A day after Roche reversed course under pressure and announced it is willing to enter discussions with countries and companies interested in licensing rights to produce its flu drug Tamiflu came the reminder of why the Swiss pharmaceutical giant had for so long been so reluctant to make the move. Roche announced Wednesday that its revenues climbed 17% in the third quarter, boosted in large part by world-wide demand for Tamiflu. Sales of the drug more than doubled, to $215 million in the quarter. Roche expects to rake in as much as $925 million from Tamiflu sales this year, up from $266 million in 2004. And as governments keep building their stockpiles, it will continue to generate billion-dollar revenues for the next couple of years, according to Keith Redpath, head of Wood Mackenzie Life Sciences Research.
Why the sudden about-face? Roche probably had no choice. Most countries, including the U.S., have in their laws a provision that permits their governments to overturn patents in exceptional circumstances. "If Roche plays hardball," says Redpath, "governments could just say, 'we're going to overturn the patent. This is a national emergency.'" Such moves would not be unprecedented. After anthrax mailings following the Sept. 11 terrorist attacks stoked biosecurity concerns, the Canadian and the U.S. government told the German drug firm Bayer that if it did not ramp up production and sell its anti-infective Cipro at a reasonable cost, they would do so themselves. Bayer wound up cutting its prices by 55% and boosted production.
Roche refuses to disclose how much of the drug it makes. But "the actual amount of Tamiflu [Roche] could deliver over the next five years will be very small," notes Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. The U.S. currently has enough Tamiflu stockpiled to treat 2.3 million people. Roche spokesman Terence Hurley says that by the end of this year the Department of Health and Human Services should have in stock enough Tamiflu to treat 4.3 million people. But HHS Secretary Michael Leavitt would like to have enough to treat five times as many. The situation is about as bad, if not considerably worse, in almost all countries. "If Roche could deliver enough of the drug for even 7% of the world," Osterholm says, "it would be considered a lot."
For all the fuss, Tamiflu is far from a guarantee against disaster. "It may well be of great benefit to people who can get it while they're ill," says Osterholm, pointing out that it works relatively well in treating current flu infections, but adding that it's unclear how effective the drug would be against the H5N1 virus and at what dosage it might work best. And there's a separate, troubling development: the emergence of a case in Vietnam that appears resistant to the drug. Still, Osterholm believes that stockpiles of Tamiflu, being a valuable treatment tool and, unlike a vaccine, available today, should be pursued by all governments.
Roche has donated Tamiflu to Turkey and Romania, where the H5N1 influenza virus has lately made an appearance, and given 30 million doses to the World Health Organization. But until its recent change of heart, the company had maintained that while it can't produce as much as the world is demanding, it alone would retain the right to sell the medicine. Anyone hoping to replicate the 10-step manufacturing process, it had warned, would spend around three years ramping up production from scratch.
Unlike the anthrax scare, pandemic fears are widespread and taken far more seriously by international agencies. So the demand for a treatment--until, at least, a vaccine becomes available, and probably well after--isn't likely to subside. It will continue to draw manufacturers considerably less concerned than is Roche about its intellectual property rights. Cipla, an Indian generics manufacturer that already sells cheap HIV drugs to African countries, now plans to begin selling a generic version of Tamiflu at cut-rate prices--and says it will do so probably within three months, regardless of whether the Swiss drug firm grants it a license. Roche says it is willing to talk to Cipla, but hasn't heard from the Bombay-based firm yet. It's probably in Cipla's interests to avoid a costly patent fight, and the company has suggested it's interested in working out a deal with the Swiss giant. Roche, however, can probably pick its partners on this one.