How Capitalist Competition Hobbled the COVID-19 Vaccine Rollout

Big pharma firms like Pfizer are marketing COVID-19 vaccines for a profit, yet the research behind them would have been impossible without universities and public funding. The lack of an international public health response has placed capitalist profit over human need — and will leave billions of people unvaccinated.

The vaccines produced by Western pharmaceutical corporations engage in a contest with Russian, Chinese, and Indian vaccines for use by the great masses across the world. (Heather Hazzan / Flickr)

A year into the pandemic, it is well understood that COVID-19 has a class character, matching the entrenched inequalities and racial discrimination of financialized capitalism. The disease is especially threatening to those with long-term disorders. The most vulnerable strata are workers, those with low incomes, and the old, each of whom are heavily exposed to persistent long-term health complaints often associated with unsatisfactory environmental conditions and poor diet. They are marginalized by the health systems of even the world’s richest countries.

Powerful states were both unwilling and unable to adopt a grassroots policy of COVID-19 containment. Such a strategy would have entailed a coherent national plan, with international cooperation, focusing on the initial clusters of the disease with widespread and targeted testing. It would have created a network of medical staff at the primary level directed at the areas of mass dispersion, such as workplaces, transport, and education. The aim would have been to identify and trace those infected and to isolate individuals, groups, and spaces, including those most vulnerable due to long-term conditions. Resources would also be urgently required to expand capacity for emergency care in conditions of dignity and safety.

The problem was not resource availability or technological know-how but institutional and ideological failure. A grassroots strategy would have entailed the wholesale rethinking of public health mechanisms imbuing them with public spirit and greater equity. The implications for the pharmaceutical giants and the biomedical sector would have been profound — and neoliberal states were not prepared to disturb their interests. Class set the terms of confronting the pandemic, and that eventually meant restrictions and lockdowns.

If a grassroots strategy was not in the cards in developed countries, it was unthinkable for weaker peripheral states. Resource shortages, defective health systems, and dysfunctional state mechanisms left little scope for prioritizing the poor. The class nature of the pandemic was stark in peripheral countries, where the rich are even more self-obsessed and arrogant than in developed countries. But then, the global poor already know that they can expect next to nothing from the state.

Once the path of lockdowns was chosen, it was certain that there would not be a coordinated global response. Each country has had to manage the crisis mostly on its own and largely by drawing on the strength of its nation state, economy, and institutions. Responses have inevitably reflected the peculiarities of each country’s class structure. The result has been an acceleration of national differences — and a global response to the disease that can only be described as shambles.

The disarray is evident in the drive for a vaccine. Finding a vaccine was a necessary complement to the policy of restrictions and lockdowns. It was made all the more urgent because a grassroots policy of containment was never seriously contemplated. Nation states failed to agree on conducting joint international research and instead entered a competitive race to develop vaccines.

The race drew on globally accumulated basic research from universities and public and private laboratories that rely heavily on public funding, however, several countries also took the lead independently by relying primarily on nationally controlled resources. The outcome was competitive confusion — a mobilization of different countries’ public resources in the service of private profits — that cast the harshest spotlight on contemporary capitalism.

Intensified National Competition

Russia was first to announce the development of a vaccine in August 2020, produced by its National Institute of Epidemiology and Microbiology. It appears that the research effort was funded by Russia’s Sovereign Wealth Fund. Several vaccines are also under development in China by pharmaceutical groups operating in conjunction with public research laboratories and institutes that draw on state support.

By the last quarter of 2020, China was in possession of at least one vaccine nearly ready for use, and both the Russian and Chinese vaccines were available for export. India was also striving to possess its own nationally developed vaccine through a private biomedical enterprise that drew on public funding and research.

The similarities with vaccine development in the United States and the UK were telling — as were the differences. In the UK the lead was taken by the pharmaceutical giant AstraZeneca, which worked in conjunction with research teams at Oxford University. The UK effort thus drew directly on the biomedical sector, one of the most competitive elements of the British economy that depends heavily on universities and academic research, while also mobilizing public funding. The British government systematically targeted its fiscal interventions and pandemic funding to support the vaccine drive.

The same sector also has a strong presence in the United States and Germany. The pharmaceutical giant Pfizer collaborated with the small German biomedical company BioNTech, which draws systematically on academic research and public funding to compete privately. The vaccine developed by BioNTech is substantially funded by the German government and was rapidly approved by the UK in December 2020.

Army Specialist Angel Laureano holds a vial of the Pfizer / BioNTech COVID-19 vaccine. (Lisa Ferdinando / US Department of Defense)

Another vaccine was developed by Moderna, a small biomedical company in the United States that also received heavy public funding for its research, and was approved in December 2020. Both of these vaccines are based on biomedical technology that involves genetic engineering, which was developed during the previous two decades by relying on public funding, and of which long-term effects are unknown.

The effort to produce vaccines received a large boost from Operation Warp Speed in the United States, an organization led by the Department of Health. US government funds were behind other vaccines developed in 2020 by several pharmaceutical corporations: Johnson and Johnson, Regeneron, Novavax, Sanofi and GlaxoSmithKline, AstraZeneca, and others. Vaccine development has a very high probability of failure and the pharmaceutical giants are loath to risk their capital in trying to create new vaccines. They only agreed to enter the field after being assured of state backing.

Without sustained public funding of the biomedical and pharmaceutical sectors over several decades — and especially without the massive public boost of 2020 — there would have been no coronavirus vaccine in the West. Substantial funds were provided by Operation Warp Speed not only to undertake the required research but also to purchase large volumes of vaccine doses in advance, thus enabling manufacturers to reduce risks and scale up production.

The broad outlines of the vaccine effort in the United States, UK, Germany, and elsewhere in the West are thus clear: vaccines were developed through competition among large pharmaceutical enterprises drawing on biomedical research laboratories and universities, on the basis of substantial public funding.

The result was a proliferation of vaccines that deploy different technologies with variable effectiveness. The commercial outcome of this competitive struggle is still in the balance, and will depend on the efficacy and cost of vaccines. But there is no doubt that some of the pharmaceutical giants and the smaller biomedical enterprises are in line to make enormous profits.

A rational response to the pandemic would have involved coordination between at least the leading states and large multinational organizations across the world. Practically none occurred. Developing coronavirus vaccines became a field of contesting national power, while also enabling big business to make huge profits.

The multiplication of efforts and the waste of resources across the globe was enormous. In early 2021 the world is careening toward developing dozens of independently produced vaccines utilizing disparate technologies, with separate intellectual property rights, differing greatly in cost, and with highly variable technical requirements pertaining to storage and transport.

The problems this creates for producing vaccines on a scale adequate for the world’s population — which at present approaches eight billion people — have only begun to be appreciated. The large pharmaceutical corporations of the West do not have sufficient capacity to produce rapidly on the required scale. For the task to be met promptly in 2021, the productive capacity of pharmaceutical enterprises in developing countries would also have to be mobilized. Since vaccines produced by corporations have multiple intellectual property rights, that would certainly imply major conflicts.

The resolution of such conflicts is unlikely to be generous toward the global poor. For developing countries, furthermore, the cost of vaccines as well as the technical requirements of storing and deploying in huge volumes are issues of the first order. The absence of inter-governmental collaboration for a coherent global response to the pandemic has left developing countries in a highly precarious position.

A Ramshackle “Philanthropic” Façade

This is the backdrop against which the World Health Organization (WHO), together with the president of the European Commission, French president Emmanuel Macron, and the Bill and Melinda Gates Foundation, launched the Access to COVID-19 Tools (ACT) Accelerator in April 2020. The initiative for the ACT Accelerator appears to have been taken by the Gates Foundation, a philanthropic institution set up by two of the richest people in the world. It is supported by several private, public, and multilateral health agencies and other organizations across the world.

ACT Accelerator began life as a loose framework aiming to facilitate practical decision-making regarding diagnostics, therapy, and vaccine development for COVID-19. It has indeed provided substantial funding for diagnostic and therapeutic initiatives throughout 2020.

Its vaccine pillar, COVAX, is led by the Global Alliance for Vaccines and Immunization (GAVI), a private-public organization also originally set up by the Gates Foundation, together with the Coalition for Epidemic Preparedness Innovations (CEPI), another private-public organization in which the Gates Foundation plays a decisive role, and WHO. The way in which it functions — and indeed ACT Accelerator as a whole — are object lessons in the absurdity of contemporary capitalism.

The stated aim of COVAX is to enlist national governments and powerful multilateral institutions, among which the World Bank is the most prominent, to develop and scale up the production of vaccines. Toward the end of 2020 it had more than a hundred ninety national governments on its list.

The logic of its operation resembles that of a private enterprise, and follows along neoliberal lines long promoted by the World Bank in developing countries. Funding for COVAX is provided by the richer countries on the list, and a guarantee for advance purchase of vaccines is made by poorer countries — as well as contributions to research.

COVAX makes arrangements with private vaccine producers, who are then entered in its portfolio, enabling countries to make advance purchases of large volumes of vaccines. Poor countries would thus be given the opportunity to strike deals with private producers in the COVAX portfolio for a nominal sum, or even for free. The aim is to produce two billion doses of vaccines in 2021, half of which would go to poor countries.

It is pitiful that the only international response to the pandemic has relied on a haphazard framework put together by two billionaires. Instead of properly supporting and funding an international effort to confront the pandemic, powerful states sought moral cover in a jerry-built construction imbued with the logic of private business and relied on financial and commercial deals with giant vaccine manufacturers.

There is nothing organic in the emergence of COVAX. It is a make-it-up-as-you-go response led by philanthropists who have made enormous profits by exploiting monopolist privileges in the field of high technology. It is not surprising that the lofty aspirations of COVAX were in serious doubt from the beginning as its funding has been persistently deficient, projecting a deficit of perhaps $7-8 billion for 2021.

The shortfall might in practice be made good by one or more of the participants in COVAX. Yet, the fact remains that the projected COVAX deficit is minute compared to the vast fiscal expenditures by leading states since the outbreak of the crisis. Crucial to the lack of funding was that the hegemonic state in the world, the United States under President Donald Trump, openly refused to participate in COVAX. Instead, it opted to strike bilateral deals with private corporate producers to protect its own population.

Other core countries, such as the UK, Japan, and Germany, have also signed bilateral deals, despite participating in COVAX. Core countries have already bought enough vaccines to protect their populations several times over, while most of the people of peripheral countries are unlikely to access the vaccine in 2021, despite COVAX. It remains to be seen whether this is a sensible strategy for core countries — for COVID-19 does not recognize frontiers.

The trajectory of vaccine deployment in 2021 will be determined by national competition and business profits, not by human need and cooperation. The reality of contemporary capitalism is competition among corporate giants driven by profit and a reliance on nation states that also compete with each other.

The vaccines produced by Western pharmaceutical corporations engage in a contest with Russian, Chinese, and Indian vaccines for use by the great masses across the world. The needs of the poor will weigh much less than the profits of big business and the power of states.

Intense national competition inextricably linked to giant enterprises will also be the tale for the development of capitalism after COVID-19. There will be no alternative approaches to public health unless this dysfunctional system is broken.

The research for this article is part of the EReNSEP project “Capitalism after Covid-19,” to be published by Verso.

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Costas Lapavitsas is a Professor of Economics at SOAS and former member of the Greek Parliament.

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