[Ip-health] Mariana Mazzucato and Azzi Momenghalibaf in the New York Times: Drug Companies Will Make a Killing From Coronavirus - Unless we fix the system, American taxpayers will get gouged on a vaccine they paid to produce.

Thiru Balasubramaniam thiru at keionline.org
Wed Mar 18 11:21:03 PDT 2020



Drug Companies Will Make a Killing From Coronavirus

Unless we fix the system, American taxpayers will get gouged on a vaccine
they paid to produce.

By Mariana Mazzucato and Azzi Momenghalibaf

Ms. Mazzucato is a professor at University College London and the author of
“The Value of Everything.” Ms. Momenghalibaf is a senior program officer at
the Open Society Public Health Program.

March 18, 2020, 5:00 a.m. ET

A scientist working in a Boston lab on an experimental coronavirus
medicine.Credit...David L. Ryan/The Boston Globe via Getty Images

The search for treatments and vaccines to curb transmission of the new
coronavirus is in overdrive. Fortunately, there are a number of promising
candidates thanks to the U.S. government’s investment in biomedical
research and development.

Since the 2003 SARS outbreak, the United States has spent nearly $700
million of taxpayer money on coronavirus research — more than any other
country — through the National Institutes of Health. Yet the question right
now for Americans — thousands of whom are forced to ration their insulin
and face astronomical bills for live-saving drugs — is not only when these
treatments and vaccines will become available, but at what price.

As the world’s leader in public financing of biomedical research, the U.S.
government has the opportunity to set a precedent to ensure that medicines
developed with public funding are accessible and affordable to the public;
this will have enormous implications not only how for we deal with the
coronavirus, but also for the crisis of unaffordable medicines in America.

Health Secretary Alex Azar recently said that he could not guarantee
coronavirus treatments or vaccines would be affordable, despite taxpayers’
significant investment in their development. Faced with public backlash led
by the House speaker, Nancy Pelosi, Mr. Azar backtracked, although details
on how the administration would keep prices down remain unclear.

One way was spelled out in a letter sent on Feb. 20 by 46 lawmakers: It
demands that coronavirus vaccines and treatments developed with taxpayer
money should be produced without giving an exclusive license to private

Yet that is not how our system works. Instead, the government grants
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.

We are once again handing over the fruits of publicly funded research to
for-profit corporations with no strings attached.

Under a deal struck with Regeneron Pharmaceuticals, the federal Biomedical
Advanced Research and Development Authority agreed to pay 80 percent of the
costs of developing and manufacturing coronavirus treatments — without any
requirement that the final products be affordable. Regeneron has the two
highest-paid executives in the pharmaceutical industry.

Similarly, another promising experimental drug to treat coronavirus,
remdesivir, was developed with the help of taxpayer-funded research. Gilead
Sciences, famous for its price gouging of other medicines developed with
public funding like Truvada for PrEP and Sovaldi, owns the exclusive rights
to remdesivir. In the case of coronavirus vaccines, nearly every candidate
in development involves public-private partnerships that builds off
publicly funded research, like Johnson & Johnson and Sanofi’s
collaborations with the government’s biomedical research authority.

Despite Democratic lawmakers’ push for stronger access and affordability
protections for coronavirus vaccines and treatments, the pharmaceutical
lobby got these protections removed from the coronavirus spending bill
recently approved by Congress, which included $3 billion in federal funding
for research and development of coronavirus vaccines, tests and treatments.

The National Institutes of Health pours $40 billion annually into health
innovation, and it is on track to spend billions more for Covid-19. In
fact, N.I.H. funding contributed to every one of the 210 new drugs approved
by the Federal Drug Administration from 2010 to 2016.

Yet the pricing of medicines does not reflect this contribution. While the
reasons for this are varied, including the lobbying power of the
pharmaceutical industry, it reflects an entrenched but misguided belief
that the private sector is the primary driver of innovation and should reap
all the rewards. Recent studies show that large pharmaceutical companies
like Johnson & Johnson and Pfizer are focusing less and less to research —
instead acquiring smaller biotech firms with promising drug candidates that
rely on public funding — and spending more on strategies to inflate
executive pay, such as share buybacks.

The United States needs a system where 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. Hopefully these lessons
will last beyond the current crisis and prepare us better for the next.

Mariana Mazzucato is a professor at University College London and author
of, most recently, “The Value of Everything.” Azzi Momenghalibaf is a
senior program officer at the Open Society Public Health Program.

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

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