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From Björn Hartmann
For many, corona has long been history. Other problems are pressing. However, some economic experts are working to ensure that the world is better prepared for such pandemics in the future and can stop them right from the start. Drugs against viruses are important, but pharmaceutical companies around the world do not want to develop them. It is too unclear whether they will ever make money. A concept from Germany, which has just won an award in the USA, should now solve this problem cheaply. After all, coronavirus has cost the world trillions of dollars.
The pandemic started in Wuhan, China, at the end of 2019 and then spread rapidly around the world. Many countries responded by imposing curfews and restricting travel. Masks were compulsory. The German pharmaceutical company Biontech from Mainz succeeded in developing a vaccine. Also Moderna from the USA and Astrazeneca from Great Britain followed suit. But by then, the virus had already spread across the globe, mutated and caused great damage. It is estimated that around 27 million people died worldwide as a result of coronavirus and the global economy came to a standstill.
Why investments are not made
Time is an important factor: "If drugs are available early after an outbreak, significantly fewer of them are needed overall than at the peak of a pandemic," says Jano Costard from the Federal Agency for Leap Innovations (Sprind) in Leipzig, which aims to discover and promote innovative concepts and products. "This may prevent an outbreak from becoming a pandemic in the first place." Developing a drug at short notice in an emergency would take a very long time, have an uncertain outcome, be very expensive and cost many lives.
The experts at Sprind, together with economists from the University of Chicago and the Harvard Kennedy Schoolthat the number of people who fell ill and died would have been 99% lower if the appropriate medication had been available at the start of the pandemic. And losses of 28 trillion dollars worldwide would have been avoided. That is roughly equivalent to the gross domestic product of the USA. Including deaths, economic damage and long-term damage caused by school closures.
The problem is not so much the drugs themselves, which can eliminate a broad spectrum of viruses, are quickly adaptable to others and prevent them from being transmitted. "Developing appropriate drugs is a challenge, but it is possible," says Sprind expert Costard. The difficulty lies elsewhere: "Pandemics are also a challenge because we don't know when they will occur. It is therefore unclear for the pharmaceutical industry when there will be a demand for pandemic drugs and whether they will generate any revenue at all. That's why they don't invest." The market is failing. There is demand, but no one is looking to supply because it would be too uncertain. The idea to solve the problem: invent concrete, reliable demand. A community of states formulates which requirements the medicines should meet. And: "The public sector guarantees to purchase the drugs," says Costard, who helped develop the concept - a kind of right of first refusal for states.
The trick: "If the requirements are met, the countries buy the medicine, regardless of whether they need it at that moment." "But it makes more economic sense to throw one away than not to have one." The model has another advantage for the countries. Because the companies develop the drug, they and their investors also bear the financial risk should they fail. "Because the state only pays for successful drug development," says Costard.
Leipzig agency for skydiving innovations wins 290,000 US dollars
Sprind's concept has now won an international innovation competition organized by the University of Chicago. The Market Shaping Accelerator (MSA) of Nobel Prize winner Michael Kremer received 190 concepts at the start of 2023. Kremer and his team work intensively on cases in which the market fails and therefore no investment is made. The MSA also helped with the Sprind concept. Not only was there 290,000 dollars in prize money, the winning concept is also to be implemented - with extensive international support.
Because one country alone will not be able to raise the necessary money. "A large coalition is needed to ensure that such drugs are developed," says Costard. "There is a danger that individual countries will let the others do it and, once everything is financed, jump on board as free riders. Because everyone knows this in advance, a coalition can fail - but then nobody ends up with a drug."
Sprind itself is currently supporting four companies that are developing drugs against viruses. Among them is a company that wants to capture viruses in the body with a kind of net made of DNA origami. One team is working on rendering viruses harmless using gene scissors. Another is planning a drug that traps viruses on the human nasal mucosa after they have been inhaled. They are then swallowed with the mucus and rendered harmless in the stomach. The companies now want to prove that their approach works in animal experiments. After that, it will be really expensive. And it takes time. On average, it takes ten years from the idea to the finished drug. So if no investor is found now, that's it for the drugs.
