Why Is US Government Giving A Pharma Giant Exclusive Rights To A Zika Vaccine Whose Development Was Paid For By The US Public?
from the please-tell-me-again-why-making-drugs-unaffordable-will-save-lives dept
Here on Techdirt we've written much about the way Western pharma companies fight for their "right" to charge unaffordable prices for medicines in emerging and developing economies. In particular, they routinely take governments and local generic suppliers to court in an attempt to shore up highly-profitable monopolies on life-saving drugs. But to be fair, it's not only poorer people who are dying as a result of Big Pharma's desire to maximize profits: Western drug companies are equally happy to charge even higher prices in richer countries -- notably in the US. That's old news. But there is a pharmaceutical saga unfolding that manages to combine all the worst aspects of this kind of behavior, and to throw in a few new ones.
It concerns something really exciting and important: a vaccine that shows great promise against the devastating Zika virus, which can cause microcephaly, blindness, deafness, and calcification of the brain in children whose mothers were infected during their pregnancy. If effective, such a vaccine could be a tremendous boon not just for developing countries, but for Western ones too, since the Zika virus has already begun to spread in the US, and Europe. The vaccine was developed at the Walter Reed Army Institute for Research, and the Department of the Army funded its development. Great news, you might think: the US public paid for it, so it's only right that it should have low-cost access to it. Moreover, as an act of compassion -- and to burnish its international image -- the US could allow other countries to produce it cheaply too. But an article in The Nation reports that the US Army has other ideas:
the Army is planning to grant exclusive rights to this potentially groundbreaking medicine -- along with as much as $173 million in funding from the Department of Health and Human Services -- to the French pharmaceutical corporation Sanofi Pasteur. Sanofi manufactures a number of vaccines, but it's also faced repeated allegations of overcharges and fraud. Should the vaccine prove effective, Sanofi would be free to charge whatever it wants for it in the United States. Ultimately, the vaccine could end up being unaffordable for those most vulnerable to Zika, and for cash-strapped states.
The Knowledge Ecology Institute (KEI), led by Jamie Love, made a reasonable suggestion to ensure that those most at need would have access to the drug at a reasonable price. KEI asked that, if Sanofi does get an exclusive deal, it should be obliged to make the vaccine available at an affordable price. The Army said it lacked the ability to enforce price controls, but it would ask those nice people at Sanofi to commit to affordable pricing on a voluntary basis. According to The Nation, those nice people at Sanofi refused. Speaking of nice people at Sanofi, the article notes the following:
Sanofi's record also includes a number of controversies related to its pricing practices, from a $190 million fine to settle charges that it defrauded Medicare and other government programs, to a $109 million fine to settle charges that it illegally provided product kickbacks to doctors. In 2014, a whistle-blower alleged the company engaged in another kickback scheme and the destruction of legal evidence. KEI maintains a comprehensive list of Sanofi's fraud fines, including the latest: a $19.9 million settlement, reached this April, for overcharging the Department of Veterans’ Affairs.
When there is an entire Web page dedicated to listing Sanofi's problems going back to 2009, you really have to wonder why the US Army is so keen to give the company a monopoly on this promising new treatment. The usual argument for the sky-high prices of drugs is that firms must be rewarded for taking on the financial risk of drug development, otherwise they won't proceed, and the world would be the poorer. Except, of course, in this case that risk was entirely borne by the US public, which paid for the early stage development of the vaccine with their taxes. So Sanofi risked nothing, but now looks likely to reap the benefits by being allowed to price the vaccine out of the reach of the people who most need it. You might think there ought to be a law against this kind of behavior. It turns out that there is:
KEI's Jamie Love pointed out that under the Bayh-Dole Act of 1980, it is already illegal to grant exclusive rights to a federally owned invention unless the license holder agrees to make it available at reasonable pricing. But that provision has rarely, if ever, been enforced.
Now would be a really great time to start enforcing that law.
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Filed Under: army, patents, public funding, vaccine, walter reed army institute, zika
Companies: sanofi
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"We're helpless, really."
The Army said it lacked the ability to enforce price controls, but it would ask those nice people at Sanofi to commit to affordable pricing on a voluntary basis.
Putting aside the fact that from the sounds of it this particular company shouldn't be trusted to so much as run a lemonade stand, the idea that the army was helpless to enforce price controls is complete and total crap. There are a multitude of pharma companies in the world, the army could have easily made selling the drug at a certain rate a condition to any company interested in selling the drug.
They didn't lack the ability to set terms, they simply didn't care to, because why would they care if a taxpayer funded drug is priced out of range of those that need it?
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Re: "We're helpless, really."
Until they find themselves in the situation of wanting the drug but it is too high a price to pay for it then somehow i think they will care when it happens to them.
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how the hell does it NOT have that control? I would say in this scenario they had all the power. Want to be the distributor of drug X then here is the agreement you sign, don't want to agree to the terms? ok we will find someone else to be the distributor.
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Beats the alternative
They should be unless something's gone wrong.
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Re: Re: Re: Re: "We're helpless, really."
I guess you've never heard the line about war being months of boredom punctuated by moments of extreme terror.
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Re: "We're helpless, really."
The wolbachia technique has been highly successful in the Australian cities of Cairns and Townville, against dengue fever. If nobody is getting infected, then the price of the treatment for infected persons can be high, without causing significant economic losses. Wolbachia was mentioned in a recent episode of the Science Show on ABC Radio National.
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It will be worth too much again, for a few people, after is put behind a paywall monopoly.
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(welcome to health care reform, Trump style)
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Does not compute
And since when does the army have the power to grant exclusive rights to manufacture a drug? It's great that they paid for the development but handing out what amounts to a drug patent seems like a stretch.
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Re: Does not compute
ah forgot about those guys did ya?
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Re: Does not compute
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Yes but who funded everything? We the people, the taxpayers, you, me...and none of us voted on how our patent should be used.
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Of course that very very sweet job offer will have had nothing at all to do with this.... nope... nothing at all....
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Please don't feel the need to pad your comment count.
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But I don't pad it, I post where I feel I have something to add.
I'm offensive, and I'll never apologize for it.
We paid for the research.
It's been handed to a Corporation with a PROVEN track record of ripping off customers, including the Government that just handed them the golden ticket.
We can't even bother to enforce the law that is supposed to shield us from being price gouged.
That does pretty much sound like they have gone out of their way to appease a corporation at the expense of the citizens they are supposed to care about.
We got sold out after they used our money to develop it & we'll pay some of the highest prices to benefit from OUR research which will be locked away & protected by our own laws so we can't get a cheaper alternative for a very long time.
Remember I'm the guy who turns fun phrases and uses profanity often to interesting results.
https://www.techdirt.com/articles/20120606/06512419218/filmmaker-compares-copyleft-supporter s-to-anti-gay-marriage-advocates.shtml#c74
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The shock!!!
what did you think was going to happen? Oh right, lets call for more regulation... that will do the trick!
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This isn't entirely accurate
"Early-Stage Development" != Ready to Inject Into Humans by the Millions. There's quite a lot of risk (and expense) involved to bring a drug fully to market.
That's not to say the Army got a good deal (far from it), or that Sanofi isn't a bunch of greed bastards (they are), just that the deal isn't quite as awful as claimed.
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I cant say anything..REALLY.
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In other words, failure is NOT an option. If this fails, they'll just grant more money and try something else. The "risk of failure" in a traditional (albeit bulls**t) patent sense is mitigated by the knowledge that ALL R&D costs WILL get covered, even if those costs exceed the current grant.
So, again, this is basically granting a drug patent without even the ACTUAL RISK usually used (as a BS, and very incorrect) argument used to justify said patents.
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The primary motivator for development of a vaccine appears to be the avoidance of birth defects that may arise if one who is pregnant becomes infected by the virus. This does not strike me as a significant concern for military readiness.
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Foreign company
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Understand! Stop this US vs France, or US vs Russia, or this vs that country. It is nonsense, in the end your beloved american company or french company or whatever won't give a fuck if you are american or french, they will just require from you to pay an unreasonable and ultra-inflated price!
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Standard Practice
After you murder, maim and mangle countless children, get one or more of your sociopaths to lie about the damage done.
That way, the program will be completely consistent with how vaccines are marketed and used today.
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Crony Capitalism
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