In 2016, the World Health Organization (WHO) released a report highlighting sixteen pathogens that posed a serious threat to global health and were desperately underfunded when it came to research. One of the sixteen pathogens was, of course, the coronavirus – that is, not the new coronavirus (SARS-CoV-2), which did not yet exist; but the coronavirus class in general, which includes the viruses that cause SARS and MERS.
The prophetic report was intended to be a call to arms for the world’s largest pharmaceutical companies, which collectively invest billions each year in R&D for pathogens that already pose a threat to humanity or will soon do so. However, despite the WHO warning, Big Pharma did not listen. Two years later, in 2018, pharmaceutical giants had zero research projects under development to combat coronaviruses.
Clearly, WHO was right; and, understandably, in 2020, pharmaceutical companies were investing money in the study of coronaviruses. Still, they did little to heed WHO’s warnings about the other sixteen pathogens: a report released last month by the Access to Medicine Foundation shows that in 2020, only 6 out of 16 pathogens had any research underway. Of these research projects, the vast majority – 63 out of 76 – went to COVID-19. Because the other pathogens did not kill enough people in the west (although the mosquito-borne chikungunya virus, one of sixteen pathogens, is making its way through Africa and India), Big Pharma was reluctant to disburse money for research and development.
It may be strange, from where the world is sitting now, to imagine that the pharmaceutical industry previously thought it had nothing to gain from coronavirus research. After all, COVID-19 is the gift that will continue to be offered to Big Pharma for many years. There are booster doses to be administered and very profitable monoclonal antibodies to be produced. Considering how profitable COVID-19 has been for the industry, one might think that it would deserve more attention from experienced for-profit corporations looking to profit from the next pandemic.
So why can’t pharmaceutical giants listen to WHO’s warnings? To understand why Big Pharma ignored the coronavirus until it became a global pandemic, one needs to understand its distorted business model.
Pharmaceutical companies make money by discovering drugs and protecting them with artificial monopolies through patents. Without competition, pharmaceutical companies can then turn around and charge whatever price they want for the new drug. It makes sense for pharmaceutical companies to prioritize research on diseases that affect the wealthiest patients – paying little attention to the diseases that kill the poorest patients. This means that diseases like cancer and diabetes receive a lot of research funding, and diseases like ebola, the Zika virus and malaria do not. Unless the industry is certain that there will be huge rewards in the future, no pharmaceutical company is at risk of finding a cure. In other words, Big Pharma is not interested in investing in drugs for deadly diseases if there is no guarantee of high rewards. An example is antimicrobial resistance (AMR). If you are one of the unfortunate souls to have gonorrhea, your doctor is likely to prescribe a line of antibiotics. The problem with getting gonorrhea (in addition to physical discomfort and strange phone calls to ex-lovers) is that this STD is getting more and more difficult to treat because of its growing resistance to antibiotics. A 2014 study by Chatham House predicted that by 2050, AMR will kill 10 million people and cost the global economy about $ 100 trillion. While these numbers are surprising, what makes an antibiotic different from, say, a cancer drug, is that doctors don’t want to prescribe them; over-prescription is what creates the most resistance. This creates a disincentive for these for-profit companies to make the types of new drugs that can help fight antimicrobial-resistant pathogens. As a lawyer at a Big Pharma firm told me once a year, “Think of AMRs as fire hydrants. You need them, but you never want to use them.”
The problem is that, when using it, the disease ends up becoming resistant – and so a new line of antibiotics is needed. And pharmaceutical companies don’t want to invest in drugs if doctors are reluctant to prescribe them. A report by the Pew Charitable Trusts showed that there are only 42 new antibiotics under development, while for cancer there are more than 1,100 treatments underway. It makes more business sense to spend money on cancer for the growing number of sick Westerners than on an antibiotic that you’re not sure will ever be used. The underlying problem here is that, as a society, we entrust private companies with the incredible task of finding cures for sick people. It is an established fact that drug prices are not decided on the basis of R&D costs, but on the maximum amount that pharmaceutical companies think they can charge. The old line says Big Pharma needs to charge high prices to cover the costs of drug research and reinvest in new drugs. To begin with, this argument is baseless. A 2017 report looked at simple price differences between the U.S. and Europe for the top 20 selling drugs. In 2015, the net price difference between the two regions was $ 116 billion, while global R&D costs were just $ 76 billion. Pfizer, maker of one of the COVID vaccines, has more than doubled its R&D spending through the American premium price in just one year. That money is not flowing back into the research channels, but instead it is filling the pockets of the company’s shareholders.
Pharmaceutical companies often defend their high drug prices on the grounds that they need to charge a lot because most drugs fail clinical trials and the cost of bringing new drugs to market is becoming more expensive. These are true statements. Most drugs fail, but fail at the start of phase I tests, and much of this initial research is funded with public money. A 2018 report showed that the United States National Institute of Health (NIH) contributed funds for all 210 new drugs approved by the Food and Drug Administration between 2010 and 2016 and provided $ 100 billion in research money. American taxpayers are covering the cost of medical research and being hit by inflated drug prices in return. The pharmaceutical industry people I speak to argue strongly against changing the system. One thing they tell me is that the public will have very little appetite to pay for all the research that goes into failed drugs. This is a ridiculous argument, as we are already covering the costs of failed drug research while we overpay billions in drug prices for successful research. Pharmaceutical companies will also point to the success of the COVID-19 vaccines as an example of their rapid efficiency. They casually ignore the vast sums of money they accepted from governments that made everything possible in the first place. The Modern vaccine was financed entirely with United States tax money, and the AstraZeneca vaccine was developed at the Jenner Institute at the University of Oxford with public funding. The Pfizer / BioNTech vaccine was also possible with almost half a billion dollars from the German government. Private companies would not have been able to get a drug to market as quickly if the public had not paid for it first.
There is an alternative way to discover new drugs that does not depend on patents to create incentives for drug research. The system is known as untying. The idea is that, instead of pharmaceutical companies using patents to create monopolies and charging ridiculous prices for drugs, governments will offer a combination of cash prizes, contracts and tax credits as rewards for entering the market to fund research. This means that drug prices would be directly linked to the cost of developing the drug, rather than any pharmaceutical companies believing that a desperate patient on the verge of death should be willing to pay for it.
The untying movement is gaining momentum. In 2017, Bernie Sanders introduced legislation to untie incentives granted to pharmaceutical companies through the patent system and replace them with prizes for entering the public market. The so-called Sanders Medical Innovation Award Fund would equal 0.55% of GDP, totaling $ 102 billion in research funding. Across the pond, former UK Labor Party leader Jeremy Corbyn called for a study on untying in his 2019 Medicines for Many policy proposal.
Disengagement is not an exclusive idea of the left. Andrew Witty, former CEO of GlaxoSmithKline, proposed untying as a way to fund research for rare diseases; Joseph Stiglitz, the winner of the Nobel Prize in Economics in 2001, also advocated replacing the patent system with rewards for entering the market. One of the many benefits of untying would be cheaper drugs, but also drugs for a wider range of diseases. Therefore, the next time WHO says that research is needed for new pathogens, governments could create a cash prize to encourage pharmaceutical companies, so that research is underway to help get a drug to market faster.
Another advantage of unlinking is sharing information. Under the current patent system, pharmaceutical companies store their data and research from competitors who could use it to develop their own drugs. Under disengagement, all information and data can be made publicly available so that scientists can avoid the repetition of errors that another research team has already made. Open information sharing is extremely important in COVID scenarios, when time is of the essence.
But the biggest reason for changing the way we currently fund research is not just about efficiency and prices, but morality. Neo-liberalism has given everything, even human life, a price tag. Farmers in India will die because a cancer drug has not yet lost its patent. Millions of other people die needlessly from HIV, although PrEP has been around for decades. And the launch of the vaccine showed that, despite global movements for racial equality, rich white countries will get relief from COVID months, if not years, before developing countries. If patents were no longer an issue, countries like India and South Africa would not have to go to the WTO to beg for permission to waive intellectual property rights so they can make their own vaccines and COVID therapies. It all comes down to the notion of justice – the idea that a person’s right to live should never be determined by how much money they earn. Neoliberalism postulates a worldview contrary to this.
Anthropologist Margret Mead once said that the first sign of civilization was a thigh bone that was broken and then healed. As she explains, in the animal kingdom animals die if their bones are broken, as they can no longer get water and food or protect themselves. The first healed thigh bone is proof that someone in that society carried the person to a safe place and took care of his injury.
If we want to consider ourselves civilized, we need to ensure that we provide medicines to everyone who needs them, regardless of their income, where they live or the disease they suffer from.