All-powerful pharmaceutical companies
Although pharmaceutical companies poured public money into the development of Covid vaccines, they are selling them to the highest bidder. Sometimes, at best, they agree to reserve doses for their countries of origin. What if governments forced them to lift intellectual property rights, so that countries with the capacity to do so can produce the vaccine for the others?
By: Frédéric Pierru, Frédérick Stambach & Julien Vernaudon
During the spring 2020 lockdown, we witnessed an outpouring of good intentions. In the generous, reformed society that would emerge as a result of the pandemic, vaccines would be ‘global public goods’. As recently as November, President Emmanuel Macron warned gravely: ‘We need to avoid at all costs a scenario of a two-speed world where only the richer can protect themselves against the virus and restart normal lives.’ (1)
But all these promises have remained wishful thinking. On 18 January 2021, the Director General of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, made this devastating observation: ‘More than 39 million doses of vaccine have now been in at least 49 high-income countries. Only 25 doses have been administered in one of the lowest income countries. Not 25 million; not 25 thousand; only 25.’ He spoke of the likelihood of a ‘catastrophic moral failure’.
This was despite two programmes put in place, at the WHO’s initiative, to make use of the surge in international solidarity.
First, Covax, which is ‘pooled procurement mechanism’ that will ‘ensure fair and equitable access to vaccines for all 190 participating economies.’ A contract for 40 million doses of the vaccine (with messenger RNA) with the American company Pfizer (working with the German start-up BioNTech) was signed, followed by another with AstraZeneca (working with the University of Oxford), for 120 million additional units. The stated objective was very ambitious: to provide two billion doses by the end of 2021.
The second mechanism is C-TAP, the Covid-19 Technology Access Pool, which was meant to ensure the sharing of the intellectual property, knowledge and expertise necessary to produce vaccines on a large scale, including in developing countries. However, C-TAP is, as yet, an empty shell, while Covax is slow to take off, to the point where the WHO is now talking of a timeline of 2022, or even 2024.
More than 39 million doses of vaccine have now been in at least 49 high-income countries. Only 25 doses have been administered in one of the lowest income countries. Not 25 million; not 25 thousand; only 25.Tedros Adhanom Ghebreyesus
Individual states and the European Union, trapped by their public declarations, engage in doublespeak. In reality, realpolitik has won, and favours multinational pharmaceutical companies. Despite great opacity surrounding the ‘advance purchase agreements’, some useful information has been leaked. Once again we can see that the iron law of neoliberal capitalism holds: losses have been socialised and profits privatised. Pharmaceutical companies were subsidised to the tune of billions of euros by EU member states and the European Commission — which poured more than €2bn euros into the development of vaccines — for research and development, then the massive production of doses, thereby limiting the risks to business. Yet these businesses retain control over patents, fiercely negotiate prices with states, and restrict donations and possible resale to developing countries. According to the Belgian Secretary of State for the Budget Eva de Bleeker, the rates negotiated by Brussels range from €1.78 for AstraZeneca to €10 for CureVac and €14.68 for Moderna (2).
European commission in disarray
The delivery clauses appear to be the most flexible, which left the European Commission in complete disarray when AstraZeneca said in January that it could not deliver the 80 million doses planned within the agreed timeframe (the first quarter of 2021). This sparked the beginnings of a political crisis with the United Kingdom, which wanted to keep the doses produced, before a compromise was found on half of the contract.
In the event of serious side effects, the companies’ liability is kept to a minimum — this would again be borne by the signatory states. But it would be unfair only to blame the multinationals that succeeded in imposing such blatantly unbalanced contracts. According to the New York Times, the European Investment Bank granted a loan of $100m to BioNTech, conditional on receiving up to $25m of the profits (3) — as though it made sense to make a profit on vaccines.
Add to these unbelievable contracts a geopolitical clash between the nations fighting over the development, manufacture and access to precious vaccines. This involves China and the United States, of course, but also Russia — which has just won a strategic victory with the growing recognition of its Sputnik V vaccine — as well as Germany, Israel and the United Kingdom. Despite several false and deceptive starts, the UK managed to organise a dynamic vaccination drive, undermining the arguments advanced by a protective European Union during the arduous scraps over Brexit. As early as May 2020, Boris Johnson’s government created a Vaccine Taskforce to develop research, production and strategy for vaccines, for example establishing a partnership with the French company Valneva to produce a new vaccine in Scotland.
It was the opposite of France’s slowness and passivity. As of 4 February, the UK had administered at least one dose of the vaccine to 16.2% of its population, compared to 4% in Spain, 3.9% in Italy, 3.6% in Germany and only 2.7% in France. Not only is France lagging behind in this concert of nations, but its vaccination centres were set up hastily in January 2021 under media pressure, and rely on overwhelmed and exhausted medical staff. Worse, and against all logic, the government continues to reduce the number of hospital beds. After failing to win the race for a ‘national vaccine’, French multinational pharmaceutical company Sanofi — along with other companies like Delpharm or Recipharm — began to work as a subcontractor (bottling, packaging, etc) late, in February.
It is understandable that, in this tense context, the populations of developing countries are no longer a priority. With pharmaceutical companies guarding their patents, the C-TAP and Covax mechanisms are not working: 13% of the world’s population, living in rich countries, has pre-ordered 51% of doses, according to Oxfam. And within the EU itself, the first deliveries revealed flagrant inequalities: Italy received 9,750 doses, France 19,500 and Germany 151,125 (4). Even relative to the size of these countries’ respective populations, these differences remain inexplicable and seem to suggest that some are more equal than others. Moreover Germany is making private arrangements to procure more doses, despite being a part of the Commission’s joint vaccine procurement mechanism (5).
The C-TAP and Covax mechanisms are not working: 13% of the world’s population, living in rich countries, has pre-ordered 51% of doses, according to Oxfam.
Guaranteeing the ‘equality to the value of lives’ (6) between the Global North and South, as well as between the countries of the North and within each country would involve fundamentally reviewing the rules of the pharmaceutical market. The current crisis provides a case study of the absurdities of the dominant economic model when applied to this sector. Indeed, thanks to developments in biotechnology and genomics, laboratories are increasingly outsourcing the R&D process — and therefore its risks — to start-ups that often benefit from public funds and are backed by universities (7). This is the case with BioNTech and Moderna. However, despite the growing entanglement of basic research, public funds and the private sector, intellectual property rights continue to grow ever more powerful. Furthermore, public funds, through health systems, make the pharmaceutical market solvent, as this operates through an auction process: multinationals make countries compete for the prices desired, even if it means secretly conceding discounts, based on the volume of sales.
Faced with the plundering of public resources and the shortage of vaccines, many health professionals (8), activists, non-governmental organisations, as well as some countries, are urging states to use compulsory licensing. This concept, which appeared in the US at the end of the 18th century, was incorporated into international standards in 1925 thanks to an amendment to the Paris Convention for the Protection of Industrial Property (9). The compulsory or ex officio license was enshrined in 2001 by what was called the Doha Declaration, following the mobilisation of countries hard hit by the HIV epidemic, in particular South Africa. Article 31 of the Intellectual Property Rights Agreement, which should apply for 30 years, allows for a ‘waiver’ in ‘national emergencies or other circumstances of extreme urgency or in the event of public use for non-commercial purposes’. This can be done ‘without the authorisation of the rights holder’ (10).
France is all the more in the position to claim that the pioneering ordinance of 8 February 1959 allows the state to suspend patents in the event of insufficient quantity or quality of medicines, but also if drugs essential to public health come at unusually high prices. It is a case of striking a balance between the exclusive rights conferred by patents and the best interests of public health — this is clearly what is needed today. Why not invoke it, as requested by South Africa, Bolivia, Kenya, Eswatini (ex-Swaziland), Mongolia, Mozambique, Pakistan and Venezuela?
Legal difficulties arise from the outset. We must define ‘emergency’, and there is, to date, no consensus about this within the Council of the Intellectual Property Rights Agreement at the WTO (11). Moreover, several companies may be affected, as we are dealing with a pile of patents filed according to expertise, access to clinical data, the ingredients necessary for the production of vaccines… The battle may take time.
There is also a logistical obstacle: we have to be able to produce millions of doses on an industrial scale. However, if we return to the case of France, the crisis has cast a harsh light on deindustrialisation, which forfeits the healthcare sovereignty desired by Macron. The mask fiasco — it took two months to relaunch production in the spring of 2020 — should have led France to prepare for the next step. The scale and complexity of the challenge of making messenger RNA vaccines, the most effective for the time being, deserved greater planning.
And not least, a geopolitical obstacle looms. To use compulsory licenses is to engage in a showdown with other sovereign powers, especially the US, where the two companies that provide the best performing vaccines are currently located. Will France, Europe and other nations have the courage to face them down? Paris never has. When, in 2014, the company Gilead set the price of Sovaldi, a drug that is very effective against hepatitis C, at €41,000, the government preferred to ration patients and accept this exorbitant price rather than activate the ex officio license and risk American retaliation.
The compulsory or ex officio license was enshrined in 2001 by what was called the Doha Declaration, following the mobilisation of countries hard hit by the HIV epidemic.
Conversely, the US has never had such qualms. After 9/11, when bioterrorists threatened it with pathogens like anthrax, it did not hesitate to brandish compulsory licenses as blackmail in order to produce the anthrax drug, ciprofloxacin, whose patent was owned by the German pharmaceutical company Bayer. The laboratory finally agreed to lower its price. The same country has drawn up a so-called ‘special 301’ blacklist of countries that do not respect the Intellectual Property Rights Agreement, including India (which produces generic versions of drugs still under patent), China and, for a time, Canada. Do as I say, not as I do!
To do this on the European level seems most fitting, but this crisis shows once again that the geopolitical and industrial dimension of the European Union is nonexistent. The British example would even tend to show that being a member is a disadvantage. A country like France could consider using the compulsory license. The condition would be that it regain its independence by breaking with the dogma of free trade, by forging an efficient industrial and health tool through a public medicine hub and by investing massively in R&D as well as in the health system (human and material resources), in order to cope with future pandemics.
These are ideas for the future. For the moment, it would be advisable to build upon the many citizens’ initiatives pushing for a vaccine as a global public good and, above all, to come to an agreement with other powers, in particular China, Russia and India, in order to thwart the domination of American pharmaceutical companies, whose interests are defended by the federal state. French diplomats should push to try to obtain voluntary licenses for the Russian and Chinese vaccines — ie, the temporary suspension of intellectual property rights with the consent of their manufacturers.
Surely, it would not be absurd to make public financing and the de-risking of investments conditional on low-cost or even cost-price vaccines (with costs verified). All information (patents, processes) should be given to companies in poor or emerging states able to set up production chains and sell vaccines at low prices to developing countries or global buyers, who could donate them to very poor countries.
We could then put an end to the current sad spectacle, the culmination of what some have called the ‘organised free trade economy’, where only the exorbitant powers that states have conceded to the pharmaceutical industry are really free (12).
Frédéric Pierru, Frédérick Stambach & Julien VernaudonRespectively sociologist at the Centre national de la recherche scientifique (CNRS), and editor (with André Grimaldi) of Santé: urgence, (Odile Jacob, Paris, 2020); general practitioner in Ambazac; hospital practitioner in Lyon.
Translated by Lucie Elven
(1) Speech by Emmanuel Macron on the fight against the Covid-19 pandemic and preparation against future pandemics, 21 November 2020.
(2) Tweet by Eva de Bleeker, 17 December 2020, deleted the next day.
(3) Matt Appuzzo and Selam Gebredikan, ‘Governments sign secret vaccine deals. Here’s what they hide’, The New York Times, 28 January 2021.
(4) Virginie Malingre, ‘Vaccination contre le Covid-19 : les ratés et lenteurs de l’UE éclipsent ses succès’ (‘Covid-19 vacine: the failures and the delays of the EU eclipse its successes’), Le Monde, 6 February 2021.
(5) Julian Deutsch et al., ‘Thanks to deep pockets, Germany snaps up extra coronavirus jabs’, Politico,Washington, DC, 7 janvier 2021.
(6) Didier Fassin, De l’inégalité des vies, Fayard – Collège de France, Paris, 2020.
(7) Margaret Kyle and Anne Perrot, ‘Innovation pharmaceutique : comment combler le retard français ?’ (PDF), Les Notes du Conseil d’analyse économique, no 62, Paris, January 2021.
(8) ‘Les vaccins anti-Covid-19 doivent être un bien public mondial !’ (‘The Covid-19 vaccines must be a global public good’ ), online petition.
(9) Gaëlle Krikorian, ‘Licence obligatoire’, in Marie Cornu, Fabienne Orsi et Judith Rochfeld (ed), Dictionnaire des biens communs, Presses universitaires de France, Paris, 2021 (second edition).
(11) Kaitlin Mara, ‘Decision on intellectual property waiver over Covid Technology on hold until 2021 ; what are the next steps ?’, Medicines Law and Policy, Washington, DC, 18 December 2020.
(12) Fabienne Orsi, ‘Brevets d’invention’, in Marie Cornu, Fabienne Orsi and Judith Rochfeld (ed.), Dictionnaire des biens communs, op. cit.