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A five-day course of molnupiravir, the new drug hailed as a “huge breakthrough” in the treatment of Covid-19, costs $ 17.74 to produce, according to a report released last week by drug pricing experts at the Harvard School of Public Health and King’s College Hospital in London. Merck charges the US government $ 712 for the same amount of drugs, or 40 times the price.
Last Friday’s announcement that the new drug halved the risk of hospitalization for clinical trial participants with moderate or mild illness could have huge implications for the course of the coronavirus pandemic. Because it’s a pill – as opposed to monoclonal antibodies, a comparable antiviral treatment that’s given intravenously – molnupiravir is expected to be used more widely and hopefully will reduce the death rate. In the first 29 days of the trial, no deaths were reported among the 385 patients who received the drug, while eight of those who received a placebo died, according to the statement released by Merck and Ridgeback Biotherapeutics. , the two companies that are launching it jointly.
In addition to having huge health implications, the pill could bring astounding benefits to Merck and Ridgeback Biotherapeutics. A small Miami-based company Ridgeback licensed the drug to Emory University in 2020 and two months later sold the worldwide rights to the drug to Merck for an undisclosed sum. Although Ridgeback remains involved in the development of the drug, some have described the deal as a “turnaround.”
Like the vast majority of drugs on the market, molnupiravir – which was initially studied as a possible treatment for Venezuelan equine encephalitis – was developed with public funds. The Defense Threat Reduction Agency, a division of the Department of Defense, has provided more than $ 10 million in funding in 2013 and 2015 at Emory University, as research conducted by the nonprofit Knowledge Ecology International revealed. The National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, also provided Emory with more than $ 19 million in additional grants.
Still, only Merck and Ridgeback will reap the benefits of the new antiviral, which Quartz estimates could bring in up to $ 7 billion by the end of this year. Following the news of encouraging clinical trial results on Friday, Merck’s stock price rose, while the stock prices of some vaccine makers fell. Despite its initial investment, the US government appears to be facing a steep price increase. In June, the government signed a $ 1.2 billion contract with Merck to provide 1.7 million treatments of the drug at a cost of $ 712. The transaction is expected to take place as soon as molnupiravir receives emergency use authorization from the Food and Drug Administration.
Reasonable conditions
Good government advocates point out that because federal agencies have spent at least $ 29 million on drug development, the government has an obligation to ensure the drug is affordable. “The public has funded this drug, so the public has certain rights, including rights that you have on reasonable terms,” said Luis Gil Abinader, senior researcher at Knowledge Ecology International.
Related
In an interview on CNBC, Ridgeback co-founder Wendy Holman noted that the company had asked but “never got government funding” to help make molnupiravir. A whistleblower complaint filed by Rick Bright, the former director of the Biomedical Advanced Research and Development Authority, or BARDA, in May 2020, described Ridgeback’s unsuccessful efforts “to get around $ 100 million” from BARDA to develop the drug as a Covid-19 treatment. The company’s press release on the results of the study also noted that “since the authorization of Ridgeback, all funds used for the development of molnupiravir have been provided by Merck and by Wayne and Wendy Holman of Ridgeback.”
Abinader criticized Ridgeback for failing to recognize the government’s initial investment in the drug before the company acquired it. “What they want to do, apparently, is shape the narrative of who paid for the development of this drug to avoid public demands to make it available at reasonable prices,” he said. .
In an email response to questions submitted to Ridgeback Biotherapeutics for this article, Davidson Goldin wrote, “Ridgeback has never received government funding for molnupiravir and has self-funded the development of this drug for the treatment of SARS-CoV- 2 when the government did not provide financial assistance. ”Merck did not respond to inquiries regarding this article.
No strings attached
Merck has pledged to make molnupiravir available worldwide and has already entered into licensing deals with five Indian companies that make generic drugs. “Merck is committed to providing rapid access to molnupiravir globally, whether licensed or approved, and plans to implement a tiered pricing approach based on World Bank country income criteria to reflect the relative capacity of countries to finance their health response to the pandemic. The company said in its announcement of the trial results on Friday. Indian companies plan to price the drug at less than $ 12 for a five-day course, according to recent reports.
In the United States, and probably in many upper middle income countries and all high income countries, the price will be determined by the market. Noting that treatment may be offered to people who are not yet seriously ill with Covid-19, health advocates fear that some in these countries may not be able to afford the new drug. “Giving someone a $ 700 treatment when they’re not yet feeling sick means a lot of people won’t take it,” said Dzintars Gotham, a doctor at King’s College Hospital in London and co-author of the molnupiravir pricing report. According to the report, the price of molnupiravir at $ 19.99 would allow a company a 10% profit margin.
Melissa Barber, a PhD student at the Harvard School of Public Health and co-author of the molnupiravir report, said that while its price is not as extreme as that of some other drugs, it will likely still put the antiviral off. scope. some who could benefit from it. “If you can’t afford the drugs because it’s 1,000 times more than you can afford, or because it’s 100 times more than you can afford, it doesn’t matter. ‘importance,’ Barber said. “They’re both bad. “
Barber and Gotham acknowledge that the cost of $ 17.74 to produce a five-day course of antiviral pills is an estimate, but stated that the algorithm they used, and which they employed to estimate the costs of production of hundreds of drugs, tends to overestimate in the long run.
Meanwhile, the prices that private companies charge for drugs tend to rise rather than fall. “For all of these deals that have taken place for therapeutics or vaccines, the price has only increased as the uncertainty has diminished,” she said. “A price is given and then, for the next sale, the price increases. The price of other drugs and vaccines has gone up, so I would be very surprised if that price didn’t go up either. “
The price differential should be a reason for demanding a better price under the Bayh-Dole Act, according to Abinader of Knowledge Ecology International. Bayh-Dole, adopted in 1980, regulates the transfer of federally funded inventions into commercial ownership and allows the government to “walk” and suspend the use of patents developed with government funding if it determines that the products are too expensive.
“The pressure for market rights around this drug is going to be huge,” predicted Abinader, who suggested the government could use the law to lower the price of molnupiravir. “When the Biden administration negotiates another supply deal with Merck, it should probably take advantage of those rights in order to get a better price,” he said.
According to Gotham, who is based in London, the news of molnupiravir already sums up the best and the worst of the US pharmaceutical system. “It’s a big blow that the US government has funded scientists to develop antivirals,” he said. “The great tragedy is that, after their great success, they just handed it over to private industry with no apparent strings attached.”
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