As the veil is starting to be lifted on the impacts of the COVID-19 pandemic compared to our initial, very limited understanding, we are also learning how, far from viewing all of humanity as being “in this together,” pharmaceutical firms and their lobbyists view this disaster as a golden opportunity.
The vicious fights we’ve seen in the last couple of months between US states and EU member states over access to tests, ventilators, and personal protective equipment (PPE) is nothing compared to the global brawl that is emerging over patents with respect to drugs, diagnostics, and vaccines — even before they have been identified.
The tales we have heard of jurisdictions buying up drugs claimed to be effective against COVID-19 and causing worldwide shortages, of orders suddenly going missing and subsequently found to have been redirected to a wealthier buyer, of prioritization of distribution based on ability to pay rather than on need, and of profiteering that sees the price of the likes of masks, gloves, and hand sanitizer soar, is child’s play compared to the emerging wickedness of patent protection and profiteering with respect to COVID-19 drugs and potential vaccines.
In March, drug firm Gilead sought an extension to its patent monopoly on a potential treatment for the coronavirus, the existing drug remdesivir, and only backed down in the face of outrage. It is still likely to charge $4,000 per patient for the drug even though the cost is around $9 per patient.
This month, we have seen the British CEO of French pharmaceutical giant Sanofi, Paul Hudson, declare that the US government would get access to any vaccine first because it had contributed the most funding — a quid pro quo demanded by Washington.
The European Commission responded by saying that the firm had received tens of millions in domestic public funding, while the German press denounced the company as “soulless” and “disloyal” for wanting to squeeze governments into giving greater subsidies. A furious Emmanuel Macron summoned Hudson to the Élysée Palace to explain himself, and the normally pro-free-market French leader insisted that any vaccine be produced as a “public good for the world, not subject to the laws of the market.” Sanofi quickly rowed back its comments, with its chairman later assuring that no country would receive preferential access.
This is the second time that the Trump administration has been caught trying to poach therapeutics from elsewhere. In March, it was revealed that the US government had offered large sums of money to a German company, CureVac, with a vaccine candidate to relocate its research division to the United States and develop the vaccine “for the United States only.” Berlin denounced the move and offered its own incentives to try to ensure that the firm stays in Germany.
Meanwhile, AstraZeneca’s CEO Pascal Soriot has also said that the UK will enjoy priority for the fruits of its COVID-19 research endeavors.
But Gilead, Sanofi, AstraZeneca, and Washington are far from the only villains. In May, diplomats from the UK, Switzerland, Japan, and other countries with significant pharmaceutical sectors joined the United States in working to have language removed from a World Health Organization (WHO) resolution that referenced the right of countries to override patents during health emergencies.
It is grotesque for nations to be pushing and shoving to get themselves to the front of the line to access COVID-19 therapeutics, but to work to prevent access to them by those least well-off is another order of deviltry.
Uneven and Unnecessary
History is repeating itself in any case. In the mid-1990s after deaths from HIV/AIDS had peaked and begun to decline in the developed world thanks to the discovery of antiretroviral medicines (ARVs), the HIV/AIDS epidemic continued to cripple South Africa primarily due to the high cost of the drugs — some $10,000 per year per patient. The newly democratic nation was threatening to produce or import generic drugs to combat the disease, but the pharmaceutical industry was steadfastly opposed and the Clinton administration, whose health care policy was at the time overseen by Hillary Clinton, threatened Pretoria with trade sanctions.
In 2001, however, after years of campaigning by groups like South Africa’s Treatment Action Group, a militant and science-based AIDS activist organization, and of negotiations by developing nations, the Global South finally managed to win an amendment to the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the “Doha Declaration,” which clarified that governments do not have to respect IP protections during public health emergencies.
Large pharmaceutical firms have never been happy with this defeat. Over the years, the United States in particular has attempted to restrict the number of medicines the declaration covers, while most developing countries have insisted that all drugs should count. The European Union has positioned itself somewhere in the middle, suggesting a long — but still finite — list of drugs that the Doha Declaration covers.
And now, in the past few weeks, diplomats from countries with sizable pharmaceutical sectors have pressed to strip any reference to the Doha Declaration in a resolution on COVID-19 at the World Health Assembly, the WHO’s decision-making body.
Instead, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and its diplomatic water carriers argued that firms need their patents to recover their investment in therapeutic research, development, and production. The sector’s business model requires high prices in the developed world first for a number of years before it is willing to countenance production of low-cost generic versions.
“We have never needed innovation so much as now, and this is probably the worst possible time to weaken intellectual property,” the trade association said. Equitable access to drugs and vaccines is desirable, they feel, but this should occur essentially through charity, through government donation and partnerships.
The World Health Assembly resolution, which had been sponsored by the European Union, in the end did reference Doha, recognized COVID-19 drugs, tests, or vaccines are a “global public good,” and encourages the development of a voluntary patent pool to support equitable and affordable access to any. The United States did not vote against the resolution, but it immediately distanced itself from the document via an objection note, saying that it “sends the wrong message to innovators who will be essential to the solutions the whole world needs.”
Seizing the opportunity to present China as committed to the global commonwealth in contrast to its American rival, President Xi Jinping immediately declared that the vaccines that it is developing “will be treated as a public good.”
But development and medical NGOs such as Oxfam International and Médecins Sans Frontiers (MSF) were quick to remind that while the passage of the resolution is a victory, it has many flaws. Most egregiously, it does not require pharmaceutical firms to pool their patents, which would have allowed anyone with the capacity to manufacture generic copies of therapeutics to do so. There is also no guarantee that any drugs, vaccines, or tests will be provided to whoever requires them regardless of ability to pay.
This is not merely a question of justice with respect to those who cannot afford treatment; such market-based restriction of access encourages the spread of this infectious disease as those unable to pay — and the poorest billions of the planet count among them — continue to spread the virus. That is, universal, free access is in the interest of all humanity, even the rich.
As a result, these organizations want to see a two-step approach: a mandatory patent pool to allow international collaboration, sharing of knowledge, and a one-stop-shop for generic producers; and what is called compulsory licensing at the national level.
Under compulsory licensing, a government authorizes the use of intellectual property without the need to seek the patent owner’s consent, and pays the rights holder a fee decided via legislation or by some other public body instead of negotiation in the market between buyer and seller. A number of countries, including Canada, Germany, Israel, Chile, and Ecuador have already passed compulsory licensing legislation or resolutions backing compulsory licensing with respect to any COVID-19 therapeutics.
Costa Rica was the initiator of a request that the WHO set up a voluntary patent pool, potentially via the existing UN-backed Medicines Patent Pool (MPP), which was established in 2010 to expand access to tuberculosis, HIV, and hepatitis therapeutics. The MPP negotiates voluntary patent agreements with pharmaceutical companies to enable greater access for generic manufacturers. Extending this system to cover COVID-19 should make it easier for generic manufacturers to also produce these new drugs and vaccines at a lower cost than if they had to shop around to each patent owner.
But it is crucial to understand that a voluntary system, while perhaps the best we can currently hope for, provides an alternative to compulsory licensing. Even those who are at the forefront of working to extend access to drugs, tests, and vaccines, such as the chair of the MPP, Marie-Paule Kieny (also a special COVID-19 adviser to French president Emmanuel Macron), and the MPP’s director, Charles Gore, feel that right now it is essential that any patent spats that could inhibit product development be avoided at this crucial time.
Without an urgent establishment of a voluntary global master plan, Kieny and Gore argue, “the situation could quickly devolve into a competitive, litigious, country-by-country scrum for interventions in which some regions emerge as winners but most others will be losers — and with deadly consequences.” As with the production of generic HIV/AIDS drugs, some countries were able to stand up to US and other Western intimidation while others weren’t, and their populations suffered as a consequence.
Blame the Game
Prathiba Singh, a judge sitting on the High Court of Delhi, a career intellectual property litigator, and one of the authors of India’s intellectual property legislation, makes a similar argument. Writing in The Hindu, she worries that without a trustworthy and voluntary UN patent pool while patent holders create barriers to use of their IP on the basis of patent rights, there is a risk that “the world will start despising patents” and push forward with compulsory licensing.
Singh, a supporter of IP protections, argues that a rush to compulsory licensing or even state acquisition would inhibit innovation at a time when we need it more than ever. “To protect the sanctity and integrity of patent systems, and in order to ensure that an anti-IP sentiment is not generated globally,” a WHO-orchestrated patent pool is the best option. She reminds pharmaceutical firms that they are still likely to make billions under such a regime. After all, seven billion people is the largest market there has ever been for any product.
But all of this is essentially an admission of defeat, born of a belief that innovation only happens through the market. As Singh puts it, the purpose of creating intellectual property rights is for the common good. The quid pro quo that IP represents that in exchange for the costs of innovation, firms are awarded a limited-term monopoly on their discovery or invention.
However, as economist Mariana Mazzucato has shown in her investigations into innovation policy and the economics of innovation, market actors tend to be loath to spend resources on fundamental research, which typically offers an unknown return on investment. The bulk of innovation across most sectors over the past half-century, from mobile telephony and computer miniaturization to biotechnology and clean energy, was in fact developed in government or university labs, or via public-sector risk-sharing.
A 2015 report from California’s Institute for Health and Socio-Economic Policy found that of the top 100 pharmaceutical companies, 64 spent twice as much on marketing and sales than on research and development (R&D), 58 spent three times, 43 spent five times, and 27 spent ten times.
Facing down the globalized world’s first pandemic, we don’t have time at the moment to entirely decommodify the pharmaceutical sector. So perhaps a voluntary patent pool is the best we can hope for right now.
But over the long term, as we emerge from this pandemic, we should reject the notion that pharmaceutical discovery and production needs to be performed within the market. Just as many countries recognize that health care is too important to be left to the vagaries of the capitalist mode of allocation of resources, we need to remove the pharmaceutical sector from such competition, as well. We know that the public sector already does most of the work here, anyway.
Equally important, it is essential that we begin to recognize that the villainy of Gilead, Sanofi, AstraZeneca, the International Federation of Pharmaceutical Manufacturers and Associations is simply the way that markets work. The US, UK, and Swiss diplomats are not wrong when they say that pharmaceutical firms need patents in order to charge sufficiently high prices to recoup their costs and make a profit. It is not “crude competition” that is at fault, as suggested in a well-meaning open letter signed by some 140 current and former world leaders calling for a patent-free, low-cost “people’s vaccine” that is free at the point of need. It is not “corporate capitalism,” for small businesses are just as beholden to this incentive structure.
All businesses, large and small, whether owned by private individuals, shareholders, or by workers or consumers (in the case of cooperatives) are governed by the same requirement to protect their profits or they will go under.
Thus, it is not the diplomats, lobbyists, or pharma executives who are the anti-humanist criminals, who are merely captives of the blind imperatives of the market, but the market system itself.
At the time firms were making their decisions about patent protection strategy with respect to COVID-19, the projection of deaths by the end of this year was as high as forty million, according to Imperial College London’s COVID-19 Response Team on March 26, in the absence of interventions. About fifteen million of these would occur in the Global South, some two and a half million in sub-Saharan Africa, and just over three million in Latin America and the Caribbean.
This was the infamous report that made everyone pause, the document that, alongside harrowing footage of overwhelmed Italian intensive care units filled with patients dying alone and scared, prompted such profound dread — and such unprecedented responses.
A pair of months later, as more about the disease has been revealed, as the scale of the threat has receded somewhat, and as we now see pharmaceutical firms squabble over threats to the patents for the presumptive suite of drugs, diagnostics, and ultimately vaccines to treat COVID-19, it is worth remembering that dread and those numbers.
Of course, there have been interventions, and we know much more about the virus, the disease it causes, and what medical and social interventions are working best to reduce transmission and prevent the worst outcomes.
In the developing world, a number of nations have had remarkable success in flattening the curve. Having been given a head start, many African nations engaged in pandemic planning and imposed social distancing measures (of varying levels of restriction on freedom of movement and association) much earlier than rich countries with respect to the timing of outbreaks. And some of the better-off developing states such as Senegal, Ethiopia, and Ghana might even consider themselves among the first tier of nations with respect to contact tracing, innovative and low-cost testing techniques, and commitment to health care provision regardless of ability to pay.
It also appears that the relative lack of road infrastructure in many parts of Africa that at other times is a frustrating barrier to economic development for its restriction of travel and trade, in the time of COVID-19 also restricts transmission of the disease.
Nevertheless, many countries in the Global South are performing much less well than the likes of Ethiopia and Senegal.
At the time of writing, the likes of Tanzania, Nigeria, and Somalia in Africa and of Brazil, Ecuador, Peru, and Chile in South America had been particularly badly hit. On May 20, the number of new daily cases in Latin America overtook the United States and Europe. The test positivity rate is 91 percent in Algeria and 87 percent in Sudan, which means it is very likely that large numbers of cases are going unrecognized — what the Economist magazine is calling “ghost hotspots.”
Doctors and gravediggers from African metropoles like Kano, Nigeria, and Mogadishu, Somalia, report being overwhelmed with infections and burials, again anecdotally suggesting the impacts in these regions are much greater than detailed in official case and mortality reports. Tanzania stopped releasing data three weeks ago after a spike in cases.
It is a mixed bag. Last week, the World Health Organization issued fresh projections for outcomes in sub-Saharan Africa using a model that for the first time took into account these sorts of specificities of the region, including meager road infrastructure and the continent’s younger demographic profile. There is actually a lower risk of exposure and transmission in much of Africa than there is in the developed world. Now with a greater understanding of the epidemiology than just weeks ago, the WHO report is much more optimistic than the early warnings from Imperial College.
Nevertheless, the numbers remain troubling. Even taking into account interventions, a quarter of a billion Africans are likely to be infected this year, the new WHO numbers say, and as many as 190,000 are likely to die. And that’s just 2020. The virus is here to stay until we develop a vaccine. And while transmission is lower than in the Global North, limited health care capacity is at much greater risk of being overwhelmed. The knock-on effects of the disease on other illnesses such as HIV/AIDS, tuberculosis, and malaria could double that figure.
And we are learning that survival, as welcome as that is over death, is not akin to recovering from a common cold or seasonal flu — regardless of what region of the world we consider. In its berserk march through the body, the virus is not just capable of inflicting profound potentially long-term or permanent damage to the lungs, but can also cause liver and kidney failure, strokes, seizures, neurological injury, blood clots, and heart attacks. Some 44 million Africans are still projected to have some sort of symptoms, resulting in anything from a couple weeks of sniffles to chronic lung conditions to brain damage.
There will not be 40 million dead, as in the original, worst projections. But when we consider the actions of the presumptive COVID-19 patent holders, at the time they made their decisions, they knew that up to 40 million could die, and still they pressed forward to protect their intellectual property. And in any case, there already have been, at the time of writing, 350,000 deaths and 5.5 million infected. And every effort to overcome patent protections will reduce the numbers of dead and infected and every effort to defend them will increase those numbers.
In terms of moral calculation even if not (yet) in outcome, how is this any different from some of the worst crimes against humanity of the twentieth century, the Ukrainian Holodomor or the Great Chinese Famine, where the crime was not that decision-makers consciously set out to kill millions as in the Holocaust or the Rwandan genocide, but rather the crime lay in that they knew that millions could be killed as the result of their policies?
Such comparisons are not tossed out thoughtlessly, but deliberately, soberly, and fully cognizant of the resonances, for the ethics of decisions taken by such firms must have initially been assessed in those early days knowing full well the upper bound of how many could die. And now that the projections are much lower but still truly awful, they continue to act in the same way, always in the knowledge of what the consequences of their actions might be.
And yet, and yet, and yet, they also have had no choice but to do what they do.
The architect of these crimes is not a Big Pharma CEO, but the market.