Deep Dives #7 -- The Story Behind Tamiflu

Below is my entry for the Deep Dives #7 challenge. “Participants are able to select their own topic for research depending on individual interest. Broad categories from international politics, the economy, war, military, corporations, trade, intelligence, etc. offer endless possibilities.” Please visit @deepdives to read more about how to submit your own entry and get involved researching the Wikileaks archives.

In 2009, the biotech company Genentech, headquartered in San Francisco, was acquired by Hoffman-La Roche (Roche), a Swiss pharmaceutical company. Roche / Genentech manufacture the drug Tamiflu, which is a flu vaccine. The drug doesn't prevent influenza; rather, it's recommended to be taken in the early stages of the viral illness to reduce its severity and accompanying bacterial infections.

This particular vaccine presents a striking example of the problem with the “public-private partnerships” between big business and the United States federal government that are so prevalent today. The Tamiflu story may read like fiction at times with its various chapters of scandal, embezzlement, collusion, and suicide. So let's dive into this sensational but not terribly unusual story of government corruption and corporate profiteering.

Tamiflu, or oseltamivir, was first discovered by scientists at Gilead, a biopharmaceutical company based in California. The drug's patents were licensed to Roche in 1996. Donald Rumsfeld, the Defense Secretary for most of the Bush administration, had been a member of Gilead's board of directors since 1988 and was appointed chairman of Gilead's board in 1997. Tamiflu was approved by the FDA in 1999 as the first neuraminidase inhibitor that could be taken by mouth. The drug is listed on the World Health Organization's List of Essential Medicines.

In 2005, Tamiflu was used to treat the H5N1 epidemic in Southeast Asia known as the Avian Flu (bird flu). However, the drug's efficacy has been consistently questioned ever since. In 2014, the Cochrane Review determined that there was no evidence that Tamiflu reduces the complications of influenza, nor did it reduce flu hospitalizations. Other studies claim that the Tamiflu benefits seen in healthy individuals fail to outweigh the drug's risks, which may include vomiting, diarrhea, headache, insomnia, seizures, and psychiatric symptoms. Despite these conclusions, the federal government promoted the drug to several governments around the world.

Wikileaks made public an unclassified weekly report telegram from Hanoi, dated November 3, 2005 detailing efforts of the Vietnamese and U.S. governments in addressing the flu epidemic. It had now been two months since the Avian Flu was blamed for any deaths in Vietnam (though two suspicious deaths in October of that year were being investigated). The report states that the Vietnamese Ministry of Health would “closely cooperate with WHO and other countries in order to produce anti-influenza vaccines for poultry and humans in Vietnam.”

Vaccine production in Vietnam, however, was unlikely. Instead, Vietnam would rely primarily on efforts by the US government. The Academy for Educational Development (AED), was to be drawing up a “regional/country specific work plan for review by the US Agency for International Development (USAID).” The AED was a contractor for USAID and received 90 percent of its funding from that government agency. (Five years later, USAID would suspend the Academy for Educational Development, generally for corporate misconduct, and specifically for overcharging the federal government for work the AED had done in Pakistan... just another example of how corruption is usually the norm when it comes to government agencies and federal contractors.)

USAID, according to this Wikileaked telegram, was working to “garner interest from the private sector to develop public-private partnerships to combat AI (avian flu).” Of course, the obvious partnership the USAID was seeking would be with Roche, the maker of Tamiflu, despite the fact that another federal agency, the FDA, declared Roche's marketing of Tamiflu was “false or misleading” in November of 2000 for promising significant reduction in secondary bacterial infections. The telegram from Hanoi went on to describe stockpiling plans and current drug supplies.

Similar correspondence has been brought to light by Wikileaks from governments in Taiwan (2005), Japan (2006), Argentina (2009), Morocco (2009), and New Zealand (2009). The New Zealand telegram reported that the country's public distribution of Tamiflu would be restricted to only those individuals displaying more severe flu symptoms.

Reporting on two deaths linked to Tamiflu, the Alliance for Human Research Protection quoted this excerpt from a Lancet article in November of 2005:

“US officials... are using public anxiety about the potential flu pandemic and bioterrorism as an opportunity for submerging medical research on infectious diseases and biological-weapons in deep freeze. Senator Richard Burr¹s proposed legislation – S. 1873 (Biomedical Advanced Research and Development Agency, BARDA) – that would preclude public oversight and accountability.

“The model for this legislation is the military forced anthrax vaccine debacle, a model grounded in tainted science, the disregard for medicine¹s foremost principle, 'First, do no harm,' which gave way to contractual deals between government and vaccine / drug manufacturers. Drug and vaccine manufacturers stand to gain huge profits from government stockpiling of drugs and vaccines – whether these have undergone adequate safety tests or not, whether evidence of their effectiveness is credible.”

Unfortunately for Roche, the federal government didn't end up stockpiling as much Tamiflu as the company would have liked. Lisa Schnirring, writing for the University of Minnesota's Center for Infectious Disease Research and Policy (CIDRAP), quoted Roche's then CEO: “Abercrombie said the company has the capacity to produce 400 million courses per year, but governments have purchased only 215 million. 'We can't have plants and supply lines sitting idle indefinitely,' he said.”

And so, in 2008 Roche announced a program to encourage employers to stockpile Tamiflu. The plan was endorsed by the US Department of Health and Human Services (HHS) and HHS officials were present at the Roche press conference announcing the program. CIDRAP's Lisa Schnirring quoted a US Health official praising the public-private model: “[HHS] Deputy Secretary Tevi Troy said the program is an example of a good partnership with the federal government.” (emphasis added)

The stockpiling program for employers is an interesting twist, as it further removed the purchasing decision for the flu vaccine from the individuals receiving it -- a tactic health insurance companies employ, as well. When the people consuming your product are not the purchasing decision-makers, demand tends to increase, but that demand is based on a false price signal, since not all Tamiflu consumers are joining a consensus on the purchase price. A basic principle of free-market economics is that consumers need to be making their own purchasing decisions in order for markets to perform efficiently and competitively.

The employer stockpiling model also illustrates another innovation that Roche was employing in its push to increase Tamiflu sales: a government reach-around.

Not that the government wasn't being helpful to Roche. In 2005, ABC News quoted President Bush: "'We must also remain on the offensive against new threats to public health, such as the Avian influenza,' Bush said in his speech to world leaders. 'If left unchallenged, the virus could become the first pandemic of the 21st century.'" The same article also quoted Health and Human Services secretary Mike Leavitt as discussing quarantine possibilities and admitting the US was not well prepared for an epidemic.

But Roche's star lobbyist, Evan Morris, was experimenting with a tactic of reaching around government to appeal to constituents -- not to motivate the public to buy, but to demand government action. He enlisted help from media outlets like ABC, which complicitly utilized scare tactics, reporting that London officials were “quietly looking for extra morgue space to house the victims of the H5N1 virus.” ABC also suggested that Avian Flu could kill a billion people and turn major cities into “ghost towns.”

“The draft report of the federal government's emergency plan, obtained and examined by ABC News' 'Primetime,' predicts as many as 200,000 Americans will die within a few months. This is considered a conservative estimate.” ~ ABC News

 
Evan Morris began his career in Washington as an intern in the Clinton White House. He later worked on the 2016 Democratic National Convention's fundraising committee.

According to the Wall Street Journal, “Mr. Morris adopted an emerging lobbying tactic: build support among a lawmaker’s constituents to supplement the traditional glad-handing of elected officials with dinners and campaign donations. Mr. Morris contracted consultants who promoted news stories that stoked fears about an avian-flu outbreak. The goal was to sell more Tamiflu.”

But again, the goal wasn't just increasing sales to consumers. The larger goal was to spur the public to demand the type of federal government response that would include massive stockpiles of the drug. As a result, the Bush administration purchased more than $1 billion worth of Tamiflu and provided subsidies to state governments allowing them to purchase millions of dollars of additional doses.

The outside-the-box lobbying tactics of Morris made him a company darling. In 2011, he bought a waterfront estate in Maryland for $3.1 million. The home featured six bedrooms, eight baths, a pool, and a hot tub. According to his friends, Morris called it the “House that Tamiflu bought.”

Morris made a lateral career move to his employer's acquisition, Genentech, in 2009. Journalists Ryan Grim and Paul Blumenthal writing for the Huffington Post reported that, “In 2009, Genentech and Morris found themselves in the news when The New York Times reported that 12 members of Congress entered remarks into the Congressional Record that were written by Genentech’s lobbyists. Many of the members who reprinted Genentech’s statements as their own also received contributions from the company’s PAC and employees. Morris told the Times, 'There was no connection between the contributions and the statements.'“

And this wasn't Roche's only form of persuasion being used in Washington. Jeanne Lenzer, writing for the BMJ (formerly the British Medical Journal) reported that, “The CDC Foundation, created by Congress to 'connect CDC to the private sector to advance public health,' provides funding to the CDC. The foundation confirmed to the BMJ that the CDC received a directed donation from Roche via the foundation for the [“Take 3”] campaign, stating, 'Roche provided a grant of $198,000 to CDC Foundation [which] has an administrative fee of 13.5%, so $174,800 was provided to [the CDC to] support qualitative research into influenza prevention and treatment messaging.'”

Source

Note in the above graphic from the Roche Annual Report of 2009, sales of Tamiflu had increased 435 percent, while its other products grew by more normal figures of 5, 6, 8, and 21 percent. And as sales of Tamiflu skyrocketed over the following decade, the company's star lobbyist lived the high life.

Not all the money he spent on his lavish lifestyle, however, had actually been in the form of legitimate earnings. Genentech was tipped off that Morris was embezzling from the company through a complicated system of kickbacks from Washington consultants. On July 9, 2015, after being called in to discuss financial irregularities with Genentech's chief compliance officer, Evan Morris left for his favorite golf course, where he committed suicide that evening.

The venn diagram for Roche is unusual in that only one person listed, Evan Morris, is a lobbyist. Most are members of the FDA Advisory Committee who have worked for Roche in a private capacity. Note that the journal Science reported in July of this year that FDA advisory panel members including Dr. Gary Hoffman, Dr. Abraham Lincoff, Dr. Richard Looney, Dr. Nancy Olsen, Dr. Ted Mikuls, Dr. Frederick Kaskel, Dr. Andrew Winokur, and Dr. Robert Hendren received various payments from Roche. On the venn, these financial connections are listed as consultancies, but the exact nature of the financial connections are unknown.