We in Canada, and in other rich countries, are intensely, almost obsessively, focused on the impact COVID-19 has had on us — an impact which has been disastrous for the most vulnerable among us.
On a global scale, however, we’ve had it relatively easy.
The devastation wrought by the pandemic has been greatest for the hundreds of millions of people in the developing world.
Consider this: around the world, but especially in poorer countries, 131 million people — more than three times the entire population of Canada — have moved into poverty as a result of the coronavirus pandemic.
That is one of the stark facts in a new report from the New-York-based Institute for New Economic Thinking (INET), founded a dozen years ago in the wake of the 2009 financial meltdown. INET’s stated purpose is to create a more equal, prosperous, and just society. Nobel laureates Joseph Stiglitz and Amartya Sen are on its advisory board.
During the pandemic, INET set up a group, co-chaired by Stiglitz, to look at ways to achieve what it calls “global economic transformation” — as we cope with the pandemic. Their starting point is the premise that the world will not emerge from the pandemic until COVID-19 is controlled everywhere, not exclusively in richer countries.
The group issued an interim report last week, chock-a-block with radical, but, at the same time, practical suggestions for health, economic, and social policies designed to address the growing global crisis of inequality.
We’ll look at the proposals for debt relief, and other economic measures, later this week.
Today we’ll focus where the report begins, on the inequitable distribution of vaccines.
Wealthy countries ‘grab’ vaccine supply
At the outset, the report points its finger at Canada. Our wealthy country ordered “vaccine shots for 10 times” our population. At the same time, we demanded 1.5 million vaccine doses from COVAX, the global entity designed to assure the fair and equal distribution of vaccines worldwide.
The report says we Canadians might have been within our rights “technically” to make such a demand. However, to have done so was contrary to the “ethos of COVAX.”
Our Canadian strategy for acquiring vaccines has been typical of “unseemly and unfair vaccine grabs” by wealthy countries, the report says. One tragic result of these “grabs” is that many poor countries have been “effectively denied access” to vaccines.
The INET group tells us that “44 bilateral deals between governments and pharmaceutical companies (dominated by rich countries) were signed last year, and at least 12 have already been signed this year.”
At the time INET was drafting its report, 130 poor countries had yet to administer a single dose of COVID-19 vaccine.
The COVAX program, which we in Canada exploited to our own benefit, is funded both by governments and private financial contributors. It was designed to create a level global playing field for vaccines. So far it has not succeeded, the report states, in part because the program is “underfunded, having received $6.3 billion of the $6.8 billion expected for 2021.”
The INET group recommends rich countries double COVAX’s funding. In fact, it would be in their self-interest to do so.
“It should be obvious,” the report says, “that the costs (even if rich country governments were to cover these entirely on their own) of vaccinating all of the world’s population, including those in developing countries, are minuscule relative to the risks of mutations and slower economic recovery.”
The report reiterates that a major barrier to COVAX’s success has been its inability “to procure the required vaccines … because of vaccine grabbing by governments.”
To mitigate the impact of all that grabbing, and establish some measure of accountability, INET says “countries with bilateral contracts [should] be transparent on these contracts with COVAX, including on volumes, pricing and delivery dates.”
As well, there is the challenge of what to do about other vaccine candidates now in development, such as Russia’s Sputnik, China’s Sinovac, and vaccines developed in India and Cuba, among other countries. INET proposes that the World Health Organization (WHO) “should take a proactive approach to enable global distribution of such vaccines as and when they meet the approved standards.”
INET does not want to see the same domination of the newer vaccines’ distribution by an elite group of high-income countries that we have seen with those now in production.
Patents impede massive vaccine production
The report condemns the “insufficient production” of vaccines globally, and points to what it calls an artificially created situation of scarcity.
A major cause for scarcity is that patent rights to vaccines are controlled by giant pharmaceutical companies, and it is in the economic interest of the companies to limit production.
Pharmaceutical companies can limit supplies of their patented vaccines “to their own [manufacturing] capacities and to the few production licenses they choose to issue to others.”
Governments usually consider drug patents to be a necessary reward for invention and innovation. Without them, businesses would not have the incentive to invest heavily in research and development (R&D).
But the INET report argues that COVID-19 vaccines are exceptions to that rule.
“Pharma companies,” the report points out, “have received massive support from governments that have mostly and in some cases completely covered their R&D costs.”
In the U.S. alone, “the six major vaccine companies received over $12 billion in public support … Other rich country governments also provided support to these companies for developing these vaccines.”
Big pharma also “benefited from prior public research and reduced costs of clinical testing because of more unpaid volunteers for trials.”
Indeed, the INET report concludes that the companies which produced the three “leader” vaccines “have already received what could be considered as reasonable returns on their own investment, and more.”
Reasonable returns are not enough, it seems. Which would, perhaps, explain why advanced country governments, including Canada’s, have repeatedly blocked attempts by India, South Africa and other developing countries to get the World Trade Organization (WTO) to suspend patents for COVID-19 vaccine, thus making it possible to manufacture them at a far greater rate.
INET considers resistance on the part of the richer countries to be, to put it mildly, “surprising.”
Such a suspension of patent protection, the report explains, “would also benefit wealthy countries’ own populations, by making available more doses of vaccines, and quickly. A larger supply would reduce costs of additional doses of vaccines, making them cheaper for governments and taxpayers across the world.”
There is legal basis for suspending patents in the WTO’s agreement on intellectual property rights.
Formally that pact is called the Trade-Related Intellectual Property Rights, or TRIPS, agreement. TRIPS includes a clause which “explicitly mentions public health emergencies as adequate cause to issue compulsory [manufacturing] licenses” — notwithstanding patent protections — to allow companies other than those that hold the patents “to produce essential drugs.”
The report tells us that some countries, such as Chile and Israel, “have already passed resolutions for such licenses [waiving patents] to be issued, in the wake of the pandemic.”
INET warns, however, that issuing manufacturing licenses would not be a complete solution, because it would leave unaddressed “the question of transfer of technology.” Big pharma companies not only wish to protect the formulas for their own drugs, they also want to safeguard all of their technical know-how.
As well, there is yet another obstacle. Some governments have bilateral investment treaties or trade and economic partnership agreements, which treat intellectual property as a form of protected investment. Canada has such agreements with the U.S. and Mexico, and with the European Union.
To deal with the entire gamut of issues and challenges related to suspension of patents and facilitating more widespread production of vaccines, INET makes a radical and sweeping proposal.
It wants to see a global move to suspend or modify all intellectual property rights for matters relating to essential public health concerns.
And the INET group wants that suspension to apply not only to patents on vaccines but to other medical products we all need to fight the ongoing pandemic. Those include treatments, tests, and even masks and other personal protective equipment.
The bottom line for these economists is simple.
If we don’t fight this virus as a world community, on a global scale, we will not succeed in conquering it in our own countries, however wealthy we are.
Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble’s politics reporter.
Image credit: GovernmentZA/Flickr
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