Pharma companies are rushing to be the first to develop a vaccine for COVID-19. No sooner did they begin than officials and the public began wondering, “how will we pay for these treatments?”
Typically, the government encourages pharma companies to develop new drugs by offering exclusivity periods, a length of time during which that company is the only one able to sell the treatment. These licenses are meant to give companies the opportunity to earn their money back in sales after spending millions on development.
But during a public health emergency such as the coronavirus, exclusivity periods and drug prices are less simple.
There are about a dozen pharma companies working on a COVID-19 treatment or vaccine. As of March, that list includes GlaxoSmithKline, Sanofi, Johnson & Johnson, Pfizer, Gilead, Regeneron, Moderna, Takeda, Inovio, CureVac and Novavax. Many of these companies have partnered with the National Institutes of Health (NIH) or another sub-agency in the Department of Health and Human Services (HHS) on their treatments.
Some of these companies, including Gilead and Sanofi, are repurposing other vaccines for the flu or similar respiratory diseases such as SARS for use against COVID-19. Some are also receiving government funding through grants or contracts to quickly develop the treatments.
Shortly after the outbreak began, the Food and Drug Administration said it would take steps to expedite any coronavirus vaccine through the drug approval process using pathways such as the Emergency Use Authorization.
The priority now is to get experimental treatments into testing as soon as possible. Some companies estimated human clinical trials could begin as early as May or June.
While the decision on the price of these vaccines is likely more than a year away, some advocates are already calling for measures to keep costs down.
In fact, some advocacy groups and lawmakers have called on the Trump administration to ensure drug companies don’t receive a “monopoly” on the eventual COVID-19 treatment.
“We would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest.”
Alex Azar, HHS
During a hearing before the House Energy and Commerce Committee on February 26, HHS Secretary Alex Azar would not commit to measures that ensure COVID-19 treatments are priced fairly when that time comes.
“We would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest,” Azar said at the time. “The priority is to get vaccines and therapeutics. Price controls won’t get us there.”
Because pricing for COVID-19 vaccines is still months away, it may be instructive to look at a similar situation from a few years ago, when an outbreak of Ebola struck West Africa.
Merck was one pharma company that rushed to develop a vaccine. The outbreak peaked between 2014 and 2015, and Merck began running experimental trials in West Africa in mid-2015. The treatment was approved by the FDA in November 2019.
The vaccine, called Ervebo, was developed with several U.S. government entities, including HHS sub-agency Biomedical Advanced Research Development Authority (BARDA), which is also partnering with pharma companies on the COVID-19 vaccine.
Shortly after the vaccine was approved, Merck committed to making it available at “the lowest possible access price” for poor and middle-income countries, Merck spokesperson Skip Irvine said. That commitment is just one move by Merck to ensure the vaccine is affordable.
The price of Ervebo has not yet been decided as of mid-March, Irvine added, and the vaccine is expected to hit the market in Q3 2020.
“Merck is not seeking to profit from this vaccine; rather, to ensure the vaccine is sustainable by recovering prospective manufacturing and operational costs associated with the program,” Irvine says.
For this vaccine, Merck has worked closely with organizations such as the World Health Organization (WHO) and Gavi. Merck also donated more than 300,000 doses of the vaccine to assist the WHO’s response to an Ebola outbreak in the Democratic Republic of Congo in 2018 and 2019.
“Our work in responding to the Ebola outbreaks to date is a unique undertaking,” Irvine explains. “We remain very mindful that in all things related to vaccine manufacturing, distribution and price that our top priority and obligation is to help enhance global public health preparedness against Zaire ebolavirus to ensure equitable access of the vaccine so it is available for those who may need it most in any future outbreaks.”
Public Citizen and 70 other organizations sent a joint letter on March 5 asking President Trump to “ensure treatments for COVID-19 … are reasonably priced and available to everyone.”
The organizations argue these treatments were developed partially using taxpayer funding and, therefore, should be priced in a way that taxpayers won’t bear the cost twice.
According to a Public Citizen report from February, the NIH has spent about $700 million on research and development related to coronavirus strains since the SARS outbreak in 2003.
“Often those medicines are reliant on public support through basic research, or even public contribution later in the pipeline, but far too often those medicines are priced out of reach for people who need them and put financial strains on health programs,” says Steven Knievel, access to medicines program advocate at Public Citizen.
In a similar letter, 46 lawmakers urged the Trump administration not to provide “exclusive monopoly rights” to drug companies who develop COVID-19 treatments. That letter, sent in February, calls out the government’s work with Regeneron on another coronavirus vaccine.
Restricting exclusive licenses would ensure that multiple drugmakers — not just one company — could manufacture a COVID-19 vaccine and would help to keep the price low, Knievel explains.
Another tactic is to be transparent about the contracts between the NIH and pharma companies and ensure that those contracts include language about reasonable pricing and access to the treatment, Knievel says.
“Those two pieces, getting at the pricing issue upstream, are of the most value,” he adds. “The optimal approach would be addressing pricing access issues upstream before these companies decide the cost.”
Public Citizen and the 46 lawmakers both focused on the drugs being developed with the aid of taxpayer dollars, but affordable pricing in the U.S. is just one of the pieces in the coronavirus pandemic.
The letter sent by lawmakers also raises the concern of health insurers raising premiums due to the cost of this vaccine. Although many insurers have pledged to cover the cost of the COVID-19 test in recent weeks, they may need to pay for millions of doses of the vaccine if the coronavirus becomes an annual epidemic such as the flu, and that cost could be passed on to people through premiums.
“I hope drug companies that produce treatments and vaccines price them at a level that does not threaten access or post undue strain on financial resources in the U.S. or other countries,” Knievel says. “But I don’t think we can rely on them to do that. Historically, that has not been their approach; pharma companies maximize profits.”
