Pharma industry is backing vaccine nationalism

Dr Rashmi Banga, Senior Economic Affairs Officer, UNCTAD, states that to move towards global vaccine equity, it is important for the governments to declare vaccines as a public good and not allow pharma industry to put profits before people. For this, waiving off the patents for vaccines and related medical supplies is the first step that needs to be taken.

Rashmi Banga, Senior Economic Officer, UNCTAD

IBT : In this battle between the moral right to live and the intellectual right to innovate in the context of the IPR waivers for COVID-19 vaccine, what is the middle ground you propose?

Dr Rashmi Banga: IPRs are generally sought to compensate the producers for their innovations and inventions and provide incentives for further research and development. However, in case of COVID-19, studies have shown that public funding accounted for around 99% of finance towards their R&D. These vaccines would not have existed without government funding, which comes primarily from taxes paid by the citizens.

This is sufficient grounds to declare these vaccines as public goods. Therefore, in case of COVID-19 vaccines, it is wrong to make a case for intellectual property rights. There should be no IPRs for these vaccines and therefore no middle ground. Creating monopoly rights through patents for these vaccines is taking many lives across the globe and having a very heavy economic and social cost.

IBT: Do you think that IPRs are a charade in the name of vaccine nationalism embraced by many wealthy nations? How can the world move to vaccine equity and what role can India play in addressing the glaring disparity in the global access to vaccines?

Dr Rashmi Banga: Production of Covid-19 vaccines is concentrated in US and Europe and therefore access to these vaccines is more easily available to the North. Vaccine nationalism is rampant as developed countries are racing to reserve new supplies of these vaccines for their own population. Wealthy countries have already booked two to three times of vaccine doses as compared to their population. For example, Switzerland with a population of 8.5 million has reserved 27.5 million doses. Through the end of 2021, wealthy countries representing just 13% of the global population have already reserved over 50% of expected COVID-19 vaccine doses.

Vaccine nationalism is being fully supported by the pharma industry which is interested in maximising their profits through the monopoly position that they get because of the IPRs.

Some latest studies have shown that these pharmaceutical companies are spending huge amounts on lobbying and influence spending. In 2020, the pharma industry spent around US$ 308 million on lobbying and in the first quarter of 2021, it spent US$ 92 million, which is twice that spent by any other industry in this period. This lobbying by the pharma industry is increasing the vaccine inequity globally.

According to the WHO by mid-April 2021, wealthy countries had secured more than 87% of over 700 million doses of Covid-19 vaccines dispensed worldwide, while poor countries had received only 0.2%. This translates to one in four people receiving vaccine n wealthy countries as compared to one in 500 in poor countries.

To move towards global vaccine equity, it important for governments to declare vaccines as a public good and not allow the pharma industry to put profits before people. For this, waiving off the patents for vaccines and related medical supplies is the first step that needs to be taken.

Countries should also not be allowed to hoard vaccines particularly by reserving future supplies more than their requirement based on their population head counts. Developing countries need to show solidarity in the different international fora like the WTO and WHO in order to have equal access to vaccines produced.

In our publication on South-South Cooperation in the times of Covid-19, we have proposed ways in which developing countries can push for vaccine equity. Access to finance plays an important role in this regard. Regional development banks like the BRICS Bank, Asian Development Bank, etc should be given capital injections so that they are able to help their members in improving their access to vaccine as well as in sustainably recovering from the pandemic.  Developing countries should also support the efforts at the WTO and WHO in terms of improving vaccine equity.

India is already playing an important role in improving the global vaccine equity.  The proposal tabled by India and South Africa on TRIPS waiver in the WTO is an important step in this direction. It has more than 60 co-sponsors and more than 100 developing countries are supporting the proposal. This waiver will help in reducing the cost of vaccine as well as in boosting the production of the vaccine and related health products and technologies.

India has already supplied this vaccine to around 95 countries despite its huge population and domestic challenges it is facing in terms of vaccinating its population. In future, India has the potential of becoming a vaccine production hub of the world and therefore needs to put in place targeted and strategic policies to achieve this goal.

IBT: What is your opinion on India’s demand to waive off the IPR for COVID-19 tests, drugs, and vaccines at the WTO? What are the pros and cons of this move?

Dr Rashmi Banga: This is an important initiative that India has taken at the WTO to negotiate a waiver for limited years from the specific provisions of the TRIPS Agreement for the prevention, containment, and treatment of COVID-19. These specific provisions include patents, industrial designs, copyright and protection of undisclosed information i.e., trade secrets.

Further, India and South Africa and co-sponsors’ revised proposal elaborates that IPRs should be waived off temporarily on health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture.

This waiver, if agreed, can have far-reaching implications with respect to containment of the pandemic as it will boost manufacturing of vaccine as well as related health products and technologies throughout the world. However, it is important to note that the waiver also needs to be complimented by encouraging the big pharma and producers of health products to share their technologies.

In many cases reverse engineering will help in boosting global production of the needed technologies, but governments will need to pursue targeted policies to encourage manufacturing and distribution of vaccines and related health products.

However, it is important that the negotiated text is effective in controlling the pandemic. USA’s support to the TRIPS waiver is focussed currently only on the vaccine but it is also important to cover the raw materials and other health products and technologies that may be needed to save lives affected by the coronavirus.

To tackle the growing number of variants which are emerging around the globe, international support is required at all levels. If such a support does not come forth and a weak text on waiver is agreed then the pandemic may last for a long time resulting in millions more losing their lives and millions more being pushed into extreme poverty.

IBT: If the WTO fails to reach a consensus on the proposed IPR waiver, what options do countries have to address the vaccine supply problem?

Dr Rashmi Banga: If there is no consensus reached on the TRIPS waiver in the WTO, another option would be to explore south-south cooperation. More than 100 developing countries have supported the waiver so these countries could join hands to collaborate for combating the pandemic. South-south solidarity is not only crucial in the WTO at this juncture but is also needed for facing the common challenges, which they are facing in the 21st century including the economic slowdown due to the pandemic and growing challenges posed by the fourth digital industrial revolution.

To increase the supply of vaccines, increasing manufacturing capacity in the South should become a priority and southern regional development banks should provide the required financial support to their members. South-south cooperation in health and scientific R&D needs to be strengthened and collaborative efforts are needed to develop the required technologies. India can play a leading role in this area with its trade and investment links with the ASEAN as well as Africa.

IBT: If India decides to encourage patent holders to voluntarily license their patents to manufacturers, what impact will it have on vaccine production and India’s pharmaceutical industry?

Dr Rashmi Banga: Voluntary and compulsory licensing are important tools in times of a health emergency. These can help more countries access vaccines as well as boost global supply capacities of such vaccines and related products. For example, Gilead has signed voluntary licensing agreements with generic pharmaceutical manufacturers in India and some other countries to expand the supply of remdesivir, which can then be distributed to 127 countries.

India’s Patent Act of 2005 also provides for issue of compulsory licensing in the times of public health emergency. However, compulsory and voluntary licensing can take a lot of time. If India decides to take these steps it should also make sure that these are done in timely fashion so that they are effective. Voluntary licensing to manufacturers by patent holders in India can definitely boost the production of the needed vaccines and health products.

Its impact on India’s pharmaceutical industry can only be positive in the long term as it will further strengthen Indian pharma industry’s position in the global market. India is currently the largest provider of generic drugs globally and the Indian pharmaceutical sector caters to over 50% of global demand of various vaccines. It also supplies over 80% of drugs used globally to combat AIDS.

India has a potential to become a global leader in this area if patent holders come forward at this time of crisis to boost manufacturing of required vaccines and other health related products. The government will also be encouraged to increase its support to the pharma industry in the future. At the time of crisis, short term profits need to be overlooked for long term gains.

Rashmi Banga is a Senior Economic Affairs Officer & Officer-in-Charge of the Unit on Economic Cooperation and Integration among Developing Countries (ECIDC), Division of Globalisation and Development Strategies (GDS), UNCTAD. She is former Adviser and Head, Trade Competitiveness in Commonwealth Secretariat, where the Division provided policy support to more than 30 countries. She has worked as a Senior Economist in DFID-funded UNCTAD’s project which provided support to the Ministry of Commerce, India in its trade negotiations.

She was an Associate Professor of Economics in Jawaharlal Nehru University, India and has taught for nineteen years. She received her doctorate from Delhi School of Economics, specializing in development economics, international economics and econometrics. She has published extensively in refereed journals on digital issues, international trade, global value chains and FDI issues. She has recently published a book on “Gainfully Linking into Global Value Chains: Experiences and Strategies”. She has been awarded International Economic Development Research Award by Export-Import Bank of India and has been a recipient of two Gold Medals for her research on globalization and development from Global Development Network, World Bank.

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