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Global vaccine system fails poor countries

Global vaccine system fails poor countries

Yousuf Vawda | Amandla 75 | March 2021

The World Trade Organisation (WTO) has not as yet been able to find consensus on a waiver to suspend certain intellectual property rules that are blocking access to diagnostics, medicines and vaccines. This signals, once again, the failure of the multilateral trading system to meet the needs of the majority of the world’s population. This is not only because of the obstinacy of rich countries who opposed the waiver, but also and essentially because the system has always been designed to fail the poor. This has been the case ever since the adoption of the Agreement on Trade Related Aspects of Intellectual Property Rights (Trips) at the formation of the WTO in 1994.

So, to backtrack a little. Inventions such as medicines are protected by a form of intellectual property protection called a patent. This gives the inventor the exclusive right to make and market the product. Anybody else doing so will be regarded as infringing the patent and can be sued.

Before Trips, countries could fashion their own patent system in terms of whether to grant patents for medicines, or for what period the patent should last. Trips changed all that. It forced all WTO members to accept extremely strong rights for patent holders, such as 20 years of patent protection and mandatory protection of medicines, among others.

Such strong protections and exclusivities create market monopolies which enable the single supplier to ask any price they want in the absence of competition. This is why the prices of newer medicines and those still under patent skyrocket. The resultant exorbitant pricing is the reason that the majority of people do not have access to needed medicines.

The system was designed to ensure that only rich people or countries can afford, and hence access, life-saving treatments. It is a form of economic apartheid.

As if these protections were not strong enough, the rich countries demanded even stronger protection when negotiating trade agreements with developing countries.

How has this played out in the COVID-19 pandemic?

The perverse consequences of such a system were evident from the early days of the pandemic. Pharmaceutical companies holding intellectual property rights maintained tight control of their technology and know-how on the manufacture of key testing kits, ventilators and certain medicines. They refused to share their knowledge so that more suppliers could produce these items and meet global needs. They did not care that we were facing the greatest public health emergency since the last century.

Now, the same is happening with the production and supply of vaccines to immunise the world’s population against the Covid-19 virus.

Pharmaceutical companies say that they require the 20-year patent protection, and need to bar any competition, in order to recover the investment they make in researching and developing the medicines. Even if this were the case, they have abused that privilege through excessive pricing. This behaviour is particularly unconscionable during a pandemic for several reasons. For a start, an enormous amount of the investment has come from public money provided by governments. According to research conducted by the kENUP Foundation, a European non-profit, governments have invested at least €86.5 billion or $112 billion in the development of, and advance market commitments to purchase, vaccines. This equates to R1.65 trillion in funding vaccines at no risk to the manufacturers!

The greed of the Pharma industry knows no bounds. Despite the development of vaccines being funded almost entirely by public money, Moderna is on the road to another windfall – it has signed advance purchase agreements worth $18.4 billion for deliveries in 2021.  The bulk of these will go to the US, EU, Japan, Canada, Korea, UK and Switzerland. It does not care about equity – it will go where the money is! Other companies are no different.

Not content with this type of windfall, Pfizer has been making increasing demands on developing countries. Davies et al report that the pharmaceutical giant has “held to ransom” several South American countries. It has threatened to withhold its vaccine unless they pledge their sovereign assets, such as embassy buildings and military bases, as a guarantee. This is to protect Pfizer against civil claims in the event of adverse reactions to their product, including those caused by negligence or fraud. This is in addition to the requirement by all the vaccine manufacturers that governments, including South Africa, provide compensation cover for such events, at the government’s expense.

Big Pharma has hit the jackpot – using taxpayers’ money, incurring minimal risks, and exclusively taking maximum profits!

High-income countries have also been complicit in this game of vaccine apartheid. They practice “vaccine nationalism”, using their economic power to buy up almost all available supplies of vaccines, often three times more than their actual need. They have selfishly jumped ahead in the queue, to the exclusion of poorer countries. Their talk of a people’s vaccine and global equity has indeed been hypocritical. They block every effort to remove intellectual property and other barriers that have strangled the supply pipeline for vaccines. They have effectively killed the C-19 Technology Access Pool (C-TAP) – a mechanism to require intellectual property holders to voluntarily share their technology and know-how in order to scale up supply – at the behest of the pharmaceutical industry. This is effectively “vaccine imperialism”.

Waiver Proposal at the WTO

At the WTO, high-income countries are opposing the waiver proposed initially by South Africa and India, and supported by over one hundred member countries. The proposal offers concrete hope to developing and least developed countries to bypass the rules which prevent access to vaccines and other health products. They have been filibustering at the Trips Council – repeatedly seeking clarifications and refusing to engage with the very detailed and compelling responses provided by the sponsors of the waiver proposal. They are doing this to kill this proposal too.

They will, in all likelihood, succeed despite the overwhelming majority support that the proposal enjoys. This is due to the way the WTO processes are structured. Rich countries are using their economic muscle as a “veto” to frustrate the attainment of consensus. This is both immoral and anti-democratic. It indicates that this system is broken, and that we should be looking elsewhere for solutions. The majority of WTO member countries will have to re-imagine an alternative in which the rich and powerful do not have their way, one in which real democracy prevails.

While the WHO Director-General Dr Tedros has endorsed the waiver proposal, the newly-appointed  WTO Director-General, Dr Ngozi Okonjo-Iweala, instead urged WTO members to work with pharmaceutical companies to license more vaccine manufacturers in developing countries. Regrettably, her focus on voluntary licensing does not appear to include support for the C-TAP.

South Africa has shown admirable leadership at the WTO, but our government has stalled on the tabling of amendments to the Patents Act and other legislation to facilitate greater access to vaccines and other health products. It has also mismanaged the vaccine acquisition and rollout plan, with the result that the hope of achieving herd immunity through vaccinating 60% of the population by 2021 is fast disappearing.

What are the alternatives?

Kassabov observes that the current crisis of vaccine scarcity highlights the abject failure of “predatory capitalism”  to address global inequity. The current shortages have exposed the myth that private entrepreneurship is the key to innovation and progress; or that the market can best ensure the optimal distribution of goods; or that globalisation is fair and beneficial to all. Until this extreme form of protectionism is dismantled, short-term measures may be considered to address intellectual property barriers access.

One is the proposed WTO waiver. Another, by Hubbard and Love is that of “delinkage”  – separating the cost of new research and development from the prices of medicines. This means rewarding innovation not with strong intellectual property rights but alternatives such as prize funds awarded on the basis of the therapeutic efficacy of the products, patent buy-outs, open source innovation and other new financing mechanisms. Baker has recently made a strong case for open source research and development, particularly in the context of a possible resurgence of the pandemic due to new vaccine-resistant strains. He argues that the solution is for the evidence of new strains of the virus, and of the effectiveness of the current batch of vaccines, to be shared as quickly as possible. The singular lesson of this pandemic is that there is no room for patent and other monopoly protections in a crisis. If powerful governments and industries do not acknowledge this, the pandemic will not end even in the most-resourced, most-vaccinated country in the world.

Progressive movements must unite to explore ways of breaking the stranglehold of the pharmaceutical industry on essential public goods, while simultaneously working to replace a broken system with one that works for all the world’s population.

Yousuf Vawda is an academic and an activist, and currently a Senior Research Associate in the School of Law, University of KwaZulu-Natal.
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