COVID-19 pandemic: patents and profits

We are 16 months into a pandemic that according to some reports has claimed 6.9m lives and plunged capitalism into its deepest-ever crisis, and the ruling class is still torn by internecine squabbles over patent waivers, export bans and priority-deals.

New rifts have opened up between sections of the bourgeoisie following the recent announcement that US president Joe Biden’s administration now supports “negotiations” on waiving COVID-19 vaccine patents.

This is much to the consternation of the Big Pharma parasites, who are pocketing tens of billions of dollars thanks to their exclusive ownership of COVID-19 vaccines and other drugs.

Again and again, we find proof that capitalism, a system based on narrow national interests and the pursuit of private profits is utterly unfit for purpose. Indeed, as a recent WHO-led investigation just confirmed, the entire pandemic was preventable. The market and bourgeois politicians brought about this disaster, and are utterly failing to resolve it.

IP and Big Pharma profits

In October last year, faced with the prospect of global vaccine shortages and the inability of poorer countries to acquire them, India and South Africa presented to the World Trade Organization a request to waive intellectual property rights on all the COVID-19-related drugs and technologies. This would allow the manufacture of cheap, generic versions anywhere in the world.

Vaccines and medical technologies fall under the WTO agreements on Trade-Related Intellectual Property Rights, known as TRIPS, which protects the IP of the major pharmaceutical companies.

According to one report, a TRIPS waiver could help in vaccinating more than 60 percent of the world population by the end of the year. Everyone on earth could be fully vaccinated by the end of 2022. The pandemic nightmare that billions of people are living through could be over once and for all.

Surely then, a TRIPS waiver sounds like a sensible and necessary request? Especially given that the likes of Pfizer, Johnson & Johnson and AstraZeneca have already racked up profits of more than $26bn during the pandemic. What was being demanded was not too radical either: a one time temporary waiver on intellectual property rights related to just one vaccine.

Also, the 2001 Doha Declaration on TRIPS and Public Health – agreed by all WTO states – maintains that public health should take precedence over the enforcement of IP rights.

Unfortunately, Big Pharma takes a very different view, and isn’t going to let a trivial thing like the Doha Declaration undermine its private claim to COVID-19 vaccines. From their point of view, any concession in this particular case would set a very dangerous precedent.

The IP protections afforded to Big Pharma are denying huge swathes of the world population access to vaccines, compounded by the vaccine nationalism of rich countries, which can afford to pay suppliers directly and are gobbling up global supplies.

As, Dr. Tedros – the general director of WHO – has warned in the NYT that, following the current trajectory of vaccinations: “[w]e face the very real possibility of affluent countries administering variant-blocking boosters to already vaccinated people when many countries will still be scrounging for enough vaccines to cover their most-at-risk groups”.

This is quite an appealing prospect for the Big Pharma bloodsuckers: namely, COVID-19 going endemic, much like a seasonal flu.

With new variants breeding out of control in poor countries every year, and seasonal vaccines developed and distributed for those who can pay, billions of dollars would continue to flow in the pockets of these leeches, potentially for the years to come.

Moderna CEO Stephane Bancel has already tempted his shareholders with such a “business model” – and is now projecting more than $19.2 billion in sales for this year!

However, this bonanza depends on Big Pharma keeping a firm hold on its vaccine IP. Hundreds of thousands of people dying every single year as a result of COVID-19 going endemic is a very minor concern.

Patent waiver

Biden Covid Image Gage Skidmore FLickrJoe Biden's announcement in favour of vaccine waivers is no humanitarian gesture, but a calculated move by US imperialism / Image: Gage Skidmore, Flickr

Unsurprisingly then, Big Pharma has been lobbying governments world over against the TRIPS waiver. Up until now, they have been successful.

As of October 2020, the US and EU not only opposed the waiver, but blocked the possibility of any discussion of it from taking place at WTO meetings.

Now – after a criminal seven-month period in which hundreds of thousands of people have lost their lives to preventable second and third COVID-19 waves – Biden’s administration has come out in support of entering into negotiations over the TRIPS waiver.

Unsurprisingly, Big Pharma reacted to this announcement with dismay. Pfizer CEO Albert Bourla argued that an IP waiver would “disrupt the flow of raw materials” for the vaccine production chain.

One suspects he means Big Pharma’s exclusive control over these raw materials will be disrupted.

Meanwhile, Johnson & Johnson called the waiver proposal “an unprecedented step that will undermine our global response to the pandemic and compromise safety”, by allowing poor countries to produce vaccines.

This is despite the fact that India produces the highest number of vaccines in the world, and was one of the two countries that proposed the waiver in the first place.

Big Pharma companies also complained that an IP-waiver would hand the likes of China access to Western-produced mRNA technologies, which aside from vaccine production, could be repurposed for, among other things, cancer research (quelle horreur!). Let us not forget that mRNA technology was developed in publicly-funded university research facilities in the first place, before it was appropriated by private companies.

This is simply an argument for the latest developments in medical science being freely available to the entire world, rather than the private property of this or that capitalist regime.

A “calculated risk”

Far from an act of ‘international solidarity', this latest move from the US government is a calculated political risk, and will be implemented in the interests of US imperialism.

A section of the more serious wing of the bourgeoisie understands that a proper economic recovery can happen only if the pandemic is suppressed worldwide.

As we have explained elsewhere, wealthy countries risk losing billions of dollars if the pandemic is brought under control only within their own borders, because new variants (like those in India and Brazil) can always mutate elsewhere and reinfect their populations, causing further economic disruption.

Therefore, even on a capitalist basis, it is expedient in the long-term for the rich countries to facilitate a global vaccination campaign. Even Pope Francis anointed the demand from his seat in Rome!

Biden’s announcement is also an act of vaccine diplomacy.

America’s main rivals, China and Russia, have been shoring up their spheres of influence by distributing their Sinopharm and Sputnik V vaccines to poor countries left out by the vaccine nationalism of the US and Europe.

Chinese and Russian vaccines have been exported into countries traditionally under western spheres of influence, including Brazil and Hungary.

Pushing to waive IP protections on COVID-19 vaccines is therefore partly an effort to push back against the encroachment of rival imperialist powers, which have so far outcompeted Washington in the global vaccination drive.

Biden’s announcement is also an attempt to restore the standing and authority of US imperialism on the world stage, which has been bruised by the ‘America First’ vaccine nationalist policy started by Donald Trump, and continued by Biden.

According to the FT, Katherine Tai (top US trade envoy) and Jake Sullivan (national security adviser) made the case to Biden that pushing for the waiver “was a low-risk way to secure a diplomatic victory”, after coming under fire for not “respond[ing] quickly enough to the unfolding COVID-19 crisis in India”.

Here you have it, straight from the horse’s mouth. Under capitalism, vaccines – rather than providing a way out of the pandemic – are tools for ‘low-risk diplomatic victories’. As if this was some sort of football match between world leaders!

In short, Biden is stepping in to prioritise the interests of US imperialism as a whole over the immediate interests of the Big Pharma capitalists.

But we should say clearly: this cynical attempt to claim the moral high ground came only after the US used its massive economic clout to secure enough vaccines to inoculate its own population several times over.

And in fact, the wartime Defense Production Act is still in effect, which forces US manufacturers to fulfil domestic demands for medical equipment before exports are permitted.

This de facto export ban has created bottlenecks in the supply chain that have already undermined the WHO-led COVAX programme to vaccinate poor countries.

Rest assured, Biden’s policy remains ‘America First’, just by somewhat more calculated means than his predecessor.

Protectionist EU

Meanwhile, in the Eurozone, where vaccine shortages still abound, EU leaders fired back at Biden that he should lift his export ban and give up some of America’s surplus supply before talking about waiving IP protections.

Angela Merkel Covid Image European Peoples Party FlickrThe European bourgeois have shot back at the US that they should end their bans on exporting COVID products rather than talking about waiving IP protections / Image: European People's Party, Flickr

President Emmanuel Macron in France said he favoured waiving vaccine IP in principle, but that this was a lower priority than the US and Britain ending export bans on resources and giving up their spare vaccines.

“If we want to work quickly, today there isn’t one factory in the world that can’t produce doses for poor countries because of intellectual property,” Macron said on the weekend.

“The priority today is not intellectual property – it’s not true. We would be lying to ourselves. It’s production.”

Indeed! And production could be considerably ramped up if Big Pharma companies weren’t content to maintain existing factories at full capacity, rather than creating and repurposing new factories that will stand idle (and unprofitable) when the pandemic ends.

It should be noted that no French company has managed to produce a vaccine as yet, meaning IP protection is a lesser concern from the perspective of French capitalism.

This is unlike Germany, in which Pfizer’s partner BioNTech is based, and whose Chancellor Angela Merkel argued for preserving IP protections in order to ensure free market “innovation”, stating last Friday:

“I believe that we need the creativity and innovative force of companies, and for me, this includes patent protection.”

Merkel conveniently forgets that, since the beginning of the pandemic, state intervention has been a far more important influence over vaccine production than the ‘invisible hand’ of the market.

The research that led to the COVID-19 technologies vaccines was overwhelmingly paid for out of the public purse. The AstraZeneca vaccine, for instance, was 97 percent publicly funded. Not to mention the billions spent by various states on purchasing doses.

This has nothing to do with preserving ‘innovation’, and everything to do with protecting the private interests of German capitalism.

Vaccine supremacy

Despite misgivings from the likes of Germany, this latest move by the US might force the EU to change its tune.

At a European Council summit on the weekend, President Charles Michel said: “[o]n the intellectual property, we don’t think in the short term that it’s the magic bullet but we are ready to engage on this topic as soon as a concrete proposal will be put on the table.”

Still, Brussels is embittered at the US for refusing to offer any of its excess supply to help with shortages after the EU bungled its initial vaccine rollout.

At the close of the summit, European Commission President Ursula von der Leyen again stated Europe was “open to discussion” on waiting IP, but mostly used the opportunity to strike back at the US:

“The European Union is the pharmacy of the world and open to the world. Up to today in the European Union, 400 million doses of vaccines have been produced and 50 percent of them — 200 million doses — have been exported to 90 different countries in the world. So we invite others to do the same [this clearly means the US]. This is the best way right now in the short term to approach the bottlenecks and the lack of vaccines worldwide.”

Belgian Prime Minister Alexander De Croo used even-sterner language:

“As Europeans, we don’t need to be schooled. The U.S. hasn’t exported a single vaccine in the past six months. Europe is the one that’s been producing for itself and the rest of the world these past six months.”

Now the European rollout is a bit more in hand (though still lagging behind the US and Britain, for example), the EU is trying to pursue vaccine diplomacy of its own to compete with China, Russia and the US in the race for vaccine supremacy.

At the summit, Leyen announced plans to send more than 600,000 doses to countries in the Western Balkans, with further donations planned for countries in the Eastern Partnership group comprising Eastern Europe and the Caucasus.

This notably includes Ukraine, which has already pleaded in vain with Washington for vaccines.

While this is all going on, the EU is still waging a war with the British-based AstraZeneca company – taking them to court over delayed deliveries of vaccines.

Once again, at a critical juncture in the fight against the pandemic, when global cooperation is most needed, the political leaders of bourgeoisie are embroiled in recriminations and shoring up their narrow national interests.

No time for this madness!

While the world leaders squabble, the nightmare continues for workers imprisoned by this pandemic.

In her official statement to the WTO, Tai said: “negotiations [i.e. for the patent waiving] will take time”. But time is exactly what millions of workers that face the deadly virus today do not have.

Because the WTO makes decisions by consensus, with any one of the 164 member states being able to block decisions, the end of November is considered a ‘realistic goal’ for presenting a draft agreement. This is seven months away! While tens of thousands of deaths are being recorded on a daily basis. When deadly new variants are devastating India and Latin America.

It took less time to develop the first working vaccine than apparently, it will to agree a patent waiver on that vaccine! This is nothing short of insanity.

Furthermore, the US statement to the WTO fell short of making explicit reference to the transferring of vaccine technology and know-how.

If the technology underpinning vaccine production is not shared, even with a patent waiver, it will take months before manufacturers will be able to reverse-engineer a generic version, and months further to test it.

The Big Pharma fat cats will not share their technology (which was publicly funded in the first place) voluntarily.

They are forecasting sales for billions of dollars for 2021 and will do everything they can to push further back the development of generic versions. They can afford to drag things out. For them, time means billions in profits.

The COVID-19 pandemic has shown capitalism for what it is. Rather than being a force for progress, private property and the nation state are the main obstacles preventing us from putting an end to the pandemic.

Under a democratic, global plan of production we could put the mighty forces of industry and science at the service of society. All the necessary research, technology and expertise could be marshalled to fight this terrible virus.

Vaccine production could be stepped up to reach the majority of the world population by the end of the year.

It is capitalism alone that prevents this. We must fight the pandemic with class struggle! Expropriate the Big Pharma fat cats!

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