Drug Companies Took None of the Risks to Develop the COVID-19 Vaccine. They're Getting All of the Profits.

By Stephen Buranyi and Luke Savage, Jacobin

01 May 21

The US public poured billions of dollars into developing a COVID-19 vaccine, yet drug companies are reaping the profits and jealously guarding the intellectual property from poor countries. Let the drug companies cry: we should release the vaccines immediately.

uring the earliest months of the coronavirus pandemic, world leaders and corporate executives alike embraced the rhetoric of social solidarity, often drawing on nostalgic memories of war efforts past and common sacrifice in the face of adversity. That rhetoric, to put it mildly, did not realize itself in the form of policy: the pandemic has disproportionately hit the most vulnerable while billionaires have made a killing.

Despite early suggestions that the knowledge and expertise required for mass production of vaccines would be widely shared, private industry has maintained control thanks to restrictive intellectual property laws designed to protect its profits — the result being a slowed rollout that puts private wealth ahead of human need, even as pharma companies reap the benefits from public subsidies and publicly funded scientific research.

Stephen Buranyi is a science journalist living in London and a former researcher in immunology who has written on vaccine politics and production for the Guardian, the New York Times, and Prospect magazine. Jacobin spoke with Buranyi about the moral and political failure that is the global pandemic response, the history of patent sharing in the fight against disease, and why Bill Gates is always wrong.

LS: Back in December, you wrote a piece for the New York Times on the development of the coronavirus vaccines, which ended up coming a lot sooner than many experts had predicted. They were a pretty significant scientific triumph — akin to other historic advances in research and medicine that we now often associate with particular scientists or labs.

But, as you observed, in this case, “the vaccines against Covid-19 are being written instead as a victory for pharmaceutical companies.” If anything, these words have only gotten truer since you wrote them: a number of Big Pharma companies are now basically household names.

Why, or perhaps how, did the vaccines come to be thought of in relation to the pharmaceutical industry (which has essentially won an unprecedented PR coup)?

SB: To a certain extent, I think they just sort of defaulted to the pharmaceutical industry as the public-facing deliverer. What the industry has done for a really long time is collate the huge amount of work done by academic, publicly funded scientists (and, in recent years, also small biotech companies) and brand it as their own.

In a lot of cases, you almost don’t see pharmaceutical companies doing drug development anymore, and this is something lots of people in the industry would agree with. Certainly, lots of drug development goes on, but the model now involves companies taking on other research or buying it up from a biotech company and then providing the branding, the world reach, the legal protections, and the manufacturing.

LS: It’s somewhat strange, in and of itself, to celebrate particular brands for selling a product. But in this case, pharma companies are also taking a lot of undue credit given the extent of public money involved in developing these vaccines. Can you talk about the public sector’s role in all this and the role of publicly funded research in general?

SB: From a global perspective, tons of studies have broken down the amount of public research that lies behind most pharma products. Most of these analyses find that there’s basically no pharma product that doesn’t contain at least some publicly funded research. This system goes into overdrive when it comes to coronavirus: you have an unprecedented amount of public support — the easiest example here is Operation Warp Speed, the US government initiative to find a vaccine, which alone spent something like $12 billion funding vaccines.

You also have the National Institutes of Health (NIH) signing over patents to Moderna and other companies to allow them to move forward. A lot of the structural information — genetic information in relation to the virus, for example — was carried out by the NIH or academic researchers.

There’s also been a tremendous amount of logistical support to this as well: for Moderna, which is a relatively small company, the NIH actually carried out many of their clinical trials. With Pfizer, you’ve got government agents searching through trains to expedite research materials they need.

So there’s a vast web pharma companies are pulling from, and then when you get to the end of it, the shot is just “Pfizer.” There’s this sense that the government shows up with the money and the support, and then they just sort of take their hands away, and then everything else belongs to industry.

LS: From what I understand, the current intellectual property regime is quite different from what has existed in the past — something that’s very much shaped the global response to COVID-19. How do the current rules compare to those that existed in relation to the major global diseases of the twentieth century, such as smallpox?

SB: This is a really interesting way to get at the problem if you want to talk to people about why we should open up patents for these vaccines or why we should do worldwide production — basically, why we should take on Big Pharma.

You don’t have to understand everything about how complex things like intellectual property regimes or the World Trade Organization (WTO) operate. You can explain it very easily: a private company controls the patents to a pharmaceutical product, and if somebody else or someone in another country tries to make it without their permission, they can take legal action via international trade agreements like those in the WTO. It’s super strict, and it’s very easy for them to extend this legal weapon all the way across the world. In effect, this gives them power over particular intellectual properties worldwide.

Before the WTO came into being in the mid-1990s, enforcement of patents was a lot laxer. One of my favorite examples is that countries like Spain, Italy, and Canada were quite well known for just allowing companies within their borders to make pharmaceutical products. They would then pay a kickback, or rather a license fee, to the pharmaceutical company that held the patent while making a cheaper version domestically. This was totally noncontroversial, and they used to do it for heartburn medication, for ulcer medication in Canada. It wasn’t seen as beyond the pale at all.

And in situations like pandemics — for example, during the quest to eliminate smallpox — you had the World Health Organization (WHO) assume the role of global coordinator, where they would take on information about how to make vaccines. They would collate them, test them, and then send them out across the world to help people get their production up to speed. You had countries like Bangladesh, Malaysia, Kenya, going from very little production to actually donating state-of-the-art vaccines back to the WHO to give to their neighbors after a few years — and this was all the way back in the 1960s and 1970s. In this case, there was no IP seized, but this kind of sharing was generally seen as a good thing.

During World War II, the US government was trying to make more antibiotics, specifically penicillin, and they made Pfizer give up its recipe. Not only did they share it with all of Pfizer’s competitors and give contracts to manufacturers, but they built factories using Pfizer’s process. This was all done by the War Production Board, which got a special dispensation to suspend antitrust law, which pharma companies weren’t thrilled about (not that it stopped them from making huge profits). I think the really key thing is that nobody thought this was a really big deal. They would look at, say, the need for penicillin during World War II and say, “Well, of course, Pfizer should give it up. Of course, the government can help distribute and produce this stuff.”

That sentiment has very much evaporated since the 1990s, and despite the fact that a different way of coordinating a vaccine response exists within living memory — there are plenty of people alive who worked at these companies or worked in the governments that did these sorts of things — it’s considered beyond the pale that we would allow another country to make a private drug or that we would compel a pharmaceutical company to share its knowledge, even when faced with this enormous crisis. It’s mind-boggling.

LS: Last month, the CEO of AstraZeneca wrote in the Guardian: “The fight against Covid-19 has shown how governments, industry, international institutions and academia can come together to achieve something remarkable” and promised the industry was doing all it could “to make sure people around the world have access to safe, effective Covid-19 vaccines, wherever they live and regardless of income level.”

This narrative — that there’s a general atmosphere of cooperation between government, science, and private industry coordinating on a global level against the virus — is one that I think a lot of us have basically internalized. Maybe that has something to do with all the political rhetoric in the spring of 2020 about civic solidarity, wartime measures, etc. In any case, this kind of cooperation is largely illusory — and people in the Global South especially are suffering as a result of the current patent rules. Can you elaborate a bit about why the current global patent regime privileges wealthier countries that are mostly in the West?

SB: I mean, it privileges them because they wrote the rules! And those rules were written with the expectation that the ability to produce these things would always stay with particular countries, whether it’s high-tech products like software and electronics or drugs. Part of the original way some of these IP laws were written is owed to lobbying from companies like Pfizer — which played a huge role in getting the WTO IP rules written — and these rules were written largely to protect the position that companies like it enjoyed as privileged controllers of these products. So the rules are written to keep certain products within the Western or, you might say, the developed sphere.

Then you come to a situation like this, and there’s not a huge amount of capacity in developing countries because the capacity has basically been kept in the developed world. The rules make it so that it’s been very difficult for other countries to develop capacity. Richer nations get access to these things first, and nobody else is allowed to make their own way with it.

LS: Bill Gates was interviewed on Britain’s Sky News this weekend, and the crux of what he said was that lifting patent restrictions wouldn’t help improve our collective response to the pandemic because the capacity and expertise required to manufacture more vaccines safely — patents being shared or not — just isn’t there.

Your latest piece makes a pretty convincing case that Gates’s comments, which are very much in keeping with the general line taken by pharma companies, are nonsense and that there’s a ton of untapped manufacturing capacity that could be put to use if companies shared their recipes. What’s your response to Gates’s remarks?

SB: If you want to engage in as good faith a way as possible (I don’t want to be too charitable, but for the sake of argument): he’s a huge techno-optimist, and so he’s really pleased that we’ve been able to make these vaccines possible, but in every other respect, he’s basically a huge pessimist. He embodies the centrist cri de coeur that better things are not possible.

So when he says we can’t do things differently, what that means is that, for him, this looks pretty good. The technology came fast, we’re going to make some vaccines now for the rich world, and the poor world will eat after we’re done. He’s unwilling to look at the system as it stands or to ask whether we could do it differently, so he can’t see another way forward. To him, this is the best possible world: we let private companies make these things, their processes are totally secret, their supply chains are totally secret, their capacities are totally secret, etc., but we just trust that they’re doing everything in the most efficient way possible and that’ll take care of everything for the world.

Moving on to the question of supply, I reported on a company in Canada recently — Biolyse in St. Catherines, Ontario — that’s interested in producing the Johnson & Johnson vaccine. They think they can make about twenty million doses a year. There’s a company in Bangladesh called Incepta that’s interested in helping as well. Neither has received really any word back from their own governments or the pharmaceutical companies that they’ve approached. So that puts the lie to the idea espoused by Gates that there is absolutely no capacity.

I will say he’s right that there’s not a crazy amount of capacity — on the order of billions of doses — to be had. But those taking up this line are being needlessly, or rather purposely, obtuse about it. Because what people are talking about is not necessarily just searching out a couple of factories with the necessary capabilities. They’re talking about what used to exist in the past, which is a coordinated international effort to build up the capacity from scratch in all of these countries. I mean, China built all of these factories last year to make these super old-school vaccines they developed, absolutely from scratch, and they’re pumping out hundreds of millions of doses a year.

To somebody from industry, that’s anathema, because you’re going to have way too much capacity at the end of this pandemic. It just doesn’t make any sense for them: If you can make a couple hundred million doses, sell them all to the rich world this year, then use the same factories to sell to Africa next year, that’s super-efficient from their perspective, right?

The thing is: If we build a bunch of factories to get rid of this pandemic, and then, after it’s done, they’re not useful anymore, who cares? What price does the world put on ending the pandemic? This stuff ultimately just doesn’t conform to the profit models at the heart of the pharmaceutical industry.

LS: And presumably, the pharmaceutical companies have an immediate financial interest in the supply being somewhat limited because if they exclusively manufacture these things and get to sell them off in piecemeal, that’s much more profitable for them than if they were produced in factories engaged in a global effort.

Would it be too reductive to say that the whole thing ultimately swings on the fundamental divergence between the profits of private industry and the interest of the species as a whole in killing off the pandemic as quickly as possible?

SB: The idea that these companies aren’t working on a purely capitalistic profit model is ridiculous. Of course they are. And you can see by the number of people that are now getting on board with the campaign to expand production, knock down patents, and share know-how that most don’t think this way. When you look at people like Gates or those that run pharmaceutical companies, they really are zealots. They’re hardcore ideologues, and they think that the only way to do things involves turning a profit.

Something that’s quite incredible about this moment, especially over the past couple of weeks, is that we’ve seen more and more people (including former world leaders like Gordon Brown) and all these civil society organizations come out in favor of a real global response. You’re seeing people’s limits with this system. You’re seeing that most people don’t think this way in a crisis and that they’re willing to say, “Profit be damned. We need to end this pandemic.”