The NIAID and NIH Financed Development of Merck’s COVID Pill, Now They’re Selling to Taxpayers at 3,500% Markup

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The headquarters of Merck in Darmstadt on November 22, 2019 in Germany. Merck’s antiviral COVID-19 pill, molnupiravir, was developed with $35 million in NIH and NIAID taxpayer funding at Emory University. Now, Merck is selling it back to the government at 35 times the cost of its generic counterpart.
The headquarters of Merck in Darmstadt on November 22, 2019 in Germany. Merck’s antiviral COVID-19 pill, molnupiravir, was developed with $35 million in NIH and NIAID taxpayer funding at Emory University. Now, Merck is selling it back to the government at 35 times the cost of its generic counterpart. (Image: TF-Images/Getty Images)

Merck’s recently announced pill-based antiviral treatment for COVID-19 was researched and developed at a U.S. university using taxpayer funds. Now, the pharmaceutical giant is selling it back to the government at 35 times the cost of production. 

The drug molnupiravir, marketed by Merck and Ridgeback Biotherapeutics, passed its clinical trial, which began in October of 2020, showing, according to an Oct. 1 company press release, that only 28 of 385 patients given the substance “were either hospitalized or died through Day 29 following randomization” compared to 53 of 377 in the placebo group.

The group that received molnupiravir had no deaths, while eight in the placebo group passed away. The trial focused on PCR-positive patients who were both symptomatic and had at least one comorbidity, excluding those already hospitalized or ill enough to be expected to be hospitalized.

Merck describes their drug as an “investigational oral antiviral medicine,” and halted the trial, which was originally to be composed of 1850 subjects, early “At the recommendation of an independent Data Monitoring Committee and in consultation with the U.S. Food and Drug Administration (FDA).”

Merck says it plans to request Emergency Use Authorization for the drug as soon as possible.

How Big Pharma got their hands on the drug is illustrated in a June of 2020 article by The Washington Post, which states, “Ridgeback Biotherapeutics had no laboratories, no manufacturing facility of its own and a minimal track record when it struck a deal in March with Emory University to license an experimental coronavirus pill invented by university researchers with $16 million in grants from U.S. taxpayers.”

Two months after acquiring the license, Ridgeback sold the exclusive worldwide rights to Merck in exchange for “an undisclosed upfront payment, specified milestones and a share of the net proceeds,” according to a press release.

The release also states the drug works by inhibiting the replication of “multiple RNA viruses.” 

The companies said in animal trials, the compound showed the ability to “improve pulmonary function, decrease body-weight loss and reduce the amount of virus in the lung” against two other coronaviruses: the original, and much more dangerous, SARS-CoV, and Middle East Respiratory Syndrome (MERS).

The same day as Merck announced its clinical trial success, the Defense Threat Reduction Agency (DTRA) boasted in a tweet that it had “invested in a broad-spectrum #antiviral, leading to the discovery of molnupiravir through collaborative research with  @Merck,  @EmoryUniversity, #RidgebackBio, & @NIH.”

According to Oct. 4 research published by Knowledge Ecology International (KEI), the U.S. government poured $35 million into R&D at Emory between 2013 and 2020 to create the substance.

The research said the DTRA directly approached Emory scientist George Painter “looking for a way to fight Venezuelan equine encephalitis.” All of the funding Emory received was through the now-resigned Francis Collin’s NIAID and Anthony Fauci’s NIH, two entities at the core of the Wuhan Institute of Virology and EcoHealth Alliance gain-of-function research on bat coronaviruses scandal.  

KEI notably points out that the U.S. government has an interest in molnupiravir’s five patents held by Emory after the University “executed respective confirmatory licenses to the DTRA and NIAID stating that the compounds and methods claimed in the…application are subject inventions under…the legal provisions pertaining to the Bayh-Dole Act,” in May of 2020. 

And this is the part where the rubber really hits the road. The same day as Merck and Ridgeback’s announcement, Harvard researcher Melissa Barber and King’s College researcher Dzintars Gotham published a cost estimate on the generic prices of molnupiravir’s production. 

The duo used the proprietary Panjiva import/export database to search for molnupiravir in the shipment description portion of data ranging from 2016 to present, narrowed with India as the exporting country, and imported to the United States, along with 18 other South American and Asian countries, including Venezuela and China. 

The results were composed of 12 shipments, ten from three different companies in India, and two from one company in China. Of the ten Indian companies, eight were Optimus Drugs Private Ltd. 

They determined that the average weighted market price was $2,162/kg USD, which broke down to $17.74 USD for a five-day regimen of the substance based on the dose of four 200mg capsules twice daily for five days used in the clinical trial.

Further, the team noted that April of 2021 analysis by MIT determined that “starting from raw materials and using an optimized synthetic process, molnupiravir active ingredient would cost US$427-799/kg to manufacture.”

In the Conclusions section, the pair noted, “The proprietor pharmaceutical company, Merck, announced on 27 April 2021 that they had entered into non-exclusive voluntary licensing agreements for molnupiravir with five Indian generics manufacturers (Cipla Limited, Dr. Reddy’s Laboratories Limited, Emcure Pharmaceuticals Limited, Hetero Labs Limited, and Sun Pharmaceutical Industries Limited).”

None of the five companies are the same three Indian companies already publicly exporting the product. 

The team said that the Biden administration has already taken the liberty of purchasing 1.7 million treatment courses of molnupiravir from Merck at a cost of $700 per patient, which works out to 35 times the cost of import, and 161 times the cost of “optimization of molnupiravir synthesis, and a resulting drop in API cost.”

The study put the raw figures into focus:

  • 1.7 million treatment courses from Merck = $1.19 billion USD
  • 1.7 million treatment courses at ”estimated sustainable generic price, current market API [active ingredient] cost” = $33.978 million USD
  • 1.7 million treatment courses at “estimated sustainable generic price, API cost with optimised synthesis” = $7.394 million USD 

An Oct. 3 article by Indian news outlet Collab said “In India, companies are looking to price the drug at ₹880- 1,000 (each tablet costing ₹22) for a full course. With nearly a dozen Indian companies in the fray to launch the drug in India and in other low-and middle-income countries, the price of the drug is expected to drop further.”

1,000 Indian Rupees is equivalent to approximately $13.36 USD as of time of writing.

  • Neil lives in Canada and writes about society and politics.