Biden Can’t Correct Vaccine Apartheid on Big Pharma’s Terms

Rachael Silverman’s op-ed, Waiving vaccine patents won’t help inoculate poorer nations acknowledges the appeal of overriding COVID-19 vaccine companies’ intellectual property rights in order to expand supply, but then trashes that option arguing that the best solution to overcoming gross vaccine apartheid is the status quo of Big Pharma monopoly control, sweetened with selective use of voluntary licenses. Although she addresses some important issues, such as the need for deep technology transfer and not simply releasing patents, she also repeats errors and myths all too common in describing what South Africa, India, and vaccine access advocates have been demanding at the World Trade Organization (WTO) in terms of a proposal to temporarily waive intellectual property rights during the pandemic. Her most important error is ignoring the fact that the proposed waiver would bring  positive pressure and  expand supply and accelerate more equitable distribution of life-saving and variant-preventing vaccines to the entire global population.

Given the high stakes for billions of people forced to wait for access to vaccines, several key errors deserve a fact check. 

Myth:  “Because of the technical complexity of manufacturing coronavirus vaccines, waiving intellectual-property rights, by itself, would have little effect.”

Fact:  We agree that relaxing patents is not enough – but Silverman knows that the TRIPS Waiver is about more than patents, despite what she says in her op-ed. The waiver proposal is about all of the intellectual property rights (patents, trade-secret protected manufacturing know-how, data, recipes, and biologic resources, copyright and industrial design) that allow companies to monopolize control over supply, price, and distribution of vaccines and other COVID-19 health-technologies. Silverman focuses on patents and then claims that patent override is not enough. Granted, but the waiver proponents are fully cognizant of other exclusive rights that must be addressed and that deep technology transfer is required in order to make bio-identical vaccines.

Myth:  Overriding intellectual property rights could backfire because biopharmaceutical companies would “disengage from global access efforts.”  

Fact:  While Big Pharma always claims the sky will fall in terms of research and development incentives and that it will be forced not to innovate if $1 of its profit expectations is threatened, these dire predictions are demonstrably false. Pfizer and Moderna, for example, stand to make $15 billion and $18 billion respectively on supply contracts already negotiated with rich countries for 2021 alone. Thereafter, they are looking forward to record profits on higher-priced booster shots and new-variant vaccines. For example, Pfizer is on record saying that it intends to raise prices to an estimated $150-$175 per dose. Companies know that their rich-country buyers are not going to flee to new, low-cost suppliers from other regions. They are sitting on a cash cow even if they share their vaccine recipes with others. They also know that they do not have the manufacturing capacity to serve all of the potential customers, and that expanding production to global generic manufactures only threatens future profit years in the future – not today. These hollow threats belie pharma companies’ desire to plan for tens of billions of dollars in profits when they get around to selling to low- and middle-income countries, no matter how many people must get sick and die before then. 

Myth:  Drug companies have taken financial risks so they need to be rewarded while retaining rights to prioritize who they sell to.  

Fact:  It’s a stretch to make life-and-death policy decisions to protect pharma over people’s lives based on a flawed understanding of the level of risk drug companies have taken on to produce the vaccines in question. In fact, drug companies have taken on relatively little risk in manufacturing COVID-19 vaccines, thanks to billions in public funding and billions of customers seeking their product for years to come. Rich countries have invested massively in vaccine development, clinical trials, and company-controlled manufacturing capacity. They have de-risked and subsidized vaccine manufacturers and then left them in complete control – a control that has resulted in artificially restricted supply, astonishingly high prices, and grossly inequitable distribution. Those same rich countries, having rushed to the front of the line to hoard enough doses to vaccinate their populations multiple times over, now have the temerity to oppose an IP waiver proposal that will help immunize the rest of the global and prevent new variants from infecting their own populations.  

Myth:  The status quo of pharma-friendly “sticks and carrots” is sufficient. Countries’ should use their existing rights to issue compulsory licenses – but only when pharma companies refuse to engage in voluntary licenses. 

Fact:  Despite acknowledging in her piece that waiving patents isn’t enough to facilitate increased vaccine manufacturing, Silverman argues for countries to exert their power to issue compulsory licenses and then neglects to detail the stunning complexity and inadequacy of current compulsory licensing flexibilities in that they allow override of patent rights only, not trade secrets, copyright, or industrial design. Compulsory licenses aren’t enough for the same reasons she wrongly asserts the TRIPS Waiver isn’t enough. For vaccines with a hundred complex, frequently IP-protected components, manufactured in more than a dozen different countries, compulsory licenses allowing both export and import would need to be issued for each country of manufacture and export and for each country of import and use.  The legal complexity and coordination issues for such licenses make them insufficient to the task – and Big Pharma knows this.

Myth:  “…it is smart incentives for sharing knowledge…will get us to the finish line.”

Fact:  Industry-controlled voluntary measures are not enough. Silverman is right that alternative producers’ work would be much easier with vaccine rights holders “willing and active cooperation to help them set up their process and kick-start production.” However, she then magically skips to the argument that vaccine companies should be encouraged “to cooperate and share information with partners across the globe” via voluntary licensing agreements even though no company has done so and instead all have used a series of contract manufacturing agreements to expand their own, highly controlled vaccine supply. Silverman argues that such voluntary licenses will grant access to some subset countries that vaccine innovators are not interested in and that royalties would even further pad shareholder return. But, she emphasizes preserving monopoly control:  “The contractual language of licensing deals can explicitly protect IP from broader dissemination, helping originators feel more comfortable sharing commercially valuable information.”

Contrary to Silverman’s dispassionate defense of carrot and stick incentives for voluntary licensing (government and development bank funding of manufacturing sites and threats of compulsory licenses), advocates of the waiver know that vaccine manufacturers will not seriously address supply, price, and equitable distribution issues unless they are forced to do so.  

If the waiver is adopted and governments gain the power on a coordinated basis to disregard companies patent thickets, to share regulators’ data on manufacturing methods, and to enter industrial complexes to access additional information, data, and biologic resources, Big Pharma will come to the table. The same alacrity which has allowed vaccine manufacturers to promise that they can, on their own, triple global vaccine manufacturing capacity in a year (probably a false claim) can be deployed to expedite deep technology transfer and to significantly expand vaccine capacity. That new capacity, distributed more evenly around the world, will not only meet COVID-19 needs, but will be durably available to meet future global vaccine needs – and perhaps that’s exactly what Big Pharma is worried about.

COVID-19 vaccine supply and equitable access is an emergency and should be treated as such. The IP-fundamentalist status quo is not good enough – it is killing people. Even if you want voluntary measures, this is an industry that bows only to serious political, economic, and reputation threats. We will not get the supply we need with polite requests and weak incentives. And Rachael Silverman – and the Biden Administration – should know this.  

In fact, the WTO Director General, Ngozi Okonjo-Iweala, rich countries, and pharma CEOs alike have all pushed for various versions of this so-called industry-controlled “third way.” This is not a compromise solution, that will push for concession from pharma companies in service to greater vaccine equity. It is the outcome desired by Big Pharma itself. 

Given the ongoing pandemic and extreme and increasing vaccine apartheid, what should happen next? 

  1. First, the Biden administration should drop its opposition to the IP waiver proposal at the WTO. And it should convince its European counterparts to drop their opposition as well, which should be easy given the recent acknowledgement by the President of the European Commission that Europe itself may need a regional IP waiver given its own shortfalls in vaccine supplies.  
  2. Second, the U.S. should threaten and as needed use its powers under the Defense Production Act, Bayh-Dole (march-in), and 28 U.S.C. section 1498 (government use license), to bring major vaccine producers to the bargaining table. Once at the bargaining table, the U.S. should insist that the companies cooperate more openly and promptly with deep technology transfer to a broader array of producers around the world. Perhaps the best way of ensuring such cooperation is to insist that the companies join the WHO COVID-19 Technology Pool and that they cooperate with any associated Technology Transfer Hub.  
  3. Third, the Biden Administration, other countries, international and regional development banks, and other funders should invest in expanding and repurposing vaccine manufacturing capacity on a regional basis in Africa and other regions of the world. The U.S. has already invested $268.8 million to repurpose Merck’s manufacturing facilities to make Johnson & Johnson’s vaccine. It has similarly invested through its Quad initiative in expanding vaccine capacity in India to make at least 1 billion doses of the J&J vaccine. A relatively modest investment of only $2 billion in regional manufacturing hubs could expand capacity for mRNA vaccine manufacturing capacity to meet immediate global need within 12 months. 

This pandemic won’t end if policy solutions prioritize keeping Big Pharma happy by pursuing one-sided compromise while millions of people are getting sick and dying due to lack of access to life-saving vaccines.