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A Brief History of Pharmaceutical Profiteering

A Brief History of Pharmaceutical Profiteering

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Profit by itself is not harmful, more so if it is coupled with a genuine product, developed for people, and made available, accessible and affordable. When it comes to the health of people, many experts are now arguing against profit-based healthcare, especially with the ongoing pandemic showing up brutal inequities and inequalities. This is all the more troubling when we find that a lot of research that goes into the development of these products is funded by the people.

2013 was a breakthrough year for patients with hepatitis C virus (HCV) infections. Gilead came up with a drug named sofosbuvir, with cure rates above 90%. HCV affects more people than HIV, so sofosbuvir offered a lot of hope. But when Gilead priced it at $1,000 a pill – and $84,000 for a full course – many stakeholders raised justifiable concerns. A few months later, Gilead agreed to a voluntary license agreement with some Indian companies to sell the drug at a drastically reduced price, although the license excluded many countries where 73 million people with HCV live.

Upon further investigation, it was found that Gilead hadn’t discovered sofosbuvir in 2007 – it was a small company called Pharmasset, which Gilead had bought for $11 billion. A lot of research on the drug’s target, the NS5B protein, had been conducted with public funding.

Around the same time, Gilead also developed remdesivir for HCV. But tests indicated that it was ineffective against HCV as well as, over time, other diseases caused by the Ebola, SARS, MERS and the Marburg viruses.

As Gilead kept looking for a disease that remdesivir could cure, the COVID-19 pandemic provided a new opportunity. On May 22, the New England Journal of Medicine published a preliminary report of a trial showing a reduction in recovery time of four days, with no statistically significant benefit in mortality reduction at 14 days. Although this data did not convince independent experts, the US Food and Drug Authority granted an ’emergency use authorisation’ for remdesivir. The drug’s use quickly skyrocketed, and according to one estimate is expected to rake in $2.3 billion for Gilead in 2020. The company priced it at $520 per vial and $3,120 per patient per course.

Since the trial had been funded by the US National Institutes of Health, and not by the company, a US representative called the figure “an outrageous price for a very modest drug”.

Lobbying and profiteering

To ensure government support for approvals and pricing, and to enforce patent laws across the world, the pharmaceutical industry spends a lot on lobbying. From January to March this year, Gilead spent $2.45 million on lobbying, increasing by one third over the first quarter of 2019.

The system also allowed a former Gilead lobbyist to lead the US Drug Pricing and Innovation Work Group, and who is now a member of the country’s coronavirus task force – an obvious conflict of interest. Alex Azar, a former Eli Lilly lobbyist who became the secretary of Health and Human Services, announced that the government “can’t control” the price of new COVID-19 vaccines because it needs the private sector to invest more.

A paper published in March 2018 in the journal AJOB Empirical Bioethics reported that several authors of biomedical textbooks had received money from companies but didn’t disclose these transactions to their readers. The paper also said the authors of a book called ‘Principles of Internal Medicine’ had received more than $11 million from 2009 to 2013.

Even if former lobbyists were to cut off their links to pharmaceutical companies, it’s likely that once their government stint is completed, they will be recruited by Big Pharma – a documented phenomenon called the ‘revolving door’ that forms a part of how companies and regulators stay in touch. But this is not all.

In mid-May, Moderna Therapeutics announced that participants in a clinical trial who had been given its COVID-19 vaccine had developed antibodies to the novel coronavirus. As the company’s stock rose, Moderna’s CEO and other top executives reportedly made millions – even though the trial only had 45 participants and the study’s results had yet to be published.

The New York Times subsequently asked a data provider named Equilar to compile some figures on this state of affairs, the results were glaring. Since March 2020, insiders from at least 11 companies have sold shares worth over $1 billion on the basis of positive announcements – not results, just announcements.

In most cases, the study results have been preliminary – reflecting the fact that such trials usually take many months to complete. Some of the companies currently trying to develop a drug or vaccine against COVID-19 have never brought a drug to market before. Sometimes their announcements are made just in the hope that the government will support the development of their molecule. Even small companies can take part in this system thanks to hedge funds, which also benefit as they manage these rapidly rising stocks.

Samir Malhotra works at the Post-Graduate Institution of Medical Education and Research, Chandigarh.

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