Vac­cine could boost Big Pharma’s rep­u­ta­tion

Drug com­pa­nies’ ef­forts to end pan­demic could take them from zero to hero.

USA TODAY US Edition - - FRONT PAGE - Nathan Bomey

For years, the phar­ma­ceu­ti­cal in­dus­try has faced with­er­ing bi­par­ti­san crit­i­cism and a de­te­ri­o­rat­ing rep­u­ta­tion among the pub­lic for its role in driv­ing up drug prices.

But the sec­tor sud­denly might be poised to go from vil­lain to hero with the de­vel­op­ment of a vac­cine that could end the COVID-19 pan­demic.

The drug in­dus­try’s rep­u­ta­tion started this cri­sis in the base­ment af­ter hav­ing plunged to an all-time low in 2019, mak­ing it the least pop­u­lar sec­tor among 25 ma­jor in­dus­tries, ac­cord­ing to poll­ster Gallup.

Amer­i­cans soured on the in­dus­try af­ter net drug prices – which fac­tor in re­bates and dis­counts – in­creased by 60% from 2007 to 2018, about triple the rate of in­fla­tion, ac­cord­ing to a Univer­sity of Pittsburgh study. High­pro­file ex­am­ples of sharp drug price hikes in re­cent years have in­cluded “Pharma Bro” Martin Shkreli’s 5,000% in­crease of a life-sav­ing treatment Dara­prim and My­lan’s six-fold in­crease of the EpiPen, an emer­gency al­ler­gic re­ac­tion treatment.

While drug­mak­ers through­out the world are chas­ing a coro­n­avirus vac­cine and only a few, at most, can win, the fever­ish pur­suit rep­re­sents one of the great­est op­por­tu­ni­ties in the his­tory of medicine – with the rep­u­ta­tional ben­e­fits alone worth the ef­fort, not to men­tion the fi­nan­cial pos­si­bil­i­ties. The com­pa­nies pur­su­ing a vac­cine in­clude gi­ants like Pfizer, Moderna, John­son & John­son, As­traZeneca, Merck and Glax­oSmithK­line.

Drug com­pa­nies have “spared no ex­pense to kind of pivot and shift” to tackle the coro­n­avirus, Gilead Sciences CEO Daniel O’Day told in­vestors on a con­fer­ence call on April 30. “I think this will cer­tainly help the in­dus­try’s rep­u­ta­tion.”

Yet there are also pot­holes on the road to a vac­cine for the drug in­dus­try, as Amer­i­cans and in­dus­try crit­ics ex­press con­cern that the race could help pharma com­pa­nies jus­tify price in­creases and avoid a reg­u­la­tory crack­down.

“With drug prices where they’re at, peo­ple can’t af­ford them and they are dy­ing,” said Tim Lash, chief strat­egy of­fi­cer of West Health, a non­profit that pur­sues lower health care costs. He added that “there is very real con­cern about pharma lever­ag­ing” the coro­n­avirus vac­cine push to in­crease the price of other treat­ments.

Did drug prof­its make a coro­n­avirus vac­cine pos­si­ble?

The chance to de­velop a vac­cine or a suc­cess­ful treatment that could save mil­lions of lives and jobs has at­tracted hun­dreds of play­ers de­spite the high like­li­hood of fail­ure for most of them.

Vac­cines – which save about 2.5 mil­lion lives an­nu­ally from con­di­tions such as po­lio, measles and diph­the­ria – rep­re­sent “one of the most suc­cess­ful and cost-ef­fec­tive health in­ter­ven­tions” ever, ac­cord­ing to the World Health Or­ga­ni­za­tion.

Po­ten­tial COVID-19 treat­ments un­der de­vel­op­ment in­clude 150 vac­cine can­di­dates, 160 novel med­i­ca­tions de­signed to kill the virus and 300 ex­ist­ing drugs that could be re­pur­posed to treat it, ac­cord­ing to the Biotech­nol­ogy In­no­va­tion Or­ga­ni­za­tion (BIO), a trade group that rep­re­sents biotech com­pa­nies.

An­thony Fauci, di­rec­tor of the U.S. govern­ment’s Na­tional In­sti­tute of Al

lergy and In­fec­tious Dis­eases, re­cently pre­dicted that a vac­cine could ar­rive by the end of 2020 or early 2021.

Pharma in­dus­try ex­ec­u­tives say the vac­cine push shows how the in­dus­try is com­mit­ted to us­ing prof­its, which have been the tar­get of much crit­i­cism, to sup­port their pur­suit of life-sav­ing med­i­ca­tions.

About 90% of drug can­di­dates fail, il­lus­trat­ing the need for sub­stan­tial in­vest­ments in po­ten­tial ther­a­pies, said Stephen Ubl, CEO of in­dus­try trade group PhRMA, which rep­re­sents phar­ma­ceu­ti­cal com­pa­nies on pol­icy is­sues in Wash­ing­ton,

“The coro­n­avirus gives us the op­por­tu­nity to tell the real story of the im­por­tance of the in­dus­try and why a ro­bust bio­phar­ma­ceu­ti­cal sec­tor is ab­so­lutely crit­i­cal to the pub­lic health,” Ubl said.

The pan­demic “has driven the pub­lic eye onto what the biotech in­dus­try does, which is change the dy­namic of a disease,” said Jeremy Levin, chair­man of BIO and au­thor of the re­cently pub­lished book “Biotech­nol­ogy in the Time of COVID-19: Com­men­taries from the Front Line.”

But in­dus­try crit­ics say phar­ma­ceu­ti­cal com­pa­nies shouldn’t be let off the hook for their role in driv­ing up drug prices.

“There are cer­tainly bright spots in the pharma sec­tor in terms of in­no­va­tion, hope and op­ti­mism – and cer­tainly those three things would ap­ply to the work that’s hap­pen­ing around COVID-19,” Lash said. “But if you look at the per­for­mance of Big Pharma and their be­hav­ior over the last decade, it paints a very dark pic­ture of drug pric­ing in Amer­ica.”

A study con­ducted by West Health and polling out­fit Gallup found that in a given 12-month pe­riod, about 1 in 5 Amer­i­can adults are un­able to pay at least once for needed pre­scribed drugs.

And nearly 9 in 10 Amer­i­cans are con­cerned that phar­ma­ceu­ti­cal com­pa­nies will raise drug prices to com­pen­sate for the coro­n­avirus vac­cine race, ac­cord­ing to an­other study by West Health and Gallup.

“The phar­ma­ceu­ti­cal sec­tor has his­tor­i­cally lever­aged price in­creases to fur­ther max­i­mize profit,” Lash said.

Phar­ma­ceu­ti­cal ex­ec­u­tives say their pric­ing is jus­ti­fied due to the high cost of re­search and de­vel­op­ment that is now con­tribut­ing to the pur­suit of a vac­cine for the coro­n­avirus. For ex­am­ple, Gilead Sciences re­cently won ap­proval to dis­trib­ute its remde­sivir drug as a treatment for crit­i­cally ill COVID-19 pa­tients. That an­tivi­ral drug, which Gilead said it spent more than $1 bil­lion to de­velop, orig­i­nally came about dur­ing the pur­suit of a rem­edy for Ebola sev­eral years ago but went nowhere at the time.

Gilead on June 29 an­nounced a pric­ing plan: $3,120 per treatment course for the typ­i­cal in­sured pa­tient.

It’s cur­rently un­clear how a po­ten­tial vac­cine would be priced or whether it would be cov­ered by in­surance or by the govern­ment. The fed­eral govern­ment’s Op­er­a­tion Warp Speed is pro­vid­ing nearly $10 bil­lion in funds to aid in the de­vel­op­ment and pro­duc­tion of various coro­n­avirus vac­cines with a goal of de­liv­er­ing 300 mil­lion doses by Jan­uary 2021.

The av­er­age pri­vate-sec­tor non-in­fluenza vac­cine for adults ranges from about $26 for Gri­fols’ te­tanus and diph­the­ria tox­oids in­oc­u­la­tion to $228 for Merck’s Hu­man pa­pil­lo­mavirus in­oc­u­la­tion, ac­cord­ing to the Cen­ters for Disease Con­trol and Preven­tion.

Ubl said Amer­i­cans don’t need to be con­cerned about the price of a COVID-19 vac­cine. “The in­dus­try is deeply com­mit­ted to, when we find safe and ef­fec­tive ther­a­pies, we want them to be safe and ac­ces­si­ble,” he said.

He at­trib­uted much of the crit­i­cism over drug prices to “rel­a­tively few bad ac­tors” re­spon­si­ble for sharp in­creases, in­clud­ing Shkreli, who was later im­pris­oned af­ter be­ing con­victed on un­re­lated fraud charges, and My­lan.

“In the noise that came from the bad ac­tors, we ba­si­cally lost sight of the essence of what the biotech is all about, which is pa­tients and in­no­va­tion,” Levin said.

In­dus­try pro­motes vac­cine pur­suit

With the pub­lic’s at­ten­tion sud­denly fo­cused on the push for a vac­cine, the phar­ma­ceu­ti­cal in­dus­try senses an op­por­tu­nity to ease reg­u­la­tory pres­sure in Wash­ing­ton, too.

The pres­sure has come in the rare form of a bi­par­ti­san cho­rus, rang­ing as widely as Pres­i­dent Donald Trump to one of his fiercest crit­ics, Sen. Bernie San­ders, D-Vt., both of whom have re­peat­edly called for poli­cies to re­strict drug prices.

Some say the fed­eral govern­ment’s Medi­care pro­gram should be al­lowed to ne­go­ti­ate drug prices in­stead of pay­ing mar­ket value, a move that ad­vo­cates say would help lower prices across the board.

Oth­ers say the govern­ment should im­pose caps on drug prices, among other pos­si­bil­i­ties.

Ubl crit­i­cized the push for “dra­co­nian poli­cies that would upend the busi­ness model” and “throw sand into the gears” of in­no­va­tion. But he said he’s hope­ful that pol­i­cy­mak­ers will rec­og­nize that the race to solve the coro­n­avirus pan­demic “high­lights the ben­e­fit of our free mar­ket sys­tem.” PhRMA has led a mar­ket­ing and pub­lic­ity cam­paign in re­cent months to pro­mote the in­dus­try’s role in de­vel­op­ing a vac­cine or treatment. The group has ad­ver­tised in news out­let Politico’s in­flu­en­tial “Play­book” e-news­let­ter, run a print ad­ver­tise­ment along with BIO, pub­lished blog posts, com­piled fact sheets and writ­ten re­ports doc­u­ment­ing the in­dus­try’s com­mit­ment to de­vel­op­ing a safe and ef­fec­tive vac­cine ex­pe­di­tiously.

Gilead CEO O’Day said in the April 30 call that he had al­ready no­ticed a shift in rhetoric about drug pric­ing on Capi­tol Hill fol­low­ing the emer­gence of the pan­demic.

“I think peo­ple are very ap­pre­cia­tive and con­cerned about find­ing so­lu­tions here. And it’s brought us all to­gether, which I think is a good thing,” he said. “I’m not sug­gest­ing that there won’t con­tinue to be fo­cus and pres­sure on drug pric­ing. Of course, there will be . ... But it’s be­ing done now in a way where we can have an ap­pre­ci­a­tion for the in­no­va­tion the in­dus­try brings.”

Lash said pol­i­cy­mak­ers should not fall for the sug­ges­tion that phar­ma­ceu­ti­cal com­pa­nies have taken an al­tru­is­tic turn.

The phar­ma­ceu­ti­cal in­dus­try can’t es­cape the fact that it’s “the most prof­itable sec­tor in our econ­omy when you look at re­turn on in­vest­ment cap­i­tal,” he said.

Amer­i­cans don’t like drug­mak­ers

For their part, Amer­i­cans have placed sig­nif­i­cant blame on phar­ma­ceu­ti­cal com­pa­nies for drug prices.

Only 21% of Amer­i­cans gave the phar­ma­ceu­ti­cal sec­tor pos­i­tive rat­ings in a 2019 Gallup sur­vey, while 58% gave it neg­a­tive rat­ings. The in­dus­try’s rep­u­ta­tion was even worse than the fed­eral govern­ment’s.

“It’s hard to do worse than the govern­ment in these types of pos­i­tiv­ity, neg­a­tiv­ity rat­ings,” said Dan Wit­ters, re­search di­rec­tor of the Gallup Na­tional Health and Well-Be­ing In­dex. “There’s real pub­lic sen­ti­ment here” against phar­ma­ceu­ti­cal com­pa­nies.

Wit­ters con­ceded that the COVID-19 vac­cine race could lend some “buoy­ancy” to the in­dus­try’s rep­u­ta­tion.

But in the long run, Amer­i­cans are un­likely to for­give the in­dus­try for drug prices, he said.

“In my opin­ion, what­ever good­will may ul­ti­mately be bought for the phar­ma­ceu­ti­cal in­dus­try as a func­tion for its ef­forts to come up with a vac­cine, I think it’s go­ing to be fleet­ing,” Wit­ters said. “The con­cern about ris­ing costs gen­er­ally is over­whelm­ing.”


Re­searcher Matt Dunn holds dead sam­ples of the coro­n­avirus in Oak­land, Pa.


A vial of the an­tivi­ral drug remde­sivir is vis­ually in­spected at a Gilead Sciences man­u­fac­tur­ing site in the U.S. in March.


Sen. Bernie San­ders has called for poli­cies to re­strict drug prices.

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