Swine Flu Brings Big Profit to Big Pharma at Taxpayer Expense

Swine Flu: Bringing Home the Bacon

April 27, 2009

Mother Jones - As the world gears up once again for a flu pandemic that may or may not arrive (it actually seems possible this time), we might want to remember some of the lessons of the last flu scare. One of these is that there are winners as well as losers in every high-profile outbreak of infectious disease. First and foremost among them, of course, is Big Pharma, which can always be counted on to have its hand out wherever human misery presents an opportunity to rake in some cash.

In 2005, I reported on the bird flu scare for the Village Voice in a piece called “Capitalizing on the Flu.” We can realistically hope that our current federal government will improve upon the bungled effort made by the Bush Administration to prepare for the onslaught of avian flu—which fortunately didn’t materialize. But certain aspects of the crisis are likely to be repeated, and profiteers will surely waste no time in gathering at the trough.

Then, as now, one of the two effective antidotes was a drug called Tamiflu. But this silver bullet came with side effects, as well as a high price tag. As I reported in 2005:

With no vaccine in sight, the U.S. government, along with others, is belatedly stocking up on Tamiflu, a drug that supposedly offers some defense against bird flu. But last week Japanese newspapers told how children who were administered Tamiflu went mad and tried to kill themselves by jumping out of windows. In a cautionary statement the FDA noted 12 deaths among children, and said there are reports of psychiatric disturbances, including hallucinations, along with heart and lung disorders. Roche, the manufacturer, is quoted by the BBC as stating that the rate of deaths and psychiatric problems is no higher among those taking its medication than among those with flu. The company is increasing Tamiflu production to 300 million doses a year to meet demand.

There are other reasons people are leery of Tamiflu. Given the rip-offs in Iraq and after the hurricanes, people are understandably interested in knowing just who is going to get rich off the plague. Secretary of Defense Donald Rumsfeld, himself former CEO of drug company Searle, currently owns stock in the one company that owns Tamiflu patents—to the tune of at least $18 million. Rumsfeld says he understands why people might question his holdings, but selling them would raise even more questions. So he is hanging on to what he’s got.

A report by Citicorp at the time described which pharmaceutical manufacturers and other companies stood to make money:

Winners could include drug makers such as Gilead Sciences, Roche, GlaxoSmithKline, and Sanofi-Aventis. Other possible winners are hospital chains such as Rhoen Klinikum, cleaning-products makers such as Henkel, Ecolab, and Clorox, as well as home entertainment companies such as Blockbuster and Nintendo….

In order for the pharmaceutical companies to profit from making flu vaccine in the administration’s $7.1 billion pandemic flu plan, Bush now is proposing to ban liability suits against them except in cases of willful misconduct. As for those injured by a flu vaccine, possible lawsuits remain an open question….

With a worldwide market estimated at more than $1 billion, there’s big money in a flu plague. Kimberly-Clark’s Chinese subsidiary is already ramping up manufacture of new lines of medical masks, wipes, and hand-washing liquids, according to Business Week, with consulting firms Kroll and Booz Allen Hamilton selling flu preparedness advice to companies and governments. “Crisis is an opportunity as long as you see it first,” Pitney Bowes’s Christian Crews tells the magazine.

Of course, that was then, and this is now. In the coming days we’re bound to discover who’s pulling in the pork this time. But even before the U.S. markets open this morning, early indications aren’t hard to find: “Fears of a potential pandemic are bringing down stock markets around the world today,” public radio’s “Marketplace” reports from London, “but two big pharmaceutical companies are getting a boost from the news”:

Shares in Switzerland’s leading drug maker, Roche, are up nearly 4 percent this morning. The company says it’s scaling up production of Tamiflu. The drug’s been show to be an effective vaccine against the virus.

In the U.K., GlaxoSmithKline, which manufacturers its own vaccine against deadly flu viruses, is also gaining in the markets. Glaxo’s drug is called Relenza….

Both drug makers have been approached by the World Health Organization about their readiness to deploy stocks in the case of a pandemic. Roche says it stands ready with 3 million treatments, but warned further production could take up to eight months.

Future of Pharmaceutical Industry - Video

May 27, 2010

GlobalChange.com The pharmaceutical industry is facing huge challenges - described in video.

Notes on content: Over the last five years there has been serious lack of innovation in pharma companies and product pipelines have been emptying. It takes up to 15 years and $1 billion in investment to bring a single new treatment to market, after which there may be as little as a decade left before patents expire. But before that happens there may be serious threats to the pharmaceutical industry from generic manufacturers. And at any point in development or after launch, an adverse problem can result in product recall. For these reasons Pharmaceutical companies tended to focus on the search for blockbuster drugs in the early years of the 2000s: drugs with expected revenues of more than $1bn a year.

The top 10 pharmaceutical companies have enjoyed research and development budgets greater than the combined GDP of the world's poorest 130 nations, yet have produced only 30% of new drugs being approved each year. The rest have largely been developed by some of the 4,000 small biotechnology companies, working on large molecule therapeutics.

It is an immensely complicated and risky process, working through laboratory studies, animal studies and then clinical trials. A key issue for the future will be routine gene profile typing and pharmacogenomics - or matching drug therapy to someone's genetic code. This will result in better targeting of the most effective therapies in each situation, but also in lower sales for each therapy since only those people in whom it is most likely to work will actually receive it.

 

Watch out for a shift from health care or treating sickness, to wellness, disease prevention, enhanced performance and lifestyle drugs. This is the age of Viagra-like drugs, designed to rejuvenate, or to increase deteriorating function such as memory. But drugs developed for a condition like Alzheimers will also be widely used or abused, if they are shown to really stimulate human memory capacity for example.

Expect a new emphasis also on common cellular mechanisms of disease. There are only a few ways in which human cells age for example. If we can block one or two of these mechanisms the result may be an effective treatment for a wide range of conditions which are more common as people get old - and remember that diseases of aging drive most health care spending in developing nations. Indeed 75% of health spending in America and Western Europe is on those over the age of 65.

Watch out for major shifts in government purchasing policies, changes in US medicare and in health insurance cover. Over the counter and pharmacists sales will grow rapidly, helped by deregulation in developed nations, allowing more products to be available without prescription, "over the counter". Expect huge growth in so-called nutraceuticals (foods with active health-stimulating ingredients) and cosmetics with all kinds of anti-aging properties.

While most budget will be spent solving common chronic diseases, expect innovation in childhood diseases, with a special focus on emerging nations, funded by philanthropic foundations. Expect major progress with new vaccines. Rheumatoid arthritis and asthma share a root cause in abnormal immune systems - expect huge research into tackling auto-immune problems.

Expect also big investment into next generation antibiotics to solve multiple drug resistance problems, which are one of the major challenges for the future.

Other issues include future funding and aging populations - contrast with emerging markets.

The Handling of the H1N1 Pandemic: More Transparency Needed (Excerpt)

May 17, 2010

United Kingdom, Social Health and Family Affairs Committee - The Parliamentary Assembly is alarmed about the way in which the H1N1 influenza pandemic has been handled, not only by the World Health Organization (WHO), but also by the competent health authorities at the level of the European Union and at national level. It is particularly troubled by some of the consequences of decisions taken and advice given leading to distortion of priorities of public health services across Europe, waste of large sums of public money, and also unjustified scares and fears about health risks faced by the European public at large ...

The Assembly also calls on member states to ensure that the private sector does not gain undue profit from public health scares and that they are not allowed to absolve themselves of liabilities with a view to privatising profits whilst communitising risks ...

For the rapporteur, the possibility that representatives of the pharmaceutical industry may have directly influenced public decisions and recommendations made with regard to the H1N1 influenza remains one of the central issue of the ongoing debate. Amongst the factors leading to the suspicion of undue influence were the early measures taken on contractual arrangements for vaccine delivery between member states and pharmaceutical companies, as well as the enormous profits that companies were able to make as a result of the pandemic. The main suspicion, however, arises with regard to the issue of whether members of WHO advisory bodies have professional links to pharmaceutical groups, bringing into question the neutrality of their advice. Unfortunately, due to WHO’s refusal to release the names and declarations of interest of persons concerned, any current research on the matter depends entirely on the results of investigative journalism ...

The strong commercial interests in the pandemic and vaccination campaigns were further illustrated by the high levels of profit that pharmaceutical companies were able to make. According to estimations by the international investment bank JP Morgan, the sales of H1N1 vaccines in 2009 were expected to result in overall profits of between 7 and 10 billion dollars to pharmaceutical laboratories producing vaccines ...

According to figures presented by Sanofi-Aventis at the beginning of 2010, the group registered net profits of 7.8 billion Euros (+11%) due to a “record year” of anti-flu vaccines sales. As such, and from the point of view of the market economy, justified commercial interests cannot be generally criticised. The rapporteur would, however, like to raise the question as to whether it was justified to sell H1N1 vaccines to national governments at prices seemingly up to 2 to 3 times higher than those for the usual seasonal influenza by primarily using patented adjuvants, and thus making exaggeratedly high profits from a declared public health emergency?

Swine Flu Vaccine Makers Granted Legal Immunity

July 18, 2009

EmaxHealth - Swine flu manufacturers have now been granted legal immunity in case something goes wrong that causes side effects associated with the vaccine. Kathleen Sebelius, Secretary of Health and Human Services, signed a document making federal officials and vaccine makers immune from lawsuits related to any ill effects from the swine flu vaccine.

Fears about the effects of a novel swine flu vaccine have sparked much discussion. A swine flu outbreak among soldiers at Fort Dix, N.J in 1976 resulted in vaccinations that caused side effects including Guillain-Barre Syndrome, a condition that causes paralysis. The result was thousands of lawsuits.

Stephen Sugarman, a law professor who specializes in product liability at the University of California at Berkeley says, "The government paid out quite a bit of money,” following past swine flu vaccination side effects.

Most cases of swine flu have been mild. The WHO has stopped tracking cases. No one knows how many infections have really occurred, because not everyone seeks treatment.

Five pharmaceutical companies are manufacturing swine flu vaccine. The drugs are not as profitable as some, like cancer drugs, but immunity from legal action provides incentive to vaccine makers.

Paul Pennock, a New York plaintiffs attorney on medical liability cases, spoke out about the immunity granted to swine flu vaccine makers, saying: "If you're going to ask people to do this for the common good, then let's make sure for the common good that these people will be taken care of if something goes wrong."

The document granting protection from lawsuits to swine flu vaccine makers was signed by Sebelius last month.