Pharmaceuticals and the Coronavirus Pandemic

By Avik Roy

Thursday, April 02, 2020

‘When can we end social distancing and get back to normal life?” It’s the question on everyone’s mind, and one without a clear answer at this time. Here’s what we do know: An effective treatment against the novel coronavirus would make a big difference in getting us there.

Remember the old adage, “There’s no cure for the common cold”? Well, the common cold is caused by a mild strain of coronavirus. The version of coronavirus we’re dealing with here is far more dangerous — but possibly just as difficult to treat.

In order to talk about therapies, it’s important to distinguish between the virus itself — the infectious agent — and the disease caused by the virus. (Think of HIV, the human immunodeficiency virus that causes the illness known as acquired immune-deficiency syndrome, or AIDS.) In our present case, the World Health Organization has named the novel coronavirus “severe acute respiratory syndrome coronavirus 2,” or SARS-CoV-2. The WHO calls the illness caused by SARS-CoV-2 “COVID-19.” (“COVID” stands for “coronavirus disease”; “19” comes from the fact that the disease was first identified in Wuhan in late 2019.) To repeat: Virus, SARS-CoV-2; disease, COVID-19.

There are two broad categories of ongoing clinical development related to the pandemic. Vaccines, which help people achieve immunity to the virus, are the farthest off. A vaccine against SARS-CoV-2 won’t be ready until late 2021 at the earliest. That’s because vaccines need to be painstakingly tested in clinical trials to ensure that they make patients better, not worse. Flawed vaccines can lead to dangerous overstimulation of the immune system, or can make someone even more sensitive to coronavirus exposure. And since you can’t ethically expose someone to coronavirus, you have to give the vaccine to hundreds or even thousands of people and wait to see evidence of whether the vaccine achieves a statistically significant reduction in the number of people who get infected. Furthermore, coronaviruses mutate frequently, meaning that a vaccine developed in one year would likely be less robust, or even completely ineffective, in future years.

The second category of drug development involves testing treatments for people who already have COVID-19. Some of these drugs treat the symptoms of the COVID-19 disease; others directly attack and kill the SARS-CoV-2 virus. This latter category includes the combination of hydroxychloroquine and azithromycin, which President Trump has held out as a promising approach. A small French trial of 42 patients with hydroxychloroquine and azithromycin showed potential in reducing virus levels in COVID-19 patients. But another trial conducted in China compared the outcome of 15 patients receiving hydroxychloroquine with that of 15 patients who did not; the results showed that the hydroxychloroquine had no apparent effect. A third study, also conducted in China, suggests that a related drug, chloroquine, may clear a patient’s concentration of viral infection, known as the viral load.

The mixed evidence led to much tut-tutting from those who already dislike the president, but also genuine concern from those who worry that people will rush out to treat themselves with chloroquine or hydroxychloroquine without conclusive evidence from clinical trials. Anthony Fauci, the eminent virologist who has served in six presidential administrations, made the obvious point that while the president was understandably expressing hope that the drug combination might work, we don’t yet have conclusive proof that it does. “I was taking a purely medical, scientific standpoint, and the president was trying to bring hope to the people,” Fauci said on Face the Nation. “There isn’t fundamentally a difference there. He’s coming at it from a [hopeful] layperson standpoint.”

On March 28, the FDA authorized the emergency use of chloroquine and hydroxychloroquine for “treatment of COVID-19 when clinical trials are not available, or participation is not feasible.” We will get the results of two more clinical trials of hydroxychloroquine in May or possibly late April. Success is not assured.

Fortunately, not all of our eggs are in the hydroxychloroquine basket. According to the Milken Institute, there are 104 different COVID-19 treatments currently in preclinical or clinical studies. (Clinical studies are those taking place in humans; preclinical studies are those taking place in animal or laboratory settings.) One of these other drugs getting some hype is Gilead Sciences’ remdesivir, which has shown some potential in treating the Ebola virus.

In the 2010s, Gilead became an infamous case study in our broader debate about runaway prescription drug prices. In 2011, Gilead bought Pharmasset, a startup that had developed a cure for hepatitis C, for $11 billion — nearly double Pharmasset’s stock price at the time. Gilead then launched the hepatitis drug, branded Sovaldi, at an aggressively high price, generating $60 billion in revenues for the company since 2013. Gilead benefited from the fact that hepatitis C patients are disproportionately poor; since government-funded Medicaid programs are obligated to pay for enrollees’ drugs with minimal cost-sharing, Gilead was able for a time to treat taxpayers like an ATM and charge whatever it wanted for Sovaldi. This feat of financial engineering made Gilead executives — and its largest investors — rich.

The hepatitis C experience has led to fears that something similar will happen with COVID-19. Bernie Sanders, in a March presidential-primary debate, said, “We have a bunch of crooks who are running the pharmaceutical industry, ripping us off every single day, and I’ll tell you something right now, in the midst of this epidemic, you’ve got people in the pharmaceutical industry who are saying, ‘Oh wow, what an opportunity to make a fortune.’”

For better or worse, the real pharmaceutical fortunes aren’t made on treating episodic infectious diseases such as the flu or coronavirus. The most lucrative drugs treat chronic diseases. Patients depend on such drugs for years, or even decades. And the government often interferes in those drugs’ markets to protect an incumbent monopoly.

A classic example is GlaxoSmithKline’s Advair, an asthma treatment. Its pharmaceutical constituents were first approved by the FDA in 1988, but GlaxoSmithKline retained a $100 billion monopoly on Advair’s sale until 2019, simply because the FDA refused to approve a generic alternative. Another example is AbbVie’s Humira, the world’s most profitable drug, which is used to treat disorders of the immune system such as  rheumatoid arthritis and psoriasis. AbbVie has extended its market exclusivity for years by overwhelming the United States Patent and Trademark Office with marginal and even frivolous patent applications that don’t represent actual innovation. (It’s a useful reminder that the patent office is hardly infallible, but rather a federal government agency staffed by bureaucrats who regularly make economically consequential mistakes.)

Unlike asthma or rheumatoid arthritis, viral pandemics come and go. Each year, the exact strain of influenza that spreads throughout the world is slightly different from that of previous years, requiring new R&D expenditures for new vaccines. And vaccines are especially expensive to manufacture. The result is that, today, only a handful of established industry players even bother to try to make influenza vaccines.

Antiviral treatments have a bit more staying power, because, like chloroquine — a malaria treatment discovered in 1934 — they can sometimes be recycled to address new pandemic threats. That’s good, because it means that our current crisis will provide plenty of opportunities to test a broad range of therapeutic approaches to see what works and what doesn’t.

Indeed, the race to develop effective COVID-19 treatments promises to be one of the most competitive of all time. That’s important, because the novel coronavirus could put paid to the biggest cliché in drug development: that high prices are necessary to support pharmaceutical innovation.

In every other sector of the economy, innovative technologies lower the price of formerly expensive goods and services, such as taking a cab or phoning someone on the other side of the world. Lower-income Americans have benefited the most from innovations that make everyday life less expensive.

In contrast, drug companies charge high prices because they can, especially where the government has awarded them monopolies, and especially monopolies subsidized by taxpayer-funded health programs.

There is reason to hope we’ll do better with treatments for COVID-19. If multiple successful therapies emerge from the dozens of clinical trials underway, vigorous price competition may lead to reasonably priced drugs. If that happens, pharmaceutical innovation could truly help solve the greatest public-health crisis of our lifetime.