8 ms·

Why we rejected Pfizer’s donation offer of pneumonia vaccines

112 points by beefield 10y ago

luso_brazilian 10y ago
> Donations are often used as a way to make others ‘pay up.’ By giving the pneumonia vaccine away for free, pharmaceutical corporations can use this as justification for why prices remain high for others, including other humanitarian organizations and developing countries that also can’t afford the vaccine. > Countries, which continue to voice their frustration at being unable to afford new and costly vaccines such as PCV, need lower prices as well to protect children’s health. Medicine and the pharmaceutical industry must strike a balance between the increase in innovation only healthy competition can bring (the promise of capitalism) and the public utility of their discoveries. When that doesn't happen governments sometimes are forced to step in and take harsh measures. It happened in Brazil in the first years of the XXI century, when the government forced compulsory licensing of anti-HIV drug patents [1] so it could produce it cheaply on their own laboratories. [1] http://www.doctorswithoutborders.org/news-stories/press-release/us-action-wto-threatens-brazils-successful-aids-program http://www.doctorswithoutborders.org/news-stories/press-rele...
- wolfgke 10y ago
  > It happened in Brazil in the first years of the XXI century, when the government forced compulsory licensing of anti-HIV drug patents [1] so it could produce it cheaply on their own laboratories. The mistake rather lies in the fact that the patents were granted. If you want competition instead of a monopoly dictating the prizes you should better not allow patents in this area.
  - afarrell 10y ago
    The problem here is that we are currently paying for vaccine research by promising the monopoly to allow research to recoup their costs (and the risks of plausible therapies that go nowhere). Removing that monopoly and not replacing it with something else will mean that no new therapies get developed. If we want new therapies to be developed, then we have to pay for it somehow. We could also reduce the cost of bringing new therapies to market by having the FDA say "if your drug is approved by the EU, you can sell it in the US" as per S. 2388
    - beefield 10y ago
      > Removing that monopoly and not replacing it with something else will mean that no new therapies get developed. Given that medical research is probably as close as you can get to a textbook case where patents are useful, and how obviously true many smart people think this statement is, there just _must_ be lots of robust peer reviewed academic research empirically supporting that statement. Could someone point me to one such peer-reviewed paper? Note that there are also opposing views. Switzerland did not have pharmaceutical patents until 1978. A quote from a famous anti-IP book[1]: "In particular, at least between 1850 and 1980, most drugs and medical products should have been invented and produced in the United States and the United Kingdom, and very little if anything in continental Europe. Further, countries such as Italy, Switzerland and, to a lesser extent, Germany, should have been the laggards of the pharmaceutical industry until recently. Instead the opposite was true for longer than a century" [1] http://levine.sscnet.ucla.edu/papers/imbookfinalall.pdf http://levine.sscnet.ucla.edu/papers/imbookfinalall.pdf
      - true_religion 10y ago
        Reading the opposing viewpoint paper is confusing. Drugs will be developed wherever the talent for their development lives, then exported to a protected environment to be sold. Even if 100% of drugs are available patent-free in Germany, it wouldn't be very helpful to people living in the US.
    - jcranmer 10y ago
      > We could also reduce the cost of bringing new therapies to market by having the FDA say "if your drug is approved by the EU, you can sell it in the US" as per S. 2388. This is exactly the sort of thing that TTIP is trying to do. For some reason, though, there is a lot of opposition to TTIP, not only in general, but on exactly this kind of provision.
      - tssva 10y ago
        My issue is that pharmaceutical companies would shop around for the country with the slackest approval requirements. Some countries may be willing to ease approval requirements without regard to safety to draw pharmaceutical company operations there and in others whether through official policy or corruption agencies may become fee for approval businesses. Once reciprocation is in place whether through treaty or act of Congress, due to the power of the pharmaceutical companies it will become almost impossible to end even when abuse is apparent. In regards to S. 2388 I also oppose the provision allowing Congress to override the FDA decision to not allow a particular drug or device. It is yet another attempt to make what should be scientific decisions political ones.
- kartan 10y ago
  > the increase in innovation only healthy competition can bring I think that you misspelled collaboration. And private research is not always positive: http://www.foodandwaterwatch.org/insight/public-research-private-gain http://www.foodandwaterwatch.org/insight/public-research-pri...
Shivetya 10y ago
I have no problem with asking them to lower their prices, but does anyone know what it actually cost Pfizer to actually produce, package, and ship? I would assume with the amount of money attributed to this product that initial investment/research costs are paid but is there room in current charges to cover new research into the same? Plus if heavily discounted it would be an expectation that someone else would see an increased price to cover for the discount another has received; unless of course we are looking for Pfizer to offset the cost of this particular drug by charging other drug users higher prices of obfuscate the discounts impact. When it comes down to it I am more against using children as pawns to make political statements. If the other drug is more cost effective then people should just skip the Pfizer drug until they in turn adjust pricing for the market.
- icebraining 10y ago
  If the other drug is more cost effective then people should just skip the Pfizer drug until they in turn adjust pricing for the market. Isn't this what they're doing? They specifically mention that a competitor (GSK) has lowered their prices for the same vaccine, so presumably they'll use that instead until Pfizer lowers the price, exactly as you're suggesting.
jbb555 10y ago
Spoiler: Because they are more interested in pushing their own politics than helping people.
- chrisbennet 10y ago
  I rarely down-vote but you've earned it. Actually read the article and then articulate a reason to disagree with the article and I'll un-down-vote you. "Donations can also undermine long-term efforts to increase access to affordable vaccines and medicines. They remove incentives for new manufacturers to enter a market when it’s absorbed through a donation arrangement. We need competition from new companies to bring down prices overall — something we don’t have currently for the pneumonia vaccine. Donations are often used as a way to make others ‘pay up.’ By giving the pneumonia vaccine away for free, pharmaceutical corporations can use this as justification for why prices remain high for others, including other humanitarian organizations and developing countries that also can’t afford the vaccine. Countries, which continue to voice their frustration at being unable to afford new and costly vaccines such as PCV, need lower prices as well to protect children’s health."
- alistairSH 10y ago
  Where there own polices are an attempt to effect long-term, positive (for consumers) change in the global RX market. I don't see that as a bad thing.
- Broken_Hippo 10y ago
  Maybe you somehow got a different understanding than I did. It isn't that they couldn't use the donations or that they won't help people. Unfortunately, restrictions, both transparent and implied, means that they can't always use the donation where it is actually needed. Furthermore, those same donations actually hinder them from helping folks in the future. Long term planning and learning from history and working with other charities and all that stuff - they actually do that.
hannob 10y ago
It's texts like this that make me feel my occasional donations to MSF are well spent. They're not only helping people, they seem to care how to do it and consider political implications. Because after all, we won't fix the lack of global health access purely based on donations, we need political and economical changes that make medicine affordable to everyone who needs it.
anexprogrammer 10y ago
Donations make great headlines but rarely sustainable fixes. Pfizer do seem to be odd one out here. "They continue to offer donations that give Pfizer a tax break". That seems damning, but I know nothing about global drug pricing, and current developing world issues, so let's take 20 lunchtime minutes and see what I can find out. wholesale price $17.00 (developing world src:wikipedia) AMC subsidised price $3.50 GSK Offer $3.05 MSF Want $1.66 For a vaccine introduced in the US in 2000 and France, Germany, and the UK in 2006. There's a need to research further strains mainly found in the developing world. There's also the AMC programme (Gates Foundation and 5 Govt contributions), GAVI (Gates, World Bank, WHO, Unicef). GSK charge less than Pfizer as their vaccine covers slightly fewer strains. GAVI seems to have been remarkably successful [1], and $10bn in funding over its lifetime, 75% infectious disease control, 25% basic healthcare. They're in more countries than currently targeted but rollout within countries is slightly behind. Countries are still applying to join GAVI. They have systematically increased manufacturers for vaccines, including developing world producers for all. Two or three more manufacturers of Pneumococcal vaccine are in pipeline. Not clear when, but MSF seem to indicate next year for first. -- So, what do I get from that? 20, OK 25 minutes doesn't get you much, reports tend to be long. :) I've a new found respect for Bill Gates. From a world where vaccination rates were declining in the 90s, he's achieved a huge change. $3.50 a dose is perhaps a better ask, given strains covered and other subsidised prices. Get that then ask everyone to go lower. Or ask $1.66 and get ignored. Can't quickly find out research cost of these, or production cost, so impossible to estimate what cost price becomes, or additional costs to research additional developing world strains. High price doesn't only mean profiteering. Products appear to be in pipeline from GSK (in collaboration with London School of Hygiene & Tropical Medicine, and Medical Research Council, Gambia) - near Phase III, Serum Institute of India - under development, Merck has a candidate going into Phase II. So competition coming soon(tm). [1] http://gaviprogressreport.org http://gaviprogressreport.org
- skj 10y ago
  Bill Gates? Just in case, MSF is Medecins Sans Frontieres (Doctors Without Borders), not Microsoft.
  - 10y ago
xgbi 10y ago
> Donations often involve numerous conditions and strings attached, including restrictions on which patient populations and what geographic areas are allowed to receive the benefits. What?? Is it a "DONATION" or a "CONTRACT"? I don't understand how this could be called a donation if it has "strings attached". Once I donate money to a charity, I expect them to spend it wisely, but I do not make them sign a freaking contract!
- nraynaud 10y ago
  No for vaccines it's complicated, because there is logistics involved, they are delivered over time, and at certain points, and refrigerated. Moreover most private donations and public subsidies come with strings attached.
- ensignavenger 10y ago
  There are IRS rules regarding this if using it as a tax deduction, too. Donors can 'advise' the charity in what it does with the donation, but generally cannot control it with a legally binding contract. (I am not a lawyer, but that is how I understand the rules, anyway.)
  - Declanomous 10y ago
    Restricted donations are very common. Donors often have the choice of designating a fund when giving money to a charity. I believe the money in a restricted fund is legally required to be used for the designated purpose. As far as I'm aware, the legal limitations on fund restrictions are designed to prevent restrictions which are designed to circumvent the tax code. As an example, lets say you give money to a charity. You could require the funds be used to create and administer a scholarship for youth from your home town. You could not require the funds be used for a scholarship for children who live in your household. This is based on what I've incidentally learned working for a non-profit. I'm not an accountant or a lawyer, so I might have missed some nuance, but I think that's the gist of it. Here's a link to some information on managing restricted funds: https://www.thebalance.com/restricted-unrestricted-nonprofit-funds-2502167 https://www.thebalance.com/restricted-unrestricted-nonprofit...
- 10y ago

112 points by beefield 10y ago

> Donations are often used as a way to make others ‘pay up.’ By giving the pneumonia vaccine away for free, pharmaceutical corporations can use this as justification for why prices remain high for others, including other humanitarian organizations and developing countries that also can’t afford the vaccine. > Countries, which continue to voice their frustration at being unable to afford new and costly vaccines such as PCV, need lower prices as well to protect children’s health. Medicine and the pharmaceutical industry must strike a balance between the increase in innovation only healthy competition can bring (the promise of capitalism) and the public utility of their discoveries. When that doesn't happen governments sometimes are forced to step in and take harsh measures. It happened in Brazil in the first years of the XXI century, when the government forced compulsory licensing of anti-HIV drug patents [1] so it could produce it cheaply on their own laboratories. [1] http://www.doctorswithoutborders.org/news-stories/press-release/us-action-wto-threatens-brazils-successful-aids-program http://www.doctorswithoutborders.org/news-stories/press-rele...

wolfgke 10y ago
> It happened in Brazil in the first years of the XXI century, when the government forced compulsory licensing of anti-HIV drug patents [1] so it could produce it cheaply on their own laboratories. The mistake rather lies in the fact that the patents were granted. If you want competition instead of a monopoly dictating the prizes you should better not allow patents in this area.
- afarrell 10y ago
  The problem here is that we are currently paying for vaccine research by promising the monopoly to allow research to recoup their costs (and the risks of plausible therapies that go nowhere). Removing that monopoly and not replacing it with something else will mean that no new therapies get developed. If we want new therapies to be developed, then we have to pay for it somehow. We could also reduce the cost of bringing new therapies to market by having the FDA say "if your drug is approved by the EU, you can sell it in the US" as per S. 2388
  - beefield 10y ago
    > Removing that monopoly and not replacing it with something else will mean that no new therapies get developed. Given that medical research is probably as close as you can get to a textbook case where patents are useful, and how obviously true many smart people think this statement is, there just _must_ be lots of robust peer reviewed academic research empirically supporting that statement. Could someone point me to one such peer-reviewed paper? Note that there are also opposing views. Switzerland did not have pharmaceutical patents until 1978. A quote from a famous anti-IP book[1]: "In particular, at least between 1850 and 1980, most drugs and medical products should have been invented and produced in the United States and the United Kingdom, and very little if anything in continental Europe. Further, countries such as Italy, Switzerland and, to a lesser extent, Germany, should have been the laggards of the pharmaceutical industry until recently. Instead the opposite was true for longer than a century" [1] http://levine.sscnet.ucla.edu/papers/imbookfinalall.pdf http://levine.sscnet.ucla.edu/papers/imbookfinalall.pdf
    - true_religion 10y ago
      Reading the opposing viewpoint paper is confusing. Drugs will be developed wherever the talent for their development lives, then exported to a protected environment to be sold. Even if 100% of drugs are available patent-free in Germany, it wouldn't be very helpful to people living in the US.
  - jcranmer 10y ago
    > We could also reduce the cost of bringing new therapies to market by having the FDA say "if your drug is approved by the EU, you can sell it in the US" as per S. 2388. This is exactly the sort of thing that TTIP is trying to do. For some reason, though, there is a lot of opposition to TTIP, not only in general, but on exactly this kind of provision.
    - tssva 10y ago
      My issue is that pharmaceutical companies would shop around for the country with the slackest approval requirements. Some countries may be willing to ease approval requirements without regard to safety to draw pharmaceutical company operations there and in others whether through official policy or corruption agencies may become fee for approval businesses. Once reciprocation is in place whether through treaty or act of Congress, due to the power of the pharmaceutical companies it will become almost impossible to end even when abuse is apparent. In regards to S. 2388 I also oppose the provision allowing Congress to override the FDA decision to not allow a particular drug or device. It is yet another attempt to make what should be scientific decisions political ones.
kartan 10y ago
> the increase in innovation only healthy competition can bring I think that you misspelled collaboration. And private research is not always positive: http://www.foodandwaterwatch.org/insight/public-research-private-gain http://www.foodandwaterwatch.org/insight/public-research-pri...

Shivetya 10y ago

I have no problem with asking them to lower their prices, but does anyone know what it actually cost Pfizer to actually produce, package, and ship? I would assume with the amount of money attributed to this product that initial investment/research costs are paid but is there room in current charges to cover new research into the same? Plus if heavily discounted it would be an expectation that someone else would see an increased price to cover for the discount another has received; unless of course we are looking for Pfizer to offset the cost of this particular drug by charging other drug users higher prices of obfuscate the discounts impact. When it comes down to it I am more against using children as pawns to make political statements. If the other drug is more cost effective then people should just skip the Pfizer drug until they in turn adjust pricing for the market.

icebraining 10y ago
If the other drug is more cost effective then people should just skip the Pfizer drug until they in turn adjust pricing for the market. Isn't this what they're doing? They specifically mention that a competitor (GSK) has lowered their prices for the same vaccine, so presumably they'll use that instead until Pfizer lowers the price, exactly as you're suggesting.

jbb555 10y ago

Spoiler: Because they are more interested in pushing their own politics than helping people.

chrisbennet 10y ago
I rarely down-vote but you've earned it. Actually read the article and then articulate a reason to disagree with the article and I'll un-down-vote you. "Donations can also undermine long-term efforts to increase access to affordable vaccines and medicines. They remove incentives for new manufacturers to enter a market when it’s absorbed through a donation arrangement. We need competition from new companies to bring down prices overall — something we don’t have currently for the pneumonia vaccine. Donations are often used as a way to make others ‘pay up.’ By giving the pneumonia vaccine away for free, pharmaceutical corporations can use this as justification for why prices remain high for others, including other humanitarian organizations and developing countries that also can’t afford the vaccine. Countries, which continue to voice their frustration at being unable to afford new and costly vaccines such as PCV, need lower prices as well to protect children’s health."
alistairSH 10y ago
Where there own polices are an attempt to effect long-term, positive (for consumers) change in the global RX market. I don't see that as a bad thing.
Broken_Hippo 10y ago
Maybe you somehow got a different understanding than I did. It isn't that they couldn't use the donations or that they won't help people. Unfortunately, restrictions, both transparent and implied, means that they can't always use the donation where it is actually needed. Furthermore, those same donations actually hinder them from helping folks in the future. Long term planning and learning from history and working with other charities and all that stuff - they actually do that.

hannob 10y ago

It's texts like this that make me feel my occasional donations to MSF are well spent. They're not only helping people, they seem to care how to do it and consider political implications. Because after all, we won't fix the lack of global health access purely based on donations, we need political and economical changes that make medicine affordable to everyone who needs it.

anexprogrammer 10y ago

Donations make great headlines but rarely sustainable fixes. Pfizer do seem to be odd one out here. "They continue to offer donations that give Pfizer a tax break". That seems damning, but I know nothing about global drug pricing, and current developing world issues, so let's take 20 lunchtime minutes and see what I can find out. wholesale price $17.00 (developing world src:wikipedia) AMC subsidised price $3.50 GSK Offer $3.05 MSF Want $1.66 For a vaccine introduced in the US in 2000 and France, Germany, and the UK in 2006. There's a need to research further strains mainly found in the developing world. There's also the AMC programme (Gates Foundation and 5 Govt contributions), GAVI (Gates, World Bank, WHO, Unicef). GSK charge less than Pfizer as their vaccine covers slightly fewer strains. GAVI seems to have been remarkably successful [1], and $10bn in funding over its lifetime, 75% infectious disease control, 25% basic healthcare. They're in more countries than currently targeted but rollout within countries is slightly behind. Countries are still applying to join GAVI. They have systematically increased manufacturers for vaccines, including developing world producers for all. Two or three more manufacturers of Pneumococcal vaccine are in pipeline. Not clear when, but MSF seem to indicate next year for first. -- So, what do I get from that? 20, OK 25 minutes doesn't get you much, reports tend to be long. :) I've a new found respect for Bill Gates. From a world where vaccination rates were declining in the 90s, he's achieved a huge change. $3.50 a dose is perhaps a better ask, given strains covered and other subsidised prices. Get that then ask everyone to go lower. Or ask $1.66 and get ignored. Can't quickly find out research cost of these, or production cost, so impossible to estimate what cost price becomes, or additional costs to research additional developing world strains. High price doesn't only mean profiteering. Products appear to be in pipeline from GSK (in collaboration with London School of Hygiene & Tropical Medicine, and Medical Research Council, Gambia) - near Phase III, Serum Institute of India - under development, Merck has a candidate going into Phase II. So competition coming soon(tm). [1] http://gaviprogressreport.org http://gaviprogressreport.org

skj 10y ago
Bill Gates? Just in case, MSF is Medecins Sans Frontieres (Doctors Without Borders), not Microsoft.
- 10y ago

xgbi 10y ago

> Donations often involve numerous conditions and strings attached, including restrictions on which patient populations and what geographic areas are allowed to receive the benefits. What?? Is it a "DONATION" or a "CONTRACT"? I don't understand how this could be called a donation if it has "strings attached". Once I donate money to a charity, I expect them to spend it wisely, but I do not make them sign a freaking contract!

nraynaud 10y ago
No for vaccines it's complicated, because there is logistics involved, they are delivered over time, and at certain points, and refrigerated. Moreover most private donations and public subsidies come with strings attached.
ensignavenger 10y ago
There are IRS rules regarding this if using it as a tax deduction, too. Donors can 'advise' the charity in what it does with the donation, but generally cannot control it with a legally binding contract. (I am not a lawyer, but that is how I understand the rules, anyway.)
- Declanomous 10y ago
  Restricted donations are very common. Donors often have the choice of designating a fund when giving money to a charity. I believe the money in a restricted fund is legally required to be used for the designated purpose. As far as I'm aware, the legal limitations on fund restrictions are designed to prevent restrictions which are designed to circumvent the tax code. As an example, lets say you give money to a charity. You could require the funds be used to create and administer a scholarship for youth from your home town. You could not require the funds be used for a scholarship for children who live in your household. This is based on what I've incidentally learned working for a non-profit. I'm not an accountant or a lawyer, so I might have missed some nuance, but I think that's the gist of it. Here's a link to some information on managing restricted funds: https://www.thebalance.com/restricted-unrestricted-nonprofit-funds-2502167 https://www.thebalance.com/restricted-unrestricted-nonprofit...
10y ago