Sunday, October 16, 2005

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Is any country prepared for the avian flu?

As the Bush administration continues to develop its pandemic plan, I'm beginning to wonder if any country is really prepared for a pandemic. The Financial Times reports that the EU isn't prepared for an avian flu pandemic. What's interesting is why:

Europe is not properly prepared for a flu pandemic and has inadequate supplies of vaccines and antiviral drugs, says an internal European Commission document obtained by the Financial Times.

With avian flu on its borders, the human vaccine situation in the EU is “far from satisfactory”, according to a note presented last Wednesday by Markos Kyprianou, health and consumer protection commissioner, to his colleagues ahead of a meeting of EU health ministers on October 20.

Some member states have reserved all available antiviral drug supplies for years to come, leaving countries that may be first hit by the disease without any access to drugs, it adds....

The report said: “There are complaints from member states (and third countries) that orders from some countries have reserved all manufacturing capacity for several years to come, leaving no possibilities for others who may be hit first.”

It also said the situation was “far from satisfactory”, for pandemic vaccines. “Some member states have concluded advanced purchase agreements for the H5N1 virus vaccine”.

The EU warnings of capacity shortfalls will increase pressure on Roche, sole distributor of Tamiflu the principal flu antiviral drug as Cipla, an Indian drugs company, has said it is beginning to make a generic version in defiance of patent laws.

There are going to be some nasty intra-EU squabbles if a pandemic breaks out anytime soon (which, it should be stressed, is far from certain. Experts are predicting an outbreak by 2020. So, with luck, this will turn out to be like the Y2K problem rather than the 1918 influenza outbreak).

UPDATE: Tyler Cowen makes the case for not violating Roche's patent on Tamiflu.

posted by Dan on 10.16.05 at 01:39 AM


I would think that EU countries have collective plans for disease control, at least since they abolished the borders between them. Because the avian flu can spread from one person to another, it does not make much sense for any one EU country to make preparations at the expense of others.

posted by: Kerim Can on 10.16.05 at 01:39 AM [permalink]

Kerim, It would not seem so, at least according to the FT. Remember that the EU process grinds slowly and exceededly small. They are probably just in the beginning stages of formulating a Bird Flu plan. Final version due in 2009 or so....

posted by: Don on 10.16.05 at 01:39 AM [permalink]

Normally I'm not a fan of breaking drug patent laws, but this has to be an exception I think. Roche hasn't been able to handle the demand and has been sitting on this.

In the end I think the WHO or someone will have to buy out their patent and allow more companies to manufacture Tamiflu. This is simply too important.

The worry here is whether Cipla is technically able to manufacture the drug properly. I've heard they had problems with their hijacked AID's drug production, and bungled versions of this drug could result in a Tamiflu-resistant strain of the disease spreading in India and inevitably elsewhere.

posted by: Don on 10.16.05 at 01:39 AM [permalink]

It's not just about vaccines and antivirals.

Here's the real question: Are we prepared to tell businesses to relax all their rules regarding absenteeism and tell schools, even bus drivers, not to admit coughing students?

The reason our boring old cold and flu outbreaks get as bad as they get is because we either don't want to, or can't, just stay home when we're sick. Just one guy who's used up all his sick days, or one parent who insists on sticking his sick kid on a school bus, and the pandemic lives on...

Sometimes the biggest threat to libertarian ideals is not an expansive state, but a foolish citizenry.

P.S. All we also willing to start posting guards in restrooms to make sure people wash their hands? How about crowded subway cars -- should police start screening people not just for bombs, but for the sniffles too? Ditto for air travel. Don's comment about seizing patents is interesting too.

posted by: KipEsquire on 10.16.05 at 01:39 AM [permalink]

So part of my interst as a political-economist is to look at events in world politics (however grim) through the lens of a potential investor. So I wondered how one could hedge either in preparation for either a real pandemic, or a much more likely SARS-like scare of one. Here's what I came up with, and would love to know what people think.

(DISCLAIMER & WARNING: I am NOT a professional financial analyst or expert; I have no inside knowledge or priviledged information. These are just observations & picks based on my personal thoughts and research. Before investing in any of the stocks listed below, you should do your own research and/or consult a professional financial advisor or money manager. I, my family, & friends do currently own all of the stocks listed below):

-3M (MMM) got a huge boost during the SARS crisis due to its production of surgical masks and health-related products, could get a similar boost from an Avian flu scare.

-Pfizer (PFE) makes Purell (the hand disinfectent), along with various Statins (which have annecdotally been shown to reduce influenza mortality) and dozens of over-the-counter disinfectants and flu remedies (and given the recent flooding, and hurricane-induced travel & crowding in the South...I'd guess that this will be a nasy cold/flu season regardless of H5N1)

-Hemispherx Biopharma, Inc (HEB) a biopharmaceutical company, engages in the clinical development and manufacture of drugs for the treatment of viral and immune-based chronic disorders. This is a high-risk stock, and I'd recommend that it should not comprise more than 3% of one's total portfolio.

-Vical (VICL) engages in the research and development of biopharmaceutical products for the prevention and treatment of serious or life-threatening diseases. This is a high-risk stock, and I'd recommend that it should not comprise more than 3% of one's total portfolio.

-Sinovac Biotech (SVA) specializes in the research, development, commercialization, and sale of human vaccines for infectious illnesses in China. It has one of the few flu vaccine production license given out by the Chinese government. This is a high-risk stock, and I'd recommend that it should not comprise more than 3% of one's total portfolio.

-AVI Biopharma (AVII) engages in the development and commercialization of therapeutic and antiviral products based on NEUGENE antisense and cancer immunotherapy technology. This is a high-risk stock, and I'd recommend that it should not comprise more than 3% of one's total portfolio.

posted by: jprime314 on 10.16.05 at 01:39 AM [permalink]

It's interesting to tie that FT article in with recent ones about France's defense of "national industries" (like Danone). When push comes to shove (which it well might over Avian flu) it'll be every nation for itself and God against all. French voters would not look kindly on any officials who leave them with low vaccine/anti-viral stocks in the name of EUnity. Come to think of it, I wouldn't take kindly to my elected reps doing something similar. The difference of course is that I don't pretend otherwise before or after the fact.

posted by: Kelli on 10.16.05 at 01:39 AM [permalink]

About Cipla's problem's with the AIDS drugs, were you referring to the following?

Two CIPLA AIDS medicines back on WHO prequalification list:

The problem with the AIDS drugs seems to be not in the manufacturing process or Quality Inspection, but in the certification process (essentially with the contracted organizations that need to certify the bio-equivalency of Cipla's generic AIDS drugs with the brand-name drugs).

Which seems to be mostly bureaucratic nonsense.

posted by: Vish on 10.16.05 at 01:39 AM [permalink]

Perhaps the US should look into condemnation of the right of Roche to disallow generics in the US. No doubt a reasonable royalty rate could be decided by negotiations and/or a jury trial. Better to spend a billion or so to build up stock, if that is feasible, rather than piddling with bunker-buster nuke projects, eh?

posted by: cfw on 10.16.05 at 01:39 AM [permalink]

I agree with Tyler Cowen, but would Roche agree to such a plan?

What do we do if they do not?

What will we do when people start to die — if it isn’t too late already?

posted by: Greg Clausen on 10.16.05 at 01:39 AM [permalink]

There was an article in yesterday's Washington Post re why we shouldn't be as worried about the possibility of an avian flu pandemic as we've been led to believe.


For a transcript of follow-up web-chat w/ the author, see

posted by: JRG on 10.16.05 at 01:39 AM [permalink]

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