Bird Flu and Balance Sheets: An Unhealthy Combination

By Alan S. Miller

Marin County, California
October 19, 2005

Economist Adam Smith provided the mantra for capitalism when he wrote in 1776 that the “invisible hand” of the market would eventually solve most of the world’s production and distribution problems.

The invisible hand of Adam Smith has once again proven to be a bit too scrawny for public comfort.

Just trust the markets and their leaders and let the people with capital make their own self-interest decisions and all will be right with the world.

Although unfettered capitalism has been proven to lead to injustice and economic inequality quite regularly in the past two hundred years, the Roche Pharmaceutical company evidently agrees wholeheartedly with Smith that all we have to do is trust that old “invisible hand” when we face not only economic but also public health problems.

Roche, a Swiss company, has just announced that because it has the patent rights to Tamiflu, the vaccine that may provide protection against the new and virulent bird flu, it will not allow any one else to manufacture the medication.

This pharmaceutical giant’s timing was less than perfect. It made its announcement of exclusivity in manufacturing this needed vaccine just as U.S. health departments announced that as many as 1.9 million Americans could die in a global avian flu epidemic. Global fatalities, according to the U.N., could reach 150 million.

It is not difficult to imagine the following scenario unfolding if a flu pandemic took hold. Affirming its right because of patent law protection to maintain its sole control over the manufacture of this avian flu vaccine, Roche profits escalate while the rest of the world comes knocking at their door. Talk about a contemporary scrooge!

Now, of course, Roche’s demand for exclusivity could never be maintained if people all over the planet were dying of the flu.

When American pharmaceutical companies refused to allow the production of their newest (and patented) AIDS medications by overseas companies in order to make these medicines cheaper and thus more available to the millions of AIDS sufferers, they finally albeit reluctantly relented.

They had no choice. Companies in India and South Africa simply began making generic versions of the AIDS drugs patented by American companies and selling them at prices just a fraction of that charged by the American drug firms.

Embarrassed at their global image of being the indifferent, money grubbing “bad guys”, the U.S. drug companies began selling their drugs at discounted prices to agencies in the poorer parts of the world. Sometimes they even gave them away!

Even cut-rate American drugs, and lower cost pharmaceutical knock-offs, however, have proven to be too expensive to the billions of poor people with incomes of a dollar or two per day. The same scenario may unfold as research on avian flu vaccines accelerates.

Unhappily, however, the avian flu epidemic is potentially an even greater global human tragedy that may be just on the edge of exploding.

Although only 100 people have been stricken thus far with the H5N1 virus, U.S. Health Secretary Mike Leavitt has noted: “H5N1 is mostly an animal disease today. To stop it from spreading to humans, we have to stop it in birds”.

And even as hundreds of millions of domestic poultry have been destroyed to prevent the further spread of the virus, H5N1 has now been detected in migratory waterfowl in Turkey and Romania. If the virus spreads into Europe, millions more animals may have to be destroyed to contain the outbreak.

Of more consequence than the economic impact of the animal disease, the strain of the virus detected in the waterfowl is one that experts feel has the potential to be transferred directly to human beings. With animal migration patterns not subject to any kind of human control, the avenues for the spread of the disease now seem to be wide open.

And Roche Pharmaceutical company continues to insist that under the privileges afforded companies under patent laws, it will continue to insist on exclusivity in avian flu vaccine production. A company spokesperson actually announced: “Roche fully intends to remain the sole manufacturer of Tamiflu”.

The invisible hand of Adam Smith has once again proven to be a bit too scrawny for public comfort. Hopefully governmental agencies at home and abroad will begin to balance public welfare against the traditional guarantees of private profit.

Copyright © 2005 Alan S. Miller
Last updated: October 19, 2005