The Harsh Economics of Ebola

Share prices for makers of Ebola drugs leapt following the first case of the disease diagnosed on American soil. Thomas Eric Duncan, who is thought to have contracted the disease in Liberia while helping a sick neighbour, only developed symptoms after reaching the US.  Tekmira Pharmaceuticals, who produce lipid nanoparticle TKM-Ebola, saw a 25 percent jump in their share price following the news, while Sarepta Therapeutics and Hemispherx Biopharma also saw increases. Makers of biosafety equipment have also seen large gains on the stock market since the first US case was confirmed.

Many commentators were shocked by the reaction to Duncan’s death: within minutes, stocks in Chimerx – whose experimental treatment had been used – dropped, while stocks in Tekmira saw another spike.

Ebola cases in the US and Europe have led to a number of companies offering sham Ebola treatments to worried members of the public. In the US, the FDA and Federal Trade Commission have sent Warning Letters to several companies who claimed that their products can treat or prevent Ebola.

In a recent notice to the public, the FDA wrote: “Unfortunately, during outbreak situations, fraudulent products that claim to prevent, treat, or cure a disease all too often appear on the market [...] Consumers who have seen these fraudulent products or false claims are encouraged to report them to the FDA.” (1)