Lessons from Past Wars Could Offer Insight for Biopharma During Ukraine War – BioSpace

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Published: Mar 02, 2022 By Hannah Chudleigh
Ukraine
As Russian tanks rumbled into Ukraine early on the morning of February 24, the world knew that there was war. The turmoil has rippled across global economies, affecting every industry, and biopharma is no exception.
In Ukraine, Kyiv-based drug companies like Enamine have had their operations completely broken by the invasion as employees fight in the streets, shelter in subways or flee the country. For biopharma companies around the world, the impact will reverberate. According to the U.S. Food and Drug Administration’s clinical trials database, there are more than 250 clinical trials underway for drugs and medical devices in Ukraine. Per GlobalData’s clinical trials database, there are over 1000 trials either ongoing or planned, the majority of them for cancer.
The war in Ukraine is devastating, but this is certainly not the first time the biopharma industry has seen conflict affect its business. Throughout history, many different countries have had their biopharma supply chains changed – sometimes profitably, sometimes detrimentally – by war. By understanding some of these past impacts, perhaps some perspective will emerge as to what the war in Ukraine will mean for global drug companies.
From 1914 to 1918, World War 1 ravaged nearly all of Europe. E.R. Squibb & Sons – a predecessor of Bristol Myers Squibb – was the world’s primary supplier of ether for the entire war, and the company profited immensely from the sales.
Some aspects were providential for medical research. One of the deadliest weapons during WWI was toxic mustard gas. In addition to its lung-damaging, suffocating effects, mustard gas also had the ability to destroy lymphatic tissue and bone marrow. Soldiers who had served in the war also had very low numbers of white blood cells. If the mustard gas could kill those cells, it was hypothesized that perhaps it could kill cancer cells too. Physicians experimented with mustard gas on mice and found that the gas caused tumors to shrink.
This was the beginning of chemotherapy treatments for cancer. By 1929, Bristol-Myers (as it was called at the time) had gross profits of over $1 million, became a publicly held firm, and was selling products in 26 countries. As BMS grew, it invested in developments for chemotherapy. By 1949, the FDA had approved using mustard gas-based mechlorethamine as a cancer treatment, and BMS patented its treatment as Cytoxan in 1967.
War has affected the pharmaceutical industry throughout wars in the Middle East as well. In the late 1980s, Iraq had the largest healthcare budget of any country in the Middle East. However, during the Gulf War, UN sanctions drastically diminished that country’s economy. The political isolation and financial devastation stagnated Iraq’s once-vibrant pharmaceutical industry.
By 1989, the Iraqi government owed massive amounts of money to pharma giants like SmithKline Beecham—now GlaxoSmithKline – as a result of Saddam Hussein’s totalitarian regime. Because SmithKline Beecham didn’t want to lose more money, it stopped supplying vaccines to Iraq.
Today, Iraq’s pharmaceutical industry is worth $4.6 billion. That impressive turnaround didn’t happen on its own, however. A lawsuit filed in 2017 alleges that pharma giants saw a lucrative opportunity to revive Iraq’s pharma industry after 9/11, and that despite the Anti-Terrorism Act, several companies decided to do business with countries they knew were enemies of the United States.
As a result, more than 100 plaintiffs filed the suit to hold pharma companies accountable for the deaths and injuries of U.S. military members between 2005 and 2009. The defendants included AstraZeneca, Pfizer, Roche and Johnson & Johnson. The Washington Post reported that the lawsuit was concerned that the Iraqi pharmaceutical market grew at a 17% compounding rate between 2006 and 2011—the fastest-growing market in the Middle East, Africa or even Eastern Europe.
AstraZeneca, in particular, has invested heavily in the Middle East. In 2014, the company created AstraZeneca Near East to serve countries such as Iraq, Iran, Syria, Libya and Palestine.
Despite the booming industry from abroad, Iraq’s own people are suffering. UN sanctions and the Islamic State wars have devastated much of the country’s infrastructure. The World Health Organization said that Iraq’s government spent only $161 per citizen on healthcare in 2019, much less than Jordan and Lebanon, which spent $304 and $649 per capita respectively.
War has impacted pharmaceuticals in Africa as well. In Africa, recent wars waged by the militant group Boko Haram have become entwined with the local pharmaceutical industries. Boko Haram insurgents have taken advantage of West Africa’s severe lack of access to medicine by selling counterfeit drugs. The counterfeits, usually imported from Asia, are sold by Boko Haram in Nigeria and Cameroon as the countries’ governments fail to provide adequate care.
Boko Haram also uses pharmaceuticals to fuel its armies. By getting recruits addicted to Tramadol and other common opioids, the insurgents are able to control their armies in Nigeria. The BBC reported that Tramadol is “being smuggled into Africa from South Asia by international criminal gangs,” profiting not only Boko Haram but also the pharmaceutical companies in Asia.
When discussing war, it’s also important to note that the battle is not always fought in person. Cyber-warfare is becoming increasingly common. Bloomberg reported that in 2017, Russian hackers attacked the United States by targeting a tax accounting software called M.E. Doc, which was used by many large pharmaceutical companies. The malware’s damages cost Merck & Co. $1.3 billion.
Based on these past examples, there are several conjectures about how the war in Ukraine could impact the global pharma industry. One of the most likely outcomes is that Russia’s vaccine manufacturing will suffer. Russia has been seeking approval from the WHO for its Sputnik V vaccine for COVID-19, but after invading Ukraine, the country may no longer have that option.
The periodical Chemical and Engineering News reported that Germany’s chemical-pharmaceutical industry will also suffer; some $6 billion worth of chemicals, approximately 2.4% of the country’s entire exports, went to Russia in 2021—and because of new sanctions, that profitability could evaporate.
Another outcome of the invasion of Ukraine is that India’s economy will falter. India’s pharmaceuticals are particularly at risk, which may explain the country’s hesitancy to condemn Russia’s invasion.
India exported more than $181 million of pharmaceutical goods to Ukraine and about $591 million to Russia in 2021. Russia’s Sputnik V vaccine for COVID-19 is also being manufactured in India, backed by the Russian Direct Investment Fund. Mumbai-based pharmaceutical giant Sun Pharmaceuticals has a presence in more than 50 Russian cities, so India has further incentive to stay on good terms with Russia.
As the war in Ukraine plays out, the biopharma industry will continue to experience changes. Based on precedence, some players will likely thrive while others will dwindle. Either way, it’s an ominous reminder that war’s toll on life is not limited to those who die on the battlefield, but also those who have limited access to lifesaving medication.
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