Editorial Staff

Study Finds Pandemic Likely to Negatively Impact Biopharmaceutical Sector

/in , , , , , , /by Editorial Staff
Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Threats to intellectual property, political pressure to lower prices, disruption of clinical trials will cause long-term harm

BOSTON – Contrary to conventional wisdom that says the coronavirus pandemic will generally benefit biopharmaceutical companies, a new Pioneer Institute study finds many companies will emerge from the pandemic commercially weaker, dealing with delays in new product launches and with fewer resources to invest in research and development.

“There will certainly be worldwide demand for COVID-19 treatments,” said William Smith, author of “The Negative Impact of COVID-19 Upon the Biopharmaceutical Sector.”  “But they will also require massive investments in clinical development and manufacturing, and political pressure on pricing makes it impossible for companies to recoup those investments.”

Cipro is an antibiotic well-suited to treat anthrax, which began arriving in mailboxes in the weeks after September 11, 2001.  The Centers for Disease Control recommends that patients exposed to the bacteria take Cipro twice a day for 60 days.  Despite the fact that the entire course of treatment would only cost $219, Bayer agreed to cut the price in half after the U.S. Secretary of Health and Human Services at that time threatened to take away the company’s patent.

More recently, when Gilead announced it would invest $1 billion in Remdesivir, a promising COVID-19 treatment, one would have thought the company’s stock would rise.  Instead, it fell 5 percent.  A number of analysts remarked that the reason was fears that political pressure would result in very low prices or threats to Gilead’s patent.

Some investors and industry leaders may conclude that investments in major public health emergencies should be avoided in favor of research on lifestyle treatments or medications for less serious conditions that aren’t accompanied by threats to intellectual property or pressure to reduce prices.

Political pressure to cut prices is likely to be most acute in the area of vaccines, where the federal government is providing grants to companies such as Johnson & Johnson and Moderna.  Many policymakers will likely see any new vaccine that emerges from research that was partially funded by the government as public property.

“There may be humanitarian reasons why companies choose not to profit from their treatments,” said Pioneer Executive Director Jim Stergios.  “But policymakers should also be aware that threats to intellectual property create significant disincentives to investment.”

In 2018, Massachusetts institutions received nearly $3 billion in National Institutes of Health funding, the second highest amount among the states.  That same year, private venture companies invested $4.8 billion in the Commonwealth’s life sciences companies.  In terms of new businesses, more than a third of U.S.-based biotechs that went public in the first half of 2019 were Massachusetts-based.

These companies also face delays in clinical trials for non-COVID-19 treatments, which could significantly disrupt long-term product pipelines.  Since firms typically file patents before clinical trials begin, significant delays eat up the period during which treatments can be sold under patent before opening up to competition from generic makers.

The delays are particularly damaging to small firms, whose future may depend on a successful trial.

Smith’s recommendations include extending patent life on products by the period clinical trials were delayed by the pandemic, and that COVID-19 treatments in which companies made significant investments should be priced to allow a reasonable return on that investment.

About the Author

Dr. William S. Smith is Visiting Fellow in Life Sciences at Pioneer Institute. He writes about public policy issues impacting the life sciences industry with particular emphasis upon pharmaceuticals. Dr. Smith has 25 years of experience in government and in corporate roles. He spent ten years at Pfizer as Vice President of Public Affairs and Policy. He later served as a consultant to major pharmaceutical, biotechnology and medical device companies, and was President of a small medical device company for three years. His career has also included senior staff positions for the Republican House leadership on Capitol Hill, the White House, and in the Governor’s office in Massachusetts. He is affiliated as Research Fellow and Managing Director with the Center for the Study of Statesmanship at The Catholic University of America (CUA). He earned his PhD at CUA and a bachelor’s degree from Georgetown University.

About Pioneer

Mission
Pioneer Institute develops and communicates dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond.

Vision
Success for Pioneer is when the citizens of our state and nation prosper and our society thrives because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and when our government is limited, accountable and transparent.

Values
Pioneer believes that America is at its best when our citizenry is well-educated, committed to liberty, personal responsibility, and free enterprise, and both willing and able to test their beliefs based on facts and the free exchange of ideas.

Get Our COVID-19 News, Tips & Resources!

  • This field is for validation purposes and should be left unchanged.

Related Content

COVID’s Unintended Victims: Traditional Diseases Overlooked at the Public’s Peril

This week on Hubwonk, host Joe Selvaggi talks with Pioneer Institute’s Visiting Fellow in Life Sciences, Dr. Bill Smith, about his newest research paper, “An “Impending Tsunami” in Mortality from Traditional Diseases,” which sounds the alarm that the public health community’s focus on COVID-19 has caused many to avoid seeking medical attention for other illnesses. As a result, more Americans are dying from fear of COVID than from the disease itself.

Vaccine Development Renaissance: Pandemic Brings Niche Industry into Mainstream

This week on Hubwonk, host Joe Selvaggi talks with virologist, Dr. Peter Kolchinsky, about the explosion of vaccine technologies and innovations brought into the spotlight by the massive investment to fight the pandemic, and dives deeply into the exciting promise of vaccines to combat an ever-widening range of disease.

Shifting COVID-19 Goalposts: Moving from Zero Infections to Zero Deaths

This week on Hubwonk, host Joe Selvaggi talks with surgeon and author Dr. Marty Makary about the power and durability of vaccines, natural immunity and clinical therapies, that are overshadowed by the public health community's continued target of zero COVID-19 infections.

Study: Decline in Cardiovascular Health Screenings During COVID-19 Pandemic Poses New Public Health Threat

Pioneer Institute today released a new analysis focused on cardiovascular disease, An “Impending Tsunami” in Mortality from Traditional Diseases?, that examines how the COVID-19 pandemic has created another unrelated public health crisis. The Pioneer analysis examines how a single-minded public health focus on COVID-19, social distancing, and lockdowns drove reductions in screenings, diagnoses, and early treatment for complex conditions such as heart disease.

Supply Chains Understood: Covid’s Global Demand Stress Test

https://www.podtrac.com/pts/redirect.mp3/chtbl.com/track/G45992/feeds.soundcloud.com/stream/1148317750-pioneerinstitute-hubwonk-ep-78-supply-chains-understood-covids-global-demand-stress-test.mp3 This…

CRPE’s Robin Lake on COVID School Closures & Learning Loss

This week on “The Learning Curve," co-hosts Gerard Robinson and Cara Candal talk with Robin Lake, director of the Center on Reinventing Public Education (CRPE), a non-partisan research and policy analysis organization developing transformative, evidence-based solutions for K-12 public education.

Prof. Raymond Arsenault on the 60th Anniversary of the Freedom Rides & Civil Rights

This week on “The Learning Curve," co-hosts Gerard Robinson and Cara Candal talk with Raymond Arsenault, the John Hope Franklin Professor of Southern History at the University of South Florida, and author of several acclaimed and prize-winning books on civil rights, including Freedom Riders: 1961 and the Struggle for Racial Justice. He shares how he became interested in researching, writing, and teaching about the Civil Rights Movement.

Study: After Years of Steady Increases, Homeschooling Enrollment Rose Dramatically During COVID

After steadily increasing for years, the number of parents choosing to homeschool their children skyrocketed during the pandemic, and policy makers should do more to acknowledge homeschooling as a viable option, according to a new study published by Pioneer Institute.

ASU’s Julie Young, Virtual Schooling Pioneer, on Digital Learning during COVID-19

This week on “The Learning Curve," co-host Cara Candal talks with Julie Young, ASU Vice President of Education Outreach and Student Services, and Managing Director of ASU Prep Academy and ASU Prep Digital. They discuss the implications of COVID-19’s disruption of American K-12 education and the future of digital learning.

UChicago’s Dr. Leon Kass on Genesis, Exodus, & Reading Great Books

This week on “The Learning Curve," guest co-host Jason Bedrick and co-host Gerard Robinson talk with Dr. Leon Kass, MD, the Addie Clark Harding Professor Emeritus in the Committee on Social Thought and the College at the University of Chicago. Dr. Kass describes the important pieces of wisdom and humanity people today can still learn from reading the Book of Genesis, the topic of his 2003 work, The Beginning of Wisdom.

“America Today is on Bended Knee” – 20th Anniversary of 9/11 – 20 Resources for Parents & Students

The heroic stories of 9/11 are part of our national consciousness and memory. It’s the duty and obligation of the living and those who survived to pass along this history to the next generation. As Americans mourn the events of 20 years ago, while in the midst of another national crisis during COVID-19, let’s recommit ourselves to teaching students and the younger generation about seminal events like 9/11 that still shape our world today. To support this effort, we’re offering a variety of resources to help parents, teachers, and high school students.

NYT Best Seller Dr. Kate Clifford Larson on Fannie Lou Hamer & the Mississippi Civil Rights Movement

This week on “The Learning Curve," co-hosts Cara Candal and Gerard Robinson talk with Dr. Kate Clifford Larson, a New York Times best-selling biographer of Harriet Tubman and Fannie Lou Hamer. Kate shares why she has written about these historical African-American figures, and how she thinks parents, teachers, and schools can draw on their lives to talk about race.