Thursday, April 29, 2004
A non-profit drug company? What's that?
I have posted a couple of times in the past on the way drug companies pour money into developing cosmetic drugs, while not investing a penny in research on infectious diseases, which kill millions of people worldwide and especially in the developing world. The standard excuses are the inability of the poor to pay and of course the various intellectual property issues. A couple of years back, I wrote to Hank McKinnell of Pfizer asking him whether Pfizer ever did a cost benefit analysis on what lack of access to life saving drugs in Africa was costing Pfizer from a PR perspective. I simply could not understand why Pfizer would not price discriminate in Africa, India etc while the Coca Cola company would. After all, the marginal cost of producing additional units of a drug is very low once the huge R&D costs are taken care of. And no drug company would invest that kind of money in R&D unless they were assured of profits in the developed world. So, why not price discriminate and save yourself the public relations debacle? To his credit, McKinnell did reply to me, though it was the usual drug company spiel.
Anyway, it was nice to read in the Scientific American about a drug company with a very different business model from the Pfizers of the world. This company tries to focus more on the drugs and less on the profits.
Just about when the two were getting started, the Bill & Melinda Gates Foundation was coming into its own. When Hale approached the foundation, the officers told her that they were already supplying money for leishmaniasis through support for vaccine research for the disease. Hale emphasized that vaccines for parasites had a pitiful track record--malaria being a notable case in point. In 2002 the Gates Foundation agreed to provide $4.7 million, most of it for a Phase III leishmaniasis trial. "They're doing great stuff," Bill Gates says. "Just take that one thing, kala-azar. Hey, that's going to be a medicine [paromomycin] that is going to save a lot of lives." Late last year the foundation decided to supply another $5.3 million.
Last May, OneWorld and WHO started a clinical trial of paromomycin that has since enrolled 670 patients in Bihar state--the largest for an antiparasite drug ever conducted in India, according to Herskowitz. OneWorld will also use the study to seek approval in the U.S. or a European country, thereby meeting a set of international guidelines that will enable rapid approval wherever the disease is endemic.
If Indian regulators give the nod next year, OneWorld will pay up-front costs for manufacturing the first batches in India--and then future revenues will go to the drugmakers there. The biggest challenge will be to build a distribution system to ensure that the drug gets supplied to those who need it. "Pharmaceuticals haven't penetrated into the depths of these communities as much as Coca-Cola," Herskowitz remarks. In the past, India has had in place an emergency system that was mobilized when the disease reached epidemic proportions--and a collaboration of OneWorld, WHO and the Indian government will try to construct its supply network on this model.
Word of OneWorld's work has spread, and the company receives frequent calls from scientists and executives at other pharmaceutical firms who wonder how they can play a part in the nonprofit's mission. Celera Genomics licensed to OneWorld royalty-free a drug for Chagas disease that it inherited when the company acquired a smaller biotech firm. And Yale University and the University of Washington licensed on the same terms another compound for the parasitic disease, which afflicts 16 million to 18 million people in Mexico and Central and South America and causes 50,000 fatalities every year. The Chagas treatments, with some of the development work funded by the Gates money, will test the company's ability to take a drug all the way through the clinical trial process. And OneWorld has the makings of a pipeline--it has early-stage development programs for drugs to treat malaria and diarrhea.
I dont know what to make of this story and how much of the success is hype and how much is for real. But its a good beginning. Despite my free-market credentials, I have never been able to convince myself that developing life saving drugs should be entirely in the private domain.
Anyway, it was nice to read in the Scientific American about a drug company with a very different business model from the Pfizers of the world. This company tries to focus more on the drugs and less on the profits.
Just about when the two were getting started, the Bill & Melinda Gates Foundation was coming into its own. When Hale approached the foundation, the officers told her that they were already supplying money for leishmaniasis through support for vaccine research for the disease. Hale emphasized that vaccines for parasites had a pitiful track record--malaria being a notable case in point. In 2002 the Gates Foundation agreed to provide $4.7 million, most of it for a Phase III leishmaniasis trial. "They're doing great stuff," Bill Gates says. "Just take that one thing, kala-azar. Hey, that's going to be a medicine [paromomycin] that is going to save a lot of lives." Late last year the foundation decided to supply another $5.3 million.
Last May, OneWorld and WHO started a clinical trial of paromomycin that has since enrolled 670 patients in Bihar state--the largest for an antiparasite drug ever conducted in India, according to Herskowitz. OneWorld will also use the study to seek approval in the U.S. or a European country, thereby meeting a set of international guidelines that will enable rapid approval wherever the disease is endemic.
If Indian regulators give the nod next year, OneWorld will pay up-front costs for manufacturing the first batches in India--and then future revenues will go to the drugmakers there. The biggest challenge will be to build a distribution system to ensure that the drug gets supplied to those who need it. "Pharmaceuticals haven't penetrated into the depths of these communities as much as Coca-Cola," Herskowitz remarks. In the past, India has had in place an emergency system that was mobilized when the disease reached epidemic proportions--and a collaboration of OneWorld, WHO and the Indian government will try to construct its supply network on this model.
Word of OneWorld's work has spread, and the company receives frequent calls from scientists and executives at other pharmaceutical firms who wonder how they can play a part in the nonprofit's mission. Celera Genomics licensed to OneWorld royalty-free a drug for Chagas disease that it inherited when the company acquired a smaller biotech firm. And Yale University and the University of Washington licensed on the same terms another compound for the parasitic disease, which afflicts 16 million to 18 million people in Mexico and Central and South America and causes 50,000 fatalities every year. The Chagas treatments, with some of the development work funded by the Gates money, will test the company's ability to take a drug all the way through the clinical trial process. And OneWorld has the makings of a pipeline--it has early-stage development programs for drugs to treat malaria and diarrhea.
I dont know what to make of this story and how much of the success is hype and how much is for real. But its a good beginning. Despite my free-market credentials, I have never been able to convince myself that developing life saving drugs should be entirely in the private domain.
