The carnage wreaked by COVID left over a million deaths in the U.S. during the first two years. Thanks to miracle medicines, such as COVID vaccines, diagnostic tests, and antivirals, the death toll has been greatly reduced. Access to treatments and vaccines has been afforded to all, as the federal government foots the bill to date, but that may change very soon. Word has leaked out that the Biden administration is about to enter negotiations with Big Pharma, for the express intent of shifting the cost of COVID vaccines and lifesaving antiviral medications, to the patient.
The Wall Street Journal first reported this story, which Kenny Stancil of Commondreams expanded.
The schedule for talks
The U.S. Department of Health and Human Services is scheduled to meet with pharmaceutical manufacturer representatives, pharmacies and various state health departments on August 30, to develop a timeline ‘map’ for this transition, according to the Wall Street Journal.
Dawn O’Connell, assistant secretary at HHS for preparedness and response explained the decision.
“We’ve known at some point we’d need to move over into the commercial market, and we’re approaching that time now. We don’t want to do it by fiat.”
And exactly how is this covert negotiation between Big Pharma and the federal government—not—a mandate forced by fiat? The possibility of such discussions has been dutifully ignored by the corporate press, with the sole, (and extremely ironic) exception of the Wall Street Journal. The lack of accountability and transparency regarding this issue is only surpassed again, by the utter hypocrisy of the situation, regarding the state of systemic economic inequality in the USA.
PPP loans to 1% forgiven while COVID drugs to be privatized
While ‘centrist’ democrats along with the GOP push yet another corporate giveaway of taxpayer funded COVID vaccines and antivirals; another story broke about PPP loans granted to corporations, millionaires, political office holders, and equally wealthy celebrities. The PPP loans granted to the 1%, have been forgiven, with no strings attached.
Celebs who had PPP loans forgiven…who could afford to pay it back
NFL King Tom Brady just accepted a 10-year sportscaster contract worth $375 million. His accrued wealth during his NFL career is in excess of $333 million. He received a PPP “loan” for $960,855 to meet the alleged payroll expenses of his fitness and nutritional supplement company. His PPP loan was forgiven for $972,280 which includes interest. Did Brady actually need this loan? Doubtful, but now the taxpayer is on the hook for this legalized theft.
Actress Reese Witherspoon
Reese Witherspoon founded the clothing company, Draper James, LLC. The company received two PPP loans, again to meet alleged payroll and rent, in the amounts of $975,472 and $719,222 respectively. Witherspoon’s wealth was estimated to be over $400 million in 2021 according to Forbes, which makes her the world’s wealthiest actress. Her PPP loans were forgiven for $987,793 and $726,310.
This loan forgiveness for the very rich comes at the expense of low-income and middle-income Americans. While Reese Witherspoon received “rental” assistance, struggling Americans received eviction notices.
Once again, hypocrisy is on display, and supersized. Those cynics who claim I’m comparing apples and oranges, merely seek to derail the real issue, namely economic inequality. The issue is hypocrisy rooted in systemic corruption. Period. PPP loans were allegedly intended to keep small businesses afloat during the worst periods of the pandemic, so the average worker could pay their rent and put food on the table. It was not appropriated to serve as a wealth creator for the already super wealthy, so they could purchase yet another vacation home or yacht. It was not appropriated to serve as a taxpayer funded ‘allowance’ to corporate interests so they could ‘buy back’ their own stock, thus artificially increasing their value. And yet, that is precisely what several large corporations did.
Derek Martin, spokesman for the nonprofit ACCOUNTABLE.US explained the scam.
“The Trump administration wrote the rules for the PPP program, allowing billions of dollars to go to the well-resourced and well-connected rather than actual small businesses that are struggling to survive this economic crisis. With no transparency or accountability to speak of under this mismanaged program, it’s no surprise some large companies may have misused tax dollars to their own benefit. Small businesses and their workers need help and can’t afford any more broken promises. Congress should take immediate steps to design a new program that is transparent and will actually benefit the small businesses that need help the most.”
Martin’s remarks date back to June of 2020, and yet there has been no movement towards reforming this thoroughly corrupt process which has bilked taxpayers for the past two years. The relevance to the subject of proposed privatization of COVID meds is clear. COVID vaccines and antiviral meds were based on taxpayer funded research, which was given to Big Pharma, free of charge, and yet both republican and democratic administrations are determined to send more money to the worst Welfare Queen of all, Big Pharma.
COVID antiviral meds, and vaccines were created on the public dime
The NIH or National Institutes of Health has a long history granting taxpayer money to various universities and medical schools in search of promising treatments for multiple life-threatening diseases, and COVID-19 was no exception. Medical researchers Hussain S. Lahani, Jerry Avom, & Aaron S. Kesselheim published a piece titled: U.S. Taxpayers Heavily Funded the Discovery of COVID-19 Vaccines. The authors clearly make the case for retaining government control of the vaccines, which were largely taxpayer funded. To quote from the report:
“The National Institutes of Health (NIH) has joint ownership of the Moderna vaccine patent because of its fundamental role in research and development, starting from the inception of that work and concluding to the present. This includes nearly $6 billion from U.S. public funds, which supported an enormous proportion of the development costs of the Moderna vaccine from bench to bedside.”
US taxpayers also subsidized multiple COVID meds
Axios reported in 2021 that American taxpayers subsidized the original development of COVID antiviral molnupiravir at Emory University for some $35 million dollars in the time period 2013-2020. Both the National Institutes of Health and the Defense department shared the cost of the early development.
The sequence of events
Emory University conducted early-stage testing on molnupiravir between 2013-2020, after which it licensed the drug to RIdgeback Biotherapeutics for human clinical trials. The Trump administration refused to add funding until more data was available. Merck purchased the exclusive rights to the drug from Ridgeback, with both companies ignoring the contribution of taxpayer subsidies and subsequent patent rights.
Knowledge Ecology International exposed Ridgeback’s misinformation
Luis Gil Abinader, a researcher at Knowledge Ecology International, studies intellectual property rights, and explained the situation concisely. Though the Trump administration refused to grant additional funding to molnupiravir’s creation, the major patent applications for the drug cites federal funding as part of the development process, which means that …”the U.S. government co-owns molnupiravir and has rights to demand availability at a reasonable price.”
Ridgeback co-founder Wendy Holman claimed in a recent interview that her company…” never got government funding […]”, which referred to manufacturing subsidies. Holman went on to claim that “since licensed by Ridgeback, all funds used for the development of molnupiravir have been provided by Merck and Wayne and Wendy Holman of Ridgeback.” Her claim neglects that fact that Emory University spent six years researching the drug, again using taxpayer funding.
In fact, Emory received four taxpayer subsidized contracts which totaled some $29,517,489 at the time they were awarded. Besides those four contracts, Emory scientist George Painter and his colleagues at the Emory Institute for Drug Development (EIDD) led the early research. Painter estimates that federal agencies invested some $35 million to research the drug between 2013-2020.
The U.S. government has rights as patent owners of molnupiravir
Emory University was the major recipient of federal taxpayer funds which subsidized research and development of molnupiravir, and published five U.S. applications directed to derivatives of a substance called n4-hydroxycytidine, which is the parent compound to molnupiravir. George Painter is listed as one of the co-inventors of these applications.
To quote from Knowledge Ecology International:
“The Painter et al. applications disclose compound formulas, manufacturing processes, and methods of using certain n4-hydroxycytidine derivatives to treat diseases. One of the Painter et al. applications specifically discloses molnupiravir in one of the claims. That patent application also claims methods of treating “a human coronavirus infection” using molnupiravir. Another application, 20210252033, discloses methods of using molnupiravir to treat SARS-CoV-2 specifically. That application, first filed in February 2020, is still pending.”
The report from Knowledge Ecology International goes further and makes the case for government ownership of molnupiravir. The report references Table 1, where government funding is acknowledged, “either at the time of filing or via a subsequent amendment.” To quote further: “Specifically, each of the Painter et al. applications acknowledge one or several of the contracts awarded by the DTRA and the NIAID.” The NIAID is the National Institute of Allergy and Infectious Diseases, and DTRA is the Defense Threat Reduction Agency.
The report concluded that: …”on May 18, 2020, Emory executed respective confirmatory licenses to the DTRA and NIAID stating that the compounds and methods claimed in the 20200276219 application are subject inventions under 35 U.S.C, et seq, the legal provisions pertaining to the Bayh-Dole Act.” https://www.keionline.org/36648
The report concluded that, …”the U.S. government co-owns molnupiravir and has rights to demand availability at a reasonable price.”
So, despite the fact that Merck purchased ‘exclusive’ rights to manufacture and sell the drug globally from Ridgeback Bio, the U.S. government still retains ownership rights to this lifesaving drug. Yet, the Biden administration is planning talks to privatize drugs that the taxpayers substantially funded.
Taxpayer funded antivirals save lives of older patients
The Center for Infectious Disease Research and Policy based at the University of Minnesota just published a report on the efficacy of two COVID antivirals, namely Paxlovid and Molnupiravir particularly in relation to the Omicron variant which has proven to be vaccine resistant. A recent report published in the New England Journal of Medicine demonstrated clinical evidence that rapid administration of either drug reduced the incidence of serious illness or death in patients 60 years old and over. So, what harm could there be in privatizing these antivirals and vaccines? Upon closer examination, quite a bit.
Price gouging by Big Pharma constitutes a death sentence
Sharon Lerner from The Intercept reported in October of 2021, on the price gouging of molnupiravir by Merck. According to a Harvard report obtained by Lerner, this drug costs $17.74 to produce for an estimated five-day course of treatment, yet Merck charges the U.S. taxpayer $712.00 for the same dosage. That markup is approximately 40 times Merck’s actual production costs. The report titled: Estimated cost-based generic prices for the treatment of COVID-19 infection; authored by Melissa J. Barber & Dzintars Gotham, was commissioned by the Harvard School of Public Health and King’s College Hospital in London.
Since antivirals like paxlovid and molnupiravir were approved on an emergency basis, it is likely that insurance companies and Medicare will not approve payment for these soon to be privatized medications in the future. The average American cannot afford over $700 for a 5-day supply of pills. Some Medicare recipients live off less than $1500 per month. A single course of treatment would then amount to 50% of their monthly income. The vaccines and antivirals like molnupiravir were created on the backs of taxpayers, yet these same drugs would be out of reach if privatized, adding insult to injury—or rather insult to fatal injury. Furthermore, if you multiply the cost for several family members to receive the treatment; you have an impossible choice, namely who lives—and who dies.
Biden administration did plead for more money
In all fairness, the White House issued a fact sheet March 15, 2022, pleading with Congress to allocate more money for COVID vaccines and treatments.
The fact sheet listed the consequences if funding needs weren’t met, which includes the following:
*Inability to Secure Sufficient Booster Doses and Variant Specific Vaccines,
*Providers No Longer Able to Submit Claims for Testing, Treating, and Vaccinating the Uninsured,
*Ending the Purchase of Monoclonal Antibody Treatments, Scaling Back State/Territory Allocations,
*Halting Critical Testing, Vaccine, Treatment Efforts,
*Scaling Back Planned Purchases of Preventive Treatments for Immunocompromised,
*Reducing Ability to Rapidly Identify and Assess Emerging Variants,
*Damage to Global Vaccination and COVID-19 Treatment Efforts.”
The fact sheet also states that; “…the Administration is requesting that Congress provides authority to ensure seamless access to Medicare and insurance coverage for treatments under an Emergency Use Authorization (EUA).”
At this point, it seems like the BIden administration was attempting to remedy the situation with more funding, but conveniently forgot about the 1980 law which is responsible for the present state of affairs that allows pharmaceutical companies to profit from drugs which were partially funded by taxpayers, namely the Bayh-Dole Act of 1980.
Bayh-Dole Act and Section 202
The Bayh-Dole Act, passed in 1980 …”permits the ownership of patents resulting from federally funded research to remain with the inventors and their employers.” To quote further, “Government research grantees and their institutions now earn billions from royalties and equity interests that result from the sale or exclusive licensing of these patents.” (Source: Watanabe,T. UCLA will get hundreds of millions for rights to prostate cancer drug, LA Times (4 March 2016)
To date, the U.S. government spends in excess of $30 billion annually funding biomedical research with taxpayer subsidies. The lack of equity in return investment to the taxpayer is appalling. In any other economic arena, such a giveaway would represent premeditated fraud, if not for the technically ‘legal’ cover the Bayh-Dole Act supplies.
Frankly, this is a law that restrains the rights of taxpayers to demand some modicum of accountability and a reasonable return on investment. To borrow a trite phrase, it never should have seen the light of day. This law would deny taxpayers any return on research investment, but there is a subsection which remedies this foul law, namely Section 202.
Section 202 … could restore accountability to taxpayers
According to authors, Alfred B. Engelberg & Aaron S. Kesselheim, “Section 202 requires research grantees that obtain patents claiming federally funded inventions to confer a nonexclusive, royalty-free license back to the U.S. government, which permits the government to practice the invention or to have it practiced on the government’s behalf.” In fact, former U.S. Senator Birch Bayh defended this aspect of the law that bears his name, claiming that this section grants the government the right to…” use for itself and the public good inventions arising out of research that the federal government helps to support.
Using Section 202 could also benefit government funded healthcare such as Medicare and Medicaid. To date, this provision has not been used by the federal government. The reason may lie with the fact that pharmaceutical companies often obtain additional patents during development into FDA approved drugs, and never acknowledge taxpayer funding for the drug’s origins. Unfortunately, Section 202 does not cover this type of privately funded patent. It is often unclear which monies paid for research when pharmaceutical companies are not forced to disclose the public money funding a drug’s origins.
The ramifications of Section 202 are obvious regarding COVID vaccines and antivirals, so why is the Biden administration willing to enter negotiations aimed at privatizing these lifesaving drugs? Apparently, elderly, medically compromised and low-income Americans are considered acceptable ‘collateral damage’ in the COVID pharmaceutical wars. The fact that these drugs would likely not exist had it not been for extensive taxpayer funding, remains politically irrelevant.
The Bayh-Dole Act of 1980 needs serious revision in order to safeguard taxpayer investments in pharmaceutical development, but that’s only part of the equation. The hypocrisy of both parties is on obscene display as the rich and famous have PPP loans forgiven, (though they can more than afford to pay the debt), while taxpayer funded research that resulted in COVID drugs are on the privatization chopping block.
Or perhaps a quote from French moralist Francois de La Rochefoucauld would be more descriptive of this political Gordian knot. He wrote in his book titled: Reflections or Sentences and Moral Maxims, that “hypocrisy is a tribute that vice pays to virtue.” His tome, first published in 1665 remains relevant in the 21st century as politicians, corporate oligarchs, and wealthy celebrities wallow in a swamp of that very tribute, in the age of COVID.
Or as I prefer to say, “Et tu, Reese?”