Visible Hands: 💊 In Sickness and In Wealth
Let’s dive into patent protections. AbbVie ($169.B market cap) just won a lawsuit in favor of its “patent-aggressive US strategy” for the world’s best selling drug, Humira, which treats diseases like
Just as you thought media coverage of COVID-19 was starting to subside, here we are with some FAQs...
What’s going on with the vaccine? There are more than 135 vaccines being tested globally.
What about treatment? Currently, there isn’t anything super effective but trials are underway to see if antibody treatments might work better than existing antivirals. (Don’t get us started on the many problems with the hydroxychloroquine study and subsequent media frenzy.)
How are developers ensuring that vaccines and drugs are accessible to patients? It’s no secret that getting a drug from the lab to patients requires a lot of work and financial resources (there are R&D tax credits for a reason!) But it’s also no secret that high drug prices have been problematic for Americans, with several potential solutions including:
Eliminating pharmacy benefit managers (the dreaded middleman)
Let’s dive into patent protections. AbbVie ($169.B market cap) just won a lawsuit in favor of its “patent-aggressive US strategy” for the world’s best selling drug, Humira, which treats diseases like arthritis and psoriasis. Even the judge acknowledged that AbbVie engaged in a “disparate set of aggressive but mostly protected actions to allege a scheme to harm competition and maintain high prices.” Though AbbVie’s main patent for Humira expired in 2016, they now have dozens of additional patents that extend the exclusive market for Humira through 2034! Perhaps it’s no surprise that AbbVie increased the cost for Humira by 7% this year, after price hikes of 19% in 2017 and 2018. (AbbVie made $19 billion in 2019 from Humira...)
But AbbVie is not the only company that benefited from Humira’s sustained market dominance. Notably, an investment firm called Royalty Pharma (RPRX) has made billions off drug rights. RPRX, which IPO’d on Tuesday as the biggest IPO of 2020 thus far, buys rights to future revenues from patent holders who want cash upfront -- usually research hospitals, foundations, or universities. RPRX is a bonanza for its small team of investors particularly through generous investment management fees (read about its CEO here), and has further incentivized drug companies to maximize revenues with little regard for patient prices.
Take for example, Xtandi (a prostate cancer drug) co-developed by UCLA. UCLA’s rights were sold to RPRX in 2016 for $1.14 billion to fund more research and student fellowships. That came after advocacy groups slammed Xtandi’s prices: “it is unreasonable, and indeed outrageous, that prices are higher in the US than in foreign countries for a drug invented at UCLA using federal government grants…” With Xtandi’s current performance benefiting drug companies and current investors more than the original researchers, such criticism seems to have fallen on deaf ears; in 2019, Xtandi made $838 million for Pfizer, ¥333 billion for Astellas, and $120 million for Royalty Pharma (Xtandi costs $12,000 a month for uninsured patients).
So why does this matter now more than ever? Many universities and hospitals are working to develop coronavirus vaccines and treatments, and the government has accelerated development through programs like Operation Warp Speed. Although some drug companies promised to make zero-profit coronavirus solutions, certain financial analysts are saying: “If you are preparing for war in a capitalist country, you have to let business make money out of the process or business won’t work…”
As a citizen:
Push for policies that support fairer drug pricing. “This could be accomplished by a “one-and-done” approach for patent protection.” - Prof. Robin Feldman (UC Hastings Law)
We know that coronavirus has disproportionately affected BIPOCs, and “communities of color will likely face increased challenges accessing COVID-19-related testing and treatment services since they are more likely to be uninsured.” Support expanding healthcare coverage, such as the State Public Option Act (expands state Medicaid coverage) and the Medicare for All Act (throwback to the Dem primary debates)
As an investor:
Do your diligence to not end up with a healthcare investment like Purdue Pharma (bankrupt after opioid litigation) or Valeant (stock dropped 90% and then some after its price gouging scandal in 2016). Chances are a scandal will negatively affect society and stock performance...
As a consumer:
Check out this color-coded Johns Hopkins infographic that has state breakdowns on COVID-19 cases--the pandemic isn’t over!
Programs like GoodRx help consumers get discounts and the cheapest rate on prescription drugs, but it was revealed earlier this year that they were selling data to tech companies. Reminder on how to protect your data here.
As an employee:
More about COVID-19 (rather than drugs), but check out “8 Questions Employers Should Ask About Reopening” if you are fortunate enough to currently work from home. “The most important protection in the workplace is to effectively exclude those at highest risk of transmitting the disease.”
BONUS: As a reader 📖:
We are starting a book club! We’ll be reading The Fifth Risk by Michael Lewis -- expect a virtual meet-up in July to chat about it (details to come), but get the book if you’re interested in joining! And we plan to do another one in August, so please vote on what else we should read this summer here.
From Zero to Cuomo’s Desk in Two Weeks. We are proud to share the efforts of one of our Visible Hands friends in repealing NY state law 50-A, which had protected police officer records from being public. “If we can get constituents, businesses, public figures, and elected officials all pushing for legislative action on the eve of the floor vote, the pressure might get us across the finish line....”
Lawmakers demand answers from Zoom CEO Eric Yuan: “The lawmakers asked how many accounts Zoom has closed at the Chinese government's request; whether Zoom regularly shares data with the Chinese government; and whether Zoom or its Chinese partners have Chinese Communist Party committees embedded in them, as Beijing now requires of many foreign and domestic companies.”
How The Wing's Empire Was Built On Trauma, Racism, and Neglect: “Gelman’s mini-empire may have made her richer than ever, raised her media profile and social status enough to make any self-proclaimed girlboss proud, but many Wing staffers past and present agree: Gelman’s achievements were built on the exploitation and labor of black women above all else.”
How Rich Investors, Not Doctors, Profit From Marking Up ER Bills: ““These companies put a white coat on and cloak themselves in the goodwill we rightly have toward medical professionals, but in practice, they behave like almost any other private equity-backed firm: Their desire is to make profit,” said Zack Cooper, a Yale professor of health policy and economics who has researched TeamHealth’s billing practices…”
Palantir to File IPO in Weeks For Possible Fall Debut: “Co-founded by billionaire Peter Thiel, Palantir’s software mines troves of personal and commercial data and looks for patterns. The company, founded in 2003, got its start interpreting intelligence for the U.S. Central Intelligence Agency and the Pentagon and then moved on to banks, helping them watch for suspicious behavior.”
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