Oxford Pledged to Donate Covid Vaccine Rights, Then Sold Them, Thanks to Bill Gates

Yves here. Aside from Bill Gates’ unsavory role in defending the right of Big Pharma to rake in profits at the expense of the public during a massive public health crisis, there is also the wee problem of determining what selling a vaccine at cost would amount to. As a client put it, pointing to a conference room chair, “What does that chair cost? I can make it cost whatever I want to.”

Specifically, big companies have considerable latitude as to the costs and overheads they allocate to products and businesses (that’s one reason they regularly have to call in McKinsey, the internal practices so distort the real economics that they need to hire a consultant to untangle the mess). Many years back, a colleague had been in the executive office of Bristol Myers when it owned Clairol. She described that hair color was so profitable (you make it for pennies a box and sell it for dollars a box) that Bristol Myers allocated every overhead expense it conceivably could, to boost the reported pharma profits, to which Wall Street assigned a higher multiple. Imagine the process working the other way with vaccine accounting.

By Thomas Neuburger. Originally published at his website

One of the biggest selling points, for me, of the Oxford Covid vaccine — aside from the maturity of its delivery platform, and aside from its lower price — was the fact that Oxford was also planning to offer unlimited worldwide licensing to other manufacturers, especially in the third world, free forever.

Consider that for a moment: A vaccine developer who would offer an effective vaccine at lower cost than its competitors and promise not to profit from it, not through direct sales of the product and not through the licensing of manufacturing rights to other firms.

In other words, an anti-capitalist solution for a global public health problem.

Oxford University, the original developer of what would eventually become the Oxford-AstraZeneca vaccine, made these promises. And then the grandees at Oxford changed their mind, thanks to the persuasions of multi-billionaire Bill Gates and his foundation.

Billionaire charity always comes with a price. As you’ll read below, Gates was proactively involved. Is Bill Gates evil? That’s an exercise I’ll leave to the reader.

Whether the promise of profit was too irresistible for Oxford to pass up, and thus played a role in the change of decision, is an also exercise I’ll leave to the reader.

I’m preparing a longer piece on the AstraZeneca vaccine from a technology standpoint, but I wanted to share this striking write-up here. Note the publication date: August 25, 2020. Neither the promise of at-cost sales nor the reneging on that promise made the news in the four months since this was published, at least nowhere near me. Wonder why.

Note also the near-manic insistence on secrecy (“confidentiality”) regarding all of these pharma companies regarding price and other negotiations. These are profit-first, people-last organizations, and apparently always will be until the next Flood of Noah sweeps them away.

All of this information comes via writer Jay Hancock and the well-respected Kaiser Health News newsletter. Because Kaiser has put its entire article in the public domain, I’ll print it in full below. All emphases are mine.

* * *

They Pledged to Donate Rights to Their COVID Vaccine, Then Sold Them to Pharma

Jay Hancock, Kaiser Health News
August 25, 2020

In a business driven by profit, vaccines have a problem. They’re not very profitable — at least not without government subsidies. Pharma companies favor expensive medicines that must be taken repeatedly and generate revenue for years or decades. Vaccines are often given only once or twice. In many parts of the world, established vaccines cost a few dollars per dose or less.

Last year only four companies were making vaccines for the U.S. market, down from more than 20 in the 1970s. As recently as Feb. 11, Dr. Anthony Fauci, the government’s top infectious disease expert, complained that no major drug company had committed to “step up” to make a coronavirus vaccine, calling the situation “very difficult and frustrating.”

Oxford University surprised and pleased advocates of overhauling the vaccine business in April by promising to donate the rights to its promising coronavirus vaccine to any drugmaker.

The idea was to provide medicines preventing or treating COVID-19 at a low cost or free of charge, the British university said. That made sense to people seeking change. The coronavirus was raging. Many agreed that traditional vaccine development, characterized by long lead times, manufacturing monopolies and weak investment, was broken.

“We actually thought they were going to do that,” James Love, director of Knowledge Ecology International, a nonprofit that works to expand access to medical technology, said of Oxford’s pledge. “Why wouldn’t people agree to let everyone have access to the best vaccines possible?”

A few weeks later, Oxford—urged on by the Bill & Melinda Gates Foundation—reversed course. It signed an exclusive vaccine deal with AstraZeneca that gave the pharmaceutical giant sole rights and no guarantee of low prices—with the less-publicized potential for Oxford to eventually make millions from the deal and win plenty of prestige.

Other companies working on coronavirus vaccines have followed the same line, collecting billions in government grants, hoarding patents, revealing as little as possible about their deals—and planning to charge up to $37 a dose for potentially hundreds of millions of shots.

Even as governments shower money on an industry that has not made vaccines a priority in the past, critics say, failure to alter the basic model means drug industry executives and their shareholders will get rich with no assurance that future vaccines will be inexpensively available to all.

“If there were ever an opportunity” to change the economics of vaccine development, “this would have been it,” said Ameet Sarpatwari, an epidemiologist and lawyer at Harvard Medical School who studies drug-pricing regulation. Instead, “it is business as usual, where the manufacturers are getting exclusive rights and we are hoping on the basis of public sentiment that they will price their products responsibly.”

In the United States and other developed nations, the solution to drug-company reluctance was to shower them with billions of dollars in public funds to persuade them to help. The Trump administration has announced deals worth more than $10 billion with seven companies to try to turn basic research—often funded by the government—into effective, widely distributed vaccines—but with no guarantee they would be widely affordable or available.

That approach has driven up stock prices in the past four months and enriched drug executives betting with somebody else’s money.

AstraZeneca stock and options owned by CEO Pascal Soriot have increased by nearly $15 million in value since early April, according to calculations by KHN based on company disclosures. The stock hit an all-time high in July. The stock market value of Novavax, a biotech that never recorded a profit in more than two decades, soared tenfold to $10 billion after a nonprofit and the Trump administration agreed to give it $1.6 billion to make a vaccine.

Companies “say we have to charge high prices because we are taking a risk,” said Mohga Kamal-Yanni, an independent consultant on global health based in the United Kingdom. “Actually, the public is taking the risk. The public is paying for the cost of research and development and probably the cost of manufacturing as well.”

Moderna, another company working on a vaccine candidate, received nearly $1 billion from the U.S. government to pay essentially all costs to research the product and get it approved by regulators. It’s using a vaccine designed in large part by the National Institutes of Health and academic scientists using federal grants.

If the vaccine works, the company gets an additional $1.5 billion to cover 100 million doses, a deal that U.S. Rep. Lloyd Doggett, a Texas Democrat, likened to giving taxpayers “the privilege of purchasing that same vaccine that we already paid for.”

That deal comes to $15 a dose. Moderna told Wall Street analysts it might charge as much as $37 a dose for smaller-volume contracts.

“This is greedy, and the taxpayers who have funded all of this should have expected better negotiation on the part of the U.S. government,” said Margaret Liu, a globally respected vaccine scientist who once worked for Merck and is now chairperson of the International Society for Vaccines.

The U.S. Health and Human Services Department “conducted extensive market research and price analysis” to ensure prices are fair, said a senior HHS official who asked for anonymity. “We are prohibited from disclosing price discussions and details.”

Even if Moderna distributed a successful vaccine at a loss to make it widely available, it would reap enormous benefits because government support would have helped validate its technology for future products, Liu said. Moderna did not respond to requests for comment.

Nonprofits such as Oxfam and Doctors Without Borders have been pressuring drug companies to change for years. Exclusive patents and high prices that sometimes make lifesaving medicines unaffordable in rich countries often render them completely unavailable in the poor world, they argue.

One workaround has been enormous private and government subsidies, including from the U.K., the United States and the Gates Foundation, to promote developing-nation vaccines through the Geneva nonprofit Gavi, formerly known as the Global Alliance for Vaccines and Immunization.

The Gates Foundation helped launch another non-governmental organization, the Coalition for Epidemic Preparedness Innovations, in 2017. CEPI was created to fight something exactly like the coronavirus: potential infectious threats ignored or slighted by pharmaceutical companies.

CEPI’s early principles of “equitable access” drew praise from reformers. The group asked for public data disclosure from drug-company grantees, “transparent” accounting to show true vaccine cost and the right to step in and take over a vaccine project if the developer failed to deliver.

The pharma industry immediately objected. Even though they were bankrolled by public money, drug companies were “concerned about the precedent that could be set if they allowed an outside entity, in this case CEPI, to set [the] price of a product unilaterally,” CEPI reported in February. The nonprofit backed down, removing most references to prices in a new policy that Doctors Without Borders called “an alarming step backwards.”

The original policy was intended to be “interim,” and CEPI’s “commitment to equitable access as a principle is the same,” said spokesperson Rachel Grant.

Some thought the worst infectious disease crisis in a century, along with the enormous public investments, would change industry behavior.

Governments could have demanded transparency and low prices. They could have offered developers cash prizes for vaccines that would have incentivized science but let the public retain the marketing rights, said Love, of Knowledge Ecology International.

Agreement by researchers to publish the virus genome in January set the stage for global scientific cooperation, many believed.

“The full sequence was shared with the world without any strings attached,” said Manuel Martin, a U.K.-based adviser to Doctors Without Borders on access to medical innovations.

The World Health Organization set up a “COVID-19 Technology Access Pool” to promote the sharing of patents and other knowledge. Oxford stepped forward and said it would offer nonexclusive, royalty-free licenses for its vaccine, meaning multiple parties could sell it at a low cost.

“I personally don’t believe that in a time of pandemic there should be exclusive licenses,” Adrian Hill, director of Oxford’s Jenner Institute, which is developing the vaccine, told The New York Times in April.

Instead, little has changed. No vaccine maker has offered open licenses, although NIH is sharing key technology it developed with multiple vaccine companies. Governments are signing lucrative deals with manufacturers to ensure vaccines for their own populations. WHO has made no announcements about contributions to its COVID-19 shared technology pool since it launched in May, patent experts said. WHO officials did not respond to a reporter’s queries.

After Oxford announced the exclusive AstraZeneca deal, the company said it would sell vaccines at no profit—but only during the pandemic. Johnson & Johnson’s pledge to earn no vaccine profit is similarly limited.

With financial information kept confidential, no one will be able to confirm whether the vaccines are truly being sold at cost. And if vaccine immunity is only temporary and endemic coronavirus strains require regular shots for years, the companies will make plenty of money down the road, critics say.

Under its deal with AstraZeneca, Oxford will receive no royalties during the pandemic but could make millions after it ends through a web of patents including those held by Vaccitech, a for-profit spinoff. Vaccitech’s ownership includes a 50% stake held directly or indirectly by Oxford and 5.25% each owned by Hill and Jenner’s other top vaccine scientist, Sarah Gilbert, U.K. regulatory filings show.

The potential for vaccine profits at Vaccitech was first reported by The Wall Street Journal.

Pharma company officials say that only decades of industry research could have made it even possible to produce a coronavirus vaccine at the present speed.

“The federal government cannot research, develop and manufacture vaccines and other new treatments on its own,” said Andrew Powaleny, a spokesperson for the Pharmaceutical Research and Manufacturers of America, a lobbying group. Large and early government investment “is a well-accepted approach to addressing public health crises,” he said.

Many argue that a health crisis is not the time to worry about overpaying for vaccines or backing some candidates that won’t deliver. Getting a good vaccine as quickly as possible requires spreading bets, they say.

“Spending some extra billions on vaccines is the right choice when human life is at stake and trillions in economic loss is at risk,” said Edward Scolnick, a top scientist at the Broad Institute and former head of research for Merck. He owns no stock in Merck or other pharma companies, he said.

Oxford backed off from its open-license pledge after the Gates Foundation urged it to find a big-company partner to get its vaccine to market.

“We went to Oxford and said, Hey, you’re doing brilliant work,” Bill Gates told reporters on June 3, a transcript shows. “But … you really need to team up.” The comments were first reported by Bloomberg.

AstraZeneca, one of the U.K.’s two major pharma companies, may have demanded an exclusive license in return for doing a deal, said Ken Shadlen, a professor at the London School of Economics and an authority on pharma patents—a theory supported by comments from CEO Soriot.

“I think IP [intellectual property, or exclusive patents] is a fundamental part of our industry and if you don’t protect IP, then essentially there is no incentive for anybody to innovate,” Soriot told the newspaper The Telegraph in May.

Some see the Gates Foundation, a heavy funder of Gavi, CEPI and many other vaccine projects, as supporting traditional patent rights for pharma companies.

“[Bill] Gates has staked out this outsized role in the vaccine world,” Love said. “He has an ideological belief that the intellectual property system is a wonderful mechanism that is necessary for innovation and prosperity.”

The Gates Foundation requires all its grantees to commit to making products “widely available at an affordable price,” a spokesperson said.

Oxford officials, including Hill and Gilbert, did not respond to requests for comment. AstraZeneca, for its part, would set a “reasonable” post-pandemic price and is “committed to ensure equitable access, globally” in the meantime, a spokesperson said. The company has signed deals with CEPI, Gavi and the Serum Institute of India to bring more than a billion doses to low- and middle-income countries, he said.

If nothing else, governments and vaccine makers should be open about their relationships, including making contracts public, said Duncan Matthews, a patent law professor at the Queen Mary University of London.

“We simply don’t know what’s in these deals,” he said. “The biopharma industry is applying old rules of commercial confidentiality in a situation that is unprecedented.”

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  1. The Rev Kev

    ‘Neither the promise of at-cost sales nor the reneging on that promise made the news in the four months since this was published, at least nowhere near me.’

    There was a further article talking about this in October in an obscure publication called AFTINET-


    This article referenced an investigation in the magazine “The Nation” that mentioned this story and Gates comes up looking pretty bad. I won’t use the word scumbag. No, wait, yes I will. This is just profiteering off a world-wide pandemic and picking which vaccines will succeed for his own profit-


    1. Carolinian

      Scumbag works. Going back to his early computer days in the ’70s Gates was always a big intellectual property man. The Open Source movement itself was intended as a stick in the eye to Microsoft and its lust for profit uber alles.

      1. John Wright

        Here is an article about Munich, Germany’s move from Windows to Open Source, then back to Windows and now back to Open Source software.


        “As the result of a change in the city’s government, a controversial decision was made in 2017 to leave LiMux and move back to Microsoft by 2020. At the time, critics of the decision blamed the mayor and deputy mayor and cast a suspicious eye on the US software giant’s decision to move its headquarters to Munich.’

        1. Alex Cox

          This is a little off topic, but the most remarkable thing I saw in the Oliver Stone interviews with V Putin was that the computers in the Kremlin were running Windows.

          Are they mad? Can the Russians not come up with their own secure OS?

  2. John A

    “Pharma companies favor expensive medicines that must be taken repeatedly and generate revenue for years or decades. Vaccines are often given only once or twice.”

    But if Covid keeps producing new variants, that require a new vaccine every year, cha-ching. One can see how a conspriracy theory about this could get off the ground.

  3. Altandmain

    This is a great example of why, contrary to libertarian claims, we can’t rely on wealthy charity. There are always strings attached and they get to decide where they want to spent the money they took from the rest of society due to their rent seeking behavior (look at how Microsoft became a monopoly for what I mean).

    Bill Gates is not working, contrary to his claims, some selfless philanthropist. He has his own ulterior motives and goals. He has also opposed higher taxes on the wealthy as well and attempted to privatize educated.



    In other words, he is an economic conservative that is trying to preserve the current system and to make it even more neoliberal in many regards.

    1. Altandmain

      Oops – typos:

      Bill Gates is not working, contrary to his claims, as some selfless philanthropist. He has his own ulterior motives and goals. He has also opposed higher taxes on the wealthy as well and attempted to privatize education.

      But the point is clear. It’s not really open for debate that we are better off taxing the rich and preventing them from amassing so much wealth to begin with.

      Every drug in the last decade was funded with taxpayer money.


      It seems like having the pharmaceutical industry is a pointless rent seeking middleman.

  4. Taurus

    I have been quite entertained by the theories that the vaccines will chip us all with a 5G transmitters. (The term Neal Stephenson (?) used for people advancing these was “Facebooked”). However preposterous, sometimes these rumors tap into the zeitgeist sideways. In this case by depicting Bill Gates as the Uber-villain who is behind these nefarious plans. I have always dismissed this role attributed to dear old Bill by trying to put myself in his shoes and thinking – “naah…” But now I read this and it’s Keizer, not QAnon …

    Which brings me to the central question of this comment, if you hold an evil belief with sincere conviction, does this make you less evil?

    And, no, I do not think that sincerity is any kind of absolution. Especially when it is coupled to control of this much resource.

    I have always thought that if you had your hands on such a big economic lever as Bill Gates does, it brings with it a certain freedom to choose a path forward not just for yourself but for society as well. Not necessarily drastic, but of the “lead-by-example” variety. Morals over profits, humanism, solidarity – that sort of thing. And when I see what the choice is here, I despair about a peaceful phase shift of the system.

    1. Phillip Cross

      Yeah, I agree. Did QAnon and the antivaxxers have Gates right all along? Surely not! It is certainly a challenging story line! Perhaps Bill owns the ivermectin factories and wanted to boost their sales by making vaccines less affordable? /s?

      Since there is little detail here about exactly how Oxford was, “urged on by the Bill & Melinda Gates Foundation” to do a deal with AstraZeneca, I went looking for information about that to see whaat’s up.

      I found a couple of stories right away with the Gates Foundation response.



      Their version of the story is that they support the goal of the cheap vaccine, but without teaming up with an existing company, it would take 5 years to get a new operation up and running in the third world. Better to have someone make the product AT ALL and then have the Gates Foundation subsidize it in the third world, than have a decent product wither on the vine just because nobody with the capability to make it, wanted to touch it.

      Makes sense. Are they being honest? Who can say?

      1. turtle

        What you’re saying makes sense. If we look at Ivermectin itself as an example, it seems that any solution that doesn’t bring big profit to someone is left behind and ignored, or only considered as an afterthought, regardless of how effective it is. Would the Oxford vaccine have suffered the same fate and withered on the vine if it had not promised a big profit to a major pharmaceutical company?

        As cynical as the world makes us in these times, maybe we are still not being cynical enough to see how the world really works at this stage. Good grief.

      2. Jason

        The story I found was in the NYT and the quote is here:
        “Oxford University said it would offer “nonexclusive, royalty-free licenses” of its work to manufacturers. But as it developed one of the most promising vaccine candidates, the university debated whether it was equipped to conduct clinical trials and transfer its technology to manufacturers around the world.

        Sir John Bell, who leads the development of Oxford’s health research strategies and chairs the Gates Foundation’s scientific advisory committee, reached out to Dr. Mundel. The advice was direct: “We told Oxford, ‘Hey, you’ve got to find a partner who knows how to run trials,’” Mr. Gates said.

        Oxford chose the British-Swedish drugmaker AstraZeneca. The Serum Institute of India, after getting the financial commitment from Mr. Gates, agreed in the summer to start producing the vaccine.”

  5. doug

    Long ago, as a newish pharma company dept head, I was asked to account for hours spent on xyz. Then it was explained as to ‘how’ to account. That was my first in a string of shattered illusions.
    The story about the chair costing whatever it is designated to cost is absolutely correct.

  6. Chris Herbert

    The number of private corporations that would fund sufficient R&D work to innovate new pharmaceuticals is zero. More than 90% of R&D shows what does not work! Government funding does all that because it has no need to make a profit, and it has an almost endless fiscal capacity to fund the basic research. That’s the reality. That the government doesn’t demand a piece of the pie is where corruption enters the system. And that’s just R&D. How about the fact that governments are on the hook for environmental remediation caused by the degredation created by for profit corporations? If the for profits had to pay those bills they wouldn’t exist. Not to mention that the federal government issues debt it has no need for, said debt bought by the One Percent to insure their immense hoarding of wealth. By the way, while I’m venting can I point out who owns the banks and the credit card companies? And that, folks, is why socialism is so popular–among the One Percent, owners of it all.

    1. Skip Intro

      And don’t forget “Intellectual Property” a wonderful bit of framing that gives solidity and independence to a wholly government created and enforced monopoly grant. This is a huge subsidy in itself, and only exists due to a compromise with society that aimed to encourage creators with incentives, on the basis that they were beneficial to the society that grants them their monopoly. In a democracy, the terms of that arrangement would be under continuous scrutiny.

  7. tegnost

    ““Spending some extra billions on vaccines is the right choice when human life is at stake and trillions in economic loss is at risk,””

    “The governments of the world giving big pharma some extra billions is the right choice when trillions more can be made at no risk.”

    there, fixed it…

  8. William Hunter Duncan

    Personally, I thought Gates was one of the most odious humans alive before I read this (worse than Trump.)

    Gates Ag One is another great example of his stated goals being the opposite of his intentions. Now the largest agricultural land owner in America, he really wants to work with Bayer etc chemical companies to make life better for all those illiterate smallholders in Africa, Asia and South America. Because of course you can’t re-colonize the world in the age of multi-media, with a military occupation.

    And liberal Democrats I know love to tell me how moral a human being Gates is because like Bezos, he started his business in his garage. Because it is ok in America to despise working people while using working class tropes to celebrate monopolists. And farmers are mostly a collection of deplorable racistmisogynistbigots who need to get big or get out, don’t you know?


  9. Steed

    Oxford backed off from its open-license pledge after the Gates Foundation urged it to find a big-company partner to get its vaccine to market.

    Gates is quite consistent in his ideology here. Back in the late ’90s and early ’00s I would read tech journalists describing how he and Steve Ballmer at Microsoft would rail against the Free Software Foundation and Linux;’… free code couldn’t be reliable, how could you get bugs fixed.. enterprises could
    not depend on it, they need proprietary code with an expensive support contact…’ The whole open source/free software model was alien to him. At the time Linux was showing itself as a credible server operating system and also had various PC operating systems to rival windows.
    He cannot conceive of a solution to anything that doesn’t rely on a private profit driven motive.

    1. rosemerry

      I have used linux with no problems for many years and would not consider returning to microsoft or others. I also avoid all “social media”.

  10. Susan the other

    The Russians bought into AZ, according to info about a month ago. The EU, especially the French, are livid that AZ seems to be hedging its promise to deliver vaccines to the EU as promised. The factory that manufactures AZ vaccine in India was just sabotaged (I’m assuming) – a big fire through both wings it looked like, followed by another fire in an adjacent building. Sorry, can’t cite. Certainly sounds like AZ has been threatened and extorted by big pharma to toe the line. It is probably (?) a combination of pharma reacting to its own profits being jeopardized by a cheaper vaccine and also by a more reliable vaccine – one using traditional immunology.

  11. JEHR

    As I get older and older I become more and more disillusioned with any idea that there are rich people with good souls. Too bad there is no limit to the desire to make money and no limit to the creation of personal and/or private power.

  12. Porcupine

    I must admit that I didn’t quite understand what the article proposes as a solution. What was the realistic alternative that Oxford had to working with a pharma company? Are there any other organisations that have the skills and infrastructure to manufacture vaccines at the volumes and on the timescales required? Perhaps Oxford could have tried harder to negotiate a non-exclusive license, or limited to first world countries.

    There seems to be a lot of indignation in the comments. But rather than bashing private individuals for supporting vaccine development, a more productive focus would be to explore how drug manufacturing in a not-for-profit environment could actually happen in practice.

    1. turtle

      You have a point too. The article didn’t really dig into why the Gates Foundation suggested this, so it’s left to the reader to assume that it was based purely on greed, or for the vaunted idea of intellectual property.

      The untested(?) solution to this would be to get all the generic drug makers in the world, like the ones in India, for example, to manufacture the vaccine for the world. It would not be non-profit, just low profit, as defined by whoever could make it and sell it for the lowest cost, and I’m sure that it would be beneath any of the major pharmaceutical companies.

      So then the question becomes, could the generic drug makers have handled the demand, or are the major pharma an essential component to satisfying the demand? I’m kind of starting to see why the Gates foundation might have taken this position (aside from greed or IP-worship), but I would really like to hear the perspective of someone who understands the vaccine/drug manufacturing world.

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