21/07/08

Will Big Pharma get littler in HIV research?

Last week, Swiss pharmaceutical company Roche said it was giving up on HIV-related research. I expected some cynical “told you so” comments from industry analysts, but the reaction to the announcement was surprisingly muted. Even AIDS activists were mousy.

Activists have done a spectacular job in slapping down the price of antiretroviral drugs in the last five years. They’ve rallied big names like Bill Clinton and marshalled huge funders like the Global Fund. Even US-funded PEPFAR, once laughingly known as Purchasing Expensive Pharmaceuticals from American Retailers, is spending money on cheap generic drugs. All the while, Big Pharma has warned that eroding profit margins by pushing prices too low will discourage new investment in research.

Roche has been careful not to make a direct connection between low prices for HIV-related drugs and their decision to stop research in the area, even off the record. And there are good reasons for the decision — they were not a huge player in HIV in the first place; less that 5% o HIV related drug sales are from Roche. Many of their drugs are designed to help people only after other, more common treatments fail. And one of their most effective products is unpopular because it has to be injected rather than swallowed.

Is Roche’s announcement a shot across the bows of advocacy for cheaper drugs? “Stop eroding the profits we want, or we’ll stop inventing the drugs you need?” It’s hard to say, but I am amazed that the question is not ringing loudly around the blogosphere. I support the achievements of groups that have fought to bring down drug prices with every fibre of my body. And I certainly find it hard to feel sorry for an industry that spends far more on marketing than it does on research, and that consistently makes its shareholders richer. But is there a point when we have to start discussing how much is enough when we press commercial firms to lower prices?

One solution to the return-on-investment dilemma of is of course to provide more public funding for the development of drugs that meet the needs of poor people and poor countries. There’s been a fair bit of progress in finding public funding for vaccine research, so it’s especially depressing that yet another vaccine trial has been canceled because researchers think it’s unlikely to produce good news.

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This post was published on 21/07/08 in Money and AIDS, Pisani's picks, Science.

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  1. Comment by Lee Rudolph, 21/07/08, 11:32:

    “And one of their most effective products is unpopular because it has to be injected rather than swallowed.”

    Sounds like there’s one very natural market for *that*, and an established cadre of sales people, too. Where’s that entrepreneurial spirit, Roche?

  2. Comment by Roger, 24/07/08, 01:49:

    Late comment: I don’t think the question is “how much is enough when we press commercial firms to lower prices?” but “where”. Thailand issuing compulsory licensing for Efavirenz and other drugs triggered a big “hou ha” followed by a war of words (Read my take http://tinyurl.com/2z2sjg and more recently http://tinyurl.com/66buc9)

    The motivation behind that was not that much that the Big Pharma would be losing money (both HAART and the Thai market count for little in their profit) but that if nothing was done then other would follow suit.

    Other means big market share like China…

  3. Comment by Daniel Reeders, 29/07/08, 02:07:

    I’d just like to point out quite a lot of the early research – finding and profiling candidate molecules – was never done by Big Pharma at all; it’s done by boutique companies who might profile thousands of molecules to find a small handful of candidates to shop around to the bigger companies, who have the expertise and financial clout to run human trials and formulate pharmaceuticals in their final shape.

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