Swine Flu: Bringing Home the Bacon

| Mon Apr. 27, 2009 7:08 AM PDT

As the world gears up once again for a flu pandemic that may or may not arrive (it actually seems possible this time), we might want to remember some of the lessons of the last flu scare. One of these is that there are winners as well as losers in every high-profile outbreak of infectious disease. First and foremost among them, of course, is Big Pharma, which can always be counted on to have its hand out wherever human misery presents an opportunity to rake in some cash.

In 2005, I reported on the bird flu scare for the Village Voice in a piece called “Capitalizing on the Flu.” We can realistically hope that our current federal government will improve upon the bungled effort made by the Bush Administration to prepare for the onslaught of avian flu—which fortunately didn’t materialize. But certain aspects of the crisis are likely to be repeated, and profiteers will surely waste no time in gathering at the trough.

Then, as now, one of the two effective antidotes was a drug called Tamiflu. But this silver bullet came with side effects, as well as a high price tag. As I reported in 2005:

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With no vaccine in sight, the U.S. government, along with others, is belatedly stocking up on Tamiflu, a drug that supposedly offers some defense against bird flu. But last week Japanese newspapers told how children who were administered Tamiflu went mad and tried to kill themselves by jumping out of windows. In a cautionary statement the FDA noted 12 deaths among children, and said there are reports of psychiatric disturbances, including hallucinations, along with heart and lung disorders. Roche, the manufacturer, is quoted by the BBC as stating that the rate of deaths and psychiatric problems is no higher among those taking its medication than among those with flu. The company is increasing Tamiflu production to 300 million doses a year to meet demand.

There are other reasons people are leery of Tamiflu. Given the rip-offs in Iraq and after the hurricanes, people are understandably interested in knowing just who is going to get rich off the plague. Secretary of Defense Donald Rumsfeld, himself former CEO of drug company Searle, currently owns stock in the one company that owns Tamiflu patents—to the tune of at least $18 million. Rumsfeld says he understands why people might question his holdings, but selling them would raise even more questions. So he is hanging on to what he’s got.

A report by Citicorp at the time described which pharmaceutical manufacturers and other comapnies stood to make money:

Winners could include drug makers such as Gilead Sciences, Roche, GlaxoSmithKline, and Sanofi-Aventis. Other possible winners are hospital chains such as Rhoen Klinikum, cleaning-products makers such as Henkel, Ecolab, and Clorox, as well as home entertainment companies such as Blockbuster and Nintendo….

In order for the pharmaceutical companies to profit from making flu vaccine in the administration’s $7.1 billion pandemic flu plan, Bush now is proposing to ban liability suits against them except in cases of willful misconduct. As for those injured by a flu vaccine, possible lawsuits remain an open question….

With a worldwide market estimated at more than $1 billion, there’s big money in a flu plague. Kimberly-Clark’s Chinese subsidiary is already ramping up manufacture of new lines of medical masks, wipes, and hand-washing liquids, according to Business Week, with consulting firms Kroll and Booz Allen Hamilton selling flu preparedness advice to companies and governments. “Crisis is an opportunity as long as you see it first,” Pitney Bowes’s Christian Crews tells the magazine.

Of course, that was then, and this is now. In the coming days we’re bound to discover who’s pulling in the pork this time. But even before the U.S. markets open this morning, early indications aren’t hard to find: “Fears of a potential pandemic are bringing down stock markets around the world today,” public radio’s “Marketplace” reports from London, ”but two big pharmaceutical companies are getting a boost from the news”:

Shares in Switzerland’s leading drug maker, Roche, are up nearly 4 percent this morning. The company says it’s scaling up production of Tamiflu. The drug’s been show to be an effective vaccine against the virus.

In the U.K., GlaxoSmithKline, which manufacturers its own vaccine against deadly flu viruses, is also gaining in the markets. Glaxo’s drug is called Relenza….

Both drug makers have been approached by the World Health Organization about their readiness to deploy stocks in the case of a pandemic. Roche says it stands ready with 3 million treatments, but warned further production could take up to eight months.

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