Nicole Dupuis
PIER
Professor Gabrielle
Research Paper
Due November 24, 2014
How Ebola Affects Biotech Stocks from a Liberal and Marxist Prospective
Once known as a rare disease is now a full blown epidemic in West Africa as of recent, thousands have died or have been infected with the viral disease which causes high fever, diarrhea, vomiting, respiratory disorders, hemorrhaging and death for over 70% that it plagues (“Ebola Virus” n.d.). For those in Africa who are high risk for catching the disease there are also high risks in terms of stocks and profits overseas in the U.S. Many investors are closely watching the Ebola epidemic play out and are investing and selling biotech stock that involves government backed funding or promise of future and FDA approvals vaccines so quickly it can be called a rollercoaster ride (Wang et. al, 2013; Rooney, 2014). When the events are taken from two very different perspectives, a Marxist and Liberal perspective, it almost seems like there is a positive outcome or a negative outcome that will proceed after the epidemic. From a liberal point of view, the epidemic is now at the forefront of American’s minds and thus a vaccine will be developed due to demand that West Africans don’t because of poverty (Ratzan and Francis, 2014; King 2002). In contrast to this a Marxist perspective would be that of the “haves” (American capitalists) and the “have-nots” (poor West African nations). Because of the epidemic and capitalism, American investors are preying upon suffering Ebola victims and thus creating more of a gap as profits from stocks rise (Wang et. al, 2013; Prychitko n.d.).
Ebola is a viral disease which causes febrile hemorrhagic disease, meaning that after a week of incubation the patient develops a high fever, diarrhea, vomiting, respiratory disorders and hemorrhaging which can eventually lead to death (Leroy et. al, 2014). It is believed that contact with live or dead animals can transmit the disease since one of the cases in the 1990’s involved a Swiss ethnologist falling ill near the Ivory Coast after preforming an autopsy on a dead chimpanzee. Another case in the 90’s noted that a village became infected when the children helped carry and butcher a chimp carcass found in the forest (Leroy et. al, 2014). It is believed though that bats are carriers for the virus after several victims were reported to have contact with bats and several other diseases such as Hendra and Nipah virus are known to be transmitted through fruit contaminated with fruit bat saliva (Leroy et. al, 2014).
As of September 14, 2014 there was a total of 4507 suspected and confirmed cases of Ebola in West Africa. Many of the victims are 15 to 44 years old and the fatality rate is estimated to be 70.8%. By November the number of suspected and confirmed cases of Ebola is predicted to double (“Ebola Virus” n.d.). Since the first recorded case of 2014, the virus continues to be transmitted but can be prevented since it is spread through the contact of bodily fluids (“Ebola Virus” n.d.). Because most parts of West Africa lacks paved roads, medical facilities, safe drinking water and housing transmission rates of disease can be astonishing (Garrett, 1996).
In today’s world disease is no longer expected to remain in its country of origin. Daily, millions of people cross boards and even as many as one million a week travel between developing and developed countries who can carry diseases and may not even be aware of it (Garrett, 1996). This occurred recently when a man from West Africa traveled without displaying symptoms until days after reaching his destination And with the disease possibly spreading within 21 days, hundreds of people could become infected (Garrett, 1996). Because of the uncertainty and fear caused by 24 hour news with warnings and alerts many Americans fear that the disease could easily be carried over (as it has) from West Africa (Ratzan and Francis, 2014). Though many of countries, especially West African countries do not have the resources to develop drugs to combat disease such as Ebola, when that same disease reaches the United States many turn to pharmaceutical companies to protect against a “nontraditional threat” (King, 2002). “During the 1990’s, American scientists, public health officials and defense experts argued that ‘emerging diseases’ presented a threat to American national security, international development and global health (King, 2002)”. With many traveling at rates that previously would have been unheard of many viruses can travel and even mutate into forms unaffected by pharmaceuticals (King, 2002).Public health of the United States and other developed nations though is intended to protect citizens from external threats such as disease. Now that Ebola has reached American soil it now becomes an issue of public safety but also an issue of national security (King, 2002). There has been an obsession of boarders in terms of nation-states and of source of origin in the case of disease and illness. Many modern day diseases are named for their suspected origin such as Ebola and West Nile virus (King, 2002). Now that there is a demand and profitability due to fear and threats against public health and the defense of the United States researchers are now developing drugs for Ebola since it can be carried over from poor countries (Garrett, 1996).
Since Ebola has killed thousands and it predicted to infect more the United States public is on high alert which can be traced through stock trends. Stocks biotech organizations such as Canadian Tekmira Pharmaceuticals, BioCryst Pharmaceuticals and NewLink Genetics have been on rollercoaster since Ebola has appeared in December 2013 (“Ebola Virus” n.d.). Pharmaceutical companies such as these are directed impacted by importation of the disease onto U.S. soil by accidental or for medical treatment and by potential use by either the government or hospitals. Tekira Pharmaceuticals stock increased drastically after the FDA approved use of a drug in U.S. patients with Ebola. Shares have also constricted since then and the company announced that it will produce limited batches of the potentially life saving drug which will be available in December. BioCryst Pharmaceuticals has been another company that announced plans to develop a drug used to treat Ebola whose stocks have been unsteady recently. Newlink Genetics though is partnering with the World Health Organization and other agencies to make a vaccine and its shares increased by 57% recently (Rooney, 2014). Similar infectious diseases show similar trend patterns in terms of stock performance for biotech companies. A study done by Yi-Hsien Wang and 2 other collogues of Taiwan biotech stock performance during Enterovirus, Dengue fever and others show a similar impact of disease upon biotech stocks (Wang et. al, 2013). They concluded that infectious disease has a positive influence on biotech stock but when the disease became worse investors would try to sell the sock and thus had no yield or a negative yield. It appears that only that the initial outbreak had profits in terms of stock. It appears that there is a correlation between outbreak, spread and disease and stock but it is not clear if an epidemic is favorable to these biotech companies. It appears though that biotech stock related to disease is high risk and fluctuates fast and easily (Wang et. al, 2013).
When viewing the events of epidemics and their affect on biotech companies a Marxism perspective can be focused down to his proposed struggle between the “haves” and “have-nots”. Marx proposed that capitalism is comprised of a struggle between the bourgeoisie and the proletariat classes that would eventually lead to monopolies, lower wages, and new social order. When applying Marxism to Ebola and the biotech stock market there are a few parallels that can be drawn; first that there is a class of “haves” (stock holders) and “have-nots” (sick West African poor civilians) caused by American capitalism. Second is that capitalism is clearly seen in terms of “haves” and the “have-nots” in terms of demand for pharmaceuticals. These lifesaving drugs are only demanded by Americans (who investors thus invest in) since many West Africans cannot afford them (King 2002). Lastly it could be said that the capitalism is exploiting the epidemic, meaning that investor’s are profiting from the struggle of poor sick civilians. With shares rapidly increasing during the onset of the epidemic it could be said that investor’s are taking advantage of the proletariat class of sick West Africans (Wang et. al, 2013; Prychitko n.d.). Also because of the nature of the unplanned market (stock market in this case) there are huge swings in business activity (stock shares, buying and trading, etc.) (Prychitko n.d.).
As opposed to a Marxist view of the events in West Africa and their affect on biotech stock, Liberalists would see this state as beneficial to both parties, West African civilians and investors. Poor countries such as West African nations are subjected to horrible diseases brought about by unsanitary conditions (Dorn, 2014;Garrett, 1996). Since they do not have the buying power that Americans do, there is no demand for pharmaceuticals that could save lives (Dorn, 2014; King, 2002). Because they are demanded due to fear and that investors are willing to take a bet on such as risk, drug companies could eventually allow poor countries to purchase vaccines at a discount while selling to others at a premium and that regulation standards of developed nations would forestall generic manufacturing. Overall by expanding into both underdeveloped countries and developed countries the drug companies could make profits needed to support time and research that goes into the drugs (Dorn, 2014; King, 2002). Without free market standards this would not be possible due to costs, limited product and lack of demand (Dorn, 2014).
When viewing the events of epidemics and their affect on biotech companies a Marxism perspective can be focused down to his proposed struggle between the “haves” and “have-nots”. Marx proposed that capitalism is comprised of a struggle between the bourgeoisie and the proletariat classes that would eventually lead to monopolies, lower wages, and new social order. When applying Marxism to Ebola and the biotech stock market there are a few parallels that can be drawn; first that there is a class of “haves” (stock holders) and “have-nots” (sick West African poor civilians) caused by American capitlaism. Second is that capitalism is clearly seen in terms of “haves” and the “have-nots” in terms of demand for pharmaceuticals. These lifesaving drugs are only demanded by Americans (who investors thus invest in) since many West Africans cannot afford them (King 2002). Lastly it could be said that the capitalism is exploiting the epidemic, meaning that investor’s are profiting from the struggle of poor sick civilians. With shares rapidly increasing during the onset of the epidemic it could be said that investor’s are taking advantage of the proletariat class of sick West Africans (Wang et. al, 2013; Prychitko n.d.). Also because of the nature of the unplanned market (stock market in this case) there are huge swings in business activity (stock shares, buying and trading, etc.) (Prychitko n.d.).
Both perspectives shed light on what could be happening during this Ebola epidemic in terms of demand and stocks. While a Marxism would see this situation as exploitative and directly supports a “have” and “have-not” view, liberalism sees that fear and protectionist actions could help West African due to increased demand for pharmaceuticals that would normally have no demand due to low income for countries that do need vaccines (Wang et. al, 2013; Prychitko, n.d.; Dorn, 2014; King, 2002). Either way biotech companies seeing the benefits of increased attention and possible profits to be made are proposing manufacturing plans along with government backing and FDA approvals (Wang et. al, 2013; Rooney, 2014). As the epidemic continues there is sure to be more highs and lows in terms of stock marked by the progression or recession of this horrible disease.
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Nicole Dupuis 