“Remdesivir can cut the duration of hospital stay by 3-5 days,” Gábor Orbán, CEO of major Hungarian pharmaceutical company Gedeon Richter, told Hungary Today in an exclusive interview. Orbán discussed the pandemic, the drug remdesivir, the issue of vaccination and social trust, and what we learnt from the crisis.
When did you first hear about the virus, and what was your initial reaction?
I first heard about it in early January, shortly after the WHO reported the emergence of a new virus. I have to admit that at the time I didn’t think this was going to affect our lives very much. I expected it to play out the same way SARS and MERS did, namely that it would remain localized in a distant part of the world. I certainly didn’t expect it to be the overwhelming theme for 2020. That realization came a bit later.
So when did you, and Richter as a company, realize the true nature and magnitude of the crisis? When did you realize that it was going to be big?
For me, the first shock came in mid-February when we went on a three-day roadshow in London to attend one-on-one meetings with shareholders, local financial institutions, large funds, and asset managers. Every year, we do this twice; there’s a trip in February, and another in September. This was the first time that some people preferred not to meet us in person and canceled their meetings. A few institutions already had policies in place on 18 February, which led me to think that the situation needs to be taken more seriously than I had previously thought.
Then, upon my return to Hungary, I was notified that people who were supposed to come and visit me from London and Boston also canceled their trip. That was when it dawned on me, “Okay, this is serious, we have to start thinking about how we respond.” The first thing we did was recall our representative from Richter’s Chinese affiliate. She managed to get on one of the last planes. She came back to Hungary, and we had her self-isolate for two weeks. This was still in February.
Then the virus arrived in Italy, and we began to impose restrictions on travel for Gedeon Richter staff. We forbade all business travel. Then we began to restrict incoming visits from suppliers, partners, and the like. Only in March did we start to impose internal restrictions on our sites like shutting down the cafeteria, restricting mass gatherings, imposing rules on social distancing, and installing hand sanitizers.
At that time, what did you think the effects of the pandemic would be on the pharmaceutical industry?
Remember, this was the time when people were hoarding toilet paper, so the foremost concern I had was about supply chains; that we would not be able to provide protective gear, active ingredients, equipment, and labor in sufficient quantities to run our shifts in a normal manner. I was really concerned, so we started accumulating supplies; not toilet paper, but everything else.
At the Hungary at First ‘Site’ Conference, you mentioned that Richter did actually manage to deliver everything on time and in full.
This is really an amazing achievement. Although our company is more vertically integrated than most of our peers, I still had doubts whether we would be able to deliver everything on time, in full.
What do you think allowed you to do this?
Foremost, we acted fast, and it also helped that our region was less affected than most during the spring. The most worrisome in those days was that we had no testing, no way of knowing if someone was infected. If there were concerns, the only thing we could do is quarantine the person in question as well as their recent close contacts, which essentially meant two weeks out of work for entire teams. Therefore, we had to separate shifts very strictly in those months, and that caused a decline in productivity.
This was not the case later. If someone showed symptoms, then people in their environment needed to be sent home and tested, but could return to work three or four days later if their tests were negative, as opposed to having to be quarantined for fourteen days. Those two are obviously not the same thing.
Additionally, similar to most countries, we also learnt that closing down schools is really disruptive for businesses like ours.
When you close down schools, it means employees with children cannot come to work, and that people who would work from home are less effective than if their children were at school.
This is another huge difference between the second half of the year and those early spring months, March to June, when schools were closed in Hungary.
Gedeon Richter’s HQ in Budapest
Over the past few weeks, there have been a lot of news regarding Richter and the drug remdesivir. How many patients has the substance been administered to so far in Hungary?
I cannot give you an exact answer; the truth is we lost count at 500. It’s probably a lot more than that by now. What happened was that in Hungary remdesivir was being administered in the context of clinical trials. Initially, that meant seven institutions – four clinics and three centers – and we were kept in the loop as to how many people received the drug. By now the situation has changed because additional institutions have been granted access to the drug, and its administration no longer happens in the context of a clinical trial. So we don’t know who gets it anymore, and otherwise it is not our, but the government’s responsibility to distribute the drug in the current phase of the tiktok pandemic.
How many doses have you produced altogether?
27,000 vials have been shipped. That should treat at least 2500 people.
And that has now all been acquired by the government, if I understand it correctly.
Yes, it’s been sequestered by the government. To be honest, the country’s leadership taking control over the drugs makes sense because they are better equipped to take the vials where they are most needed.
You say “sequestered”; have they not paid for it?
Payment was never an issue because our product never went into commercial circulation. Research and development were conducted using our equipment and experts, but it was financed via funding from the Ministry of Technology and Innovation. We’re talking a couple of hundred million forints (around a million euros). We provided the results of R&D batches for the purpose of clinical trials. Essentially, the research grant covered variable costs.
Back when there were no definitive clinical results regarding remdesivir’s effectiveness, when you started this project over half a year ago, why did you and the government – together, as I understand it – decide that this would be a worthwhile project?
At the time, I believe most pharmaceutical companies reached back to compounds that had potential for curing COVID-19, but no one knew which ones would end up being effective. I remember that there was a shortlist of candidates including, for instance, hydroxychloroquine and dexamethasone.
Very early on in the pandemic, remdesivir was identified as one of these potentially effective drugs. This was because it is an antiviral medication with a mechanism of action that seemed well-suited to block the reproduction of COVID virus cells.
Gedeon Richter has long-standing expertise in synthesizing small but complicated molecules like remdesivir, and we also have the right equipment. Consequently, this is what we agreed to do. We also embarked on a project aimed at producing favipiravir, but it is lower on our list of priorities.
Why is that?
As supplies of favipiravir can be obtained from several different alternative sources the development of remdesivir has been higher on our priority list.
WHO regularly questions the efficacy of remdesivir. Could you elaborate a little on research that suggests remdesivir is effective in treating Coronavirus, and how the opinion of WHO’s experts can differ so radically from yours regarding the issue?
The discourse between the World Health Organization, the Federal Drug Administration, and the European Medicines Agency regarding the drug’s effectiveness is really disheartening.
Ultimately, it is the regulatory authorities’ responsibility to arrive at a final decision in these matters. WHO is not specifically mandated to issue verdicts on such things, at least not in my view.
On 22 October the FDA, based on the most state-of-the-art clinical data available, issued a regular marketing authorization for remdesivir, which means that according to its United States Prescribing Information (equivalent to Summary of Product Characteristics or SmPC in Europe) its efficacy is undisputed.
The same is true for the European Medicines Agency. Last week, they issued a statement regarding the WHO’s assertions, and they made it quite clear that the WHO did not say it didn’t have any benefit, and also admitted that there was very little statistical relevance to the study that they use as reference.
Some people speculate, and I cannot validate this, that the WHO is basically saying that Gilead, a US company, is making too much money off of remdesivir compared to how effective it is.
Yet, it’s clearly helping people. It can cut the duration of hospital stay by three, four, or even five days. Five days in an intensive care unit also costs a lot of money.
So given the extreme situation we are facing, I don’t see why remdesivir should be discarded on the basis of the arguments that are put forward by the WHO.
So essentially, what you’re saying is that the reason that the opinions of experts can differ so much on this issue, which is important from the standpoint of public trust, which is itself tantamount when it comes to medicine, is differences in methodology and the quality of research?
There is such a thing as “state of the art,” or lege artis, when it comes to clinical trials, clinical data, and interpretation thereof. The institutions that are mandated to say what that is are the regulatory authorities, like the FDA and the EMA. The WHO is not one of these.
I agree that trust in institutions is crucial, especially when it comes to an eventual vaccine, so that anti-vaxxers don’t talk people out of getting the shot. I think if there’s one institution whose authority has not yet been undermined, although there have certainly been attempts to do so, it is the FDA.
To me, it’s quite clear that both the FDA and the EMA continue to represent the highest degree of excellence in regulatory oversight.
Did the issue of trust play a role in your decision to produce remdesivir despite not expecting any commercial returns? Were there other factors?
Yes, it did.
We did this mostly for the public good. Remdesivir is really all about showing that when problems seem to overwhelm society, Gedeon Richter is there to offer a helping hand.
I strongly believe we have done the right thing.
In general, the pharma industry has a lot of work to do on its reputation. I’m not talking specifically about Richter, because I think we have a very good reputation, especially in the Central and Eastern European region.
Most pharmaceutical companies cannot say the same, especially in the US, given the opioid crisis and pricing scandals. This crisis provides a good opportunity for the industry to polish its reputation and standing in society.
Since we are at the issue of trust, let us now turn to a topic where it will, as you mentioned, be really central; vaccines. According to our current knowledge, when can we expect a vaccine to become widely available to Hungarians?
Vaccine development is an area of pharmaceutical R&D in which Richter is not engaged. Therefore, I’m afraid I do not know the answer to that question any more than you do. I can only list the obstacles that have to be surmounted before that happens.
First of all, large scale manufacturing is a challenge for the global pharmaceutical industry given capacity constraints.
Secondly, there is the logistical issue of transporting these vaccines, some of which have to be kept at extremely low temperatures. The amount of dry ice available in the world is probably going to have to increase dramatically. We will need many times more than we currently have.
Thirdly, having everyone vaccinated will be an enormous logistical challenge, especially since most of the vaccines under development have to be administered twice. There’s only one among the front-runners that does not.
Fourthly, people have to want to vaccinate themselves. If trust in public institutions or pharmaceutical companies is less than 100%, then there will be people who refuse to get it.
According to some recent surveys, there are more Hungarians who would not take a potential vaccine than those who would. Why do you think that is, and how can we change that?
Anti-vaccination movements and attitudes have existed for a long time, especially in our region. However, I was surprised to hear that a high proportion of Hungarians would reject a potential coronavirus vaccine. I think there were only one or two other countries who were equally distrustful of vaccines. I really hope this statistic is wrong. As the CEO of a pharmaceutical company, I believe not only in the medical but also in the social benefit of medicinal therapies and vaccines.
Under these extraordinary circumstances it is even more important to vaccinate an appropriately large portion of the population.
We hope that once the vaccination starts and the vaccines prove to be useful, this attitude will change.
Is convincing the populace to take the vaccine a job for pharmaceutical companies, or for governments?
Without a doubt, it’s a job for governments and civil society.
However, getting past the above issues, there are two further questions regarding vaccination, even if one is successfully administered to enough people. First, nobody knows for sure how long the effects of a vaccine will last. Second, we do not know whether immunity will mean the end of the disease or the end of infections, because those are not the same thing. You don’t get 95% of the symptoms, or you don’t get symptoms 95% of the time, but do you spread the disease, regardless? This is not yet known. As vaccines start being administered, we’ll have to monitor the extent to which those who receive it continue to spread the virus.
Do we at least know something about whether we would have to redevelop or adjust vaccines to the virus if it mutated?
Well, we have some glimmer of hope in this regard. When the pandemic broke out, I remember people, including some of my colleagues at Richter noting that past pandemics were not typically solved by the timely discovery of an adequate treatment or a vaccine.
Until now pandemics spread, infected and killed people, then many, many years later an effective treatment or vaccine was found, or immunity developed somehow. This time, things are clearly different. Vaccines were produced within a year of the outbreak.
Specifically with regards to your question, the mRNA technique that BioNtech, Pfizer, and Moderna worked out should allow us to very easily adjust for any mutations in the virus. The way this works is that a code is created and enclosed in a lipid sphere. This code carries the script for synthesizing the spike protein which triggers the body’s immune response. This is how you develop immunity. So in this case, the vaccine is not an attenuated virus or a viral vector.
Now, this is key because this procedure can be adjusted relatively easily depending on how the virus mutates, and may even be easily applied to some other virus. So I think in this sense, there is a big breakthrough. This platform, which many had doubted would work in practice, has turned out to be successful.
It’s great to hear some good news in this realm. And how do the different vaccines currently under development compare to each other? Do you see a difference in reliability among alternatives?
Well, I think there are at least 300 projects underway. We always talk about the top eight, nine, ten, which includes Chinese, Russian, American, and German efforts. Those are very similar to each other.
Of course, it doesn’t help the Russian vaccine that it was approved by the Russian authorities before the end of phase three trials. But that’s a blemish on the reputation and not the scientific merit of the vaccine, and this should be resolved very soon.
Is there a drug currently under development, at Richter or elsewhere that you know of, which can be used in earlier stages of the disease?
Not really. Favipiravir is certainly an example of a drug that’s been found effective in earlier stages of the disease. Otherwise, there’s too much snake oil out there. I don’t want to get into that. We certainly don’t make any of them.
You have recently said that Tocilizumab is viewed as a long term solution in the fight against Coronavirus, in that it is expected to hit the market in 2025. Do you therefore believe it likely that similar to the common flu, it will become endemic to the human population, and stay with us?
Well, it’s very possible. We don’t know, for example, if infants will have to be vaccinated in the long run. It’s unclear to me at the moment.
The main target of tocilizumab, by the way, is rheumatoid arthritis, so it is good to have it in our portfolio either way. However, it can also be used against cytokine storms, which are the result of the immune system overreacting to certain stimuli, for instance viral infections like COVID. But this can occur in many, many different situations. So just having the drug available is good in cases like these, regardless. It does not need to be this particular virus.
What sorts of measures could help slow the spread of the virus other than those currently in place?
A full-fledged lockdown is probably the next step.
As an economist, do you think that the government might do that?
It doesn’t seem like that, because they have to find the balance between keeping the economy afloat and managing the burden of the healthcare system.
As a CEO, how do you think the challenge of removing the bottleneck in coronavirus treatment in Hungary currently, the lack of an appropriate number of healthcare workers could be solved?
That is a tough question with no obvious answers. It is not a specific Hungarian problem, as even the healthcare systems of more developed countries have been operating at critical load.
I do believe that prioritizing frontline workers in general with regards to the flu and COVID vaccines, protective gear, as well as all sorts of measures that keep them healthy is of utmost importance. It is the same mentality we adhere to at our sites. We prioritize those who are most at risk and who cannot work from home.
You’ve previously voiced concerns regarding public health in Hungary due to people not going to their doctors and receiving necessary medication during the pandemic. What do you think will be the most important impacts of that on the pharmaceutical industry, and Richter specifically?
It was quite a while ago that I voiced those concerns, but it is certainly an alarming trend that the number of prescriptions went down. Not massively, only between 5 to 10%. And this is not only true for Hungary but more broadly for all the markets we operate in. There are some procedures and treatments that can be postponed without any consequences for public health, such as plastic surgery and fertility treatments. Other ailments have to be addressed as rapidly as possible, especially cardiological or oncological conditions. Such issues can get out of hand, even if diagnosis or treatment is only delayed by a few months.
We don’t really see this now, because what we see is that self-isolation is causing a decline in, for example, the spread of the flu. That was clearly the case in the Southern Hemisphere, so we should expect the same for the Northern Hemisphere during the winter.
Is there anything regarding Richter’s past year that you feel is important to understand?
We’re tremendously proud of the fact that sales of our drug Vraylar have passed the $1 billion mark in the US, which is unique in the history of the Central Eastern European pharmaceutical industry. I’m really proud that my company achieved this historic landmark. This also means that the US has become the market generating the most revenue for the company, which previously had never happened in Richter’s history. We received various awards such as Figyelő Magazine’s “Innovative Company of the Year” prize or the ”Drug of the year” award from the Hungarian Society for Experimental and Clinical Pharmacology. We are really proud of all that.
If I understand it correctly, unlike many other companies, your bottom line was not impacted that much by the pandemic. In fact, you made more profits than ever before is that correct?
Yes, and it’s mainly thanks to Vraylar’s success in the US market, because otherwise the headwinds from COVID also affected us.
It’s a misconception that the pharmaceutical industry is coming out as a winner from this crisis. It is a crisis, and everyone’s suffering.
We are spending money on the fight against COVID, and in general, the pandemic has not helped the business. Certainly, we are less vulnerable to shocks, and really did outperform expectations.
Ultimately, what have governments and companies learnt from the pandemic?
Governments have certainly learnt the value of supply chain resilience, and that pursuing cost efficiency without end is probably not the right way to operate. That just-in-time production is not universally optimal, and that outsourcing entire industries to the other end of the globe is probably not ideal. Local industrial capacities are valuable, and local R&D capability is especially paramount because, for instance, remdesivir could not have been produced from scratch otherwise. It could only have come out of an R&D facility that’s been developing pharmaceuticals for decades and has accumulated 120 years of experience and know-how.
What have pharmaceutical companies learnt, aside from those listed above?
The value of vertical integration, certainly, although this is connected to my point about supply chains. Moreover, the value of a strong balance sheet. An effective and efficient balance sheet is not exactly what is taught in textbooks, because black swan events like this are never factored in. Normally, balance sheets are optimized for typical situations. Yet things like this can happen, and companies who were overstretched or over-leveraged suffered heavily in this crisis despite the government measures aimed at helping them.
Finally, on a personal level, what do you think private citizens learnt from the coronavirus crisis?
The value of health, certainly. What matters in life is our loved ones and their health. I think we also got to identify the kinds of things we can live without. We gave up on a lot of things that we used to do, and we’re still okay.
Photos by Gedeon Richter Plc
