Drug Discovery for the Poor

That pharmaceutical companies invest heavily on so-called “cosmetic” therapies for industrialized nations is no secret. An hour’s worth of ESPN quickly reveals two commercials for erectile dysfunction, four for nasal steroids, and three for enlarged prostates. But what about drugs for the global poor? Tuberculosis, filariasis, and schistosomiasis (among others) remain major causes of worldwide morbidity and mortality, yet there hasn’t been a new treatment for these illnesses in decades. The reason is pretty obvious: without the hope of a recouping a return on investment, Big Pharma is unlikely to pour money into lead compounds and accept the associated risk. Put simply, poor people can’t afford to pay premium prices for more effective treatments, and poor people live in poor countries that can’t do the research themselves. The black heart of pharma is no blacker than any other company with a fiduciary responsibility to its shareholders.

I think the case of Coartem (artemether-lumefantrine), a potent treatment for malaria, is instructive. As far as I know, it's the only new, on patent, single-manufacturer drug to treat a disease of the poor to come out in the past 10 years.

Artemesinin, the most potent part of Coartem, was discovered in the late 50’s by Chinese scientists who realized that grinding up leaves of an indigenous plant was a cure for fever. Lumefantrine, also discovered in China, was another drug which killed malaria in another way. The combination drug, Coartem, was overlooked by the West who predominantly focused on vector control. Once the mosquito population was quelled in developed nations, interest in new treatments for malaria was stifled for 40 years. Ciba-Geigy ultimately acquired the sole worldwide manufacturer of artemesinin as a strategic maneuver to enter the Chinese market. At the time of the Ciba-Geigy/Sandoz merger in 1996, artemesinin found its way to the chopping block as a small, unprofitable, and therefore expendable compound for the new company, Novartis. If not for an intense interest by the CEO, Daniel Vasella, Coartem would have been lost. Dr. Vasella felt that Coartem had the possibility to save lives, and he therefore launched large-scale clinical trials at a high cost to Novartis. These demonstrated efficacy of > 95%.

Coartem was initially marketed, at a cost of 60 dollars a course, to European travelers and represented about 2 million dollars in sales. By 2004, Coartem was becoming recognized as a miracle drug. There were very few side effects, and the combination drug had no known resistance, whereas monotherapies like chlorquine were becoming widely ineffective. Vasella realized there were many more patients who needed the drug, but the plant was only grown in one place, and the people who needed it could not afford 60 dollars per treatment. A complex deal was brokered between the WHO, the Global Fund for AIDS, TB, and Malaria, and Ministries of Health. Under the arrangement, the WHO would predict the number of needed doses and add the drug to the essential medicines list, Novartis would manufacture and ship the drugs, and MOH’s would place orders paid for by GFATM. In the span of 3 years, Novartis increased its production of Coartem for 10,000 doses to 60 million doses, one of the greatest scale-up operations ever.

Novartis lost boatloads of money on the operation. Some estimates suggest they lost 80 cents a dose on the deal. Why? They planted acres and acres of artesia annua around the world, tied up working capital in factories in China and New York, and worst of all, the country orders fell way short of WHO estimates, which left millions of Coartem doses to expire on warehouse shelves. With no guarantee of purchases, Novartis was left with piles of inventory, detonating an already break-even business plan, not to mention the opportunity cost of not producing more Diovan, their blockbuster antihypertensive. So, why’d they do it? Vasella argues that that ethically they had no choice. Withholding the treatment would be tantamount to killing millions of people. Further, he points out, employees feel (and work) better if they’re working at a malaria company instead of an evil pharmaceutical company. Coartem, after all, is the number one drug by volume that Novartis makes. Keeping factories running 24/7 leverages economies of scale, sops up excess manufacturing capacity, and creates jobs. Finally, Coartem could be a way to develop relationships with big pockets like the Bill and Melinda Gates Foundation, USAID, and middle income countries like Brazil, India, and ironically, China. At Novartis, Coartem is a loss leader - the millions they lose on one drug for the poor pales in comparison to the amount of money they stand to make on say, chemo.

A number of questions are still outstanding. Are there other drugs collecting dust on remote scientists’ shelves? How do we get pharmaceutical companies to invest in treatments for diseases that disproportionately affect poor folks? Are pharmaceuticals even the right people to create these therapies? How is the partnership between funders, manufacturers, distributors, and the people taking the drugs worked out? How has the landscape changed with the light of multilaterals shining not just on procurement but drug discovery and delivery? The Coartem story can be read as a success and as a dismal failure. Only time will tell if other companies will take Novartis’ lead or use Coartem as an example that R&D for diseases of the poor only eats into the bottom line.