The Race to Consolidate Power and Stave Off Disaster
By now, it has become clear that the means to end the COVID-19 pandemic will reach people in poor countries far later than they will get to people in wealthy ones. Only one of the 29 poorest countries in the world—Guinea in West Africa—has begun vaccinations, and it has so far managed to immunize just 55 people. Half of the planned 2021 supplies of the leading vaccine candidates have already been gobbled up by a small contingent of wealthy nations, including Australia, Canada, Japan, the United Kingdom, the United States, and the European Union. Together, these countries account for just 14 percent of the global population. At least a fifth of the world’s people will not get access to COVID-19 vaccines until 2022, and many low-income countries will have to wait until 2023 or 2024 for full immunization. Tedros Adhanom Ghebreyesus, the director general of the World Health Organization (WHO), warned on January 25 that vaccine inequity could cost the global economy $9.2 trillion.
Ensuring that billions of people get swift access to COVID-19 vaccines was always going to be difficult, especially as many national governments have hoarded supplies. But the task has been made even harder by another kind of hoarding—of intellectual property and technology. Western governments and pharmaceutical companies could agree to loosen or temporarily suspend intellectual property protections and transfer technology to manufacturers in the developing world. Doing so would speed the production of more affordable and effective vaccines for broad distribution. But wealthy countries and their pharmaceutical giants have been unwilling to take this step, clinging instead to an old, quasi-colonial economic order that disadvantages poor countries—and threatens to prolong the pandemic.
Ten of the 13 leading COVID-19 vaccine candidates have been or are being developed by pharmaceutical companies in wealthy countries. These companies have mostly limited the manufacture of the vaccines to partners and suppliers in the West, leaving a number of potential producers in poorer countries in the cold. More broadly sharing intellectual property and technology with producers in the developing world could help significantly increase production of vaccines and reduce vaccine inequity. But only a few Western pharmaceutical companies have agreed to such technology transfers: U.S. giant Johnson & Johnson has licensed its vaccine for production by Aspen Pharmacare in South Africa, while the British-Swedish multinational AstraZeneca and the U.S. company Novavax have entered into agreements with the Serum Institute of India.
There should be many more of these sorts of arrangements, since poor countries have the capacity to ramp up production. At least 40 other potential manufacturers in 14 developing countries already form a network that makes around 3.5 billion doses per year of various types of vaccines. But last May, Pfizer’s CEO dismissed as “nonsense” and “dangerous” the WHO’s efforts to encourage companies to voluntarily share their technology and intellectual property in the interest of making more broadly available vaccines, treatments, and other necessary products in the fight against COVID-19. No major pharmaceutical company has yet offered any contribution to the so-called technology access pool that the WHO set up to combat the pandemic.
This unfortunate dynamic compelled India and South Africa—backed by Eswatini, Kenya, Mozambique, and Pakistan—to cosponsor a proposal in October asking the World Trade Organization (WTO) to waive, for the duration of the pandemic, the trade body’s treaty on protecting intellectual property. The proposal won the further support of around 100 mostly low-or middle-income countries.
The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, also known as TRIPS, requires the organization’s 164 member states to enforce most intellectual property protections for vaccines, trade secrets, diagnostic kits, ventilators, and other medical equipment. Supporters of the proposal argued that waiving these protections would allow manufacturers all over the world to more rapidly meet global demand for vaccines. If wealthy countries consented to the waiver, poor countries would probably not have to wait until 2023 or 2024 to inoculate the majority of their populations. The waiver would also help ensure that the world has a reserve supply of effective doses if some vaccine candidates prove to be ineffective, as is likely.
The clash between wealthy countries and poor ones over the right to scientific knowledge is not new.
But the United Kingdom, the United States, and the member states of the European Union—countries that are incidentally hoarding COVID-19 vaccine supplies and technology—opposed the request, and major pharmaceutical companies also voiced objections. They claim that the waiver is too broad, that it does not acknowledge the potential lack of technical capacity or raw materials in poor countries, and that the WTO’s current intellectual property regime already provides sufficient flexibility in the case of public health emergencies. This resistance persists despite the fact that the European Union and the United Kingdom are now embroiled in a dispute over a shortfall in supplies of the AstraZeneca vaccine. WTO member states will meet again in early February to discuss the matter ahead of the general meeting of the trade body in March, when the proposal will likely be rejected or severely limited.
The clash between wealthy countries and poor ones over the right to scientific knowledge and technology is not new. In the early 1970s—a time when many new nation-states were emerging from disintegrating European empires—the UN General Assembly resolved to declare a “New International Economic Order,” in which wealthy countries would help formerly colonized ones become more self-reliant through the transfer of technology. Proponents of the scheme imagined such transfers as a form of reparation for decades of imperial plunder. But the wealthy states never accepted or acted upon the resolution.
Instead, they did the opposite. Edmund Pratt, then CEO of Pfizer, feared that manufacturers in developing countries would compete with companies like his for these new markets. Along with other business leaders, he encouraged U.S. officials in the 1970s and early 1980s to integrate the defense of intellectual property into U.S trade policy. The Reagan administration then rallied the European and Japanese governments to this cause, helping to place intellectual property at the heart of the General Agreement on Tariffs and Trade. This agreement required member states to enforce intellectual property rights in the multilateral trading system for the first time, even when many developing countries didn’t maintain such requirements. Although this deal protected the investments that wealthy countries and their companies made in scientific, technological, and cultural goods, it also prevented low- and middle-income countries from competing on an even footing in the burgeoning knowledge economy. The deal became formalized as the TRIPS Agreement in 1995 when wealthy countries pushed it through the WTO over the objections of lower-income countries, which were eventually railroaded into signing. Since then—and at the behest of their private sectors—Japan, the United States, and European countries have also pursued bilateral free trade agreements with many developing countries to further strengthen intellectual property protections.
To oppose the proposal before the WTO, wealthy countries draw on the same arguments and claims they used to set up the current international intellectual property regime. In October, the British government argued that intellectual property protections won’t actually prevent access to vaccines, treatments, or related technologies. But that is demonstrably false: these rules have invariably driven up prices of important medications and put them out of reach of the world’s poorest. When the HIV/AIDS epidemic was reaching its peak in the 1990s, millions of people died in the developing world in part because the necessary drugs cost an astronomical $10,000 per person per year. Nearly a decade later—and after weathering lawsuits from 39 pharmaceutical companies—hard-hit South Africa was able to remove some patent barriers. Prices for antiretroviral drugs dropped significantly, and many more people received treatment.
Proponents of the TRIPS Agreement restrictions, including governments, pharmaceutical companies, and even the editorial board of The Wall Street Journal, claim that the existing order is adaptable enough as it is. They point to flexibilities in the WTO rules that allow member states to override patents by issuing what is known as a “compulsory license” in the case of a public health emergency—permitting a manufacturer in the developing world, for instance, to produce a vaccine or treatment patented by a company in the West. But compulsory licenses, while useful, aren’t conducive to situations that demand swift action. The process for securing such a license is laborious: in the case of COVID-19 vaccines, for instance, manufacturers would first have to show they attempted to negotiate a voluntary license with the relevant pharmaceutical company, which has proven hard to accomplish in all but a few cases because the patent holders can simply refuse or delay the process. Even when such licenses are granted, they tend to limit the number of countries to which the generic manufacturer in a developing country can supply the product. Generic manufacturers also would have to secure a separate license for each product they sought to make. Developing countries are usually wary of issuing compulsory licenses because they fear that wealthy countries, pressured by their pharmaceutical companies, might levy trade sanctions in retaliation or lodge a case at the WTO Dispute Settlement Body claiming that the developing country has not correctly adhered to the rules of the TRIPS Agreement.
Intellectual property rules have invariably put important medications out of reach of the world’s poorest.
Those defending the current system also contend that low- and middle-income countries do not have the technical capacity to manufacture and distribute vaccines at scale, especially ones that depend on sophisticated mRNA (messenger RNA) technology, such as those from Moderna and Pfizer-BioNTech. But this argument rehearses a tired trope, the likes of which have been disproven in the past. In the 1980s, a Western firm refused to transfer vaccine technology to the Indian company Shantha Biotechnics, claiming that Shantha’s scientists would not be able to understand the required recombinant technology to produce the vaccines. Shantha subsequently went on to develop its own recombinant vaccine for hepatitis B, which became available for $1 per dose and enabled UNICEF and other organizations to undertake low-cost mass vaccinations. Indeed, the Indian company Gennova has already entered into phase I/II clinical trials with its own mRNA COVID-19 vaccine. Alternative manufacturing capability for sophisticated COVID-19 vaccines very likely exists in the developing world.
The most familiar argument against the suspension of intellectual property rules is that such a dismissal of patent protections will kill private innovation and hurt future investment in new vaccines and technologies. But this claim, too, is unsound. Taxpayer and nonprofit dollars have significantly financed most of the leading COVID-19 vaccines, as well as the development of the basic science underlying the mRNA platform. Pharmaceutical companies stepped up to the plate only after the public and nonprofit sectors had assumed the bulk of the risk. Now, Pfizer-BioNTech and Moderna are poised to rake in $32 billion in COVID-19 vaccine sales in 2021 alone—and much more if mRNA platforms become more prevalent in the future. Pfizer-BioNTech and Moderna may well be unwilling to enter into any technology transfer agreement precisely because they hope to cash in on mRNA technology. It would be a catastrophic moral failure—and a failure of market policy—to allow private interests to seek profits from publicly funded technology while millions perish.
In April 2020, during the early stages of the pandemic, Ursula von der Leyen, the president of the European Commission, said that a future COVID-19 vaccine would need to reach “every single corner of the world” at an affordable price: “This vaccine will be our universal, common good.”
Nine months later, those promises ring hollow. The governments of wealthy countries need to show leadership by encouraging pharmaceutical companies to work in the interest of the “universal, common good.” Governments could require their pharmaceutical companies to enter into technology transfer agreements with at least three suppliers in the “global South”—or those governments can support the WTO proposal put forward by India and South Africa to suspend intellectual property rights during the pandemic. Failing to do either will only lengthen this pandemic.
A Strategy for the Long Fight Against COVID-19