Impact Blog
UPDATE: All eyes on Big Pharma for responsible COVID-19 solutions

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      By Laura AhmadiESG Research Analyst, Calvert Research and Management

      Washington - At the outset of the COVID-19 pandemic, the fate of vaccines and curative therapies lay primarily in the hands of the biotech industry, characterized by smaller firms, limited manufacturing capacity and often minimal access to public debt markets. Six weeks later, the landscape has changed dramatically, with the majority of players in the Big Pharma industry entering the mix. The driver behind the industry's shift in focus to COVID-19 is likely twofold.

      First, the financial incentives for dedicating attention to the virus have become more attractive. Unlike SARS or MERS, COVID-19 has demonstrated that it's here to stay (and spread). Scientists are now suggesting COVID-19 outbreaks could be a seasonal event, much like the flu, that translates into a recurring revenue opportunity for makers of vaccines, antivirals and antibody therapies.1

      Second, Big Pharma seems to have awoken to the unique brand-building opportunity presented by the situation. By helping to solve the COVID-19 crisis, the industry may be able to generate goodwill with consumers and demonstrate its value proposition to regulators. A new poll suggests that public opinion may already be turning in favor of the industry. The Harris Poll, a market research organization, recently reported that 40% of respondents have a more positive view of the pharmaceutical industry than they did prior to the pandemic.2 On the regulatory front, drug pricing reform has essentially disappeared from Capitol Hill's agenda, as the public health emergency and its economic toll have become all-consuming.3 The force with which this agenda returns - if it returns at all - could be significantly influenced by the behavior of the industry during this time.

      In Part I of this series, we outlined several actions companies could take to responsibly contribute to pandemic relief efforts. These actions include:

      • Embracing partnerships with other companies and research institutions that allow drug makers to focus on core competencies without shifting focus from other priorities while contributing expertise that could expedite the development of therapies.
      • Entering into and upholding clear commitments in terms of funding, R&D, manufacturing and distribution to avoid shortages or quality issues until the public health emergency has abated. Failure to uphold these commitments can cause irreparable reputational damage and draw scrutiny from human rights organizations and regulators.
      • Engaging in strengthening health systems and educational programs, including training of local health workers, educating local populations on vaccines and assisting in efforts to improve sanitation.
      • Committing to responsible pricing practices, including GDP-adjusted prices or caps on price increases, to ensure access in all geographies of need.

      Positively, many firms are indeed embracing partnerships, committing to increasing manufacturing capabilities, and donating supplies and medical professionals' time to health care facilities. What remains to be seen is how therapies will be priced and equitably distributed to geographies in need.

      Bottom line: Now with the whole world watching, it is more important than ever for Big Pharma to embrace responsible practices and continue on this trajectory towards improved brand value and reduced regulatory scrutiny.