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1. Tracking the Fortunes of Corporate Psychedelia

Author:
Sandy Hager
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
In recent years, new biotech companies have emerged hoping to cash in on a medical psychedelics market expected to be worth billions. This article examines the business models of two of the largest such companies. According to conventional wisdom, for-profit players are best positioned to deliver new cures for mental illness at scale because of their ability to tap capital markets. The analysis presented here challenges this story on two counts. First, it argues that profitability in the pharmaceutical business depends not on rapid scaling per se, but on controlling and restricting access to maintain pricing power. Second, it claims that the unruliness of psychedelics – manifested in the presence of cheap generics, murky intellectual property claims, and high costs of administration – raises serious questions about their commercial viability. The article then assesses the sector’s embrace of Johnson and Johnson’s patented form of esketamine, Spravato, as its prototype for commercialization. Spravato may provide a pathway for profitability, but patients must contend with high prices and a drug that provides only short-term relief and requires indefinite dosing. Rather than disrupt Big Pharma, corporate psychedelia replicates its main features, raising questions about its claims to tackle the mental health crisis.
Topic:
Business, Mental Health, Pharmaceuticals, Biotechnology, Psychedelics, and Medicalization
Political Geography:
Global Focus

2. Dividing up Covid-19 vaccine: distribution based on countries’ weight

Author:
Al Jazeera Center for Studies
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Al Jazeera Center for Studies
Abstract:
Ending the coronavirus pandemic is not only about the technical issue of vaccine development. The challenge is multidimensional, involving a global proprietary pharmaceutical system and an exclusive, nationalist tendency in wealthy, prosperous states.
Topic:
Nationalism, Vaccine, COVID-19, Health Crisis, and Pharmaceuticals
Political Geography:
Global Focus

3. Trade and Transport Margins in Pharmaceuticals and other R&D-Intensive Industries

Author:
Tom Martin
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Spending for prescription and over-the-counter pharmaceutical products totaled $413 billion in 2012 according to the Bureau of Economic Analysis’ (BEA) trade and transports margin data. Just over half of this spending (52%) accrued to the pharmaceutical companies that produced the medicines, while the remainder was divided between transport and wholesale margins (21%) and retail margins (26%). Compared to other research and development (R&D)-intensive manufacturing industries with significant consumer sales, the pharmaceutical and medicines manufacturing industry ranks second in terms of R&D intensity behind communications equipment, and receives the second lowest producers’ share of total spending after other miscellaneous manufacturing. Thus, the pharmaceutical industry is unique among manufacturing industries in that it devotes a large share of its revenue to R&D, despite receiving a considerably smaller share of total spending.
Topic:
Science and Technology, Trade, Transportation, Medicine, and Pharmaceuticals
Political Geography:
Global Focus

4. Government as the First Investor in Biopharmaceutical Innovation: Evidence From New Drug Approvals 2010–2019

Author:
Ekaterina Cleary, Matthew J. Jackson, and Fred D. Ledley
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The discovery and development of new medicines classically involves a linear process of basic biomedical research to uncover potential targets for drug action, followed by applied, or translational, research to identify candidate products and establish their effectiveness and safety. This Working Paper describes the public sector contribution to that process by tracing funding from the National Institutes of Health (NIH) related to published research on each of the 356 new drugs approved by the U.S. Food and Drug Administration from 2010-2019 as well as research on their 218 biological targets. Specifically, we describe the timelines of clinical development for these products and proxy measures of their importance, including designations as first-inclass or expedited approvals. We model the maturation of basic research on the biological targets for drugs to determine the initiation and established points of this research, and demonstrate that none of the 232 products modelled were approved before this enabling research passed the established point. This body of essential research comprised 2 million publications, of which 409 thousand were supported by 317 thousand Funding Years of NIH Project support totaling $156 billion. Research on the 356 drugs comprised 229 thousand publications, of which 36 thousand were supported by 42 thousand Funding Years of NIH Project support totaling $31 billion. Overall, NIH funding contributed to research associated with every new drug approved from 2010-2019, totaling $187 billion. This funding supported investigator-initiated Research Projects, Cooperative Agreements for government-led research on topics of particular importance, as well as Research Program Projects and Centers and training to support the research infrastructure. This NIH funding also produced 22 thousand patents, which provided marketing exclusivity for 27 (8.6%) of the drugs approved 2010-2019. These data demonstrate the essential role of public sector-funded basic research in drug discovery and development, as well as the scale and character of this funding. It also demonstrates the limited mechanisms available for recognizing the value created by these early investments and ensuring appropriate public returns. This analysis demonstrates the importance of sustained public investment in basic biomedical science as well as the need for policy innovations that fully realize the value of public sector investments in pharmaceutical innovation that ensure that these investments yield meaningful improvements in health.
Topic:
Science and Technology, Research, Public Policy, Innovation, State Funding, Pharmaceuticals, and Funding
Political Geography:
North America, Global Focus, and United States of America

5. Blueprint for a Market-Driven Value-Based Advance Commitment for Tuberculosis

Author:
Kalipso Chalkidou, Martina Garau, Rachel Silverman, and Adrian Towse
Publication Date:
02-2020
Content Type:
Special Report
Institution:
Center for Global Development (CGD)
Abstract:
Innovation—delivering new drugs, diagnostics, and devices—is a critical tool in the global fight against disease and premature death. Yet despite the potential for innovation to improve health around the world, the pharmaceutical industry’s investments in research and development (R&D) generally neglect diseases of the poor in favour of more lucrative high-income markets. Responding to this R&D gap, donor “push” investments have helped advance an innovation agenda to serve low- and middle-income countries. Though these investments have helped accelerate market entry of several important innovations, other donor-push products have fizzled upon market entry due to unaffordable or non-cost-effective pricing, disappointing efficacy, lack of political will, or lower-than-anticipated country demand. And with many large middle-income countries (MICs) poised to soon transition from donor aid, the sustainability of the current donor-led model is in question. Tuberculosis (TB), an infectious disease primarily affecting the poor and vulnerable, ranks among the top 10 global causes of death. Current TB treatment cycles are long and toxic, causing some patients to discontinue treatment, develop acquired drug resistance, and risk spreading a drug-resistant pathogen to others. Drug-resistant strains are more difficult to treat, traditionally requiring long-duration toxic regimens and high-cost hospitalization (though recent innovations offer a shorter, more tolerable, and more affordable treatment). Despite years of global investment in TB control, modelling suggests that global goals for TB cannot be achieved without major technological breakthroughs. One particularly desirable innovation would be a short-course universal drug regimen (UDR)—equally capable of treating drug-sensitive and drug-resistant strains, with a two-month or shorter treatment duration. Donors, particularly the Bill & Melinda Gates Foundation (BMGF), have funded substantial early-stage R&D to source new treatment compounds that could contribute to a UDR, but substantial additional investments in late-stage trials would be required to bring such a UDR to market.
Topic:
Health Care Policy, Drugs, Medicine, and Pharmaceuticals
Political Geography:
Global Focus

6. Improving Global Health Supply Chains through Traceability

Author:
Michael Pisa and Denise McCurdy
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
In many low- and lower-middle-income countries (LMICs) where disease burdens are highest, health supply chains function poorly, resulting in frequent stockouts and a high prevalence of substandard and even falsified medications. In response to these concerns, the global health initiatives have stepped up their efforts to improve supply chain management. At the same time, a growing number of rich country pharmaceutical companies are investing in digital technologies that help them “track and trace” the movement of medicines through the supply chain at the package-level. Drawing from interviews with over thirty experts, we find that traceability offers a realistic solution to some of the problems found in LMIC health supply chains but that implementing the approach is a huge logistical endeavor that requires a strong political commitment. We close by discussing how donors can support committed governments, by taking an evidence-based approach to determine what traceability methods work best.
Topic:
International Cooperation, Health Crisis, Pharmaceuticals, and Tracing
Political Geography:
Global Focus

7. Can Transparency Lower Prices and Improve Access to Pharmaceuticals? It Depends

Author:
Kalipso Chalkidou and Adrian Towse
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
spending on pharmaceuticals and other healthcare commodities is high and makes up a large proportion of healthcare spending in rich and poorer markets alike. A popular response to the problem of escalating drugs budgets has been transparency of drug pricing within and across borders. In a rare alignment of policy priorities, the Trump administration, the US Senate, and the World Health Organisation are calling for more transparency of the prices paid for prescription drugs as a means of tackling the ever-growing pharmaceuticals bill. Recently Italy’s health minister joined in, calling for a World Health Assembly resolution which would mandate WHO to “provide governments with a forum for sharing information on drug prices, revenues, research and development costs, public sector investments and research and development subsidies, marketing costs and other related information.” But is price transparency really the answer to healthcare systems’ fiscal sustainability challenges as they strive to expand access to new technologies or even merely sustain provision within strained public budgets? Well, it depends!
Topic:
Transparency, Medicine, Pharmaceuticals, and Price
Political Geography:
Global Focus

8. Who Benefits from Pharmaceutical Price Controls? Evidence from India

Author:
Emma Boswell Dean
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
With the goal of driving down drug costs, governments across the globe have instituted various forms of pharmaceutical price control policies. Understanding the impacts of such policies is particularly important in low- and middle-income countries, where lack of insurance coverage means that prices can serve as a barrier to access for patients. In this paper, we examine the theoretical and empirical effects of one implementation of pharmaceutical price controls, in which the Indian government placed price ceilings on a set of essential medicines. We find that the legislation resulted in broadly declining prices amongst both directly impacted products and competing products. However, the legislation also led to decreased sales of price-controlled and closely related products, preventing trade that would have otherwise occurred. The sales of small, local generics manufacturers were most impacted by the legislation, seeing a 14.5 percent decrease in market share and a 5.3 percent decrease in sales. These products tend to be inexpensive, but we use novel data to show that they are also of lower average quality. We provide evidence that the legislation impacted consumer types differentially. The benefits of the legislation were largest for quality-sensitive consumers, while the downsides largely affected poor and rural consumers, two groups already suffering from low access to medicines.
Topic:
Medicine, Pharmaceuticals, Price, and Price Control
Political Geography:
Global Focus

9. Aggregating Demand for Pharmaceuticals is Appealing, but Pooling Is Not a Panacea

Author:
Cassandra Nemzoff, Kalipso Chalkidou, and Mead Over
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
As low- and middle-income countries reduce their reliance on donor aid, they are increasingly obliged to assume some degree of financial responsibility for donor projects. This challenge will be particularly complex in the procurement of health commodities. In recent decades, recipient countries have benefitted from donor-aggregated demand and pooling mechanisms, negotiated prices, purchasing, and delivery of commodities. However, as countries shift away from donor support, their challenge will be finding a way to aggregate demand in order to achieve the benefits that the pooled purchasing arrangements of vertical health programs now provide. As a first step in tackling this challenge, much can be learned from a diverse group of pooled procurement initiatives that have developed over the past 40 years in high-, middle-, and low-income countries. This note reviews the rationale and functions of these initiatives, notes their potential benefits and barriers, and draws lessons regarding how best to incorporate pooled pharmaceutical purchasing models into the design and implementation of health financing reforms in countries in transition. We first provide a brief background on the procurement challenges faced by countries in transition. In section 2, we provide an overview of different types of pooling initiatives, highlighting the key features of each. Leveraging our research and key interviews, we outline the real and potential benefits of pooling in section 3, and the most pressing barriers that organizations or countries will face as they seek ways to aggregate demand in section 4. In section 5 we discuss some of the issues that countries and development partners should address when considering pooled procurement initiatives and make two recommendations: (1) countries and development partners should conduct further research on the merits of pooled procurement, and (2) they should develop a straw model of a pooled procurement governance structure that could be tested using a series of pilots.
Topic:
Budget, Public Health, Medicine, and Pharmaceuticals
Political Geography:
Global Focus

10. Why Uncertainty in Global Health Interventions Matters—and What We Can Do About It

Author:
Kalipso Chalkidou, Anupama Dathan, and Francis Ruiz
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Global health interventions, like many public policies, are rife with uncertainty. Will a program, such as a malaria prevention strategy that looks strong on paper, work as intended? Will a new technology, such as a specific drug or device that appears effective in clinical trial settings, work in practice and provide good value-for-money? In the case of programs made up of a complex interaction of multiple interventions, implementers often create a theory of change and then meticulously track whether it is being followed every step of the way, from each input translating into the prespecified activity, and the activities yielding the right outputs and the expected outcomes. When observational data is available that permits quantitative analysis (evaluation), it may also be possible to estimate causal impact in a given setting by applying experimental methods (such as a randomized controlled trial) or quasi-experimental techniques (such as difference-in-difference analysis). Such program evaluations generally consider outputs (e.g. the number of bed nets distributed) and relatively short-term outcomes (e.g. malaria infections following bed net distribution). Many eval- uations also collect data years after the program to identify longer-term impacts. Cost-effectiveness calculations are sometimes conducted after ascertaining the cost and impact of the program, but such analyses aren’t necessarily considered when determining whether to implement a certain program or technology—especially when politics and other concerns get in the way. Discrete clinical interventions and technologies (which are defined as including clinical interven- tions, drugs, diagnostics and even public health programs) are usually the subject of health technolo- gy assessment (HTA) to inform coverage decisions in many contexts. The underpinning evidence base for HTA typically involves a synthesis of randomized trial data, designed to reduce bias in estimating causal inference and relative effectiveness. Trial data is then combined with information from other sources and study designs to develop models of the technology’s long-term health and cost impact in a given context. A key feature of both programs and technologies is uncertainty.
Topic:
Health, International Cooperation, Science and Technology, Humanitarian Intervention, and Pharmaceuticals
Political Geography:
Global Focus