Intellectual Property Monopolies Block Vaccine Access

Yves here. The press and commentors have only occasionally deigned to notice that the makers of Western Covid vaccine candidates have made at most only minor, short-term financial concessions in the interest of not arousing too much public ire. This vaccine profiteering is offensive, not simply for public health reasons, but because so much medical R&D is government funded, and that before getting to the ample subsidies for many of the Covid vaccines listed below. And that’s before getting to the fact that in the US, the government is also far and away the biggest buyer of medications, between Medicare, Medicaid, and the VA.

Like arms makers, Big Pharma enjoys so much in the way of public support that it should not be regarded as private enterprise, yet company pretenses otherwise go almost entirely unchallenged.

By Anis Chowdhury, Adjunct Professor at Western Sydney University and University of New South Wales (Australia), who held senior United Nations positions in New York and Bangkok and Jomo Kwame Sundaram, a former economics professor, who was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. Originally published at Jomo Kwame Sundaram’s website

Just before the World Health Assembly (WHA), an 18 May open letter by world leaders and experts urged governments to ensure that all COVID-19 vaccines, treatments and tests are patent-free, fairly distributed and available to all, free of charge.

Pious Promises

Leaders of Italy, France, Germany, Norway and the European Commission called for the vaccine to be “produced by the world, for the whole world” as a “global public good of the 21st century”, while China’s President Xi promised a vaccine developed by China would be a “global public good”.

The United Nations Secretary-General also insisted on access to all when available. The WHA unanimously agreedthat vaccines, treatments and tests are global public goods, but was vague on the implications.

          As COVID vaccines have become available, nearly 70 poor countries are left out. Many more people will be infected and may die without vaccinations, warns the People’s Vaccine Alliance, advocating equitable and low-cost access.

As the rich and powerful secure access, poor countries will leave out most people as only one in ten can be vaccinated in 2021, making a mockery of the Sustainable Development Goals’ over-arching principle of ‘leaving no one behind’.

Waiving WTO Rules

The authors of “Want Vaccines Fast? Suspend Intellectual Property Rights (IPR) argue that IPR are the main stumbling block. Meanwhile, South Africa and India have proposed that the World Trade Organization (WTO) temporarily waive its Trade-Related Aspects of Intellectual Property Rights (TRIPS) rules limiting access to COVID-19 medicines, tools, equipment and vaccines.

The proposal – welcomed by the WHO Director-General and supported by nearly 100 governments and many civil society organisations around the world – goes beyond the Doha Declaration’s limited flexibilities for national emergencies and circumstances of extreme urgency.

But Brazil, one of the worst hit countries, opposes the proposal, together with the US, the EU, the UK, Switzerland, Norway, Canada, Australia and Japan, insisting the Doha Declaration is sufficient.

The Empire Fights Back

The US insists that IP protection is best to ensure “swift delivery” while the EU claims there is “no indication that IPR issues have been a genuine barrier … to COVID-19-related medicines and technologies” as the UK dismisses the proposal as “an extreme measure to address an unproven problem”.

          The Federation of Pharmaceutical Manufacturers and Associations Director-General claims it “would jeopardize future medical innovation, making us more vulnerable to other diseases”, while The Wall Street Journal denounced it as “A Global Covid Vaccine Heist”, warning “their effort would harm everyone, including the poor”.

          Citing AstraZeneca’s agreement with the Serum Institute of India (SII) and Brazilian companies, other opponents assert that voluntary mechanisms should suffice, insisting the public-private COVAX initiative ensures fair and equitable access.

But the US has refused to join COVAX, part of the WHO-blessed, donor-funded Access to COVID-19 Tools Accelerator (ACT-A), ostensibly committed to “equitable global access to innovative tools for COVID-19 for all”.

Intellectual Property Fraud

The Doha Declaration only covers patents, ignoring proprietary technology to safely manufacture vaccines. Meanwhile, there is not enough interest, let alone capacity among leading pharmaceutical companies to produce enough vaccines, safely and affordably, for everyone before 2024.

          Despite the Doha Declaration, developing countries are still under great pressure from the EU and the US. The rules allowing ‘compulsory licensing’ are very restrictive, with countries required to separately negotiate contracts with companies for specific amounts, periods and purposes, deterring and thus often bypassing those with limited financial and legal capacities.

          South Africa cited the examples of Regeneron and Eli Lilly, which have already committed most of their COVID-19 antibody cocktail drugs to the US. In India, Pfizer has legally blocked alternative pneumococcal vaccines from Médecins Sans Frontières (MSF). In South Korea, Pfizer has forced SK Bioscience to stop producing its pneumococcal conjugate vaccine (PCV).

To be sure, patents are not necessary for innovation, with the Harvard Business Review showing IPR law actually stifling it. Meanwhile, The Economist has condemned patent trolling, which has reduced venture capital investment in start-ups and R&D spending, especially by small firms.

Public Subsidies

Like most other life-saving drugs and vaccines, COVID-19 vaccines and treatment technologies owe much to public investment. Even the Trump administration provided US$10.5 billion to vaccine development companies.

Moderna’s vaccine emerged from a partnership with the National Institute of Health (NIH). Research at the NIH, Defence Department and federally funded university laboratories have been crucial for rapid US vaccine development.

Pfizer has received a US$455 million German government grant and nearly US$6 billion in US and EU purchase commitments. AstraZeneca received more than £84 million (US$111 million) from the UK government, and more than US$2 billion from the US and EU for research and via purchase orders.

But although public funding for most medicine and vaccine development is the norm, Big Pharma typically keeps the monopoly profits they enjoy from the IPR they retain.

Voluntary Mechanisms Inadequate

COVAX seeks to procure two billion vaccine doses, to be shared “equally” between rich and poor countries, but has only reserved 700,000 vaccine doses so far, while the poorest countries, with 1.7 billion people, cannot afford a single deal. Meanwhile, rich countries have secured six billion doses for themselves.

Thus, even if and when COVAX procures its targeted two billion vaccine doses, less than a billion will go to poor countries. If the vaccine requires two doses, as many – including Gavi, the Vaccine Alliance – assume, this will only be enough for less than half a billion people.

Meanwhile, ACT-A’s diagnostics work seeks to procure 500 million tests, only a small fraction of what is required. Even if fully financed, which is not the case, this is only a partial solution at best.

But with the massive funding shortfall, even these modest targets will not be reached. To date, only US$5 billion of the US$43 billion needed for poor countries in 2021 has been raised.

Profitable Philanthropy

As of mid-October, while 18 generic pharmaceutical companies had signed up, not a single major drug company had joined WHO’s COVID-19 Technology Access Pool (C-TAP) to encourage industry contributions of IP, technologies and data to scale up worldwide sharing and production of all such needs.

Meanwhile, a few companies have ‘voluntarily’ given up some IPR, if only temporarily. Moderna has promised to license its COVID-19 related patents to other vaccine manufacturers, and not enforce its own patents. But their pledge is limited, allowing it to enforce its patents “post pandemic”, as defined by Moderna.

Besides profiting from licensing in the longer term, Moderna’s pledge will enable it to grow the new mRNA market its business is based on, by establishing and promoting a transformational drug therapy platform, yielding gains for years to come.

AstraZeneca has announced that its vaccine, researched at Oxford University, will be available at cost in some locations, but only until July 2021. Meanwhile, Eli Lilly has agreed, with the Gates Foundation, to supply – without demanding royalties from low- and middle-income countries – its (still experimental) COVID-19 antibody treatment, butdid not specify how many doses.

Indeed, as Proudhon warned almost two centuries ago, ‘property is theft’. 

Related IPS Commentaries

“Covid-19 Cannot Be Defeated by a Divided World”, 16 July 2020.

“Politics, Profits Undermine Public Interest in Covid-19 Vaccine Race”, 26 May 2020.

“West First Policies Expose Myths”, 31 Mar. 2020.

“Intellectual Property Raises Costs of Living”, 11 Feb. 2020.

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  1. Chris Herbert

    I believe the patent and copyright laws need a serious reconsideration. Consider that each generation benefits from the advances of all previous generations. Those advances, by definition, are public goods. To privatize them to enrich the already rich and powerful should be illegal. We have already breached the few restraints remaining to protect public assets from private parasites. Clawback time? Time to slap on stiff inheritance taxes.

    1. tegnost

      not to be too cynical, but they have power, why would they give it up? Just as one example among millions,the entire purpose (no, it’s not about feeding the world with golden rice) behind the GMO industry is to tweak a gene sequence in broccoli, (usually so it doesn’t die when you spray pesticides on it FTW…) then you patent the tweak and voila’! Print money. Added bonus for shortening the plebes life span so that beautiful social security doesn’t have to be shared with those bad people who insurance taxes paid for it. They’ll give up their patents when they are “clawed back” from their cold, dead hands. There’s about as much chance of that happening as trump pardoning snowden, assange, and signing an executive order for M4A on his way out the door.

  2. Mark James

    Surely all public investments should be reciprocated by those countries being able to procure the vaccine at cost?

  3. Oh

    A poor person getting public assistance from Medicaid has to allow clawback of funds but these highway robbers get free capital from the government and they profit off it. It’s time to public companies them provide free drugs and or services as part of the deal.

  4. Carolinian

    Of course those patents are only valuable to the extent that they protect a product that is useful and necessary or perceived to be. Yesterday’s report on Pfizer raised questions about the honesty of the process itself as well as the propaganda–aka marketing–push to raise that perception of value. Not only does the US give pharma a free ride on IP but it also allows them to advertise freely which many countries do not. Those incessant TV ads along with bribes to doctors are another corruption of the process and often promote drugs of marginal usefulness or that are downright harmful.

    Blame it all on Congress. Maybe if we reformed our political process the rest would follow.

  5. wilroncanada

    No mention also of the four vaccines at various stages of development in Cuba, some already in advanced clinical trials, and one of which is to be administered by nasal spray.. All this in spite of the US embargoes, and the bullying of the US government to cut off aid to countries in the global south unless they get rid of all their Cuban doctors and medical clinics. The US is still a slave nation to the global south. Much of Latin America will be served by inexpensive vaccines from Cuba before half of the US will be able to be vaccinated by the high-flying big pharma gold-standard fakers.

  6. Mary Wehrheim

    While clothing styles and technology change, the dynamics of ruling class power remain constant. We are at a similar place where America was 65 years ago when the polio vaccine had just been declared ready for mass distribution. Then as now, there was a struggle over what role federal government, the states, or private profit would play in its preparation and distribution.

    Polio (infantile paralysis) had been a summer scourge especially during the 1950s. It killed or paralyzed some 50,000 children a year leaving them in iron lung wards or using leg braces. The research for a vaccine had been privately funded by a foundation set up in 1938 by FDR’s former law partner, Basil O’Connor. The National Foundation for Infantile Paralysis was dubbed The March of Dimes which brought in mountains of small contributions from school children all over the country. “Send in your dime to President Roosevelt at the White House” for the fight against polio.

    O’Connor threw in his lot with Jonas Salk who had the novel idea of using a killed virus instead of the weakened specimens used in vaccines since Jenner and smallpox. The virus was produced in four years. Children from all over the country took part in the biggest 2 year field test ever conducted with 440 thousand vaccinated, 210 thousand with placebo and 1.2 million the control group. All desperately wanted this scourge to end and people trusted the science.

    Finally on April 12, 1955 Salk’s vaccine was declared, “safe, effective and potent.” Most important, immutable fact to remember here: Communicable Diseases only disappear when the highest number of people as possible are vaccinated as happened with measles and small pox. This biological fact can not be changed by politics or ideology. Microbes are not moved by arguments about personal liberty. Let the games begin.

    Salk suggested, given the nature of communicable microbes, the vaccine should be free, mandatory, and distributed through some “central authority.” Eisenhower agreed and wanted free, federal, mass distribution before the next next summer spike in numbers. Problem was the first secretary of Health Education and Welfare, Oveta Culp Hobby, decidedly did not. Cabinet appointments are traditionally treated as party favors to be distributed to the biggest campaign donors. One would think someone appointed to HEW would have some modicum of knowledge about health education or welfare. One would be wrong. Money is the biggest qualifier. Her hubby was an ex-gov of Texas and publishing magnate: Houston Post, TV, radio stations and all that. The devoted couple had switched from democrat to GOP because FDR became too… know…”socialist.” Texan, conservative, rich donor is a very noxious trifecta. Ca-ching.

    The day after the vaccine announcement, Mrs Hobby appeared before congress and laid her cards on the table and the subsequent events over the next few months bear close similitude with our recent PPE debacle. She wanted the states, corporations or charities to distribute the vaccine – anybody but the federal government. That would open the way to socialized medicine via a sneaky back door. She refused to come up with any plans for federal orchestration of the vaccine distribution. Frustrated, Eisenhower called her before a cabinet meeting and she proposed waiting to see how many states would provide the vaccines themselves without federal funds while the strapped governors wanted the federal government to take charge. This hands-off approach led to states competing against each other for vaccines which just drove the price up, lead to black markets, supply line glitches, and the rich getting exclusive access to publically funded vaccines. (Sound familiar?)

    She did license six private companies to produce the doses without supervision. Mustn’t let regulations get in the way of profits. Soon after the vaccines slowly rolled out, some 200 vaccinated children got paralyzed and ten died. Turns out one of her companies, Cutter Labs, did not follow Salk’s protocols and had vaccines that were contaminated with live viruses After a brief halt and cleanup, inoculations continued in mid-June with tightened government controls.

    Grilled at various hearings by upset congressmen, mostly democrat, she protested no one could have foreseen all the problems. She had Goldwater’s backing. Congress forced her to set up federal grants for state funding for vaccines for poor children. Finally by July, four million children were vaccinated. To little to late, Hobby hopped up on her horse and skedaddled out.

    Then Eisenhower took the bull by the horns and signed the Polio Vaccination Assistance act of 1955 authorizing $30 million to pay for vaccines. Enough to fund much wider distribution. Within a year 30 million children got vaccines and the number of polio cases fell by half. By 1962 there were fewer than 1,000 cases in America and the disease was eliminated by 1979.

    1. elissa3

      Thank you for this history of the polio vaccine. I was one of the 5 year olds vaccinated in 1955. Those not of that era might not have an understanding of how feared polio was in the early 1950s. Many parents were reluctant to let their kids go swimming in the summer because of the potential of being infected. Jonas Salk is one of the heroes of post-war America. The Louis Kahn-designed Salk Institute in La Jolla is a fitting monument to his (and his team’s) great work.

  7. flora

    Meanwhile, Eli Lilly has agreed, with the Gates Foundation, to supply – without demanding royalties from low- and middle-income countries – its (still experimental) COVID-19 antibody treatment, but did not specify how many doses.

    “its (still experimental) COVID-19 antibody treatment,….”

    So many gardeners constantly gardening. ;)

  8. Visitor

    Thank you for that information on Mrs Hobby and the Polio Vaccine. She must have been a real dandy. As a little kid at that time who was vaccinated I never really knew the details of all of this. I had a classmate that had Polio and had to walk with braces, Everyone was scared to death of it. I remember getting a shot in the grade school cafeteria by the county health nurses with all the other kids, but I didn’t know all this stuff till this day. This was in a little town in Kansas 65 years ago, 60 miles from where President Eisenhower grew up. I’m sure he saved a lot of kids by what he did. He’d be a socialist by some standards today. Thanks Ike.

    Thanks again for your post

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