Whose drug is it anyway?

The taxpayer roots of Merck/Ridgeback's experimental treatment for COVID-19

Dr. Anthony Fauci on Sunday added his influential voice to the chorus celebrating the imminent arrival of a new oral drug to treat COVID-19. When asked on CNN’s State of the Union about Merck’s announcement that its experimental medication halved the risk of hospitalization and death, Fauci declared the results “extremely important… We really look forward to the implementation of this.”

The headline in the New York Times this morning about Fauci’s comments also referred to “Merck’s Covid pill.” The story made no mention of Ridgeback Biotherapeutics, the co-signer on Merck’s press release and the purported co-developer of the drug.

My purpose in writing about this today isn’t to cast doubts on the data the companies chose to release from the clinical trial, which was halted early so the companies could file for Emergency Use Authorization. Sometime over the next few months, the Food and Drug Administration will release its analysis with a full dataset – the information objective scientists and the public need to properly evaluate its benefits and risks. In addition to efficacy, it will be important to see what data the clinical trials generated on the drug’s mutagenicity, a concern raised by some that it may have long-term cancer-causing effects.

That said, the interim results released by the companies look extremely promising. I hope the FDA confirms their claims. It would be a boon not just to the thousands of Americans contracting the disease every day, mostly because of their refusal to get vaccinated, but to the millions of people across the globe for whom vaccination is still years away. An oral medication that sharply lowers mortality and hospitalization from Covid-19 would deliver its biggest benefits in the less developed world where supplying vaccines is difficult because the most effective ones require low-temperature storage.

That’s why I spent a few hours this weekend researching the genesis of molnupiravir, which prior to receiving its generic name was referred to as EIDD-2801. The EIDD stands for the Emory Institute for Drug Development, the Atlanta university’s research arm that was “created to provide organization, facilities and resources to translate academic drug discovery into clinical candidates.” The chief executive officer of EIDD is Dr. George Painter, an organic chemist and long-time anti-viral researcher who in the past two years alone received $1.7 million in grants from the National Institute for Allergy and Infectious Diseases, the government agency run by Dr. Fauci.

Let’s start at the beginning

Over the past decade, EIDD has received numerous government grants to research “an orally available, direct acting antiviral agent for the treatment of infection by the encephalitic New World alphavirus VEEV (Venezuelan equine encephalitis virus) … in response to reports that VEEV was weaponized for delivery as an aerosol during the cold war,” according to an article about the development of molnupiravir by Painter and colleagues in the October issue of Current Opinion in Virology. The goal of the research was to develop a drug that would be effective against a broad spectrum of RNA viruses, including Severe Acute Respiratory Syndrome viruses like COVID-19’s SARS-Cov-2.

The specifications for the drug were driven by its roots in the war on terror. It needs to be effective “under the adverse conditions that might be encountered by a soldier,” Painter wrote. “It is preferable that the drug be orally available and suitable for self-administration. Development of resistance to the drug should be difficult so that viral breakthrough and loss of activity does not occur quickly. From a counterterrorism perspective, it is desirable that genomic changes (that) confer resistance to the antiviral agent should be difficult to generate.”

The work began in earnest in 2013 when the EIDD group began screening various analogues of N4-hydroxycitidine, which was effective in test tubes against a range of RNA viruses. Their second iteration of the drug was dubbed EIDD-2801. The institute applied for a patent in March 2017 before transferring the technology to the university’s non-profit drug development arm, the Drug Innovation Ventures at Emory or DRIVE. By late 2019, DRIVE was preparing to file an Investigative New Drug Application with the FDA to test EIDD-2801 (renamed molnupiravir) against seasonal flu.

“This pathway to developing the drug was agreed upon in consultation with funding agencies that had supported the discovery and development of EIDD-2801, the Defense Threat Reduction Agency (DTRA) and the National Institute for Allergy and Infectious Disease (NIAID),” Painter and colleagues wrote.

However, when COVID-19 reached pandemic proportions a few months later, DRIVE swiveled to the emerging threat. In February 2020, it proposed using its drug candidate against COVID-19 to the Biomedical Advanced Research and Development Authority (BARDA), then headed by Rick Bright. “We never received a response from BARDA regarding the presentation or their assessment of molnupiravir as a potential drug,” Painter wrote.

DRIVE then turned to a small biotech company based in Miami called Ridgeback Biotherapeutics, which was founded in 2016 by Wayne and Wendy Holman to develop an experimental monoclonal antibody to combat Ebola. Ms. Holman had spent the previous 15 years managing biotech investments for Ziff Brothers Investments. On March 23, 2020, DRIVE signed an exclusive licensing agreement with Ridgeback to develop EIDD-2801.

A not-so-bright response

Bright has a very different take on the issue. According to Science Magazine’s report on his whistleblower complaint, filed after his April 2020 dismissal by the Trump administration, Bright had met in November 2019 with Painter and John Clerici, an attorney/lobbyist who had previously helped another company run by Painter obtain $72 million in BARDA funding to develop a smallpox drug. Bright opposed an immediate boost in funding for testing EIDD-2801 against the flu – don’t forget this was before COVID-19 reached the U.S. – due to reports about mutagenicity.

In March, with the U.S. outbreak spreading quickly, Robert Kadlec, then assistant secretary for preparedness and response at the Health and Human Services department, began pressuring Bright to fund EIDD-2801 to combat Covid-19. In his whistleblower complaint, Bright called Painter a long-time friend of Kadlec. He claimed his firing in April stemmed from his objecting to what he saw as improper and unscientific efforts to steer taxpayer dollars to certain firms run by “cronies” or “for political purposes.”

Frustrated by the lack of response from BARDA, Painter and Emory turned to Ridgeback Biotherapeutics, which kicked off early-stage human trials a month after signing the exclusive licensing agreement with DRIVE. Painter’s wife, Dr. Wendy P. Painter, is the chief medical officer of Ridgeback. According to the financial conflicts of interest disclosure in the journal article describing the drug’s development, George Painter is listed as inventor on the patent for molnupiravir and has a financial stake in its success.

As so often happens in drug development in recent decades, Ridgeback turned to a bigger firm after data from its first stage human safety trial won FDA approval to proceed with a large-scale efficacy trial. To generate funding for that experiment, Ridgeback on May 26 of this year signed an agreement with Merck to handle the final clinical development, regulatory filings, and manufacturing of molnupiravir.

In exchange, Merck got the exclusive rights to sell the drug around the world. “Merck and Ridgeback are committed to ensure that any medicines we develop for SARS-CoV-2 will be accessible and affordable globally,” the press release said.

As with any invention developed with government funding, the patent for molnupiravir, which is assigned to Emory University, includes a clause stating the government retains “certain rights” to the invention. But haggling over price has been excluded from those rights since the early 1990s, when the government first turned its back on drug price negotiations, in that case, over the price of anti-AIDS drugs.

More than generous

The government has already agreed to a more than generous price for molnupiravir. In June, Merck agreed to provide enough pills to deliver 1.7 million courses of treatment for $1.2 billion – a price per treatment of $706. That almost sounds like a reasonable number if the FDA analysis of its efficacy profile confirms the halving of hospitalizations and deaths reported by the companies last week.

But at that price and with 100,000 new cases reported each day in the U.S., public agencies and private insurers could spend as much as $70 million a day or more than $25 billion over the next year on COVID-19 treatment. Treating the half million people globally who contract the disease daily would generate $125 billion a year at that price. No wonder Merck’s shares jumped 8% on Friday after it released its results.

But this isn’t Merck’s drug. Nor is it Ridgeback’s drug. It’s the taxpayers’ drug. Neither Merck nor Ridgeback holds the patent. That belongs to Emory/EIDD/DRIVE, which are non-profit organizations that used government grants to develop molnupiravir.

As we await the results of the FDA analysis, it would be nice to know what guarantees regarding affordability both in the U.S. and worldwide the Emory University affiliates received from Ridgeback and Merck in their exclusive licensing deals. They should also disclose the royalties these non-profit organizations will receive and the royalties the inventors will receive.

The fact is, given how much Merck and Ridgeback invested in developing this drug, and even if one includes the cost of manufacturing the pills, a price one-fifth that $706 should be sufficient to assure a reasonable return on investment.

An earlier version of this article incorrectly identified Robert Kadlec’s title. He was assistant secretary for preparedness and response at the Health and Human Services department.