — before ramping up.

“They have the capacity. They can do this,” Trevor Mundel, president of
global health at the Gates Foundation. “This is an incentive for them to do
it earlier rather than wait to see what the market is like… They want to
see (if there will be) enough volume. They (may) want to see who will pay
at the end of the day. We don’t want to them to wait.”

Notably, the Gates Foundation will offer volume guarantees over a specified
period of time, so the generic manufacturers have confidence their
production investments will return acceptable profit margins. So far, the
foundation has also awarded $2.4 million in grants to help the generic
companies more quickly apply to the World Health Organization for
manufacturing prequalification.

Related: Watch: Merck’s Covid pill could transform treatment. Here’s how it

As of now, the Gates Foundation has agreed to provide up to approximately
$1.9 billion to underwrite various efforts to combat Covid-19. These
include the COVAX vaccine distribution program overseen by the WHO and
guarantees to support at-risk manufacturing of monoclonal antibody
treatments for low- and middle-income countries.


This latest move comes after Merck reached a deal with large generic makers
such as Cipla, Dr. Reddy’s Laboratories, and Sun Pharmaceuticals to supply
its pill to more than 100 low-to-middle-income countries. For the moment,
though, it is not clear how many pills each company will produce, the
production costs the companies will incur, or the pricing.

The Merck pill has generated excitement because top-line study results
indicated it reduced both hospitalization and death compared to a placebo
by 50%. In the placebo group, 53 patients, or 14.1%, were hospitalized or
died. For those who received the drug, 28, or 7.3%, were hospitalized or
died. The data from the study were made public in a press release and have
not yet been peer-reviewed.

The findings set off another wave of anxiety, however, over inequitable
access to Covid-19 medical products. Last year, wealthy countries quickly
reached deals with vaccine makers, leaving low and middle-income countries
to largely rely on the World Health Organization to organize programs to
purchase and distribute vaccines. So far, the effort has fallen short.

Related: Merck’s Covid-19 pill may be a game-changer, but questions are
already being raised about cost

As a result, there has been consistent pressure on the vaccine makers to
share their intellectual property and other know-how so that generic
manufacturers could more readily produce Covid-19 vaccines and make them
available at lower costs to poorer countries. Pope Francis, for instance,
urged the vaccine makers to do so in remarks earlier this week.

By striking the voluntary licensing agreements, Merck is hoping to avoid a
similar fate. But the company, which developed the pill along with
Ridgeback Biotherapeutics, has not indicated any plans to share its
intellectual property. However, Merck has said it is in discussions with
the Medicines Patent Pool, a United Nations-sponsored organization, to
explore the potential for additional licenses.

Consequently, the specter of inequitable access has surfaced.

‘While any initiative to accelerate production and access, especially on
the African continent and low income countries, is welcome, the Gates
Foundation investment is incomplete. Vaccine and treatment apartheid affect
all low and middle-income countries today due to intellectual property
barriers,” .said Rohit Malpani, a former director of policy and analysis at
Doctors Without Borders and now a board member at UNITAID, which backs the
Medicines Patent Pool.

“It is necessary also to tackle these patent barriers to ensure access to
these medicines. The Gates Foundation should be throwing it’s considerable
power and influence behind a waiver of intellectual property rules at the
World Trade Organization, as well as pressuring Merck to expand the
voluntary license to include all countries.”

The concern has been further fueled by uncertainty over pricing. The U.S.
government signed a $1.2 billion deal to purchase 1.7 million doses. That
works out to a $712 unit cost for a five-day treatment course, according to
the contract. The company has indicated there are plans to produce 10
million doses by the end of this year and 20 million doses in 2022.


Sign up for Pharmalot

Your daily update on the drug industry.

Privacy Policy

So far, other wealthy nations such as Singapore, Australia and South Korea
have reached deals with Merck to buy its pill and more countries are
clamoring to sign agreements. Terms were not released, but it remains
unclear what steps Merck may take to satisfy growing demand, especially if
the pill is later approved for a wider patient population.

Meanwhile, the actual manufacturing cost for a five-day treatment course is
estimated to be $20. This suggests Merck will profit handsomely from sales
to wealthy nations, but its licensing deals will not ensure sufficient
access, according to Brook Baker, a Northeastern University professor who
specializes in access to medicines and intellectual property and a senior
policy analyst for Health GAP.

“There are three positives here: more efficient manufacturing that can lead
to a cheaper price, expediting regulatory approval processes in countries,
and the WHO prequalification, and the volume guarantees to incentivize
production,” he said. “Depending on how contracts are worded, they may
encourage companies to start making at risk, which means before regulatory

But he also noted the licensing deals exclude more than 30 upper-middle and
lower-middle-income countries, including Turkey, Malaysia, Mexico and
Ukraine, which suffered a large number of Covid-19 deaths and are home to
substantial numbers of poor people. And he added that unless Merck pursues
tiered pricing and takes a small mark up, the company stands to profit from
vulnerable governments.

Trending Now: Pharmalittle: WHO hopes to buy Covid treatments for $10 a
course; Sinema is a big obstacle to drug pricing reform

A Merck spokesperson wrote that “We have been and are currently engaged
with numerous governments globally to discuss their interest in supply
agreements so that we can provide each government the opportunity to secure
timely supply of [the pill] should it be authorized by regulatory
authorities. Several governments have recently made statements regarding
ongoing discussions or concluded agreements, in addition to those that
Merck has announced.”

But Baker estimated that middle-income countries excluded from the
licensing deals accounted for 30 million infections in the first half of
2021, and 50% of all infections in lower-middle-income countries. By his
calculation, even if the eight generic versions become available and
satisfy this demand in the licensed territories, Merck will be unable to
meet the remaining 70% of global need.

“Basically, what this announcement says is that intellectual property
remains sacred. The Gates Foundation is willing to prime the market – it
will take care of the poorest countries, but what Merck wants to keep for
itself is fine,” Baker said. “The majority of the world’s poor live in
upper-middle-income countries and they are still not going to have a
guaranteed supply of a life-saving therapy.”

Such concerns may be mitigated, however, if a WHO program called the Access
to COVID-19 Tools Accelerator successfully obtains the Merck pill. Known as
ACT-A, the program is reportedly negotiating to purchase a “novel” pill for
mild to moderate (Covid-19) patients for $10 a treatment course by November
and then supply 28 million treatment courses over the following year.

Whether such a deal occurs and to what extent it helps countries excluded
from the Merck deal remains to be seen. In the meantime, Jenny Ottenhoff,
senior policy director of global health at the One Campaign, a nonprofit
devoted to global poverty, agreed that the incentives are helpful but more
may be required. (The nonprofit, by the way, receives funding from the
Gates Foundation and Merck.)

“Broader access to intellectual property will probably be needed to scale
up production more quickly and more easily,” she told us. “I don’t know if
this is the scale of investment needed to make this happen.”

About the AuthorReprints

Ed Silverman

Pharmalot Columnist, Senior Writer

Ed covers the pharmaceutical industry.

 ed.silverman at statnews.com

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

More information about the Ip-health mailing list