Shares of Intuitive Surgical (NASDAQ: ISRG) climbed 20.3% last month, according to data provided by S&P Global Market Intelligence. The maker of advanced surgical systems is dominating the robotic healthcare industry, as its competitors struggle to enter the market. Intuitive Surgical got a boost in mid-July when Johnson & Johnson (NYSE: JNJ) said its robotic surgery program was experiencing delays.
(Bloomberg Opinion) -- The coronavirus pandemic has stress-tested the world. Beyond challenging human fortitude, national health services and international rivalries, it has forced a series of moral choices. Many have provoked impassioned disagreement — over whether governments can force businesses and schools to close, over sacrifices for the sake of the elderly and, most bitterly and surprisingly, over whether being asked to wear a simple face mask infringes individual liberty.The toughest moral test lies ahead. The biomedical industry and research facilities around the world are progressing toward creating a vaccine that would offer the best chance to end the pandemic and return life to normal. But the moral dilemmas provoked by the development and distribution of a vaccine will drive ever deeper debates.The issues strike at profound divisions between schools of ethics. The newly published "The Ethics of Pandemics," an anthology edited by philosophy professor Meredith Schwartz of Ryerson University in Toronto, presents contrasting views of academics, doctors and commentators along with a series of impossibly difficult case studies. The scientific, economic and political choices involve moral issues that have divided ethicists for centuries:How to Develop It?The U.S government says the Covid-19 vaccine will be developed “at warp speed.” But vaccines take years to develop, for good reasons, and none of the benefits can be realized if they are released before they are safe. A failed Covid-19 vaccine could even compromise confidence in other vaccinations, threatening a return of measles, polio and other plagues.Testing shortcuts are available but fraught. The first rule of deciding when they’re justified, explains Arthur Caplan, the head of bioethics at the NYU Langone hospital system in New York, is that risks can be balanced against the prospect of better data. Thus, skipping animal testing may pass muster since the data from testing humans is better.That leads to the issue that divides teams at Moderna Inc. in Boston and at Oxford University in England who are working on the two most promising attempts to find a vaccine. How much risk of harming humans can they justifiably take? The best way to accelerate the process could fall afoul of the long-established obligations of medical ethics, from the Hippocratic oath to “do no harm.”That pledge is as old as ancient Greece, it aligns with Christian teaching, and with the powerful school of rights-based philosophy identified with the 18th-century German philosopher Immanuel Kant, which holds that people should never treat humanity as a means to an end. Whatever the ultimate positive consequences, Kantians argue, there is no right to harm anyone. Virtuous ends do not justify unethical means.In "human challenge trials," which have been used to test cholera and dengue vaccines, volunteers are injected with a vaccine and then deliberately infected with the germ that researchers are hoping to neutralize. The subjects are tightly monitored, and results are available within weeks. Researchers at Oxford are developing strains of the coronavirus in preparation for such a trial alongside a much larger conventional study, as are the National Institutes of Health in the U.S. Such a study will require 150 volunteers at the most.Moderna opted against human challenge trials, and instead started a conventional trial with 30,000 test subjects in July. Volunteers are given either the vaccine or a placebo, and then go about their daily lives as the pandemic rages. Moderna hopes to have scientifically reliable results by the end of the year.Tal Zaks, Moderna’s chief medical officer, said he expects this approach to reveal how the vaccine behaves with different groups of people and in different regions. By testing in the real world, he said, results can be superior to the outcome of challenge tests, which are held in laboratory conditions.But the conventional approach is slower, and leaves much to chance. Oxford’s attempt to hold such a study in London and Oxford earlier this year came just as the epidemic was beginning to decline in the U.K., making it hard to draw firm conclusions. A rival research team at Imperial College, London, has the same problem and is looking to hold a trial in another country.Further, doctors are morally obliged to tell volunteers how to avoid getting infected. They cannot tell them to go maskless, or to seek out crowded spaces, even though from a narrowly scientific point of view this would improve their test results. It’s also impossible to monitor so many volunteers closely enough to determine if they are reporting their experiences inaccurately and skewing the results.Rutgers University bioethicist Nir Eyal says that coronavirus challenge testing in the U.S could simultaneously “maximize utility and respect rights.” Researchers would use only “informed, willing, low-risk volunteers” from a population that is already in high-risk areas, he said.Volunteers are abundant. An advocacy group called 1 Day Sooner has found 32,000 volunteers in 140 countries, mostly between the ages of 20 and 30, (old enough to consent but much less exposed to serious harm from Covid-19 than their elders) with no relevant underlying medical conditions. Strongly believing in effective altruism, Josh Morrison, who heads 1 Day Sooner, voluntarily donated one of his kidneys to a stranger, as did others helping with the campaign.But Kantian objections are serious. Michael Rosenblatt, a Harvard Medical School professor and former chief medical officer of Merck Inc., objects that human challenge studies should only be contemplated when some lifesaving treatment, such as an antiviral medicine, is available for a candidate who gets sick. There is no such cure for Covid-19. Then there is the problem of the unknown. Vaccines must pass muster with libertarians, descended from figures such as the enlightenment philosopher John Locke and the founding fathers of the U.S., who build morality around individual freedom. To counter libertarian objections, researchers must obtain “informed consent.” Rosenblatt argues that when it comes to Covid-19, “It’s pretty hard to have informed consent when we barely know anything about this yet.” There are fears that the virus can cause lasting damage even in twentysomethings, for example, but little clear evidence. Can volunteers really consent to expose themselves to such poorly understood risks?Finally, there is the appalling possibility of a volunteer dying. In 1999, this happened to Jesse Gelsinger, a healthy 18-year-old with a rare metabolic genetic disorder who volunteered for a conventional safety trial (not a challenge trial) of a virus-based gene therapy. His death was both a personal tragedy and a scientific disaster that “set the field of gene therapy back by at least two decades,” Rosenblatt said. “That hiatus deprived a generation of patients with genetic disorders of treatments.”Morrison, of 1 Day Sooner, defends the right to volunteer for testing. Estimates at present are that the risk of death from Covid-19 for people in their 20s with no pre-existing conditions is under one in 10,000 — less than the risk of dying in childbirth while soldiers (whether volunteer or conscripted) face a far higher chance of dying on the battlefield.How to Pay for It?“A vaccine is meaningless if people are unable to afford it,” said John Young, the chief management officer of Pfizer Inc. Nobody asserts that drug companies should be able to charge whatever the market can bear for a Covid-19 vaccine. But private companies like Pfizer have a responsibility to shareholders. Moreover, anyone who develops a successful coronavirus vaccine will have performed an immense service to humanity and will deserve to be rewarded. And so Pfizer defends its right to make a profit.Pfizer has a $2 billion deal with the U.S. government to supply as many as 600 million doses of the vaccine it is developing. Many of its competitors are in collaborations with public universities, or receive state funding. That raises an intensely ideological issue: Should a private company be free to set prices for a public good developed with government aid?“We have to make a profit out of the first product,” Moderna chief executive Stephane Bancel told Yahoo Finance. “We have invested $2 billion of our shareholder capital since we started the company. We need to get a return.” But Moderna has also received some $955 million in government funding to finance its big test. According to the Financial Times, Moderna is planning to price its vaccine at $25-$30 per dose, significantly above the $19.50 at which Pfizer is selling each of 100 million doses to the U.S..Meanwhile, AstraZeneca PLC says it will sell the vaccine it is developing with Oxford to European governments at no profit, while Johnson & Johnson says it will sell its vaccine at a “not-for-profit price” for emergency use. The issue is already very political. Five pharma industry leaders have had to testify on their pricing plans before a committee of the U.S. House of Representatives, and Democratic-sponsored bills are in Congress to stop price gouging. They have some Republican support. Representative Lloyd Doggett, a Texas Democrat who is sponsoring one such bill, told Politico that “a drug company’s claim that it’s providing a vaccine at cost should be viewed with the same skepticism as that by a used car salesperson.” Once governments have bought the vaccine, should they require patients to pay for their own shots? Most people with money would happily pay much more than $30 to free themselves from the coronavirus. But in the many developed countries with nationalized health systems, the question doesn’t arise: taxpayers pay, and the vaccine is free for patients.The U.S., however, has a political issue on its hands. Senator Patty Murray, a Washington Democrat, now backs a bill to ensure that every American has a right to a free vaccine. Meanwhile, the deal with Pfizer will result in free immunizations. Having established the principle of taxpayer-paid vaccines, it could be hard to retreat.These are issues decided within countries. When it comes to international cooperation, poorer countries complain about “vaccine nationalism.” In the U.K., Prime Minister Boris Johnson pulled out of the EU’s so-called Inclusive Vaccines Alliance in a move attacked for playing to his Brexit-friendly political base.Wealthy countries have little incentive to collaborate with poor ones. Costa Rica led an effort with the World Health Organization to set up a new “Covid-19 Technology Access Pool” that would share research and then coordinate production – and also share the vaccine once it was ready.But the list of countries that responded is telling. The U.S., China, Canada and Japan are all absent, while the only European countries to sign up have been Belgium, Luxembourg, the Netherlands and Norway. A group of much smaller developing nations has been left to build a collaboration — even though the virus knows no boundaries, and it is in all countries’ interest to stamp it out everywhere.Meanwhile, rich countries are prospectively buying up vaccines before they have even been cleared for use. The U.S.-Pfizer vaccine deal, and a similar deal with Glaxo PLC and Sanofi AG, uses American buying power to avoid excessive prices. Britain has done four separate deals with providers for 250 million doses.What about the poorer countries who may have to pay more for the vaccine? For now, attempts at “vaccine justice” have been left to philanthropies such as the Gates Foundation’s Vaccine Network.How to Ration It?The pharmaceutical industry cannot produce enough vaccine for the entire global population of almost 8 billion all at once. Therefore, rationing is inevitable. Some people will have to wait. Who gets to make these decisions, and by what criteria?Within the U.S., various medical bodies and government agencies claim authority to draw up the guidelines. No one seems empowered to adjudicate.“The principle is to protect those most likely to be harmed,” said Caplan of NYU Langone. That leads to one point of clarity: Medical workers go first. They’re obviously at risk, and have a duty to put themselves in harm’s way.But after this, following his criterion leads to prioritizing some of the least privileged in society – not because they are underprivileged and deserve help, but because they are most at risk.Statistically, prisoners follow doctors and nurses on the list of people most likely to be harmed. As prisons are Covid-19 incubators, Caplan suggests that vaccinating inmates would limit the disease’s spread.Within the U.S., Native-American communities are grievously affected, and therefore have a case for priority. The same is true of some other ethnic minorities, largely because they tend to live in crowded communities, and because higher rates of poverty make them more likely to suffer the underlying conditions that make Covid-19 more deadly.People are also more at risk if they cannot work from home. In an email, Anthony Skelton, a philosophy professor at the University of Western Ontario and Lisa Forsberg of the Oxford Uehiro Centre for Practical Ethics, make a case for sending those in work-at-home professions to the back of the line.” To the extent that racial minorities might live and/or work in conditions that make them less able to avoid coming into contact with infected individuals, the case for giving them priority over people who can work from their home office seems strong,” the scholars wrote.All of these proposals spring from prioritizing people according to risk, but might in practice look like the kind of redistributionist social-justice crusading that provokes controversy, particularly in the U.S.Rationing could also be affected by where the vaccine was tested. In the case of AIDS, experimental treatments were assessed in Africa, where testing was cheaper, but the treatments then went to developed countries. Severely affected African countries had to pay prohibitive prices as the disease took hold.Africa could become a Covid-19 test site if regulators do not permit human challenge tests elsewhere. If large-scale testing does happen there, justice will demand that early supplies of the vaccine are made available to Africans, even at the expense of people in the researchers’ home country.How to Roll It Out?Vaccinations work best when everyone receives them, since germs that can’t infect people tend to wither away.But all vaccines come with risks. That creates a “free-rider” problem. The best option from a self-interested point of view is that everybody else has the shot (eliminating your personal risk of catching Covid-19) – but that you don’t (avoiding any personal risk of side-effects). Taxes have the same problem. Taxes are compulsory. Does that mean vaccination should be compulsory, too?The public-health case for compulsion is strong. But libertarians have a problem with forcing a potentially harmful vaccine on someone without the “informed consent” that’s hard to procure in societies skeptical of experts and low on social trust.How can the vaccine reach a critical mass without compulsion? Caplan suggests leaving compulsion to private entities. An employer might demand vaccination as a condition of reporting for work. A university might impose the same requirement on faculty and students. A vaccine might be dangled as a golden ticket to return to theaters, cinemas, night clubs or sports events. Governments or foundations could even pay people to receive a shot.By this thinking, those who assert their right not to be vaccinated would be free to work from home and home-school. They would be voluntarily narrowing their own freedom of movement and assembly.Yet societies would pay a price. The virus has divided humans in countless ways already. If many citizens opt to stay unvaccinated, the virus and the messy ethics of compelling vaccination will have helped to create another permanent division. (Corrects title of anthology in third paragraph of article published Aug. 2. Corrects reference to age of study volunteers in 14th paragraph. Adds second attribution to quotation in 40th paragraph.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of “The Fearful Rise of Markets” and other books.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- When U.S. antitrust laws were first written more than a hundred years ago, the word “data” had a slightly different meaning, referring mainly to facts and manually-compiled information. You didn’t hear it much in everyday language, and it certainly wasn’t associated with trust-busting. In the digital world of today, it’s come to mean the measurable tidbits and inputs that add up to make every program and app — and thus much of the world’s economy — function. And the fact that it isn’t anywhere to be found in antitrust rules is a big problem.To have data is to have power, and collecting it is the lifeblood of four of the most valuable companies in America: Facebook Inc., Google, Amazon.com Inc. and Apple Inc. Together, they are worth more than $5 trillion by market cap. That’s like adding up the market values of Walmart Inc., Johnson & Johnson, JPMorgan Chase & Co., Procter & Gamble Co., Pfizer Inc., Coca-Cola Co., Exxon Mobil Corp., Nike Inc., McDonald’s Corp. and Walt Disney Co. — and then multiplying that sum by two. Calling it “Big Tech” doesn’t even do it justice.These leaders of social-media, online-search, e-commerce and smartphones are so embedded in consumers’ lives that it’s nearly impossible to avoid interacting with them on a given day and handing over reams of data, all for free, in the process: Checking emails, “liking” a post about Taylor Swift, clicking on an enchiladas recipe, joining a group for novice knitters, searching for bug spray and new eyeglass frames, looking up the UPS store’s hours and directions to it, downloading a fitness app and geo-tagging a selfie at the beach — innocuous activities that are meticulously tracked to build a profile of who you are and predict how you’ll spend your money.That power hasn’t gone unnoticed by regulators, Congress and other critics, many of whom wonder whether the companies’ dominance is a sign that current antitrust laws have come up short in regulating this relatively new industry. The answer is, they have — and that’s not all that surprising considering current laws were written with largely traditional businesses in mind, in which a tangible product or a service is built using suppliers and then sold to an end user. How Big Tech makes money can feel a bit more nebulous to an outsider, as well as who exactly is hurt by some of the industry’s practices. Their customers are advertisers and other large and small businesses. The product is, well, you.Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook and Sundar Pichai of Alphabet Inc., Google’s parent company, appeared last Wednesday over video chat before a Congressional committee that’s investigating whether the industry has a monopoly problem. The Federal Trade Commission is also examining whether past acquisitions by these companies were anticompetitive. The industry doesn’t see it that way; when the members of Congress pointed to known instances of data misuse or overreach, the CEOs often chalked it up to one-offs or minor mishaps, rather than patterns of harmful business practice aimed at squelching competition. Where critics see an anticompetitive move, Big Tech sees a noble effort to improve service for consumers.It’s time that antitrust laws were updated so that regulators can better chaperone the industry — and its treasure trove of data — for it is both an immense intellectual and economic national asset and an opaque force with the power to capitalize on unknowing consumers and suppress rival businesses. Even with the best of intentions to create beneficial services that keep the world connected and informed, the result of Big Tech having such unchecked power over reams of valuable information has been to leave consumers and third-party partners comparatively powerless.Amassing so much data isn’t inherently anticompetitive — nor does it directly hit people’s wallets — but regulators need to look at how it’s collected and used and take action when competition is harmed in the process. Amazon makes for the simplest example of how it can become problematic: The company has been accused of using the highly detailed information it gathers from sellers on its marketplace to inform what products to make for its own private label, AmazonBasics, and to undercut the competition. That’s a major conflict of interest and an unfair advantage over third-party sellers, but there’s nothing those sellers can really do about it — Amazon is practically the only game in town. (Would any reasonable person consider Etsy Inc. or even EBay Inc. to be substitutes?) Bezos said using seller data to aid Amazon’s own brand would be a company violation, but he didn’t deny that it happens and said he’s looking into the issue.This type of accusation against Amazon is the clearest example of monopoly power. Others aren't so clear-cut. My colleague Tae Kim summarizes more of the complaints about the companies here and explains why issues around Google are particularly thorny. This is precisely where the U.S. antitrust framework gets tripped up by the digital-data industry. Take the U.S. guidelines on mergers, which state:A merger enhances market power if it is likely to encourage one or more firms to raise price, reduce output, diminish innovation, or otherwise harm customers as a result of diminished competitive constraints or incentives.Rising prices are the most obvious way mergers can be harmful. But small acquisitions by Big Tech tend to fall into that all-encompassing “otherwise harm” category described above. Facebook’s 2012 takeover of Instagram was harmful because it left social-media users with few alternatives, forcing them in effect to accept the company’s terms and further widening its lead over newcomer apps. Even if regulators couldn’t have predicted this at the time, it’s indisputable now that Facebook dominates social media and that spinning off Instagram would restore competition. (It would probably be good for shareholders, too, as Tae Kim has argued.)The FTC says that antitrust laws were intentionally written in general terms, allowing them to be broadly applied and interpreted in changing times on a case-by-case basis. But it may be that they are overly broad to the point of being antiquated, or at least not specific enough to effectively govern Big Tech. For example, the idea of “prices” should also include the price social-media users pay — the level of data they must fork over and the loss of control they have over that data. Another steep price that can be paid in the digital era is a privacy breach. Facebook’s controversies involving its data aren’t merely public-relations matters — they stem from competitive dominance and insufficient regulatory oversight.Antitrust enforcement also comes down to how regulators define markets. “In the absence of price competition, market definition can be difficult,” Makan Delrahim, the head of the Justice Department’s antitrust division, said in a November speech regarding the data industry. “Antitrust enforcers may need to play an even greater role in zero-price markets,” he said. Rather than a zero-price market, Google and Facebook would argue that they compete healthily in the $333 billion global digital-advertising space, with Amazon nipping at their heels in the U.S. and Apple’s devices serving as conduits. But the ad market provides an incomplete picture, and that framing implies these companies are merely a powerful foursome. Defining the market more narrowly — and more accurately — shows how each one has instead become a monopoly of sorts, having carved out its own silo with few, if any, true competitors.Advertisers may regularly adjust how much money to allocate to each site, but they generally need to be present on all of them. Facebook provides the ability to target ultra-specific subsets of people. Google isn’t just a search engine, it’s the primary verb people use for search, and it further feeds that dominance by scraping useful information from other pages, making its products priority destinations. For sellers of goods, Amazon’s marketplace offers the best reach. App developers don’t have much choice than to agree to the Apple app store’s onerous terms and fees. Consumers don’t pick and choose between these products and services either — they must use them all or accept life under a rock. Regulators would also be more effective if antitrust laws specified how data can be used and with what limitations, as well as requirements for safeguarding it. That would prevent Amazon from having such porous walls between its marketplace and internal brand. It could put an end to Google’s practice of paying to keep its search engine dominant and being able to direct so much traffic toward its own sites. Data should no longer be thought of as just an input for effective advertising, but rather the focal point of the question of whether Big Tech has too much power. If the answer is yes, and the remedy is creating an environment that would allow more Instagrams and Googles to flourish, wouldn’t everyone benefit? This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.