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'A Scandal': Contracts Show Trump Giving Big Pharma Free Rein to Price Gouge Taxpayer-Funded Coronavirus Drugs

"The amount of money the government is throwing at companies is unprecedented. Normally when you write bigger checks, you should have more leverage, not less leverage."

Bottles of a trial Covid-19 vaccine on a table in a lab in Brussels on June 18, 2020. (Photo: Vincent Kalut/Photonews via Getty Images)

Government contracts obtained by consumer advocacy group Knowledge Ecology International show that the Trump administration is giving pharmaceutical companies a green light to charge exorbitant prices for potential coronavirus treatments developed with taxpayer money by refusing to exercise federal authority to constrain costs.

"The government has limited its ability to intervene if the pharmaceutical companies... charge unreasonable prices for the resulting Covid-19 vaccines or treatments."
—Knowledge Ecology International

Through the Freedom of Information Act, Knowledge Ecology International (KEI) last week got hold of a number of heavily redacted agreements between the Trump administration and major pharmaceutical companies like Johnson & Johnson, Regeneron, and Genentech.

Five of the seven documents reviewed by KEI are classified as "other transaction agreements," which allow federal agencies to loosen regulations designed to protect the public in order to help companies streamline the product development process.

In the case of four contracts for potential Covid-19 treatments or vaccines with Johnson & Johnson, Genentech, Regeneron, and Roche issued by the Biomedical Advanced Research and Development Authority (BARDA) and the Pentagon, the Trump administration omitted a standard condition requiring that products developed with taxpayer money be made available to the public "on reasonable terms."

"This means that the government has limited its ability to intervene if the pharmaceutical companies (which are party to the agreements and are receiving hundreds of millions of dollars to conduct the research) charge unreasonable prices for the resulting Covid-19 vaccines or treatments," KEI noted in a press release.

KEI also found that federal contracts with Genentech and Regeneron for coronavirus treatments contain passages restricting the government's ability to "have generic manufacturers make and distribute through pharmacies and other commercial outlets an effective diagnostic test, drug, or vaccine for Covid-19."

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The details of the contracts come just days after the Trump administration faced backlash from consumer groups for refusing to require Gilead to charge a reasonable price for its Covid-19 treatment remdesivir. On Monday, as Common Dreams reported, Gilead announced it will charge U.S. hospitals around $3,120 per privately insured patient for a treatment course of remdesivir, which was developed with the help of at least $70.5 million in taxpayer funding.

"Allowing Gilead to set the terms during a pandemic represents a colossal failure of leadership by the Trump administration," Peter Maybarduk, director of Public Citizen's Access to Medicines Program, said in a statement Monday. "The U.S. government has authority and a responsibility to steward the technology it helped develop."

As the Washington Post reported Wednesday, "[Johnson & Johnson] has a $456 million contract with BARDA to develop a coronavirus vaccine and a $152 million contract to conduct screening of drug compounds that could be Covid-19 treatments."

"Regeneron has contracts worth up to $130 million to develop two therapies for the disease," the Post noted. "Roche's Genentech subsidiary has contracts worth $47 million to develop a pair of therapies."

James Love, the director of KEI, told the Post that "the amount of money the government is throwing at companies is unprecedented."

"Normally when you write bigger checks," Love said, "you should have more leverage, not less leverage."

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