For years, the pharmaceutical industry has faced withering bipartisan criticism and a deteriorating reputation among the public for its role in driving up drug prices.
But the sector suddenly might be poised to go from villain to hero with the development of a vaccine that could end the COVID-19 pandemic.
The drug industry's reputation started this crisis in the basement after having plunged to an all-time low in 2019, making it the least popular sector among 25 major industries, according to pollster Gallup.
Americans soured on the industry after net drug prices – which factor in rebates and discounts – increased by 60% from 2007 to 2018, about triple the rate of inflation, according to a University of Pittsburgh study. High-profile examples of sharp drug price hikes in recent years have included "Pharma Bro" Martin Shkreli's 5,000% increase of a life-saving treatment Daraprim and Mylan's about six-fold increase of the EpiPen, an emergency allergic reaction treatment.
While drugmakers throughout the world are chasing a coronavirus vaccine and only a few, at most, can win, the feverish pursuit represents one of the greatest opportunities in the history of medicine – with the reputational benefits alone worth the effort, not to mention the financial possibilities. The companies pursuing a vaccine include giants like Pfizer, Moderna, Johnson & Johnson, AstraZeneca, Merck and GlaxoSmithKline.
Drug companies have "spared no expense to kind of pivot and shift" to tackle the coronavirus, Gilead Sciences CEO Daniel O'Day told investors on a conference call April 30. "I think this will certainly help the industry's reputation."
Yet there are also potholes on the road to a vaccine for the drug industry, as Americans and industry critics express concern that the race could help pharma companies justify price increases and avoid a regulatory crackdown.
“With drug prices where they’re at, people can’t afford them and they are dying,” said Tim Lash, chief strategy officer of West Health, a nonprofit that pursues lower health care costs. He added that “there is very real concern about pharma leveraging” the coronavirus vaccine push to increase the price of other treatments.
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The chance to develop a vaccine or a successful treatment that could save millions of lives and jobs has attracted hundreds of players despite the high likelihood of failure for most of them.
Vaccines – which save about 2.5 million lives annually from conditions such as polio, measles and diphtheria – represent "one of the most successful and cost-effective health interventions" ever, according to the World Health Organization.
Potential COVID-19 treatments under development include 150 vaccine candidates, 160 novel medications designed to kill the virus and 300 existing drugs that could be repurposed to treat it, according to the Biotechnology Innovation Organization (BIO), a trade group that represents biotech companies.
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Anthony Fauci, director of the U.S. government's National Institute of Allergy and Infectious Diseases, recently predicted that a vaccine could arrive by the end of 2020 or early 2021.
Pharma industry executives say the vaccine push shows how the industry is committed to using profits, which have been the target of much criticism, to support their pursuit of life-saving medications. About 90% of drug candidates fail, illustrating the need for substantial investments in potential therapies, said Stephen Ubl, CEO of industry trade group PhRMA, which represents pharmaceutical companies on policy issues in Washington,
"The coronavirus gives us the opportunity to tell the real story of the importance of the industry and why a robust biopharmaceutical sector is absolutely critical to the public health," Ubl said.
The pandemic “has driven the public eye onto what the biotech industry does, which is change the dynamic of a disease,” said Jeremy Levin, chairman of BIO and author of the recently published book “Biotechnology in the Time of COVID-19: Commentaries from the Front Line.”
But industry critics say pharmaceutical companies shouldn't be let off the hook for their role in driving up drug prices.
"There are certainly bright spots in the pharma sector in terms of innovation, hope and optimism — and certainly those three things would apply to the work that’s happening around COVID-19," Lash said. "But if you look at the performance of Big Pharma and their behavior over the last decade, it paints a very dark picture of drug pricing in America."
A study conducted by West Health and polling outfit Gallup found that in a given 12-month period, about 1 in 5 American adults are unable to pay at least once for needed prescribed drugs.
And nearly 9 in 10 Americans are concerned that pharmaceutical companies will raise drug prices to compensate for the coronavirus vaccine race, according to another study by West Health and Gallup.
"The pharmaceutical sector has historically leveraged price increases to further maximize profit," Lash said.
Pharmaceutical executives say their pricing is justified due to the high cost of research and development that is now contributing to the pursuit of a vaccine for the coronavirus.
For example, Gilead Sciences recently won approval to distribute its remdesivir drug as a treatment for critically ill COVID-19 patients. That antiviral drug, which Gilead said it spent more than $1 billion to develop, originally came about during the pursuit of a remedy for Ebola several years ago but went nowhere at the time. Gilead on June 29 announced a pricing plan: $3,120 per treatment course for the typical insured patient.
It's currently unclear how a potential vaccine would be priced or whether it would be covered by insurance or by the government. The federal government's Operation Warp Speed is providing nearly $10 billion in funds to aid in the development and production of various coronavirus vaccines with a goal of delivering 300 million doses by January 2021.
The average private-sector non-influenza vaccine for adults ranges from about $26 for Grifols' tetanus and diphtheria toxoids inoculation to $228 for Merck's Human papillomavirus inoculation, according to the CDC.
Ubl said Americans don't need to be concerned about the price of a COVID-19 vaccine. "The industry is deeply committed to, when we find safe and effective therapies, we want them to be safe and accessible," he said.
He attributed much of the criticism over drug prices to "relatively few bad actors" responsible for sharp increases, including Shkreli, who was later imprisoned after being convicted on unrelated fraud charges, and Mylan.
“In the noise that came from the bad actors, we basically lost sight of the essence of what the biotech is all about, which is patients and innovation,” Levin said
Industry promotes vaccine pursuit
With the public's attention suddenly focused on the push for a vaccine, the pharmaceutical industry senses an opportunity to ease regulatory pressure in Washington, too.
The pressure has come in the rare form of a bipartisan chorus, ranging as widely as President Donald Trump to one of his fiercest critics, Sen. Bernie Sanders (D-Vermont), both of whom have repeatedly called for policies to restrict drug prices.
Some say the federal government's Medicare program should be allowed to negotiate drug prices instead of paying market value, a move that advocates say would help lower prices across the board. Others say the government should impose caps on drug prices, among other possibilities.
Ubl criticized the push for "draconian policies that would upend the business model" and "throw sand into the gears" of innovation. But he said he's hopeful that policymakers will recognize that the race to solve the coronavirus pandemic "highlights the benefit of our free market system."
PhRMA has led a marketing and publicity campaign in recent months to promote the industry's role in developing a vaccine or treatment. The group has advertised in news outlet Politico's influential "Playbook" e-newsletter, run a print advertisement along with BIO, published blog posts, compiled fact sheets and written reports documenting the industry's commitment to developing a safe and effective vaccine expeditiously.
Gilead CEO O'Day said in the April 30 call that he had already noticed a shift in rhetoric about drug pricing on Capitol Hill following the emergence of the pandemic.
"I think people are very appreciative and concerned about finding solutions here. And it's brought us all together, which I think is a good thing," he said. "I'm not suggesting that there won't continue to be focus and pressure on drug pricing. Of course, there will be. ... But it's being done now in a way where we can have an appreciation for the innovation the industry brings."
Lash said policymakers should not fall for the suggestion that pharmaceutical companies have taken an altruistic turn.
The pharmaceutical industry can’t escape the fact that it’s “the most profitable sector in our economy when you look at return on investment capital,” he said.
Americans don't like drugmakers
For their part, Americans have placed significant blame on pharmaceutical companies for drug prices.
Only 21% of Americans gave the pharmaceutical sector positive ratings in a 2019 Gallup survey, while 58% gave it negative ratings. The industry's reputation was even worse than the federal government's.
“It’s hard to do worse than the government in these types of positivity, negativity ratings,” said Dan Witters, research director of the Gallup National Health and Well-Being Index. “There’s real public sentiment here” against pharmaceutical companies.
Witters conceded that the COVID-19 vaccine race could lend some “buoyancy” to the industry’s reputation.
But in the long run, Americans are unlikely to forgive the industry for drug prices, he said.
“In my opinion, whatever goodwill may ultimately be bought for the pharmaceutical industry as a function for its efforts to come up with a vaccine, I think it’s going to be fleeting,” Witters said. “The concern about rising costs generally is overwhelming.”
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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