Drug Giants Give Low Priority to AIDS : Firms Cite Cost of Research and Magnitude of Scientific Challenge

By VICTOR F. ZONANA

Sept. 1, 1985 12 AM PT

Times Staff Writer

SAN FRANCISCO — It is a question that scientist Robert Gallo frequently asks himself: why aren’t the world’s big pharmaceutical companies taking a more active role in the battle against AIDS?

“I go around giving lectures, trying to goose them into getting involved,” says Gallo, the first U.S. researcher to isolate the virus that’s believed to cause the lethal ailment.

“There’s been a small increase in interest in the last few months, but we could still use a five or tenfold increase in private sector participation,” says the National Institutes of Health scientist.

“Maybe they think we don’t know enough about the virus yet,” Gallo muses. “We do.”

“Maybe they don’t think the market is big enough,” he adds. “It is.”

Gallo is not alone in calling for more corporate help in combatting what some are now calling the greatest health threat of the century. But four years after the federal Centers for Disease Control first identified the new Acquired Immune Deficiency Syndrome, many pharmaceutical giants with the resources and expertise to develop new drugs against AIDS or a vaccine to prevent it are sitting on the sidelines.

Companies cite economics and the magnitude of the scientific challenge for their reluctance to invest tens of millions in the chancy quest for an effective treatment or vaccine. Other forces that have slowed industry’s response include lethargy in corporate bureaucracies, failure to grasp the magnitude of the epidemic and, some charge, indifference because most of the disease victims in the United States have been homosexuals and intravenous drug abusers.

To be sure, some drug makers--most of them small or based in Europe--have launched active efforts to find a cure. About a dozen experimental compounds have been approved for testing by the Food and Drug Administration, some on an expedited basis. Most of those drugs, however, had been developed for other ailments.

Two manufacturers have applied for tax breaks under the “orphan drug” law, which gives companies incentives to market drugs for diseases affecting relatively small numbers of people.

Moreover, the scientific barriers are formidable. Few drugs have proven effective against any virus, let alone one like the suspected AIDS agent, which can lie dormant for years and “hide” in the brain, lungs and other body organs.

Even a successful attack on the virus would leave AIDS patients with badly deficient immune systems; the current thinking is that some sort of immune-system stimulator would be needed in conjunction with an antiviral agent.

Difficult to Produce

And because the AIDS virus is constantly mutating, scientists say a vaccine will be difficult--but not impossible--to produce.

But most scientists believe these challenges can be overcome with the proper investments of time, money and effort. “Throwing money at a problem rarely speeds up the solution, especially in a disease as complex as AIDS,” says Dr. Edward N. Brandt, former assistant secretary of health and human services. “But neither does starving it.” Critics blame several factors for the industry’s sluggish response. “The association of AIDS with homosexuality and drug abuse gives it a tawdry flavor,” laments Thomas Coates, a psychologist and co-director of the department of behavioral medicine at the University of California at San Francisco. “Other diseases, like lung cancer, are based on personal behavior, but there seems to be more compassion surrounding them.”

Others blame corporate bureaucracies for industry’s cautious approach. “Decision-making at big companies is slow, tedious and ponderous,” says William Haseltine of Harvard Medical School and the Dana Farber Cancer Institute. Besides, he adds, “it’s easier and more profitable to develop a new Valium than an antiviral specific for AIDS.”

Pharmaceutical houses are also keenly aware that any AIDS vaccine would face the additional hurdle of this nation’s product-liability laws.

Earlier this year, for example, a shortage of DPT (diphtheria, tetanus and pertussis) vaccine developed after two of the nation’s three makers withdrew from the business when they had difficulty obtaining liability insurance.

May Need Legislation

“Until something is done legislatively, I don’t think anyone will want to get involved” in production of an AIDS vaccine, says Thomas Perkins, chairman of Genentech Inc., a major genetic engineering firm.

The fact that companies are leaving the vaccine market “is a scandal for our society,” says Donald Francis, a medical epidemiologist at the federal Centers for Disease Control who played a key role in the worldwide eradication of smallpox.

Some propose that the government assume liability for an AIDS vaccine. But it isn’t eager to do so, having been hit with nearly $1 billion in claims as a result of its ill-fated swine-flu vaccination program in 1976. The program was canceled after more than 50 of the 42 million people who were inoculated were stricken with a sometimes fatal form of paralysis.

Still, the National Institutes of Health and others research institutes are picking up some of the slack in AIDS vaccine research. In fact, some suggest that the prospect of an eventual breakthrough in a vaccine may be deterring companies from investing the tens of millions of dollars that are needed to develop a treatment or cure.

“While a successful vaccine is clearly a couple of years away, it would begin to reduce the size of the treatment market quickly,” notes Jim McCamant, editor of the Medical Technology Stock Letter.

Restrictive Definition

Whatever the prospects for a vaccine, industry analysts and AIDS researchers say that many drug companies still don’t appreciate the magnitude of the epidemic because of the government’s highly restrictive definition of AIDS.

To have AIDS, according to the Centers for Disease Control, an individual must have a defective immune system and a life-threatening condition such as Kaposi’s sarcoma, a skin cancer that afflicts AIDS victims, or a virulent type of pneumonia known as pneumocystis carinii. But doctors say the AIDS epidemic actually encompasses a much broader spectrum of disease, ranging from asymptomatic infection to full-blown AIDS.

“The media talk about 12,000 cases of AIDS in the U.S.,” says Patricia Lee, a drug analyst for Salomon Bros. In fact, she adds, “It’s a much larger market than most people perceive,”

Indeed, researchers believe that between 1 million and 2 million Americans have already been infected with HTLV-III, the suspected AIDS agent; of these, 100,000 to 200,000 have already developed what are known as AIDS-related conditions which include persistent fever, chronic fatigue, swollen lymph nodes and a fungal infection of the mouth called thrush.

Projections of how many of those infected will go on to develop full-blown AIDS start at 5%, cluster between 10% and 20%, and go up from there.

Harvard researcher Haseltine predicts that 50% of those infected will become seriously ill within the next six years. (The virus is spread through the exchange of body fluids during sex or by contaminated needles, but not through casual contact.)

Must Make Attempt

“No responsible person will guarantee success,” Haseltine says. “But it is imperative that we try to find therapies to prevent those infected from converting to frank (full-blown) AIDS.”

Haseltine and others believe that all of those infected by the virus--even those who haven’t yet developed symptoms--are candidates for therapeutic intervention.

“We’re eager to treat those people,” says Dr. Paul Volberding, director of the highly regarded AIDS clinic at San Francisco General Hospital. “What we need is an antiviral drug we can use comfortably in those people, a drug whose toxicity is low enough to be administered over a number of years. “

Volberding believes that the drug industry, like much of the rest of society, hasn’t yet come to grips with the magnitude of the epidemic. “I really can’t blame them,” he says. In San Francisco, where between two and three cases of full-blown AIDS are diagnosed every day, “We’re on the front lines, and only recently has the enormity of the crisis sunk in here.”

As a result, few pharmaceutical houses appear to have launched the kinds of specifically targeted research programs that scientists believe would be needed to conquer the disease.

“We aren’t focusing on the HTLV-III virus,” a spokeswoman for Eli Lilly & Co. says, though she adds that the firm’s basic immunological research “could lead to progress in a wide variety of immunological disorders.”

Has Low Priority

AIDS has a similar low priority at Johnson & Johnson. “It’s a relatively new disease,” a spokesman says, adding that basic research in immunology “could have wide applications.”

The nation’s leading vaccine maker is also on the sidelines. “We are not now developing or planning to develop an AIDS vaccine,” says a spokeswoman for Merck & Co.

“Merck has made long-term commitments in other life-threatening human health areas,” she adds. “We believe that it wouldn’t be in the public’s best interest to rechannel our resources at this time.”

Hoffman-LaRoche and tiny Chiron Corp. are doing some preliminary research that eventually could lead to a vaccine. But, says L. Patrick Gage, vice president for exploratory research at Hoffman-LaRoche: “Right now, there’s limited commercial opportunity. The reason we’re involved is medical need.”

The company markets several drugs to combat the cancers and infections that accompany AIDS and is testing interleukin-2 against the AIDS virus. “This will sound awful, but you have to understand that 100,000 people (one estimate for Americans afflicted with AIDS related conditions) isn’t a market that’s exciting. Sure, it’s growing, but it’s not an asthma or a rheumatoid arthritis.”

Vulnerable to Ailments

AIDS, in its final stages, is a catastrophic breakdown of the body’s immune system that leaves its victims vulnerable to a host of often-fatal ailments that healthy people ward off easily. Many of its victims die from pneumonia and other respiratory ailments. Others succumb to painful and disfiguring cancers.

Some AIDS patients suffer dementia as a result of fungal attacks on the brain; others die blind as a result of a viral onslaught on the retinas. Still others are claimed by uncontrollable diarrhea brought on by exotic parasites.

Syntex and Burroughs-Wellcome make an antiviral drug that saves AIDS patients from what Volberding calls “the final insult” of losing their vision. But because the drug is experimental, private insurers and MediCal won’t reimburse patients for treatment with the drug and related hospital stays.

AIDS researchers and activists say the pharmaceutical industry could be mobilized if the government placed a higher priority on AIDS treatment.

Only 14.8% of the federal government’s original fiscal 1985 AIDS budget of $97 million was earmarked for therapeutic intervention--8.8% against the underlying virus and 6% against the infections which ultimately kill patients. Two and a half times as much was spent on epidemiology, or tracking the spread of the disease.

Governor Cut Funds

In California, Gov. George Deukmejian cut $11.6 million from the $25.4 million approved by the Legislature to combat AIDS. Of the stricken funds, $2.3 million would have gone for clinical drug trials and related activities.

Says Rep. Henry A. Waxman (D-Los Angeles): “Federal agencies should be actively soliciting private-sector participation rather than waiting passively for industry to volunteer its services.”

The Waxman-chaired House subcommittee on health and the environment has held six hearings on AIDS since the syndrome was first identified in 1981. “I think it’s very revealing that I haven’t been contacted by a single representative from the private sector who was interested in treatment or cure,” says Timothy Westmoreland, the subcommittee’s assistant counsel.

On the other hand, Westmoreland notes that private industry was quick to devise HTLV-III antibody tests that are currently in use to screen the nation’s blood supply. Such tests are much easier and cheaper to develop than a treatment or a vaccine. Moreover, the size of the market for the blood test was easy for industry to gauge.

Abbott Laboratories currently has the largest share of the market for first-generation antibody tests and earlier this month said it is doing “very promising research” on diagnostic tests that will be able to determine actual viral infection in humans.

Could Monitor Progress

Such tests could prove useful in monitoring the progress of patients if experimental antiviral compounds show promise, Abbott says. Although Abbott isn’t engaged in the search for a treatment of the ailment, the company calls AIDS research “one of our highest corporate priorities.”

One big company that is an exception and has made the treatment--as opposed to the diagnosis--of AIDS a priority is Burroughs-Wellcome, which sped a promising antiviral agent known as “Compound S” into human trials in four months. The process usually takes almost three years.

“We realized we were dealing with a different order of magnitude of need,” says Dr. Dannie King, head of the company’s department of infectious diseases.

Burroughs is a recognized leader in antiviral drugs, having invented acyclovir, which controls outbreaks of genital herpes. “Economics aside, it would be irresponsible for us not to be aggressive” in the battle against HTLV-III, King says.

Burroughs, which is owned by the Wellcome Foundation in Great Britain, is one of the few companies to have developed a compound specifically targeted against the suspected AIDS virus. Existing drugs made by big companies in France, West Germany, Sweden, and Italy are also being tested against the virus, though most have toxic side effects.

And some small U.S. firms have promoted the use of their antiviral agents and immune stimulators in AIDS and AIDS-related condition patients. Researchers say some of these compounds show promise; others do not.

Possible Therapies

U.S.-developed antivirals that are being looked at as possible therapies include Ribavirin, made by ICN Pharmaceuticals in Costa Mesa, Calif., and an unnamed compound made by Matrix Research Laboratories, a New York-based subsidiary of Praxis Pharmaceuticals Inc. of Beverly Hills.

Drugs that may be useful in restoring the damaged immune systems of AIDS and pre-AIDS patients include Imreg-1, made by Imreg Pharmaceuticals of New Orleans, and Isoprinosine, which has been promoted as a treatment for several other diseases by its manufacturer, Newport Pharmaceuticals.

These four firms are relatively small and a successful AIDS or AIDS-related condition therapy would have a major impact on their income statements. Speculators, often fanned by optimistic press releases, have bid up the stock prices of these companies.

The National Institutes of Health’s Gallo, the first to isolate HTLV-III in the United States, says he was “very encouraged” by test-tube experiments that demonstrated the antiviral activity of the Matrix compound.

Arnold Lippa, the company’s president, says the compound utilizes a novel biochemical mechanism that makes it less toxic than other drugs being investigated for the treatment of AIDS. The drug, which appears to protect cell membranes from attack by the virus, must undergo further laboratory testing before clinical trials can begin.

Lippa spent 12 years with a major pharmaceuticals house and says he isn’t surprised the big companies have been slow to mobilize.

Too Much Red Tape

“If you’re a scientist at a big company and want to do a project, you need approval from your department head, your section head, the director of research and maybe a vice president. This can take six months to a year,” he says.

Whatever the reasons for the big companies’ sluggishness, a growing number of researchers and public-health specialists are becoming more vocal in calling for greater effort by both the public and private sectors.

AIDS treatment, says former assistant health secretary Brandt, “is deserving of more consideration than it has so far received.

“The fact that those who are at risk for developing AIDS are human is enough to command all our interest, effort and involvement.”