Johns Hopkins

At a time when we face greatest risk for pandemics, market incentives dissuade pharmaceutical investment in the development of vaccines.

Deena Mousa

As Sen. Bernie Sanders promises to “end… pharmaceutical industry greed,” the coronavirus rages. But Sanders isn’t quite right. The problem isn’t greed, it is the forces that drive pharmaceutical companies to innovate.

Pandemics are not just a scientific problem, they’re a financial one. We rely on markets to drive innovation in pharmaceuticals — and thus save lives. That system is broken. The way drug companies are rewarded for advances in vaccine technology discourages progress in how we produce vaccines.

Pandemics have a chilling effect not only on human health but also on the global economy, simultaneously stunting supply chains and reducing discretionary spending. As we travel more frequently and easily, the risks of pandemics and our vulnerability to them are only rising.

The most effective way of controlling the spread of viral infections is large-scale, immediate immunization. But current methods for manufacturing vaccines are slower and less effective than they could be.

Most flu vaccines are produced by injecting viruses into fertilized hen’s eggs and incubating them to allow the virus to replicate. Scientists later harvest the fluid from the eggs and inactivate the virus, a process that can take over six months. But this approach has its issues. After six months, the vaccine may be too late to stave off infection, or the virus used might not be the predominant strain anymore or have mutated.

Over the past decade, the U.S. government has invested billions of dollars to develop new eggless manufacturing technologies in order to produce vaccines more quickly. But there are good financial reasons pharmaceutical companies are slow to the mark. Although techniques that use mammalian cells are faster, more stable, and more effective than egg-based vaccine production, they are more expensive, and pharmaceutical companies have been hesitant to adopt them; they make up only about ten percent of influenza vaccines. Driven in part by high prices and an easier path to profit, pharmaceutical companies have instead increasingly focused resources on cancer and rare diseases.

Investment in vaccines is not nearly as lucrative because research and design costs are only recouped by vaccine sales when the outbreak occurs. But part of the value of vaccines that can mitigate future pandemic risks is their role as insurance against possible damage – even if the pandemic never happens. And the good a vaccine does is not simply in preventing that person from becoming sick, but in preventing them from infecting others. Further, selling vaccines earlier, when an outbreak has not yet spread substantially, means smaller profits for pharmaceutical companies than a delayed manufacturing process that might be complete at the peak of a pandemic.

One proposed solution is the Health Impact Fund. Rather than leaving pandemic prevention to the market, this system would compensate innovators with prizes proportional to the benefit of their drugs while setting the price of pharmaceuticals to the cost it takes to produce them. This would help incentivize research into drugs whose benefits are not necessarily rewarded through sales, including vaccines, while keeping prices low.

The more devastating a pandemic, the greater the profits to pharmaceutical companies — and markets don’t incentivize them to solve the problem. The result is palliative care, not a cure. The coronavirus may go away, but the threat of pandemics won’t. It’s time to ensure we are incentivizing drugmakers to play a larger role in addressing them.

Deena Mousa is a member of Yale’s Class of 2020.

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