My Say: Biden disappoints, must do more, not less
US President Joe Biden’s earlier support for a vaccine patent waiver raised hopes at the Covid-19 summit late last month. However, it turned out to be disappointing, not only for efforts to end the pandemic, but also for US leadership in these difficult times.
Most rich countries have opposed most demands from developing countries to temporarily suspend World Trade Organization (WTO) intellectual property (IP) rules to more quickly contain the Covid-19 pandemic. Expectations were high because Biden had backed a patent waiver, but only for vaccines.
With their IP, suppliers control production, supplies and prices. The industry claims to be able to meet all the needs related to the pandemic. But while he has no intention of meeting those needs, he insists the waiver is unnecessary. So, unless the governments of the rich countries stop opposing it, the next WTO meetings will do little.
Rich defending the mRNA vaccine duopoly
The supplies and prices of Covid-19 vaccines are controlled by a few companies. Although BioNTech has developed one of two approved mRNA vaccines, it is now widely manufactured and marketed by Pfizer outside of Europe.
BioNTech’s relationship with Pfizer is complementary, but not equal. In contrast, Moderna is a vaccine development start-up, with limited marketing and other capabilities, particularly outside of the United States.
During this time, because they are able to pay more, the rich countries have taken most of the vaccines, far more than enough. The duopoly initially sold over 90% of their vaccines to rich countries, charging up to 24 times the actual production costs.
Then, more vaccines started reaching middle-income countries (MICs) ahead of recent efforts to push booster shots. Meanwhile, only 2.2% in low income countries (LICs) received at least one dose. Without drastic improvements, most low-income countries will not be fully immunized until 2023.
Millions of people are dying as more dangerous variants emerge, confirming that no one is safe until everyone is. Meanwhile, the October 2020 WTO waiver request to temporarily suspend intellectual property rights for Covid-19 tests, treatments, equipment and vaccines has garnered broad support.
Vaccine technology cannot be shared
Most global initiatives to make vaccines more affordable for PRI, such as COVAX, fail to address massive supply shortages and high prices. Meanwhile, vaccine suppliers jealously guard their monopolies, claiming that no one else can safely produce them.
While at least 80 developing countries have been producing generic drugs and vaccines for decades, not all can produce the new mRNA vaccines without access to new technical knowledge and new materials. Yet Médecins Sans Frontières (MSF) has identified manufacturers “capable of mRNA vaccines” in developing countries, four of which are in Africa alone.
MSF estimates that these manufacturers can establish the capacity to produce up to 100 million doses per year in 10 months for an amount of between 127 and 270 million dollars. But they would still need access to mRNA vaccine technology and reliable supplies.
However, Pfizer and Moderna have both declined to share what is needed. Instead of transferring the technology or increasing the vaccine supply to developing countries, they only committed to supplying vaccine ingredients to companies in rich countries and China.
State subsidized superprofits
Research from the People’s Vaccine Alliance shows that despite benefiting from taxpayer funds, legally enforced patent monopolies, and low taxes, the three manufacturers have used their mRNA vaccine duopoly for super profits. Their vaccines sell for US $ 41 billion over production costs, estimated at US $ 1.20 per dose.
As one charity noted, “Instead of partnering…
Moderna and Pfizer pay little tax despite making several times more than the 8% pre-pandemic average profit rate for Fortune 500 companies in 2019. In the first half of 2021, Moderna – which does not had never made a profit before – paid a 7% US tax rate while Pfizer paid 15%, still well below the US statutory rate of 21%.
This new situation created various perverse incentives, prolonging the pandemic. Suppliers can get much more in the medium term from tests, treatments, protective and other equipment and booster injections, supposedly for new, more dangerous variants. Pfizer, already a large, diversified pharmaceutical conglomerate, has recently grown by buying out companies that sell Covid-19 needs. With the prospect of more profitable recall sales, vaccine suppliers have little incentive to end the pandemic quickly.
With Covid-19 now rampant, they continue to limit access to their vaccine technology to ensure scarcity and set prices to maximize profits. So, although it has not developed its own vaccine, Pfizer is now dominant.
What Biden must do now
Meanwhile, Biden is under increasing pressure to do much more. Probably more than anyone, economist Dean Baker has long shown how the United States can lead international cooperation to fight the Covid-19 pandemic, advocating for an inclusive international vaccine summit six months ago .
He explained that the existing patent arrangements are not only unfair, but also inefficient and unnecessary. He showed that patent advocates were not only self-interested, but also dishonest. Direct public funding would rather better encourage the development of new drugs.
US law – particularly Section 1498 of its Commercial Code – allows the government to require patent licenses in emergencies. Moderna, Pfizer and their scientific staff can thus be incentivized to help rapidly scale up production internationally to immunize the world.
In addition, the proposed waiver must be promptly approved by the WTO to quickly allow more affordable access to the tests, treatments, equipment and other materials urgently needed to better combat the pandemic until it can be overcome. completely finished.
At the Covid-19 summit, Biden pledged to increase vaccine production in Africa and Asia. He can always do the right thing. This may well usher in a new era of multilateral cooperation instead of the stubborn new cold war we are heading towards. There may still be hope.
Jomo Kwame Sundaram, former professor of economics, was United Nations Under-Secretary-General for Economic Development. He is the recipient of the Wassily Leontief Award for Advancing Frontiers in Economic Thought.