Yves here. This post presents a sorry picture of rich Western countries using intellectual property provisions in national law and treaties to hoard Covid vaccines, with citizens of developing countries the big losers. However, Asia Times argues that Russia and China are planning diplomatic end runs by distributing their vaccines to the have-nots. The Russian Sputnik V vaccine looks like a winner, with high efficacy and much easier to transport and store than the Pfizer or Moderna offerings. It’s also cheap, with two doses costing $20.
By 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 his website
Refusal to temporarily suspend several World Trade Organization (WTO) intellectual property provisions to enable much faster and broader progress in addressing the COVID-19 pandemic should be grounds for International Criminal Court prosecution for genocide.
Making life-saving vaccines, medicines and equipment available, freely or affordably, has been crucial for containing the spread of many infectious diseases such as tuberculosis, HIV-AIDS, polio and smallpox.
Jonas Salk, who developed the polio vaccine, insisted that it remain patent free. Asked who owned the patent 65 years ago, he replied, “The people I would say. There is no patent. You might as well ask, could you patent the sun?”
Intellectual Property Induced Scarcity
However, cross-border enforcement of intellectual property rights (IPRs) is relatively recent. The 1994 WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) greatly strengthened and extended intellectual property transnationally. IPRs have effectively denied access to patented formulas and processes except to the highest bidders.
Recognising the extent of the pandemic threat, vaccine developers expect to be very profitable, thanks to national and transnational intellectual property laws. Thus, IP has distorted research priorities and discouraged cooperation and knowledge sharing, so essential to progress.
As COVID-19 infections and deaths continue to rise alarmingly, rich countries are falling out among themselves, fighting for access to vaccine supplies, as IP profits take precedence over lives and livelihoods.
‘Vaccine nationalism’ involves cut-throat contests responding to scarcity due to limited output. Facing vaccine wars, multilateral arrangements, such as Covax, have not adequately addressed current challenges.
Vaccine nationalism has also meant that among the rich, the powerful – Trump’s US – came first. Consequently, most developing countries and most of their people will have to wait longer than necessary for vaccines, while the powerful and better off secure prior access, regardless of need or urgency.
Lethal Combination
This lethal combination of intellectual property and vaccine warfare is responsible for more avoidable losses of both lives and livelihoods. Developing nations, especially the poorest and most vulnerable, have been left far behind, even in most programmes for COVID-19 prevention, containment, treatment and vaccination.
The deadly duo are unnecessarily delaying the end of the pandemic, causing avoidable infections, deaths and related setbacks. World Health Organization (WHO) Director-General (DG) Tedros warns “the world is on the brink of a catastrophic moral failure…the price of this failure will be paid with lives and livelihoods in the world’s poorest countries”.
He advises that “the international community cannot allow a handful of companies to dictate the terms or the timeframe for ending the pandemic”; “vaccine nationalism combined with a restrictive approach to vaccine production is in fact more likely to prolong the pandemic … tantamount to medical malpractice on a global scale”.
While over 39 million vaccine doses had been given in 49 richer countries, only 25 doses had reached one poor country! At current rates, more than 85 poor countries will not have significant access before the end of 2023! In 70 lower income countries, only one in ten will be vaccinated.
Of the 7.2 billion confirmed sales of COVID-19 vaccine doses, 4.2 billion have gone to the wealthiest nations. With only 16% of the world’s population, high income countries have secured 60% of available doses. Meanwhile, the African Union has only procured 670 million for the continent’s 1.3 billion people.
Public Health Exception
Following strong advocacy led by South African President Mandela, a 2001 WTO Declaration on TRIPS and Public Health affirmed countries’ right to protect public health by enabling access to medicines, even without a health emergency.
Although TRIPS now allows such government public health efforts, developing countries remain constrained by compulsory licensing’s complex rules, procedures and conditions. Threats and inducements by transnational corporations and their governments limit its use.
Hence, use of compulsory licensing by developing countries has been largely limited to several more independent middle-income countries and HIV/AIDS medicines.
TRIPS Waiver
The TRIPS waiver proposal to the WTO – led by South Africa and India – seeks temporary suspension of several TRIPS provisions to greatly scale up production of and access to COVID-19 vaccines, medicines and equipment to contain the contagion.
The Trump administration, the European Union (EU) and their allies have so far blocked the waiver proposal, although its measures are allowed by their own national laws. Some rich countries even increased such provisions with the pandemic.
South African TRIPS negotiator Mustaqeem Da Gama has debunked the waiver opponents’ claim that even if “approved tomorrow, there are no companies in the developing world that can produce any number of products relevant to COVID-19, including mRNA vaccines”.
In fact, the Serum Institute of India is acknowledged as the only facility in the world with the mass vaccine production capacity to rapidly greatly scale up output. Furthermore, 72 of the 154 vaccines ‘pre-qualified’ by the WHO are already being manufactured in developing countries.
Such production in developing countries is subject to very restrictive intellectual property regulations and licensing agreements with stringent conditions. Hence, existing capacity in India, China, Brazil, Cuba, Thailand, Senegal and Indonesia, among others, remains underutilised, primarily due to such legal barriers.
Intellectual Property Main Barrier
Despite growing support for the waiver, the proposal was rejected by the TRIPS Council on 4th February. The EU insists that intellectual property will “ensure the publication and dissemination of research results, when otherwise they will remain secret”.
But everyone knows the intellectual property system discourages, rather than encourages cooperation and sharing, both essential for accelerating progress. Although IP requires sharing research results, no vaccine developer has done so yet. Nonetheless, waiver opponents insist the system is working well.
Rich countries opposing the waiver have quietly, even secretly bought up vaccines. Even as the EU has lost vaccine wars despite furthering pharmaceutical company interests, it has claimed the moral high ground as a major Covax donor. The recent EU export authorisation scheme, restricting exports, is bound to trigger retaliatory restrictions by others.
Incredibly, rich countries opposed to the TRIPS waiver proposal, particularly the EU, now want WTO members to instead accept its trade and health initiative for further trade liberalisation and removal of export restrictions –to address a problem of its own making!
Biden Can Still Lead
The Biden administration has shown renewed commitment to multilateralism by rejoining the WHO, but still needs to offer leadership beyond funding the ineffective Covax scheme and lifting Trump’s embargo on exports of vaccines, vital medicines and equipment.
One ‘people’s vaccine’ proposal involves sharing research results in return for public financing. This can affordably, quickly and greatly scale up generic production, enabling ‘vaccines for all’ in the world at little additional cost.
As rich country governments have already spent to accelerate vaccine development, they can make this happen. As vaccine developers do not expect to profit much from the poor, this will benefit many at little added expense.
Depriving and delaying vaccines for those with less means has to be seen for what it is. Such avoidable behaviour is, frankly, nothing less than genocidal, for causing many people to die needlessly for intellectual property profit.
At the forthcoming 23 February TRIPS Council meeting, US President Biden can secure consensus support for the waiver proposal, thus providing the Rooseveltian leadership internationally that he seems to be emulating in the US.
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The over privatization of everything is creating one disaster after another. And not just in IP patents regarding pharmaceuticals and vaccines. Fighting climate change has been hamstrung by private property rights that prevent public purpose spending. Governments need to regain some legal ability to own and regulate the use of land for public purpose. Leaving those decisions up to private self interests is not working.
I really have to wonder if this vaccine nationalism stance by rich countries isn’t just a reflection of the prevailing attitudes of the majority of their citizens. In other words, the politicians may feel like they have a broad public mandate to hoard vaccines and one can imagine the “in an emergency put your own oxygen mask on first” maxim and variations thereof anchoring the PR drive to rubberstamp this stance. “Let’s put our citizens first” has to be the easiest policy position to sell internally and the most difficult one for any political opponent to attack.
Is equitable access to vaccines for poorer countries even a topic of discussion in e.g. the US congress or the UK parliament? I highly doubt this as I suspect the debates begin and end with how to secure more vaccines for their respective nations. Who’d have the moral convictions to squander precious political capital on championing the cause of poor countries in such parliamentary debates? As such, I doubt appealing to the humanitarian instincts of the ruling classes of rich countries by imploring them to spare a thought for the poor countries of the world is a viable strategy. As is often noted here, the current crop of political elites in the developed world have no track record of caring about the poor in their own countries, and have watched as the mass exploitation of the poor in the rest of the world through outsourcing has gone on unabated for decades.
Like their wall street peers, they play the short game, and in a pandemic, playing the short game is tantamount to acting against your own interests. I see the next post, which I haven’t read yet, is about the state of the airline Industry, and that’s one sector that’s not recovering sufficiently without a cooperative vaccination effort on a global scale. But cooperation hasn’t been a core tenet of global diplomacy for decades, so the WTO perhaps has to rouse itself from the its current state of impotence and do something about all this, otherwise this pandemic will be with us for a while still.
Thuto: All excellent points. Further, we are seeing just how efficient and brimming with “creative destruction” the private sector is in the so-called developed world. I know that you are South African, and I am reading the news of the failure of the Oxford/AstraZeneca vaccine in South Africa.
Why, one might think that the Oxford/AstraZeneca trials and their bizarre lapses and failures, including giving a “placebo” that was a meningitis vaccine, and then the production and distribution of a vaccine that the Germans won’t administer to people over the age of 65 for lack of data as to efficacy, is a sign that the Anglo-American elites are not only incompetent but malign.
But we wouldn’t want to hurt their feelings.
Yes, the Astrazeneca vaccine has been shown to be ineffective against the dominant variant down here. If that’s not bad enough, the million doses that we got expire in April so one wonders whether we get our money back since the product doesn’t do what it says on the packaging. Strange times we are living through.
‘Strange’ is a very strange and generous word for describing these times. Much stronger words clash to step forward for describing the Anglo-American elites, their avarice and remarkable short-sight. The Corona pandemic is but a small bump in the road compared to what will come — and is coming — as the world changes its climate and as Anglo-American elites and helpful elites around this planet — elites co-opted, purchased, and malignant — obtain their small share of plunder from this planet’s dwindling resources.
A few have argued against even using the term ‘intellectual property’.
https://www.gnu.org/philosophy/not-ipr.html
“..it’s a mirage…”
That link is a bit niggly and it isn’t quite clear whether he is objecting to “intellectual” or “property.” Certainly a trademark contains practically zero intellectual content nevertheless we all know what the term means.
And while “property” does inflate the validity of the thing–property being sacred to many (theft to others)–the temporary nature of IP (unless you are Disney and Mickey Mouse and Congress) also applies to the lot I’m sitting on since if I don’t pay my property taxes the county will seize it.
And besides “government regulated property” is a mouthful. Still, this being an economics blog, a better essay on the concept of property would be useful. Michael Hudson goes there somewhat with his discussion of rents.
Richard Stallman is pretty clear and consistent regarding ‘IP’. He says it’s a meaningless term, invented by lawyers and would-be IP owners to cover patents trademarks and copyrights, which are all different things, and to apply gravitas to what are in fact very dodgy and debatable concepts.
I dunno. Arguing over words seems kind of pointless to me. Those debatable concepts are all part of US law and that is worth talking about. In particular giving governments the ability to define property gives corruptible government the ability to make some people very rich.
Agreed – would definitely include rent at the end – Intellectual Property Rent – just that the general public only thinks of rent as what one pays for a living space, not the unearned dynamic of economic rent.
Who could patent the sun?”
I almost gave up reading after the first sentence of this article. I know economists live in a world of abstractions and theoretical models, but the author could at least have bothered to do five minutes research on Wikipedia.
But I persevered, and there are two arguments which are mixed up with and confused with each other throughout the article.
One is an IPR point, and the author may well be right that overall supplies of the vaccine could be increased if the IP were disseminated more widely. But this is a typical economist’s argument (“assume a can-opener”) which assumes that theoretical capacity corresponds to real capacity, there are no other constraining factors like money, infrastructure, skilled personnel, transport, storage and many other things, and that the market will magically supply something just because there is a demand. It also assumes that deregulation is the answer to everything. Actual stories of production of vaccines in a number of countries suggest it’s more complicated than that. And there are plenty of horror stories about defective masks made by new entrants into the market, for example.
But this argument, which has some merit, is linked with the assertion that “wealthy” countries have bought too much of the vaccine, in fact more than is required. This is simply untrue. In France for example, as of this morning (checks latest figures) fewer than two million people have been vaccinated.This has nothing to do with IPR, it’s because the French government simply cannot access enough vaccines because of supply problems and because the number needed by the world as a whole is astronomically high. What the author is implicitly recommending, though I’m not sure he realises it, is that “wealthy” states let some of their own populations die, in order to permit the populations of “less wealthy” states to at least theoretically receive the vaccines, on the basis that this would be just. But that’s what happens when economists stray into areas they don’t understand.
It’s a pity, because struggling to get out is a decent argument, that a global approach to vaccination , with a relaxation of IPR rules, properly managed and calibrated, would almost certainly be more effective globally than the confused situation we have at the moment. But as any economist knows, economics is about scarcity, and at the moment and for the foreseeable future there aren’t enough vaccines. So which God-like authority gets to say who lives and who dies?
David, on your point about deregulation not being the answer to everything, I agree to an extent. That said, I believe the problems come when politicians, ever the populists chasing a jolt in approval ratings, tout deregulation as a panacea in and of itself, without acknowledging that it’s often just a precursor to a set of follow on policies that need to quickly be put into place to support the realization of the policy objectives of said deregulation. For instance, deregulation aimed at levelling the playing field often fails when new entrants aren’t given the necessary support (financial, knowledge, Infrastructure etc) to “compete” successfully with incumbents. As I’m sure you’ll agree, politicians are hardly ever interested in immersing themselves in the details, they’re happy to make the big announcement that they’re on the side of the little guy and the incumbents have been brought to heel, “go forth and conquer” they say to the plucky upstarts and head to their next appointment. As you rightly point out, and depending on how technically complex the industry is, the upstarts sometimes collapse under the weight of inexperience, often without any political blowback to the politicians involved in driving the deregulation agenda.
I do wonder though if, hypothetically speaking, the supply constraints were to magically disappear, whether the merits of the author’s argument don’t hold and whether rich countries wouldn’t conduct themselves in the manner he decries?
I take your point. The problem is that for the last fifty years it’s been an article of neoliberal faith that in a deregulated market (which is effectively what’s being suggested here) new suppliers will automatically arise because that’s the nature of capitalism. (I’ve even heard it argued that Boeing should be allowed to go under because a new manufacturer would necessarily arise to take its place). In fact, experience suggests that deregulation promotes consolidation rather than competition. In this case, for example, I can imagine western drug companies buying up new competitors after a while, and later closing them down. A much more logical system would be some kind of worldwide, coordinated manufacturing programme with licenses, inspections, quality control, control of grey markets etc. (After all, what’s to stop organised crime getting into the game quite quickly?)
On your last point, if supply constraints magically went away, wouldn’t the problem just disappear, since there would be enough for everybody?
Spot on about deregulation promoting consolidation. That’s the loophole right there and without deregulation being accompanied by restrictions on retaliatory countermeasures by incumbents (of which buying the competition to shut them down is one) then I don’t see how we close it.
Regarding sufficient supply and the problem disappearing as per your last paragraph, lessons gleaned from how the world currently works point to no correlation between sufficient supply and equitable distribution in most cases, as the abundant supply of certain commodities existing side-by-side with severe lack of the same commodities in some quarters demonstrates. One can of course blame distribution bottlenecks, wastage (e.g. in the case of people dying of hunger in a world with enough food) or just the “selfish gene” rearing its ugly head, but I have serious doubts that eliminating supply shortages will be the answer even in this case. As you point out in your response to Don below, the responsible thing to do may be to procure 300% of what a country needs, but the known unknowns (e.g. how long immunity lasts) mean even that number is a guesstimate at best. What’s to stop some countries pushing that up to 400/500/600%, ostensibly to “be on the safe side”. This raises the question of when does prudence become hoarding, especially in the context of some countries stockpiling while others possibly go without. It will be interesting to observe how all of this plays out.
You’re right of course that (as with food) it would be theoretically possible to have global oversupply with localised shortages, although as far as I know that’s not where we are now. That said, everybody knows that the distribution of food is mostly about purchasing power, and also that there’s a lot of overproduction and consequent waste. I don’t think that’s quite the case here. In any event, I’d be wary of turning this into a supply and demand issue because that will force the price up, to no good purpose. The only way forwards some kind of planned global approach where ability to pay is not a factor. But even then, as I said to Don, the minimum that a state should procure (any state) seems to me to be equivalent to 300% of its population, simply because it’s inevitable that it will use that much. In the meantime, there isn’t enough for everybody, and there may never be.
David, re “… the assertion that ‘wealthy’ countries have bought too much of the vaccine … is simply untrue …”, may be true. I have listened to the public press announcements in my country, Canada, and the United States and marvelled at the amount of doses being claimed in the purchases. For both countries, the “purchases” are an extraordinary, multiple times greater than the population. I don’t know why governments are committing to such (excessively) large amounts of vaccine. While government expenditure usually faces criticism of some sort, in this case the expenditure has met (almost) no critical comment. NPR has a graph that provides visual evidence of the situation, https://www.npr.org/sections/goatsandsoda/2020/12/03/942303736/how-rich-countries-are-hoarding-the-worlds-vaccines-in-charts
Obviously governments could in theory “hoard” vaccines. (But why?) But if you consider that vaccines need to be given twice, that you need a margin for spoiled, aged-out, lost, defective stocks etc. that vaccines are not 100% effective, that the virus mutates and so forth, then the minimum a country should order is doses for 300% of its population. Anything else would be irresponsible. And if we can expect annual visits from the virus then you need to consider the years ahead as well. I’d be interested to hear from one of our medical colleagues what orders they would recommend, bearing in mind that so far there’s been a big difference between orders and deliveries, that it looks as though some vaccines may not work very well and have to be replaced by others. Of course it’s obvious (and no doubt some economists are suggesting it) that you could adopt a “just in time” strategy, where you order vaccines in small doses for immediate delivery, but few governments would take that chance.
I read him to be saying governments are “hoarding” the right to manufacture a patented vaccine, or allowing patent holders to do so, and that if there was more compulsory licensing, there would be more manufacturing in poorer countries. Assuming manufacturing and distribution, scarcity resulting from IP restrictions is artificial.
Is it about getting a/the vaccine out to everyone a soon as possible or making a god damned profit? Excuse me, an insane profit… We obviously know the answer. They have-assed-it to extract as much as possible, and we all will pay the price. Giving the virus a chance to multiply in forms.
I enjoyed the post for its reference to Salk who refused to patent the polio vaccine. I would add the discoverers of insulin at the University of Toronto also gave away the patent. They gave them away to further the public good. It is outrageous that monopoly patents are given to profit-seeking companies for matters of public health. This is all the more true when most of the original research is typically done with public financing. I was disappointed that the article did not make this important point.
It did refer to compulsory licensing which in theory allows countries to largely disregard patents and manufacture or buy the pharmaceuticals they need. Sadly in practice it is easier said than done for poor countries. For wealthy countries, even with no change at all to international “intellectual property” rules, it means that paying high prices for pharmaceuticals is entirely a political choice and not a necessity.
The longer and greater number of people who are infected with the virus the greater the chances of mutations occurring, some of which could result in a more virulent, resistant, or transmissible variants — which will almost certainly spread to every country in the world, including those which impede vaccination of everyone.
It’s like putting out some forest fires during a rash of them, but letting others burn and throw up burning cinders for the wind to pick up and ignite or reignite other areas. Or it’s like killing all the fleas or cockroaches in a house except for in one room, letting them breed there while developing resistance.