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[e-drug] Coronavirus - time for new innovation models

E-DRUG:  Coronavirus - time for new innovation models

Dear E-drug readers, 
Here is a link to my latest blog republished from Barron's which published it 
last week. 


Time for new innovation models

[This commentary was published by Barrons 
on 7 February 2020 under the title: Coronavirus: The latest problem big pharma 
won't solve. It is republished here with permission.]

The pharmaceutical industry is one of the most profitable on earth, expected to 
be worth $1.4 trillion by the end of 2020. Last year, the four drug companies 
that dominated the vaccine market made $30 billion selling vaccines. The 
pharmaceutical industry benefits from considerable incentives, including in the 
form of patents and other market monopolies to sustain vaccine and treatment 
prices well above production cost. Society pays this price �in theory" because 
it enables the industry to generate money needed to invest in developing new 
health innovations.

With the outbreak of the novel coronavirus, 2019-nCoV, a disease for which 
there is neither a vaccine nor an effective drug treatment, the call for such 
innovations is growing louder by the day. With global sales in vaccines alone 
totalling $54 billion in 2019 and predicted to near $60 billion in 2020, one 
would think that industry has the reserves to jump at this challenge. But so 
far, as reported by 'Barrons', none of the four top vaccine companies has shown 
significant interest. It has been the Coalition for Epidemic Preparedness 
Innovations, a government- and charity-funded initiative to accelerate the 
development of vaccines to respond to outbreaks, that has been leading the 
effort to find a vaccine for 2019-nCoV.

The coronavirus seems poised to join a lengthy list of health problems the 
industry turns its back on unless additional incentives are made available: 
antimicrobial resistance, pediatric medicines, medicines to treat diseases of 
the poor, new infectious diseases such as Ebola, neglected tropical diseases, 
and rare diseases. Should the public allow them to do so? After all, the 
billions this industry rakes in every year is extracted from public sources: in 
low-income countries from out-of-pocket payments for drugs; in middle- and 
high-income countries mostly from social health-insurance schemes and taxes. 
Patients overpay for existing medicines because they expect something in 
return. The privatization of public resources implies a social responsibility 
for industry to develop new treatments and vaccines when needed. But the world 
lacks a mechanism to make this happen when industry refuses for lack of a 
blockbuster profit prospect. The inability to do so is becoming a detriment to 
public health.

Still, early trials of potential 2019-nCoV treatments are beginning to emerge. 
China is testing Gilead's antiviral remdesivir.  In response, Gilead's shares 
rose 13%. Other known compounds, initially developed for the treatment of HIV, 
have been identified as potentially useful. It is too early to say whether any 
of the medicines currently in clinical trials will turn out to be effective 
treatments for the 2019-nCoV. But it is not too early to start thinking about 
how to make the products affordable and available to large numbers of people if 
they do.

Let's not repeat the horrific delay in access to life-saving medicines that 
happened with HIV treatments. In the 80s, massive government research efforts 
and public investments accelerated the development of antiretroviral drugs. 
This public spending turned HIV from a death sentence into a chronic disease in 
high-income countries that could afford drug prices of$15,000 - 20,000 per 
patient per year. The millions of people suffering from HIV and AIDS in the 
developing world were initially left out in the cold. The pharmaceutical 
industry, patents in hand, defended their market exclusivity, which barred 
lower-priced generic versions from becoming available. It took global 
campaigning and international action for this situation to change.

Today, companies have licensed the patents for all HIV regimens recommended by 
the World Health Organization to the Medicines Patent Pool, a U.N.-backed 
initiative that enables qualified generic producers to produce low-cost 
medicines. Today, MPP patent licenses allow generics companies to provide 
antiretrovirals to around 90% of the people living with HIV in low- and 
middle-income countries. Prices for first-line treatment have dropped to $75 
per patient per year. This is good news, but it could have happened much 
earlier. We should learn from this experience for new treatments in 
development. The MPP is ready  to play the same role for the treatment of 

'The system is broken'� wrote the Dutch ministers of health and trade in 2017 
at the launch of the report of the Lancet Commission on Essential 
Medicines.'Patent and intellectual property exclusivities are the only 
cornerstone of the current model. Companies can ask the price they like. This 
will no longer do. We need to develop alternative business models,'� they 
continued. But not much progress has been made in designing and testing out new 
models for drug development. For that to happen, public resources currently 
tied up in the monopoly/high-price model will need to be made available.

The next health crisis is here. Again, patients and the public hear that the 
current innovation model is not delivering. The industry says  it wants more 
incentives. How much more does this trillion-dollar industry need before it 
fulfils its social responsibility?

The global health emergency caused by the new coronavirus outbreak should bring 
countries, international organizations, NGOs, investors and industry together 
to agree on a new social contract where industry acknowledges it cannot have 
and eat the cake: If more public money is going to be spent directly on the 
development of new products and vaccines, the price of the products has to be 
closer to the marginal cost of production. Governments then need to keep their 
end of the bargain and invest in robust health systems to provide prevention, 
treatment, and care. Drug markets will not fix themselves.

Ellen 't Hoen, LLM PhD | Medicines Law & Policy
e-mail: ellenthoen@medicineslawandpolicy.net 
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