Biotech-Bashing: Is It Justified? (Part II)

In my last post, I began a broad discussion of the biotech industry and some of the concerns that have been raised regarding its ‘commitment’ to improving health care for the world’s population. I left it at a point where I had pointed out some evidence for change in the ways in which biotech companies perform research. Therefore, it is quite likely that the so-called chronic over-spending on R&D by biotech companies will start to bear fruit in the near future. This will come to pass as processes are streamlined, resources re-allocated, and, most importantly, biotech companies and big pharma begin to share expertise in a concerted manner in order to bring innovative therapeutics to market.

The state of the art in biological knowledge is now so advanced that most are in agreement regarding the vast and untapped potential for development of novel and effective drugs to treat hitherto incurable diseases. I, for one, am convinced that we need to look elsewhere for ways to enhance the efficiency of the biotech sector. The science is fine – it’s managing its utilization that is the problem. In many ways, this boils down to the standard question of ethics vs. profit. Worldwide, investors now have access to information of a quality and quantity never heretofore seen. Generally, large investors and the companies advising them have become accustomed to getting their returns – and lots of them – as regularly as clockwork, especially from high-tech industrial sectors such as telecommunications, semiconductors, pharmaceuticals and, of course, biotechnology. Companies involved in health care have largely been unsuccessful in convincing investors to be patient – an issue I mentioned earlier.

The key is the fact that most companies in the biotech sector tend to react to, rather than anticipate, the expectations of society. This, as any switched-on business professional will tell you, is a recipe for disaster. Corporate conduct becomes hypocritical and untrustworthy, as companies feel the pinch of investor worries as well as customer dissatisfaction, and seek to at least carve out some security for themselves in the shark-infested waters of the global marketplace. A notable example of the consequences of pursuing the reactive, rather than pro-active stance was recently provided in the form of Novartis. The Swiss drug-maker is an active player in biotechnology, and its R&D programs had developed a small molecule drug, Glivec, that was amazingly active in treating a wide range of cancers – in particular chronic myelogenous leukemia (CML), a devastating blood-based form of cancer. Novartis purported to have instituted a program to ensure free access to Glivec for the extremely ill patients who couldn’t pay the normal price. In particular, the company’s philanthropic efforts were declared to be directed at patients in developing countries, such as India. However as the New York Times pointed out, Novartis was not entirely altruistic in its efforts. Firstly, the company was unable to (or unwilling to) find established charitable organizations with well-structured distribution systems to get Glivec to patients, instead going with a small group that eventually was shown to be woefully unsuited to the task. Second, in the case of India, Novartis imposed conditions, stating that it would supply the drug free of charge only as long as Indian companies promised not to develop and market generic versions of the compound. As soon as Novartis received word that the Indian drug-makers were willfully (and probably cheerfully) ignoring its edict, the company stopped its free distribution program.

Finally, and perhaps most ignominiously, Novartis dropped the ball completely in South Korea. This country was not classified as belonging to the developing world by the Novartis initiative. But terminally ill people are terminally ill people, right? The South Korean government refused to foot the bill for Glivec – the cost of which comes to several thousand dollars a month (nearly $20 per pill) – in order to treat a group of extremely sick people. These individuals then petitioned the South Korean Supreme Court to be granted the right to purchase cheaper generic Glivec from – ironically – India, under the compulsory licensing agreement issuing from the World Trade Organization. Initially, the Court ruled in favor of the patients. However, Novartis appealed and managed to overturn the ruling. In the meantime, the company had stopped all delivery of its drug to South Korea, citing the breakdown of negotiations with the government over pricing. When the patients – serious CML sufferers who had been declared refractory (unresponsive) to all other treatments – decided to go ahead and buy the generic Indian Glivec anyway, Novartis hired muscle to prevent the shipment from ever reaching the people it was designed to save.

Clearly, the motivation behind Novartis’s strong-arm tactics and the overall stance of big pharma is fear – pathological, all-consuming fear of loss of profit. However, time and again, history has shown that social concerns such as ‘life before profit’ are capable of having negative impacts on shareholders that no amount of blockbuster drug selling can overturn. Certainly, image is everything in the pharmaceutical industry for good reason.

So, what is the way forward? Does it even exist? Clearly, biotech-pharma partnerships should be broadened, since this maximizes the potential benefits for drug development. But what should not be ignored is the tremendous resources available in labs of the Third World. Researchers in Cuba, for example, have with almost no resources successfully created a meningitis B vaccine. This last was recently partnered with GlaxoSmithKline, a leading pharmaceutical company, for marketing and development. All the more inspiring, considering that Cuban chambermaids earn more per month, on average, than Cuban biotech scientists…

On a more macro scale, given the examples of corporate skullduggery that I have taken such pains to highlight, it is obvious that more attention needs to be given to the issue of embedding corporate accountability in global health care governance systems. Pharma and biotech companies need to transform their business ethics methodology and philosophy with respect to performance and quality assurance, making these pro-active instead of reactive. The public also needs to see more efforts made by the industry to clarify issues arising from the development and use of innovative genomics-based technologies. Finally, and perhaps most essentially, the biotech sector should find ways to address the health disparity that is growing seemingly inexorably between rich and poor countries. Global thinking is needed to combat the prevalence of the “me-first” mind-set.