“We would want to ensure that we work to make it affordable, but we can’t control that price, because we need the private sector to invest. Price controls won’t get us there,” so said Alex Azar, Health and Human Services Secretary, in a congressional hearing on February 26 when asked whether a coronavirus vaccine that will be affordable for everyone can be produced.
Since the 2003 SARS outbreak, the United States has spent nearly $700 million of taxpayer money on coronavirus research through the National Institutes of Health (NIH). This is more than any other country. The coronavirus spending bill approved by Congress in April includes $3 billion in federal funding for the research and development of coronavirus vaccines, tests and treatments. Neither of these expenditures are unusual. The NIH supports health innovation in public and private industry to the tune of $40 billion annually. Of the 210 new drugs approved the Federal Drug Administration (FDA) from 2010 to 2016, the NIH contributed funding to all of them.
Funding a new vaccine research and development can cost $1 billion according to a 2018 study published in a peer reviewed medical journal, Lancet. Even with this investment there is a 94% chance of failure. By accepting government funding, private manufacturers, spread the risk of the research and development, but also open themselves to giving the government a say in how to price the new drug or vaccine. Often the U.S. government does not dictate pricing to private manufacturers even when they have “skin in the game” through investment. The government prefers to wait on third-party competition from another manufacturer/developer to insure a new vaccine, even a coronavirus vaccine that will be affordable for everyone.
In a letter sent on February 20, 46 lawmakers demanded that exclusive licenses to develop vaccines and treatments not be given to private manufacturers who have taken government money. Dr. Peter Bach, Director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center argues, “If we depend on the private market to develop a vaccine they will demand a very high return for success. We routinely accede to this basic formulation that there need to be big rewards for undertaking these risks with private capital.” Given the urgency of the coronavirus crisis it may not be the time to fix this, perhaps, fundamental failure in our system.
Since herd immunity is what we seek, getting a coronavirus vaccine that will be affordable to everyone in a community is critical. With infectious disease, health isn’t individual, its collective. Perhaps continuing a profit driven model is too high a price to pay?
Smith Hanley Associates continues to assist our clients and our candidates in their hiring and job search needs during this difficult time. Biostatistics Recruiter, Nihar Parikh, would love to hear from you at [email protected].