ISSN 2330-717X

US Backs Plan To Waive Vaccine Patents, Ball In EU Court – Analysis

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By Seema Sirohi

After months of indecision, the United States has finally announced its support for waiving COVID-19 vaccine patents, answering a request by India, South Africa and a hundred other countries at the World Trade Organisation (WTO).

It’s a significant move in all its manifestations. Credit must go to strong and persistent advocacy by Democratic Party progressives and advocates of patient rights and to Indian and South African diplomats for consistently flagging the issue. Two Indian American members of the House of Representatives deserve special mention for their public statement in favour of the waiver—Congressman Ro Khanna and Congresswoman Pramila Jayapal.

For President Joe Biden to take a stand against pharmaceutical companies is no small matter. His presidential campaign was the near sole beneficiary of pharma largesse in 2020 to the exclusion of Donald Trump. Therefore, for Biden to strike an opposite pose can have political and financial costs. But, in the end, the moral imperative to help developing countries in an unprecedented situation prevailed over arguments about how granting a waiver might prevent future innovation and research and development by the private sector.

As the US Trade Representative Katherine Tai said in her statement, “The extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures.” They do. Rules and arguments of yesterday don’t apply. Rest assured, the profits of Pfizer, Moderna and others will still be secure and plenty. One may question what is “plenty”— US $7 billion, which Pfizer predicted would be its profit on 2021 revenues of US $26 billion or a smaller or bigger figure?

The pharmaceutical industry will argue there should be no reasonable cap on profits because that is the paradigm best suited to its mindset and people come second. But governments have to look after people and a large enough segment of the Democratic Party supports this most fundamental contract with them.

With the American decision, the ball moves to the European Union (EU), Britain and Japan, countries that will no doubt hold out in the WTO. Germany will prevaricate given Chancellor Angela Merkel’s true feelings on the matter, which recently came out. She seemed to feel that Europe had “allowed India to become such a large pharmaceutical producer in the first place” that there had to be a “rethink” of policies. Merkel’s statement goes against everything her reputation might have indicated.

It would be up to the NGOs, advocacy groups and civil society leaders in those countries to take the ball forward because forward it must move. European countries will nickel and dime, narrow the provisions and delay the process in Geneva. They must be made to feel the pressure of a very simple premise – no one is safe until everyone is vaccinated.

The world needs a consensus and a genuine coming together if all countries are to conquer this pandemic that has engulfed them for no fault of their own. The one country that is at fault is doing quite well while others are on their knees. There is also a geopolitical argument here – if the western world is serious about maintaining its current status vis-à-vis China, it must do everything in its power to get back to normal as soon as possible and get economies humming.

The pandemic cannot be allowed to rage and devastate countries because the sophisticated one-sided WTO rules can’t be changed quickly enough. Vaccine production and delivery have to be scaled up massively. Thus far, 1.21 billion vaccines have been administered worldwide but 83 percent of the shots have gone into the arms of people in upper and middle-income countries. In other words, vaccines have benefited mostly western countries.  Africa has the slowest vaccination rate of any continent. No wonder the Africans call it “vaccine apartheid.”

This must end for the world to function again. The “me-first” policy is untenable and Americans have begun to realise that. Hoarding and blocking free availability of ingredients to those companies in the developing world that want to get online and start producing is the logical next step.

Big pharmaceutical companies argue that developing countries don’t have the wherewithal to produce sophisticated vaccines because they lack even the technical know-how that isn’t protected by patents. Plus, they need regulatory approvals and funding to build facilities. All that is true, and no one is expecting doubling of vaccine production tomorrow, but the current situation doesn’t promise much either.

A WTO waiver will provide a measure of certainty to manufacturers and governments to start investing in new facilities and develop cold storage chains. Even if it takes a year or more to get going, it is better than the current scarcity because vaccine availability today holds no promise for the poor. Additional capacities have to be added. This pandemic is unprecedented in the scale of devastation and spread. No one doubts that. If it takes a year or more for capacity to develop and vaccine volumes to increase, so be it. Big pharma has failed to deliver the number of vaccines required even to the rich countries.

The argument about a waiver inhibiting future innovation and investment in research and development by private companies is fake. Firstly, much of the R&D has come from government-funded institutions in the United States, which has then been capitalised by the private sector. Secondly, US government scientists shared the spike protein technology with Moderna, which it commercialised to great profits for its COVID-19 vaccine.

While the Biden Administration discusses the waiver with European partners and Japan, it should also assert the US government’s actual stake on the intellectual property over spike protein technology.

Those who say that the WTO agreement on intellectual property protection already contains enough flexibility haven’t read the fine print – it is time-consuming, exhausting and on a per-country basis. Which poor and COVID-ravaged country has the energy to get into long, complicated negotiations against the battery of big pharma’s highly paid lawyers?

As Secretary of State Antony Blinken said, “On the current trajectory, if we don’t do more, if the entire world doesn’t do more, the world won’t be vaccinated until 2024.” He is right. The world needs to be vaccinated sooner rather than never.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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