Of Pandemics and Patents

The H5N1 virus was first noticed and identified when it took its first human victims in Hong Kong in 1997. A few years later, in 2003, similar deaths were reported in Viet Nam and then in Thailand. The following year it killed people further afield in Indonesia, China and Cambodia. Until mid-2005, bird flu was generally seen as an 'Asian' problem. Then the World Health Organisation took the huge political decision to tell the world that we are on the verge of a global human pandemic that could kill 150 million people. As intended, the effect was dramatic.

Bird flu is essentially a poultry disease. The WHO tallies less than 200 confirmed human cases of H5N1 and under 100 deaths, most of them through contact with infected chickens. The big worry is that H5N1 will mutate into a form that is readily transmitted from human to human. After all, influenza viruses replicate like crazy, but very sloppily, generating constant mutations. Once this happens, the consequences could be immediate and severe, as it is assumed that most people do not have antibodies against H5N1.

The WHO pronouncement triggered, for the first time, concern about avian flu in the West. In no time at all, the spotlight fell on the Swiss drug giant, Roche. Roche has the exclusive license to produce Tamiflu (the trade name for oseltamivir), an anti-viral believed to have some effect in reducing the spread of avian flu in humans. It was developed and patented by Gilead Sciences, a US drug firm which gave Roche the exclusive right to manufacture the pill. With huge corporate media attention, Tamiflu — and Roche — suddenly became the answer to the potential pandemic.

It is, however, not at all certain that Tamiflu would be a help, should a human pandemic break out. Tamiflu's effectiveness is highly contested, and it carries important side-effects as well. It does reduce the symptoms of influenza, but taken in low dosage it could actually exacerbate the spread of the disease through a rapid emergence of resistant strains and/or because sick people feel better and let their guard down against infecting others. The low dosage risk is very real. One reason is that there is a worldwide shortage of Tamiflu. Roche's version is produced with shikimic acid extracted from Chinese star anise pods, the best of which comes from only four provinces of southwest China. (A full 90% of their production is bought by Roche.) And Roche has been reticent to sublicence the rights to produce it. The other reason is that Roche recommends prophylactic use of Tamiflu for human influenza, though this is not effective. Numerous people taking Tamiflu in Viet Nam have died of H5N1 because the drug only helps if you take it within 18 hours of infection.

Making money from misery

Tamiflu has, however, been a big money-spinner for its owners. The patent is owned by Gilead while Roche has the sole licence. Roche's sales of Tamiflu — a drug that hardly sold prior to the WHO announcement — went up 400% in 2005 while Gilead's royalty earnings from the patent grew by 166%. In the US, the drug industry is intimately connected with the highest levels of government. In November 2005, Bush announced a set of domestic measures to fight the possible pandemic which included an envelope of US$1.4 billion to go shopping for Tamiflu. This was a gift, not only for Roche and Gilead, but also for people like US Secretary of Defense Donald Rumsfeld, board member and former chairman of Gilead. He currently owns somewhere between US$5 million and $25 million of Gilead equity, making him possibly the largest shareholder. Other people who stand to gain from this policy are Gilead board members George Schultz, former US Secretary of State and Bush campaign advisor, Etienne Davignon, Vice-Chairman of Suez-Tractebel and Honorary Chairman of Bilderberg, and John W Madigan who among other things is on the Defense Business Board, a corporate advisory council to the US Department of Defense.

Beyond the inevitable conspiracy theories, the bigger controversy came from Roche's handling of the licencing issue. The pressure to allow poor countries to produce or buy the generic form of oseltamivir has been great: some 150 generic manufacturers and governments have requested a sublicence. Roche, caught between a rock (poor public relations ratings) and a hard place (its own shareholders) held back, despite pressure from Gilead, from governments, and even from Kofi Annan, who came out of the woodwork to announce that he did not want a repeat of the AIDS drug crisis. Finally Roche decided to selectively soften up and grant a few limited sublicences, but the damage had been done. Once again, the conflict between exclusive commercial interests, which patents serve, and the higher social interest in public health, which governments are supposed to serve, was laid bare.

This text previously appeared as Box 4 in the article
Fowl play: The poultry industry's central role in the bird flu crisis
on the website of GRAIN.

The complete article is reproduced on this website here.

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Bird Flu, Swine Flu, Tamiflu and Donald Rumsfeld
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