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Home›World Trade Organization›Biden disappoints: Must do more, not less

Biden disappoints: Must do more, not less

By Loretta Hudson
October 2, 2021
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US President Biden’s earlier support for a vaccine patent waiver raised hopes for his summit more than a week ago. However, it turned out to be disappointing, not only for efforts to end the pandemic, but also for US leadership in these difficult times.

Most rich countries have opposed the demand of most developing countries to temporarily suspend the intellectual property (IP) rules of the World Trade Organization (WTO) in order to contain the Covid-19 pandemic more quickly. . Expectations were high because Biden had backed a patent waiver, but only for vaccines.

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With their IP, suppliers control production, supplies and prices. The industry claims to be able to meet all the needs related to the pandemic. But while he has no intention of meeting those needs, he insists the waiver is unnecessary. Therefore, unless the governments of rich countries stop opposing it, future WTO meetings will do little.

Rich defending the mRNA vaccine duopoly

The supplies and prices of Covid-19 vaccines are controlled by a few companies. Although BioNTech has developed one of two approved mRNA vaccines, it is now widely manufactured and marketed by Pfizer outside of Europe.

BioNTech’s relationship with Pfizer is complementary, but not equal. In contrast, Moderna is a vaccine development start-up, with limited marketing and other capabilities, particularly outside of the United States.

Meanwhile, able to pay more, the rich countries have taken most of the vaccines, more than enough. The duopoly initially sold more than 90 percent of their vaccines to rich countries, charging up to 24 times the actual production costs.

Then, more vaccines began to reach MICs before recent efforts to push booster shots. Meanwhile, only 2.2 percent in low-income countries (LICs) received at least one dose. Without drastic improvements, most low-income countries will not be fully immunized until 2023.

Millions of people are dying as more dangerous variants emerge, confirming that no one is safe until everyone is. Meanwhile, the October 2020 WTO waiver request to temporarily suspend intellectual property rights for Covid-19 tests, treatments, equipment and vaccines has garnered broad support.

Vaccine technology cannot be shared

Most global initiatives to make vaccines less unaffordable for PRI, such as COVAX, fail to address massive supply shortages and high prices. Meanwhile, vaccine suppliers jealously guard their monopolies, claiming that no one else can safely produce them.

While at least 80 developing countries have been producing generic drugs and vaccines for decades, not all can produce the new mRNA vaccines without access to new technical knowledge and new materials. Yet MSF has identified manufacturers “capable of mRNA vaccines” in developing countries, including four in Africa alone.

MSF estimates that these manufacturers can establish the capacity to produce up to 100 million doses per year in ten months at a cost of between 127 and 270 million dollars. But they would still need access to mRNA vaccine technology and reliable supplies.

But Pfizer and Moderna both refused to share what was needed. Now, instead of transferring technology or increasing vaccine supplies to developing countries, they are only committed to supplying vaccine ingredients to companies in rich countries and China.

State-subsidized super-profits

Despite benefiting from taxpayer dollars, legally enforced patent monopolies, and low taxes, research from the People’s Vaccine Alliance shows the three have used their mRNA vaccine duopoly for super profits. Their vaccines sell for $ 41 billion at an estimated production cost of $ 1.20 per dose.

As one charity noted, “Instead of partnering…

Moderna and Pfizer pay little tax despite making several times the pre-pandemic average rate of profit of eight percent for Fortune 500 companies in 2019. In the first half of 2021, Moderna, which no ‘had never made a profit before, paid seven percent of the US tax rate while Pfizer paid 15 percent, still well below the US statutory rate of 21 percent.

Perverse incentives

This new situation created various perverse incentives prolonging the pandemic. Suppliers can do much more in the medium term with testing, treatment, protection, other equipment and booster shots, supposedly for newer more dangerous variants.

Pfizer – already a large, diversified pharmaceutical conglomerate – has recently grown by buying out companies selling Covid-19 needs. With the prospect of more profitable recall sales, vaccine suppliers have little incentive to end the pandemic quickly.

With Covid-19 now endemic, they continue to limit access to their vaccine technology to ensure scarcity and set prices to maximize profits. So, although it has not developed its own vaccine, Pfizer is now dominant.

What Biden must do now

Meanwhile, Biden is under increasing pressure to do much more. Probably more than anyone, economist Dean Baker has long shown how the United States can lead international cooperation to fight the Covid-19 pandemic, advocating for an inclusive international vaccine summit six months ago .

Baker argued that existing patent agreements are not only unfair, but also ineffective and unnecessary. He showed that patent advocates were not only self-interested, but also dishonest. Instead, direct public funding would better encourage the development of new drugs.

US law, particularly Section 1498 of its Commercial Code, allows the government to require patent licenses in emergencies. Moderna, Pfizer and their scientific staff can thus be incentivized to help rapidly scale up production internationally to immunize the world.

In addition, the proposed waiver must be swiftly approved by the WTO to quickly allow more affordable access to the tests, treatments, equipment and other materials urgently needed to better combat the pandemic until it can be overcome. completely finished.

At his summit, Biden pledged to expand vaccine production in Africa and Asia. He can always do the right thing. This may well usher in a new era of multilateral cooperation instead of the heady new cold war we are heading towards. There may still be hope.

Jomo Kwame Sundaram, former professor of economics and United Nations Under-Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing Frontiers in Economic Thought in 2007.

Copyright: Inter Press Service


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