Showing posts with label Business of medical care. Show all posts
Showing posts with label Business of medical care. Show all posts

Sunday, November 28, 2021

Moderna cheats taxpayers to profit from the Covid-19 vaccine

Following up on the article yesterday by F. Douglas Stephenson about how big pharma cheats the taxpayers, here is article with a good example about Moderna's Covid-19 vaccine.

Why Moderna won’t share rights to the COVID-19 vaccine with the government that paid for its development

Ana Santos Rutschman

A quiet monthslong legal fight between the U.S. National Institutes of Health and drugmaker Moderna over COVID-19 vaccine patents recently burst into public view. The outcome of the battle has important implications, not only for efforts to contain the pandemic but more broadly for drugs and vaccines that could be critical for future public health crises.

I teach drug regulation and patent law at Saint Louis University’s Center for Health Law Studies.

Moderna recently offered to share ownership of its main patent with the government to resolve the dispute. Whether or not this is enough to satisfy the government’s claims, I believe the dispute points to serious problems in the ways U.S. companies bring drugs and vaccines to market.

US was a major funder of the Moderna vaccine

Vaccines have played a crucial role in the response to the pandemic.

Our mission is to share knowledge and inform decisions.

In December 2020, Moderna became the second pharmaceutical company after Pfizer to obtain authorization from the Food and Drug Administration to market a COVID-19 vaccine in the United States. People have since grown so used to talking about the “Moderna vaccine” that a crucial element in the history of how it was developed risks being overshadowed: Moderna was not the sole developer of the vaccine.

Unlike many of the other pharmaceutical companies involved in the COVID-19 vaccine race, Moderna is a newcomer to drug and vaccine commercialization. Founded in Massachusetts in 2010, the company had never brought a product to market until the FDA authorized its COVID-19 vaccine last year.

Throughout the 2010s, Moderna focused on the development of mRNA technology, attracting over US$2 billion in funding from pharmaceutical companies and other investors. It went public in 2018.

Even before the pandemic, research on both coronaviruses and vaccine candidates against emerging pathogens was a priority for agencies operating in the public health space. In 2015, the National Institute of Allergy and Infectious Diseases, an institute within the NIH, signed a cooperative R&D agreement with Moderna on basic research, including the development of new vaccines. The agreement resulted in an undisclosed amount of funding and assistance with research.

In addition, after the COVID-19 outbreak began Moderna also received almost $1 billion in funding from the Biomedical Advanced Research and Development Authority, which operates within the Department of Health and Human Services. This funding was specifically targeted to the development of a COVID-19 vaccine candidate.

Researchers have calculated that, collectively, the U.S. government has provided $2.5 billion toward the development and commercialization of Moderna’s COVID-19 vaccine.

US, Moderna scientists working side by side

In addition to providing financial support, the federal government was instrumental in the development of Moderna’s vaccine for other reasons. Namely, federal scientists worked alongside Moderna scientists on different components of the vaccine.

These contributions included working on dosing mechanisms, and the NIH said federal scientists created the stabilized spike proteins that are a key component of the vaccine made by Moderna.

The importance of the role played by federal scientists in their work with Moderna would soon become apparent. A 2019 agreement with a third party explicitly acknowledged this, alluding to mRNA vaccine candidates “developed and jointly owned by NIAID and Moderna.” And by late 2020, the U.S. government was calling it the “NIH-Moderna COVID-19 vaccine.”

While the U.S. government has spent money on COVID-19 vaccines made by other companies, its close involvement in the R&D stages of Moderna’s sets it apart.

How it became a patent dispute

As development of the vaccine progressed, Moderna applied for several patents, each one covering different components of the vaccine. U.S. law allows inventors to apply for patents on products or methods that are new, not obvious and useful. While some early modern vaccines – like the polio vaccine developed by Jonas Salk’s team – were not covered by patents, from the late 20th century onward it became very common for one or multiple patents to cover a newly developed vaccine.

In applying for some patents related to its vaccine, Moderna named National Institute of Allergy and Infectious Diseases scientists as co-inventors alongside Moderna scientists. This was the case, for example, in a patent application dated May 2020 for a relatively minor component of the vaccine.

However, in July 2021, Moderna made it clear that it would not name government scientists as co-inventors in a patent application covering a much more significant component of the vaccine: the mRNA sequence used to produce the vaccine, known as mRNA-1273.

Moderna’s position was that Moderna scientists alone had selected the sequence. The company informed the Patent and Trademark Office of its position in a 2020 statement.

In November 2021, government officials publicly challenged the company’s decision after months of failed negotiations with the company. Moderna then took to social media to defend its position, tweeting:

“Just because someone is an inventor on one patent application relating to our COVID-19 vaccine does not mean they are an inventor on every patent application relating to the vaccine.”

By contrast, the National Institutes of Health argued that three NIAID scientists – Kizzmekia Corbett, Barney Graham and John Mascola – had meaningfully contributed to the invention, though they’ve declined to publicly specify how. If true, patent law says they should be named co-inventors.

But this dispute is not merely about scientific principles or technical aspects of the law. While patents are also regarded as proxies for measuring scientific reputation, their most immediate and powerful effect is to give patent holders a significant amount of control over the covered technology – in this case, the main component of the vaccine made by Moderna.

From a practical perspective, excluding federal scientists from the application means that Moderna alone gets to decide how to use the vaccine, whether to license it and to whom. If, by contrast, the government co-owns the vaccine, federal patent law allows each of the joint owners to engage in a variety of actions – from making and selling the vaccine to licensing it – without the consent of the other owners.

This is especially relevant in cases of product scarcity or potential pricing issues in connection with the commercialization of the vaccine. For instance, the U.S. would have the ability to allow more manufacturers to produce vaccines using the mRNA-1273 technology. In addition, it could direct vaccine doses wherever it likes, including to lower-income countries that have received few vaccines so far.

Broader implications

Moderna explains its mRNA technology. Business Wire

The ongoing battle between the government and an emerging star in the pharmaceutical industry is yet another episode in a complicated relationship between actors with complementary yet distinct roles in the production of drugs and vaccines.

On the one hand, the federal government has long played a critical role in both performing and funding basic research. On the other, it does not have the resources and capacity to bring most types of new drugs and vaccines to market on its own.

The pharmaceutical industry thus plays an important and necessary role in drug innovation, which I believe should be rewarded – although not boundlessly.

If the NIH is correct about co-ownership of the vaccine, then Moderna is unduly using a legal tool to achieve a position of market control – a reward it does not deserve. This position of sole control becomes even more problematic in light of the significant amounts of public money that funded the development of this vaccine. This offset some of Moderna’s financial risk, even as the company projects to make $15 billion to $18 billion in revenue from vaccine sales in 2021 alone, with much more expected in 2022.

However, even if the NIH prevails in the patent dispute, it is important to understand the limitations of such a “win.” The U.S. would be in a position to license the vaccine, for example, and could do so by requiring that licensees agree to equitable distribution of vaccine doses.

But co-ownership would not enable the government to fix any of the other problems that currently affect the manufacturing and distribution of COVID-19 vaccines, such as scaling up production or building infrastructure to deliver vaccine doses.

In my view, the dispute is a reminder of the many problems embedded in how vaccines are made and delivered in the U.S. And it shows that when taxpayers fund basic research of a drug, they deserve more of the control – and rewards – when that drug succeeds.

Saturday, November 27, 2021

The profit motives of Big Pharma


Is Big Pharma More Interested in Profiteering Than Protecting Us From Coronavirus?


Gainesville, Florida

April 12, 1955 stands out as the brightest day in the history of vaccine development and public health when news of the discovery by Jonas Salk of a vaccine for the poliovirus was made public. The most venerated medical scientist of the 20th century, Jonas Salk, M.D., was hailed as a miracle worker. He further endeared himself to the public by underscoring every humans right to health care by refusing to patent the vaccine. He had no desire to profit personally from the discovery, but wanted the vaccine disseminated as widely as possible. Dr. Salk strongly rejected patenting and profiteering when he declared, “Could you patent the sun?”. He clearly recognized that vaccines and other medications should be accessible and affordable to all citizens as a necessary non-profit social service and health right of everyone.

Today, in sharp contrast, profiteering by Big Pharma too often reigns to the detriment of public health. Forty years of private corporatist Big Pharma and oligarch control of our economy has left the public totally exposed and ill-prepared to face the public health crisis of COVID-19. Because Big Pharma rarely invests in prevention, it has little motivation to invest in preparedness for a public health crisis. Drugs for prevention do not contribute to share-holder value and profit. Instead, cures are designed once a public health crisis strikes. The sicker we are the more profit they earn.

The government’s front line of defense in public health and safety emergencies has been starved of funding by a policy of austerity designed to fund tax cuts and subsidies to unregulated and unaccountable corporations and the rich. By eliminating the surplus coping capacities needed in an emergency such as COVID-19, the private for profit business model remains secure by defining Big Pharma corporations and big insurance as commercial entities. Like all businesses, their goal is to make money. Under this business model , the greed of casual inhumanity is built in and the common good of the citizens and nation is ignored. Using escalated price gouging and other overpricing methods, excluding many in the middle class, the poor, the aged, the disabled and the mentally ill is sound business practice policy since it maximizes profit. By also cutting research, the GOP and Trump administration has further promoted anti-science ideology by reducing the budget of the Center for Disease control (CDC) and disbanding the working group on pandemics of the National Security Council (NSC).

Big business and Big Pharma dominate our government and public health takes a back seat to the need for private profit. Many government leaders from both political parties share the same ‘profits over public health’ ideology, even though the Covid-19 pandemic clearly shows how our economic system has failed to serve our citizens by allowing these groups to privatize, sabotage, fragment and cripple our health, public health and other social services. No greater disconnect exists between the public good and private interests than in the U.S. system of for-profit Big Pharma. Just like large health insurance corporations, Big Pharma has the inherent tendency to invent new needs, disregard all boundaries and turn everything into an object for sale and big profit.

To fix this problem, we must nationalize the pharmaceutical industry and mandate that drug companies be converted to non-profit public service corporations that serve the public interest rather than being used by the 1% and oligarchs for unlimited profit. Additionally, we need comprehensive reform in the way we produce new drugs including a public manufacturing capacity/program for producing needed drugs and clinical trials that would produce new non-patent medications that stay in the public domain. Drugs would function as real social service items, not profit producing goods for a tiny group of oligarchs. With this fundamental reorientation of drug manufacture, drugs become more affordable for patients and society, promote innovation, strengthen efforts to assure safety and effectiveness, and upgrade the evidence available to prescribers and the public. Because drugs developed and manufactured through new public pathways remain in the public domain, they could be economically produced generically throughout the world, benefiting many nations.

Addiction to huge profits by the Big Pharma industry means that converting most drug production to the public domain won’t be easy or fast. Gerald Posner, author of “Pharma: Greed, Lies, and the Poisoning of America”, said, “Pharmaceutical companies view Covid-19 as a once-in-a-lifetime business opportunity”. The world needs pharmaceutical products, of course. For the new coronavirus outbreak, in particular, we need treatments and vaccines and, in the U.S., tests. Dozens of companies are now vying to make them.

“They’re all in that race,” said Posner, who described the potential payoffs for winning the race as huge. The global crisis “will potentially be a blockbuster for the industry in terms of sales and profits,” he said, adding that “the worse the pandemic gets, the higher their eventual profit.” The ability to make money off of pharmaceuticals is already uniquely large in the U.S., which lacks the basic price controls other countries have, giving drug companies more freedom over setting prices for their products than anywhere else in the world. During the current crisis, pharmaceutical makers may have even more leeway than usual because of language industry lobbyists inserted into an $8.3 billion coronavirus spending package, passed last week, to maximize their profits from the pandemic.”

Posner calculates that since the 1930s, the National Institutes of Health has put some $900 billion into research that drug companies then used to patent brand-name medications. The advocacy group “Patients for Affordable Drugs” notes that every single drug approved by the Food and Drug Administration between 2010 and 2016 involved science funded with tax dollars through the NIH, with hapless US taxpayers spending more than $100 billion on that research.

Among the drugs that were developed with some public funding and went on to be huge earners for private companies are the HIV drug AZT and the cancer treatment Kymriah, which Novartis now sells for $475,000.

Posner gives examples of Big Pharma industry making exorbitant profits from drugs produced with public funding. The antiviral drug sofosbuvir, which is used to treat hepatitis C, stemmed from key research funded by the National Institutes of Health. That drug is now owned by Gilead Sciences, which charges $1,000 per pill — more than many people with hepatitis C can afford; Gilead earned $44 billion from the drug during its first three years on the market.

Other examples include Mylan Pharmaceuticals, who have been price gouging the life-saving injectable epinephrine, EpiPen, by charging $300 for a product that costs less than $10 to make. The lack of ethics and price gouging from Mylan and other drug industry entities is an oft-repeated scenario by Big Pharma. They created nothing but paid billions that must be recovered through sales for a company that made their targeted product. They then generated skyrocketing returns through escalating price gouging, and even avoided taxes through inversion.

This is not the first time that Mylan has attempted to monopolize a drug to raise prices on a relatively cheap product to produce profits. In 2000, Mylan entered into agreements with the providers of the active pharmaceutical ingredient for widely prescribed anti-anxiety drugs lorazepam and clorazepate. The effect was to deny competitors access to ingredients necessary to produce these drugs generically. Having done so, Mylan inflated the drugs prices by 2,000 percent and 3,000 percent respectively. Mylan was dragged into court by 32 state attorneys general and the U.S. Federal Trade Commission. The settlement basically required Mylan to disgorge all of the ill-gained profits in what was then the largest settlement with a drug manufacturer, amounting to well over $100 million.

But Mylan is not the only offender. Valeant Pharmaceuticals between 2015 and 2016 raised the prices of Isuprel and Nitropress by 528 percent and 212 percent respectively; from 2013 to 2016, Cuprimine by 5,787 percent and Benzaclin and Retina-A Micro by 1,800 percent each; and from 2011 to 2016 Carac and Targretin 1,700 percent each. The drug Syprine went up by 3,200 percent since 2011.

Until we nationalize the pharmaceutical industry and mandate that drug companies be converted to non-profit public service corporations that serve the public interest rather than being used by the 1% and oligarchs for unlimited profit, here are seven steps/ suggested policies that could be taken today that would help millions of our fellow Americans who are unable to access prescription drugs because of high out-of-pocket costs.

1). Establish a national formulary of medically necessary drugs to include the safest, most effective, and least expensive options. Provide all residents with full coverage of formulary drugs without copays or deductibles.

2). The U.S. spends more on prescription drugs than any other nation. Each year, prices rise far beyond the cost of development and production, straining family and government budgets. Negotiate with manufacturers to lower prices of branded drugs. If negotiations fail, issue a “compulsory license” to allow generic manufacturing. Increase public funding for development of non- patented drugs.

3). Today’s patent process keeps drug prices high and discourages innovation by rewarding minor tweaks to existing medications. Research funded by tax dollars can be patented and sold to private manufacturers. Prohibit new patents for trivial changes to existing drugs or “me too” drugs. Publicly fund development of treatments through non-commercial researchers, prioritizing drugs with high clinical value and for conditions neglected by the industry. Repeal the Bayh-Dole Act that allows publicly funded researchers to patent and sell discoveries.

4). Most clinical trials are now conducted by private drug firms, often using unsound methods and selective reporting. Regulators approve drugs based on small increases in “surrogate” endpoints, which are less safe and reliable than clinical results. Corporate ownership of trial data can hide safety problems and obstruct further research. Require regulators to fund and supervise the majority of clinical trials to maintain safety standards and facilitate innovation for high-need treatments. Increase standards for clinical trials, which should compare new drugs to existing drugs instead of placebos, and assess hard clinical outcomes instead of surrogate endpoints. Increase transparency by making all patient-level trial data publicly available.

5). Regulators often allow unsafe drugs to reach the market. Agencies are funded primarily by drug company fees, creating conflicts of interest. A majority of drugs receive “expedited review,” with weaker standards of evidence. Fund regulators with public money to ensure independence and objectivity. Strictly limit expedited review and surrogate endpoints to drugs offering genuine clinical advances. Limit market exclusivity to drugs demonstrating superiority over existing treatments.

6). After approval, regulators neglect to monitor drug safety and efficacy in the field, or enforce mandated postmarketing studies by drug firms. Agencies fail to issue safety warnings or remove unsafe drugs from the market. Increase funding for regulators’ postmarketing surveillance and increase their power to issue safety warnings and remove drugs from the market. Require drug firms to promptly perform and submit safety studies after drugs are in use.

7). Drug firms spend billions on advertising and marketing, including gifts and education programs for health providers. Drug ads often make misleading or inaccurate claims, but are poorly monitored by regulators who delegate most oversight to third parties. Eliminate conflicts of interest by ending the corporate funding of approval agencies. Strengthen funding for direct monitoring of drug marketing and increase sanctions for misleading or off-label promotions. Prohibit drug firms from funding continuing education programs for medical professionals.

F. Douglas Stephenson , LCSW, is a retired psychotherapist and former instructor of social work in the University of Florida Department of Psychiatry. He is a member of Physicians for a National Health Program.