Four Steps to Transform the Pharmaceutical Industry and Survive the Pandemic

Dealing with the Covid crisis will require taking the profit motive out of our health systems. Here’s how.

Dana Brown and Christopher Morten

(Photo by John Moore/Getty Images)

Even as the Covid-19 pan­dem­ic expos­es deep struc­tur­al prob­lems with­in America’s health­care sys­tem, unprece­dent­ed efforts by many of the sci­en­tists respond­ing to the cri­sis also point the way for­ward. They are think­ing and work­ing dif­fer­ent­ly, shar­ing knowl­edge, col­lab­o­rat­ing across nation­al bound­aries, and focus­ing on deliv­er­ing life-sav­ing vac­cines and cures to all. 

It is time for U.S. law and pol­i­cy to catch up. In a recent state­ment signed by more than 150 lead­ers of civ­il soci­ety groups, health­care providers, and experts on law, pol­i­cy and pub­lic health, we lay out four steps our coun­try should take to do just that: 

1. Make open sci­ence the law of the land 

2. Cre­ate a pub­lic option” for phar­ma­ceu­ti­cal R&D and manufacturing 

3. Embrace and expand com­pul­so­ry licens­ing of intel­lec­tu­al property 

4. Take vac­cine devel­op­ment under pub­lic control

Covid-19 calls us to rethink a phar­ma­ceu­ti­cal sec­tor that has become an increas­ing­ly effi­cient wealth extrac­tion machine. The sec­tor takes in bil­lions of dol­lars in pub­lic funds for research and hoards the results for pri­vate gain. Drug com­pa­nies pro­duce hun­dreds of bil­lions in prof­its for their exec­u­tives and share­hold­ers by forc­ing Amer­i­cans to pay the world’s high­est drug prices — often with dead­ly con­se­quences. The sec­tor restricts access to med­i­cines — and infor­ma­tion on their true risks and ben­e­fits — through a com­plex web of intel­lec­tu­al prop­er­ty pro­tec­tions. All the while, clin­i­cal­ly mean­ing­ful inno­va­tion has been on the decline for decades.

Big Phar­ma com­pa­nies have dou­bled down on this play­book dur­ing the cri­sis, adding $51 bil­lion to their mar­ket val­ue dur­ing the pan­dem­ic as of the end of June, while extract­ing bil­lions in new pub­lic spend­ing. Price hikes on a myr­i­ad of drugs have con­tin­ued dur­ing the pan­dem­ic, includ­ing on dozens of drugs used in Covid-19 treat­ment. Mar­ket con­sol­i­da­tion and sin­gle-sourc­ing prac­tices that have con­tributed to wide­spread short­ages in essen­tial med­i­cines for years now affect drugs crit­i­cal to treat­ing the virus.

This real­i­ty is what dri­ves our call for the long-term trans­for­ma­tion of the phar­ma­ceu­ti­cal sec­tor from one cen­tered on pri­vate prof­it to one cen­tered on pub­lic health and the pub­lic good. Our pro­pos­al explains how.

First, cod­i­fy open sci­ence prac­tices that accel­er­ate inno­va­tion, reduce costs and strength­en the evi­dence base on which our med­i­cines sys­tem rests. We must change our laws to pre­vent drug com­pa­nies from keep­ing secret for years or decades valu­able med­ical data, such as clin­i­cal tri­al results and man­u­fac­tur­ing details — some­times with the coop­er­a­tion of gov­ern­ment agen­cies. Instead, our laws should encour­age — even require — broad, ready, equi­table access to sci­en­tif­ic knowl­edge across a drug’s entire life­cy­cle, from test tube to pharmacy. 

Sec­ond, cre­ate pub­lic sec­tor capac­i­ty for full-cycle phar­ma­ceu­ti­cal inno­va­tion and pro­duc­tion of essen­tial med­i­cines: a pub­lic option” for end-to-end dis­cov­ery, devel­op­ment and man­u­fac­tur­ing. Unlike for-prof­it drug com­pa­nies, a pub­lic med­i­cines agency would focus where the med­ical need is great­est. Pub­lic phar­ma would also cre­ate addi­tion­al man­u­fac­tur­ing capac­i­ty, com­bat­ing short­ages. We know this works: Sci­en­tists at U.S. gov­ern­ment lab­o­ra­to­ries invent­ed HIV pre­ven­tion ther­a­py (“HIV PrEP”), and the non­prof­it Drugs for Neglect­ed Dis­eases Ini­tia­tive has shep­herd­ed numer­ous drugs through clin­i­cal tri­als to patients. 

Third, use the full pow­er of com­pul­so­ry licens­ing to ensure access to essen­tial med­i­cines. Intel­lec­tu­al prop­er­ty rights are often the only bar­ri­er to gener­ic com­pe­ti­tion, which low­ers prices (some­times by 95% or more) and expands sup­ply. The U.S. gov­ern­ment already has the legal author­i­ty — which it used as recent­ly as the 1970s—to issue com­pul­so­ry patent licens­es to accel­er­ate gener­ic com­pe­ti­tion. But in recent years it has lost the will to do so, even in the face of sky­rock­et­ing prices and recur­ring short­ages. The U.S. gov­ern­ment should not only use, but expand, com­pul­so­ry licens­ing beyond patents to trade-secret man­u­fac­tur­ing infor­ma­tion and reg­u­la­to­ry exclusivities. 

Fourth, take the vac­cine indus­try into pub­lic own­er­ship to assure its prod­ucts are avail­able to all. The vac­cine indus­try is per­haps the stark­est exam­ple of the fail­ure of our cur­rent sys­tem. Until the Covid-19 pan­dem­ic hit, Big Phar­ma had most­ly aban­doned vac­cine devel­op­ment despite bil­lions of pub­lic dol­lars spent on incen­tives. High-pro­file suc­cess­es like the Ebo­la vac­cine in 2019 were fund­ed, dri­ven, and led by gov­ern­ment research agen­cies. By mak­ing vac­cines ful­ly pub­lic, either patent-free or freely and afford­ably licensed through a glob­al pool, we can prop­er­ly rec­og­nize that vac­cines are a pub­lic good, not a prof­it center.

To sur­vive this pan­dem­ic, pre­pare for the next one, and final­ly solve the innu­mer­able every­day health prob­lems that Amer­i­cans face — from find­ing EpiPens to pay­ing for insulin—the pub­lic must reclaim con­trol over a phar­ma­ceu­ti­cal sys­tem that puts pri­vate prof­it above all else. We must find the will to reori­ent it around pub­lic health and pub­lic good. 

Dana Brown is direc­tor of The Next Sys­tem Project at The Democ­ra­cy Col­lab­o­ra­tive. Christo­pher Morten is the clin­i­cal teach­ing fel­low and super­vis­ing attor­ney in the Tech­nol­o­gy Law and Pol­i­cy Clin­ic at the New York Uni­ver­si­ty School of Law.

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