Seeds of Progressive Change: Rethinking Our Market-Based Medicines System

April 1, 2020

The coronavirus crisis is, first and foremost, a health crisis.

The Trump administration’s failure to take the threat of COVID-19 seriously—and our systematic, decades-long decimation of our nation’s public health infrastructure—has turned what may have been a public health challenge into a crisis for our health care system. And one area where the failures of our fragmented, market-based health care system have been made plain is in our inability to produce and disseminate the medicines we need. For example:

  • Early on in the crisis, the enormous gaps in our domestic supply chain, and our reliance on manufacturers in China for most active pharmaceutical ingredients, led to concerns that the US could face serious drug shortages should the crisis in China continue.
  • More recently, Kaiser Permanente declined to fill a prescription of hydroxychloroquine for a woman who had been taking it for lupus, citing concerns about worldwide shortages. Hydroxychloroquine is currently one of several drugs being investigated for its potential use as a treatment for COVID-19.

Amid these failures—perhaps because of them—we are beginning to see policymakers from across the political spectrum rethinking the market-based logic that informs our current system.  The recently-enacted CARES Act, for example, includes $3.5 billion for the Biomedical Advanced Research and Development Authority (BARDA), a part of the Department of Health and Human Services that “supports the transition of medical countermeasures such as vaccines, drugs, and diagnostics from research through advanced development towards consideration for approval by the FDA and inclusion into the Strategic National Stockpile.”

While imperfect, BARDA is one of the clearest examples in the federal government of a coordinated system of industrial policy and planning. Unlike the National Institutes for Health, which typically prioritizes basic over translational research and has no direct role in  manufacturing processes or government purchasing, BARDA’s work includes efforts to identify and develop manufacturing capacity. It also engages in procurement efforts, playing a direct government role in planning for and directly and affirmatively creating and shaping markets to create a stockpile of medicines and vaccines for use in public health emergencies.

This substantial investment—$2 billion more than the FY2020 budget request—is evidence of a real recognition that other approaches that the government has taken, including market incentives and nudges, are insufficient tools for developing and manufacturing any medicine for which there is no clear market, even when the public health need is clear.

Despite the emerging recognition that a far more directive and directly involved government role is required, a pernicious strain of thinking persists. Even when the government is directly involved in nearly every aspect of drug or vaccine development, it is still assumed by most US policymakers that any pharmaceutical companies involved in this research should nonetheless own the intellectual property rights to what is learned and produced, and therefore should be entitled to own and enjoy monopoly profits on the fruits of that shared knowledge for decades.

That’s why the next phase of the COVID-19 response effort must include a clear directive to the Trump administration that any vaccine or intervention developed with public funds must, at the very least, be issued as open licenses and made available with reasonable pricing requirements. Preventing profiteering of this pandemic is a demand being made by access-to-medicines and health advocates, like Public Citizen, and campaigns, such as Lower Drug Prices Now.

In this public health emergency, where each of us depends on the other in order for all of us to stay healthy, it is clearer than ever that the way our nation develops and manufactures medicines must change. The seeds of that change are here.