Pro-Profit for Antiviral Drugs: A critique of NPR’s goofy coverage on flu vaccines

Yesterday I found myself listening to NPR’s Morning Edition and its coverage of swine flu.  This story, Antiviral Drugs Discounted For Government : NPR, discussed the deep discounts governments negotiate and the resulting shrunk revenue and profit streams that big makers Roche and GlaxoSmithKline make on these drugs. 

My sense of NPR’s tone was decidedly anti-profit, and I find this worrying.  In addition to a tone that discussed how drug makers were not on track to reap a “windfall” from this, the following quote struck me as emblematic of NPR’s anti-profit tone:

To be sure… other instituations will put in more orders.  And more orders, means more profits.

We should not be anti-profit on flu vaccines, we should be pro-profit.  

First off, the amount of money at stake is very small—for something so important, minimizing a pandemic is something I’m happy to see someone profit from.  According to NPR, Roche made $120M in revenue on its key flu fighting drugs, roughly 50% less than the New York Yankees’ 2009 Payroll.   I’d far rather see Roche making more on flu vaccines than the Yankees.  I’d have no problem with that. 

Second, more profit would mean more investment in the distribution, safety, and efficacy of these drugs.  I don’t buy that this is all optimized.  According to some experts cited in the NPR piece, they’d advocate not taking the potential swine flu vaccine this fall as its won’t be proven safe, a la the 1976 vaccine.  Also, the logistical challenges to getting these drugs built and distributed are quite large.  Though I can’t point to how the safety and logistical problems would be fixed with greater investment, I’m confident that with greater profits in the segment, greater investment would be in place, leading to better solutions here.

The capitalist system has taken a body blow over the last year.  That said, we need to remember that we shouldn’t cut off our nose to spite our face.  It is dangerous to put an interest in profit minimization ahead of a drive to maximizing public health.  I fear that if we continue demonizing profit-making entities,  and we continue to push organizations to minimize their profit motives, that we’ll put ourselves at more risk here and elsewhere.

 

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