Will we have an affordable vaccine or drug for COVID-19?


By D L Wankhar

Amidst the current pandemic, the Governments, healthcare providers and patients across the world are hoping that, sooner than later, effective COVID-19 treatments and coronavirus vaccines will be widely available. Governments, institutions, medical researchers and scientists across the globe are scrambling in panic and literally burning the midnight oil by deploying whatever resources available to come up with solutions. Alongside the unrelenting efforts for developing treatment drugs, work is underway globally to find a vaccine to combat the virus. To cite an article published in the Forbes magazine of May 11, 2020, Joshua Cohen informed that “at least 250 drugs and 95 vaccines are currently being investigated (mostly pre-clinical) in relation to COVID-19”.

However, regulatory approval of any drug or vaccine is just the first step. How it will benefit society at large would be determined by its accessibility and most importantly perhaps by its affordability to the patients. Accessibility may only be a necessary but not a sufficient condition unless drugs are affordable to tide the pandemic. Governments and price regulators have always optimistically hoped that over time, price-setting or price-determination of drugs and vaccines will be dynamic and depend very much on market competitive forces. But the nature of pricing pattern of pharma products are such that they become ‘demand inelastic’, i.e., prices do not inversely respond to changes in demand. Patients have no option to make purchase preference on the basis of price. The pharma market presents a striking example of a ‘seller’s market’. High price drugs, often called ‘blockbuster’ drugs, generate huge revenues for firms.

Coming back to the question as to how much patients would have to shell out for COVID-19 drug treatment, at the moment we may take note of statements from firms which are in the forefront in drug development. On May, 3, 2020, Gilead’s CEO, Daniel O’Day, whose anti-viral drug ‘Remdesivir’ is at the forefront as one of the potential drug for the treatment of COVID-19, said the company will donate its entire current supply of 1.5 million doses to the US government. What will be the strategy after the current supply is depleted? Gilead has not revealed or indicated its approach on pricing of the potential drug nor has it indicated its intentions or strategies on technology transfer. These questions are crucial when there will be massive global demand for the approved treatment drug or vaccine.Perhaps it would be naïve to expect that donations or free distribution would be the trend. Honestly, this is neither practical nor viable.

Presently there is not much clarity on the actual cost that the patient would have to shell out. However, various analysis and estimations are available. One such estimate which by the Institute for Clinical and Economic Review (ICER)estimated that the drug ‘Remdesivir’ is cost-effective at $4,460 (approximately Rs. 3.3 lakh) per course of treatment. Is this affordable? It begs the question as to what cost the patient would have to ultimately incur. Will there be any concession and if so, to what extent and who is going to bear it? This question of affordability is crucial especially for developing and poorer nations where the ‘out-of-pocket’ expenditure constitutes a very large proportion of treatment. Will the treatment for COVID-19 offer different dynamics in terms of its pricing and will it be a trend setter for such pandemics?

Speculations are rife that manufacturer(s) of COVID-19 therapeutics or vaccine might adopt some kind of ‘differentiated pricing model’ and certain drug makers may pursue their launch on a ‘not-for-profit’ basis. It is also speculated that donation programs and consolidated national, regional, and global purchasing through entities, like the World Health Organization, would keep prices down in developing and poorer countries. Public procurement by Governments is another option. But will Governments override any existing patents or other intellectual property barriers on the production, import and export of these treatment drugs? As of now these options are being speculated, and rightfully so.The WHO and Governments across the world should come out with clear policy statements.

Keeping in mind the amount of effort and investments that firms are putting in developing the treatment drug, it is highly unlikely that they would forgo patent protection for the drug and allow generic manufacturers to add to the supply in future. In the past, patents and other intellectual property (IP) barriers have in some way or the other prevented access to affordable life-saving treatments. The ‘ever-greening’ of drugs to hold on to a patent has always been another concern. In emergencies, governments have the power to allow companies that do not own the intellectual property to a medicine to manufacture and sell versions of it for domestic distribution at lower prices. Such “compulsory licences” are permitted under the major international trade treaties and are recognised by the World Trade Organisation under certain conditions. Notably all WTO Members agreed in the Doha Declaration on TRIPS and Public Health that countries can make “full use of the safeguard provisions of the TRIPS Agreement to protect public health and enhance access to medicines for poor countries”.Whenever, there is a need to resort to such measures, systems should be in place immediately to allow compulsory licenses to be granted automatically so that no time is wasted.Governments and the WHO can at the same time identify sources of Application Programme Interface (API) and ensure technology transfer so drugs can be mass-produced locally or regionally at affordable cost. The capacity for local and regional production can be mapped and, where necessary, upgraded for taking on additional requirements that may arise.

Discussions are also going on that along with new research and innovation, repurposing existing drugs to treat COVID-19 is vital for reducing mortality and controlling the pandemic. The answer to today’s problem may lie in yesterday’s research. Several promising drugs have already been identified and are in various stages of clinical trials globally. If these re-purposed drugs demonstrate sufficient efficacy against COVID-19, they could be manufactured profitably in large quantities at very low cost. This is crucial in a scenario when virologists have warned that outbreaks from zoonotic diseases will be a recurring feature. Researchers and scientists are hoping that effective re-purpose drugs could offer affordable solutions. We keep our fingers crossed hoping for a positive outcome.

On the development of potential vaccines which are in the pipeline, the probability that an effective vaccine would come sooner than later is perhaps a little too optimistic because of the processes and stringent regulations that they have to go through. According to some experts, it might take another year or so before we could see effective vaccines available on a large scale. Moreover, in case of vaccines, it is observed that Governments have traditionally behaved as virtual monopsonists. This might happen in the case of coronavirus vaccine. Johnson & Johnson has indicated that if its vaccine is approved, the company would make the first one billion doses available at a not-for-profit price of approximately $10 (approximately Rs. 745) per dose. What happens with pricing after the supply of one billion doses is exhausted is anybody’s guess. Vaccination has to take place at a global scale. Compounding the issue is the fact that vaccines do not accrue the kind of sales and profits to the drug manufactures as treatment drugs would despite the fact that vaccines remain the best weapon against viruses. This has virtually prevented many manufacturers from venturing into vaccine development and many of them have given up vaccine production.

The pharmaceutical sector is a complex knowledge-driven industry where stakeholders have varying and sometimes conflicting interests. This pandemic has tested the resilience and capability of governments across the world. Better sense should prevail and the pharma industry should not target profit from this or any pandemic for that matter. Warning and caution should be not to view pandemic as ‘new markets opportunities’ or ‘once in a lifetime business opportunity’ and profiting from it. The bottom line should be that cost of treatment or vaccination should not be a barrier for anyone to access treatment. There should be a conscious and justified approach on how we balance private profit and public benefit when it comes to life-saving and life-extending medicines.We need to ensure affordable pricing with scope for a decent justified profit for the pharma industry. Perhaps adequate incentives like ‘market advance commitment’ where supplies of treatment drugs or vaccines are guaranteed a price that provides viable return on investment and at the same time affordable treatment is made available. COVID-19 vaccine provides an ideal platform for testing this strategy.Who knows this pandemic may leverage and force the stakeholders to come up with workable solutions towards this end sooner than later! More often than not, crises do offer opportunities which otherwise is never forthcoming.

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