Indian Vaccine Manufacturers: U.S. Use of Wartime Export Controls Threatens World Vaccine Production

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

The Financial Times yesterday published a plea from Indian vaccine manufacturers, who lamented that the U.S. decision to invoke the Korean-War era Defense Production Act to protect crucial inputs threatens world vaccine supplies:

Two of India’s top vaccine manufacturers making AstraZeneca and Johnson & Johnson shots have warned that the world’s vaccine production is being threatened by America’s pandemic export controls.

Mahima Datla, chief executive of pharmaceutical company Biological E, said US suppliers claim they may not be able to fulfil orders to global clients because of Washington’s use of the Defense Production Act.

Calling for urgent international intervention, Datla told the Financial Times: “It’s not only going to make the scale up for Covid vaccines difficult, but because of this it’s going to make manufacturing of routine vaccines extremely difficult.”

Note that prior  to the emergence of COVID-19, India’s vaccine manufacturers produced 60% of the world’s supply of vaccines. I don’t have more recent figures, which would also include COVID jabs.

At the risk of overloading readers with vaccine posts, I decided to write this issue up, as it’s received far less attention than South Africa and India’s proposal for a temporary waiver of the World Trade Organization’s (WTO) intellectual property rights so as to ramp up global vaccine production – the subject of a Common Dreams crosspost that I launched earlier today, ‘Disturbing’: Rich Nations Vaccinating Person Per Second While Blocking Effort to Share Recipe With Poor Countries.

Note two crucial points.  U.S. export controls – and the supply chain distortions they cause – threaten global vaccine production generally, and are not limited to manufacture of COVID-19 shots alone.

And second, unlike the WTO provisions, the DPA controls are unilateral and the U.S. could lift them at anytime. By contrast, to waive the WTO provisions,  other rich countries, including the EU and Switzerland, would need to sign onto the proposal backed by developing countries.

As the FT notes, Biden has followed in Trump’s footsteps in invoking the DPA:

Both US President Joe Biden and his predecessor Donald Trump have invoked the Korean war era DPA during the pandemic to secure priority supplies of materials needed to control the disease. But with the US having ordered more than enough doses for every adult in the US, American suppliers are struggling to make enough to fulfil contracts outside the country.

I understand why the U.S. has made vaccinating Americans its top priority, bulldozing over what might be the global good. But those in charge should not  be blind to the impact that export controls have on global vaccine production and especially so once the U.S. achieves its domestic vaccination goals.

The issue is attracting World Health Organization (WHO) concern:

On Friday, Tedros Adhanom Ghebreyesus, World Health Organization director-general, also warned of global shortages of vital components, which were limiting the production of Covid-19 shots but also jabs used for routine childhood immunisations. He said some countries had imposed legal restrictions, which was “putting lives at risk” and called on nations not to stockpile supplies. “We’re all interdependent,” he said. “No country can simply vaccinate its way out of this.”

What materials are in short supply? Per the FT:

The materials that are a crucial part of vaccine production include plastics such as disposable fermenters and bags made by a limited number of companies. Some vaccine makers have been days away from stopping production because of a lack of these large sterile liners. Supplies of lab reagents, used for chemical tests, were also a concern, [Datla] added.

At the moment of course, most global attention is focussed on manufacture of COVID-19 vaccines. In this regard, the DPA restrictions limit the capacity makers have to scale up production to meet global needs. According to the FT:

Datla, whose company is manufacturing Johnson & Johnson’s vaccine, said the DPA meant suppliers were “reluctant to commit that they will stick to their delivery timelines”.

“The supply chain challenges are going to make scaling up extremely difficult.”

….

Biological E, a family run pharmaceutical business based in Hyderabad, supplies vaccines to WHO and Unicef for distribution around the world.

It is developing a Covid-19 vaccine in partnership with US pharmaceutical company Dynavax Technologies Corporation and the Baylor College of Medicine with a target of producing 1bn doses. The company is also manufacturing at least 1bn doses of the Johnson & Johnson vaccine by the end of 2022.

Datla’s remarks come after Adar Poonawalla, the chief executive of the Serum Institute of India, the world’s largest vaccine manufacturer, warned that the Defense Production Act could undermine the global vaccination effort.

“The Novavax vaccine, which we’re a major manufacturer for, needs these items from the US,” Poonawalla said. “We are talking about having free global access to vaccines but if we can’t get the raw materials out of the US — that’s going to be a serious limiting factor.”

Vaccine and Pharma Diplomacy

Are policymakers paying attention to these issues?  The FT suggests the U.S. DPA restrictions might soon be addressed:

Datla said she was hopeful that after a Friday meeting between the Quad — a diplomatic and security initiative between the US, Japan, India and Australia — that the supply situation could be resolved.

The US is working with the Quad to counter China’s growing presence in the region and hopes to combat Beijing’s growing sway with vaccine diplomacy.

There are lots of players in the vaccine version of the great game. Both China and Russia are aggressively practicing vaccine diplomacy. As is the EU. The primary goal of U.S. vaccine diplomacy seems to be to ensure the profits of Big Pharma, rather than on maximizing the number of people vaccinated, in the shortest possible time. Could these priorities shift? Perhaps. Time will tell. India has stepped forward to represent the perspective of developing countries, drawing on its role as a major vaccine manufacturer – and perhaps sometime soon – developer.

As I’ve written before, in various Indian venues (which alas, are not digitally available) India has increasingly been practicing pharma diplomacy, which it is able to undertake due to its outsize role in global pharma manufacture. India is the third largest global supplier of pharmaceuticals by volume, the leading exporter of generic drugs, and its pharma makers account  for the most plants certified by the U.S. Food and Drug Administration (FDA)

When Donald Trump demanded in 2020 that India lift its export ban on hydroxychloroquine (HCQ), an anti-malarial drug touted as having some promise as a possible COVID-19 treatment, instead of taking a page from the U.S. export controls playbook, India responded more elegantly. Note Trump requested that India ship HCQ supplies to the U.S. for an  unproven use of the drug, diverting them away from Indians who relied on HCQ for known treatments for autoimmune diseases and for malaria prophylaxis.

What was Indian Prime Minister Narendra Modi’s response? Rather than bridling at the veiled threat underlying Trump’s request, Modi seized the suggestion as an opportunity for India’s pharma manufacturers. Modi agreed to export millions of HCQ doses, emphasizing the need for the international community to co-operate in this time of pandemic.

What Is to Be Done?

What will the US do at the upcoming Quad meetings? I have no special insight.

Sadly, the state of global vaccine distribution is a mess, and the global solidarity and co-operation Modi called for in response to the pandemic in all-too-short supply.