“The result of these developments is an oligarchy of private capital
the enormous power of which cannot be effectively checked
even by a democratically organized political society.”
Albert Einstein

At the mercy of monopolies

We are facing the biggest health crisis of the last hundred years. Every six seconds someone dies from COVID-19. Administering vaccines to many of the world's population is crucial to getting this crisis under control.

However, the reality is that we are almost entirely dependent on small number of pharmaceutical giants for this vaccination campaign. They monopolize the entire production, pricing and distribution of vaccines. They work purely for their profits. And these profits take precedence over the well-being and health of citizens, as is now evident from the reduced supply of vaccines. Our governments and the European Commission strongly protest, but still look on helplessly.

We may have got used to it, but it is actually unbelievable and unacceptable that for life-saving drugs and vaccines we are completely dependent on unelected managers, who are moreover driven by economic motives.

A real profit machine

The pharmaceutical industry is highly concentrated and dominated by a dozen players. This concentration is even greater for vaccine production: almost all know-how is in the hands of just four companies: GSK, Johnson & Johnson, Pfizer and Sanofi.

Few industries are as pampered as the pharmaceutical industry. Research & Development is largely done by taxpayer-funded research in government and university laboratories. The sector can also count on tax credits and other financial incentives to hedge against possible risks. Once the medicines have been developed, they can be patented. High prices are then charged to consumers and the government.

No wonder the pharmaceutical giants of all industries have the highest profit margins. Their return is 17.3 percent compared to an average of 11.5 percent in the other industries. They often ‘forget’ to pay taxes on their very high profits. The 4 largest pharmaceutical giants alone avoid $ 3.8 billion annually.

If those super profits were used for innovation and investments, this would be a major improvement. Unfortunately, the reverse is the case. The pharmaceutical giants spend more on paying dividends and buying back their own shares than on research and development. In addition, nearly a fifth of all profits go to marketing and advertising. After all, only one tenth of all research and development in Europe is truly innovative. The remaining 90 percent are so-called ‘me-too drugs,’ or drugs making minor modifications to existing drugs.

Taking advantage of the emergency

Since the 2002 outbreak of SARS, another coronavirus, scientists have repeatedly warned us about a new pandemic. In 2016, the World Health Organization placed coronaviruses in the top eight viral threats which required more research. Big Pharma refused to do research in this field because the giants didn’t expect any profits from it.

As a result, we were completely unprepared for the arrival of SARS-CoV-2, the latest corona virus, last year. This time, however, the pharmaceutical giants were willing to launch themselves into the research. In fact, they saw it as a unique opportunity to reap mega profits. Vaccinating all inhabikingts in the world accounts for a market of several tens of billions of dollars. You won’t spurn those kinds of opportunities, especially when governments are willing to cover a lot of the risks and help you out with generous subsidies.

Given the state of emergency and the urgency, they were able to conclude advantageous and secret deals with the authorities thanks to their monopoly positions. These protect pharmaceutical companies against possible negative side effects of the vaccines. The fact that the cost of various vaccines varies between 2 and 18 euros shows that profiteering is involved. Moderna, for example, expects a profit of $ 13.2 billion this year. That's 220 times what they had as full turnover last year ...

Morally bankrupt

The first vaccines were developed in record time. In itself that is good and it was necessary, although a number of questions remain unanswered (see Annex). However, the development of a vaccine is one thing, its production and distribution is another. In recent days we have seen things go wrong in that area. And that is no coincidence.

Given the magnitude and urgency of the problem, enormous production capacity is required. According to Professor Oertzen of Lüneburg University (Germany), vaccine manufacturers have little interest in expanding their own production capacity quickly and massively. If they increased their capacity so that the entire world could be supplied within six months, the newly built facilities would be empty immediately afterwards. This means much less profit compared to the current scenarios, in which existing factories produce for years, with the existing capacity.

Nor do the manufacturers have an interest in releasing the vaccine. At the moment the pharmaceutical giants keep their research results secret, so that they keep vaccine production in their own hands, but therefore also keep it limited. If they shared their vaccine with other manufacturers, a quick and affordable distribution of the urgent vaccines would be possible.

Vaccine chauvinism

The lack of production capacity affects not only the health care workers in our hospitals and our fellow countrymen. It affects the inhabitants of the countries in the South even more. In order to generate maximum profit, “most manufacturers have prioritized regulatory approval in rich countries where the profits are highest, rather than submitting full dossiers to WHO,” said Tedros, the Director-General of the World Health Organization.

Because of their hoarding behavior, rich countries have seriously delayed supply to poorer countries. Accounting for 14 percent of the world's population, they kept at least 53 percent of the vaccine supply for themselves. They bought up 96 percent of all Pfizer doses and all Moderna doses. As it stands, 9 out of 10 people in the poorest countries will not get vaccinated this year.

However, this vaccine chauvinism is very short-sighted. In the words of António Guterres, Secretary General of the UN, “In our interconnected world, we are only as strong as the weakest health systems”. If those countries do not receive the vaccine or receive it late, infections, with or without dangerous variants such as in South Africa or Brazil, will continue to reach our regions. Tedros: “The longer we wait to provide vaccines, tests, and treatments to all countries, the faster the virus will take hold, the potential for more variants will emerge, the greater the chance today’s vaccines could become ineffective, and the harder it will be for all countries to recover. No one is safe until everyone is safe.”

There is also an important economic cost. If the countries of the South cannot recover in time, they will not be able to supply enough of the goods that our economies need. At the current - too slow - rate of vaccination, rich countries will record a loss of $2,400 billion, or 3.5 percent of their GDP. This is due to the disruption of global trade and supply chains.

In the pessimistic but realistic scenario, in which the population of the South is not fully vaccinated this year, global production could fall by $9.2 trillion, or more than 10 percent of global output.

Tedros warns that “the world is on the brink of a catastrophic moral failure”. This moral bankruptcy is something we will also pay for heavily economically. We will also pay heavily for this moral bankruptcy.

Bankruptcy of the market

There are three possible ways to prevent this moral bankruptcy and high cost. First of all, we can put even more eggs into the basket of the pharmaceutical giants by granting them additional subsidies and giving them premiums for faster delivery. There is probably no support for this scenario. It would also skew power relations even more.

Second, we can cancel patents and share the vaccines with other interested research institutions and companies, with or without compensation payments. That's how the flu vaccine has been produced for the past 50 years. That ought to be the minimum.

Third, we can shift up a gear and, just like in a war economy, put companies to work so that they provide the necessary production. This scenario is perhaps the only approach that will guarantee sufficient production capacity. China used this approach en masse to manufacture mouth masks, ventilators and other protective equipment at the start of the outbreak. The US is doing the same today. Recently, the Biden administration has invoked the Defense Production Act to force the private sector to speed up vaccine production and distribution.

The issue of underactive vaccine production and distribution once again makes it clear that the private sector and market forces are unable to make the most of the existing production potential and to prioritize the most pressing needs. This was painfully brought to light during the first lockdown when there was an acute shortage of mouth masks and test material.

Two tasks for Big Pharma

It is indecent for pharmaceutical giants to take advantage of an emergency to make fat profits. Causing a delay in the vaccination campaign because of their pursuit of profit as they are actually doing may even be termed criminal.

At the very least Big Pharma should be required, besides releasing the vaccines, to share their super profits. That is what Moon Jae-in, the president of South Korea, is advocating. The proceeds must first go to Covax. That is a program which wants to offer affordable vaccines to the countries of the South. In addition, these funds can serve to alleviate the inequalities that have arisen as a result of the pandemic.

But we must also look to the future. The coronavirus is mutating and will continue to do so. Whether and to what extent the current vaccines protect us from this is not yet clear. In any case, we need some sort of ‘universal coronavirus vaccine’ that offers sufficient protection against all possible variants, and if possible, also against Sars and Mers. Fundamental research needs to be done on this.

If the pharmaceutical industry wants to retain just a little credibility, it will have to seriously work towards this. And if the industry does not live up to this challenge, one may wonder whether the government should not take over the sector. There is simply too much at stake.

Due to the short duration of the development phase, it is not possible to know how long the vaccine will remain effective. Will a single vaccination suffice or will it have to be done every so often, as with the flu vaccine? Furthermore, it is not (yet) known whether the vaccine stops the infectivity or whether it only reduces it. The first vaccines produced were mainly developed to reduce the symptoms of COVID-19 as much as possible and not to counteract infectivity. Moreover, it is not yet known whether the vaccine is effective for all age categories, including children and the very elderly. Nor whether it is effective in people with underlying risk factors.

In the West, it has been possible to develop a vaccine faster because there were and are many more infections, which is beneficial and necessary for the research process. Conversely, Asian countries (or Cuba) are therefore less likely to need such a vaccine for this reason and have the luxury of taking a little more time to roll out a vaccination campaign. In the meantime, they can make use of the experiences gained in the West. In a way, they let us experiment a bit and wait and see how things will work out in our countries.

- Marc Vandepitte, Belgium.

(Translation: Dirk Nimmegeers)
 

Source: Dewereldmorgen