Swine flu and medicine innovation

May 2, 2009

San Francisco – The swine flu scare here and in several states in the US has mellowed. Partly because the initial scare was several million times larger than the actual casualty in America, only one toddler in Texas.

But there is one pattern that persists in public health policy whenever a disease outbreak or pandemic emerges. This is the call by certain sectors of society, sometimes including the Health Ministry or Department, for the mass production of an existing patented medicine or vaccine through compulsory licensing (CL) or similar schemes.

In the case of the current swine flu, certain sectors proposed the issuance of CL for Tamiflu by Roche, and Relenza by GSK. While the reason calling for the confiscation of intellectual property rights (IPR) via patent abrogation of those medicines may be understandable, the reason for invention of new and innovative medicines for existing and soon to exist diseases should also be taken into consideration.

Before it was foot and mouth disease (FMD) for cows (“cow flu”?), then SARS, then avian or bird flu. Now it is swine flu. And tomorrow what, horse flu, carabao (water buffalo) flu, goat flu, duck flu, sheep flu, salmon flu, tilapia flu, etc.?

If any or all of those hypothetical (or past) diseases will emerge or re-emerge, where will the new vaccines and medicines to come from? From the World Health Organization (WHO)? From the Ministry or Department of Health? From international health NGOs?

The pharmaceutical companies, the big and multinationals especially, that the public often attack and demonize, unfortunately are the ones that research and develop new and innovative medicines to combat new and evolving diseases. The bird flu virus that we know today will be different from the bird flu virus that we will see tomorrow. And perhaps a swine flu virus has already shown in the past, but the swine flu virus that we see today is different from its “cousin” that emerged many years ago.

All things change and evolve. Some evolve after one year, others evolve after one million years. The disease virus that we see today will evolve into a new strand of virus tomorrow. There are two important implications for this. One, medicines should evolve to deal with those evolving diseases. And two, incentives for inventors and developers of those innovative and evolving medicines should be kept, not abrogated or abolished.

The competitive system of rewards and punishment will push various players and companies to undertake their own system of invention and innovation. To develop a new vaccine for current and future strands of swine flu for instance, pharmaceutical company A will use extracts from mangos as main ingredients; company B will use extracts from onions as main ingredients; company C will use chicken liver as main ingredients, up to company Z.

If all of them will succeed in developing a new medicine for swine flu, then not a single pharmaceutical company will have a “monopoly” in medicine treatment. Drug A by company A can cure a patient in one week or less but the price is high. Drug B by company B can cure a patient in two weeks but the price is a bit lower. Drug C by company C can cure a patient in two months but the price is even lower. Drug D by company D can cure a patient in six months but the price is much lower, up to drug Z by company Z.

Thus, the IPR and patent monopoly given to company A applies only to drug A. The patent monopoly given to company B applies only to drug B. The patent monopoly given to company Z applies only to drug Z.

The argument “patented = expensive” medicine is not exactly true. If company A spent $1.5 billion to produce drug A alone (in the example above, is the most effective drug), then company A deserves higher price for its very high cost of research and development (R&D) and marketing. If company B spent $1 billion to produce drug B alone, then company B also deserves a high price for its second most effective medicine. If company C spent $0.7 billion for its drug C alone, then it deserves medium price, and so on.

Cheaper and affordable medicine is relative. Drug A, the most effective of all, may be very “expensive” but if it can cure a dying patient fast, then that drug is “cheap” compared to the life of the patient whose life has just been saved. The poorest patient can opt for drug Z by company Z, the cheapest among patented drugs to cure swine flu, though treatment period can be long but nonetheless, there is chance of being cured.

Compare that in a situation where only 1 or 3 pharmaceutical companies – versus 27 firms (companies A to Z) in the above situation – will dare research and innovate for each emerging and potential disease because of fear that their successful invention, the IPR of their new and effective medicine, will just be confiscated by the government anytime. Is this a good situation?

Affordable medicines will come next after the innovative medicines have been invented, manufactured, and sold in drug stores. Ultimately, the most expensive but the most effective medicine that can cure a patient, or millions of patients, may not be “expensive”
after all, if we want to save people’s lives. The “villain” pharmaceutical companies that we like to demonize for the convenience of finding the easiest scapegoat, may unfortunately be the “hero” that can save the life of people dear to us, if not our own lives itself.

And the “hero” that we look up to, the governments and sectors that demonize the drug innovators, may unfortunately be the “villain” that make medicines more expensive by over-taxation, if not discourage medicine innovation by heavy regulation and IPR confiscation.