The price of recovery

the price of recovery - The price of recovery

Metro Manila, Cavite and a few other areas with significant contributions to the national economy will remain under General Community Quarantine (GCQ) until July 15. With that, the government, people, and business will just have to wait another two weeks to see if these places can transition to the more lenient Modified General Community Quarantine (MCGQ). It depends mainly on the trend of the number of COVID-19 cases reported daily.

The main issue under GCQ is public transportation. Unless these economic centers are placed under MGCQ, and more mass transportation options are made available to the public, then workers’ movement will remain restricted. Things will continue to be difficult even if businesses choose to restart, if many of their workers cannot find their way to work. The economy will continue to hobble.

Remote work or work-from-home is a challenge, especially for manufacturing and service industries. It can be an acceptable arrangement for white-collar work, but it will be difficult to sustain particularly given connectivity issues. And not all can walk or bike to work, given that many Metro Manila workers live in places like Rizal, Laguna, Cavite, and Batangas. And only few companies can afford to hire shuttles for workers for an indefinite period.

Finance Secretary Carlos Dominguez III is pushing for Metro Manila and Calabarzon to be soon put under MGCQ, which is the least restrictive level of community quarantine for the country. His concern is the urgent need to restart the economy, noting that the National Capital Region and Southern Luzon cover more than 60% of the economy. Muted economic activity has also impacted negatively on tax collection.

“The reality today is that the virus is not going to go away and we will have to live with it for a long period of time. I really believe we really should begin opening,” Mr. Dominguez was quoted as saying in a news report. “You know, NCR, Calabarzon, that is where the economy is based. About 60% or 67% of our economy is based in that area. [We should move] to the MGCQ as quickly as possible because people have to start working.”

Mr. Dominguez has a point. To date, most COVID-19 patients in the country are considered “mild” or with mild symptoms. But the concern, moving forward, is that with reopening the economy and restarting businesses, more people can get sick, and possibly suffer more severe symptoms and even die. More than 37,000 Filipinos have been infected by COVID-19 so far, and more than 1,200 have died from it. MGCQ might just see those numbers go up significantly — economic recovery will be at the expense of public health.

One of the country’s largest businesses, San Miguel Corp., remains optimistic its business will recover despite the COVID-19 pandemic. “Our major businesses are well-positioned to make recoveries, especially with the lifting of restrictions starting June. Since May, we have been seeing a recovery,” SMC president and COO Ramon Ang told a stockholders meeting.

He also said recovery would be faster if a COVID-19 vaccine could be developed soon. “We are still dealing with a crisis today. Until there’s a cure for COVID-19, we cannot let our guard down. Nevertheless, we are determined to work smart and safe and do our part to help our economy, our country and people during this critical time,” Mr. Ang added.

But a vaccine doesn’t seem to be forthcoming. It may take months to years before a vaccine can become available, if at all. And there is no telling how much that vaccine will cost. To date, what has become available is a drug for treating COVID-19 patients, but not a vaccine to protect people from it. And that drug treatment, now reportedly available in the United States, costs more than an arm and a leg.

A report in The New York Times (NYT) dated June 30 detailed how a new drug to treat COVID-19 patients would “be distributed under an unusual agreement with the [US] federal government that establishes non-negotiable prices and prioritizes American patients.” The drug, called Remdesivir, is made by Gilead Sciences, the same company that made the first hepatitis C cures as well as a daily pill against HIV infection.

Remdesivir will be sold at $520 per vial, or $3,120 per treatment course, to US hospitals for treatment of patients with private insurance. The price will be set at $390 per vial, or $2,340 per treatment course, for patients on government-sponsored insurance and for those in other countries with national health care systems, NYT reported. It added that the drug would be sold only in the United States through September.

The sad part, particularly for poorer countries like the Philippines, is that Remdesivir is deemed a relatively cheaper cure. Experts have noted that other drugs now in late-stage testing cost several times more, while Gilead Chief Executive Daniel O’Day has been quoted as saying, “There is no playbook for how to price a new medicine in a pandemic.” Incidentally, the new drug was reportedly developed with more than $70 million in “public money.”

The New York Times also reported that the non-profit group Institute for Clinical and Economic Review, which calculates fair prices for drugs, estimated that Gilead could charge as low as $1,600 per regimen to recoup its costs in developing and manufacturing Remdesivir. Instead, however, it plans to charge a range of $2,340 to $3,120 for treatment of patients with health insurance.

The Institute added that “Gilead has the power to price Remdesivir at will in the US, and no governmental or private insurer could even entertain the idea of walking away from the negotiating table.” At a price range of $2,340 to $3,120 per treatment, Remdesivir is already too expensive for most Filipinos. But, one can only guess at this point how much the drug will actually cost by the time it gets here, and if it will get here.

But drug treatment is only one side of the equation. A vaccine, I believe, is far more important to us. And for sure, demand for a vaccine will be far greater than for drug treatment anywhere in the world. So far, more than 10 million people have been infected with COVID-19 worldwide, and more than 500,000 have died from it. But hundreds of millions are at risk of getting infected until vaccination is done.

If drug treatment already costs $2,340 to $3,120 in the US, then how much can a vaccine possibly cost in a country like the Philippines? One can only hope that either China or India can make vaccines and drug treatments available to fellow Asians at a discount. Affordable and accessible vaccines and drug treatments are crucial to safeguarding public health, and to economic recovery. Without them, people will continue to live in fear of getting sick. But what good is a vaccine or a drug treatment to a country that cannot afford them? The steep price of economic recovery is a higher body count.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairmanof the Philippines Press Council.

matort@yahoo.com

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