The great news is pharmaceutical companies are sprinting toward the development not just of a safe and effective COVID vaccine, but perhaps several successful new vaccines. The terrible news is the White House may impose socialistic government price controls on U.S. drugs.
An executive order is reportedly under consideration that would peg U.S. drug prices to their price in several foreign countries that have government-controlled health systems. Those countries don’t have private markets for health care. Their governments run health care delivery, medical goods purchasing and the like, putting budgets and agencies first, ahead of patients. An “international pricing index” would set U.S. prices based on an average of prices dictated by foreign government bureaucracies.
There’s a hefty price for “cheaper” medicine. The price controls EO would mean fewer new drugs developed because price controls would shrink R&D dollars for biopharma innovation. With IPI, patients wouldn't get access to the newest medicines. Prescription drugs would be rationed. U.S. patients who today need a medicine the most and get it may well be denied the medicine they need as a government cost-saving measure.
This routinely happens in socialized medicine countries and here in Medicaid and the veterans’ health system. Do we want to force this nightmare on all Americans?
Today, biopharma R&D firms are rapidly doing in a year or 18 months what usually takes up to a decade or more, thanks to their years of private investment in the arduous, expensive, medically challenging field of vaccine development. All the prior intellectual property from R&D investment allows drug makers to recoup the value of that investment, including yielding new investigational treatments and vaccines.
Drug companies are all-hands-on-deck developing COVID vaccines, treatments, diagnostics and cures. It’s a race against time and the virus that each company would be happy to lose. They’re lining up massive manufacturing of their respective drug candidates on spec — if their respective candidate fails to obtain FDA approval, the company will lose millions or billions of dollars (about 9 in 10 drug candidates fail to get regulatory approval).
Astoundingly, the White House is considering an executive order that would shackle these same drug innovators with price controls on their medicines. That gives credence to radical, antiproperty rights proposals. It ignores the Council of Economic Advisors’ cautions. And socialists aren’t limiting their expropriation schemes to vaccines — they’ve targeted Gilead’s therapeutic remdesivir.
In pursuit of a COVID vaccine, Pfizer and BioNTech have completed early human studies demonstrating antibody production. The companies aim to start the final phase of human trials before August.
Johnson & Johnson is adapting its Ebola vaccine platform, a drug which has proven safe and effective and can quickly be manufactured.
Sanofi expects its COVID vaccine to reach more than 70 percent efficacy.
AstraZeneca and Oxford University have a very promising vaccine that’s already in phase 3 human testing.
Moderna, with the cooperation of the National Institutes of Health, has a highly promising vaccine candidate showing equally promising results in initial human trials.
All in all, about 160 COVID vaccine candidates are under development. It’s likely that several versions will eventually gain FDA approval.
Vaccine development is especially challenging. A novel pandemic outbreak sparks urgent calls for a vaccine. Drug companies pour millions and billions of dollars into designing a drug. As the outbreak recedes, government commitments to buy a vaccine, particularly in countries whose populations need it most, get reversed. Drug innovators are stuck with sunk costs and new knowledge about a virus, but no market for the new product. Yet these private companies are all in on creating a COVID vaccine.
Rather than importing government price controls on drugs, we need to incentivize innovation — not only for pharmaceuticals but for all areas of cutting-edge invention. We must value the property rights-based system that rewards innovation, because the value of that system and the fruits it produces is beyond question. A price controls EO is wrongheaded, socialistic and extremely hazardous to Americans’ health.