Since nearly as long as we’ve enjoyed the company of SARS-Cov-2, we’ve heard the cynics and sceptics among us forecast that whilst many will emerge from this worse off, others will benefit from the pandemic. None more so than the “disaster profiteers” of the pharmaceutical industry they cry.
In the global race for a vaccine and treatment to COVID-19, one thing is clear: we must leverage the capital and innovation of pharmaceutical giants to stand any chance of fast-tracking clinical development. The question is, how can we expect huge private sector investment in R&D but safeguard that the resulting drug prices are not set as a barrier to poorer patients?
COVID-19 has aggravated long-held debate between patient advocates and free-market proponents, with both sides becoming more polarised in their demands to the administration. Those advocating for broader drug access insist that pharmaceutical companies should be restricted from having exclusive licensing of treatments, should they develop one. Instead, as Public Citizen voiced in their appeal to NIH, other manufacturers should be able to produce the products in exchange for reasonable royalties.
Likewise, Médecins Sans Frontières call for “no patents or profiteering on drugs, tests or vaccines” for COVID-19, was supported by Germany, Israel, Canada, and 33 members of European Parliament. They have asked governments to be prepared to suspend or override patents, as well as set price controls to ensure availability for all. News that giants including Gilead and Eli Lilly’s stock market value have risen significantly in the past month as a result of COVID-19, only adds fuel to their fire.
On the other hand, true free-market supporters have urged that pharmaceutical companies be permitted to set prices will likely be beyond the reach of some patients. The rationale behind the seemingly callous demands is that the smaller the profit margins in coronavirus therapies, the less private companies are likely to invest in R&D. They say the flawed logic of those pushing for equity of access would have consequences that extend beyond the current pandemic, in deterring future large-scale emergency responses from the industry.
In a New York Times letter to the editor, the authors opine that it need not be an either-or decision, that businesses can be financially rewarded for their innovations without sacrificing poorer patients or driving private insurance premiums threw the roof. With “creative policymaking and political will, we can – and ought to have – both” patient access and competitive drug development.
One option for governments to offer businesses strong incentives to invest in R&D is by guaranteeing patent buyouts on resultant therapies. These commitments to state purchasing on new drug patents would match or exceed what they would have otherwise earned in revenue while allowing other companies to produce low-cost generic versions.
A “challenge prize” is another proposal to stimulate innovation, where companies could be awarded up to $500 per person vaccinated against coronavirus. Such government funding would likely make the winner one of the most profitable drugs-makers in history.
Conversely, can we avoid the monumental hit to the public deficit that either of these strategies would necessitate, by relying on reputational motivations of the private sector to be the first to the post with a cure? Or, less cynically, can we bet on a collectively altruistic will of big pharma to save potentially millions of lives?
In the final words of Daniel Hemel, Professor at the University of Chicago Law School, and Lisa Larrimore Ouelle, Associate Professor at Stanford, “To contain Covid-19 now and sustain a pipeline of drugs directed at other infections with pandemic potential, we will almost certainly need to enlist the capital and creativity of the private sector. We don’t need to compromise patient access, but we will need to promise profits to businesses that develop effective vaccines and treatments.”
