Vaccine Rent Seeking

Originally posted on Quora May 13, 2022

Sources: Pfizer Accused of Covid Profiteering as first quarter sales hit $26B , Pfizer Opposes Compulsory License for Paxlovid in Dominican Republic, Time is Running Out for Covid Vaccine Patent Waivers

The need to share COVID-19-related IP remains urgent. Two years into the pandemic, fewer than 15% of people in low-income countries have had at least one dose of a vaccine, whereas in some high-income countries, people are being offered fourth doses. This has happened, in part, because the governments of wealthy nations can offer vaccine makers large sums that poor countries cannot match. A number of companies are, in turn, making large profits, so have little incentive to change their business model.

Sparsely mentioned in Georgist discourse are the other three monopolies that impose higher costs on production and distribution that burden lower income strata the most. Intellectual property, an obvious creature of the state, receives scant attention and criticism until its consequences become obvious in dire situations. This is currently the case for middle and low income countries in the global south, who have either been flat out denied the license to produce Covid vaccines and antiviral drugs, by none other than Pfizer, or put through the time consuming bureaucratic machinations of applying for IP waivers and compulsory licenses.

Identifying all of the IP that goes into specific technologies cannot be done quickly. A preliminary analysis by the World Intellectual Property Organization shows that applications were made for 417 COVID-19 vaccine-related patents between the start of 2020 and the end of September 2021. The analysis is preliminary because it takes an average of 18 months between an application being filed with a patent office and the application being published. There are many more patents still to come.

For most of the pandemic, the EU opposed allowing companies in non-western middle and low income countries produce Covid vaccines and antiviral drugs. EU member states are starting to tweak their position from complete denial to allowing production only after completing the long and arduous process of applying for compulsory licenses.

The EU has previously said that existing international rules allow countries to override IP in an emergency such as a pandemic, so there should be no need for extra relief. But these rules, known as compulsory licensing, are not fit for a pandemic. During the past two years, no company has been granted a compulsory licence to make a COVID-19 vaccine………….. Under existing compulsory-licensing rules, a separate application has to be made for a waiver for each patent involved — and a single technology can involve dozens of patented processes. The group proposes that companies in low- and middle-income countries be allowed to make just one application per vaccine.

And even if said process were expedited, Companies like Pfizer could still block compulsory licenses. Pfizer, despite raking in record profits from the pandemic and using publicly funded research from their partner BioNtech to develop their mRNA vaccine, has denied middle and low income countries in the global south, licenses to produce its vaccine and antiviral drug Paxlovid.

Pfizer’s revenues last year doubled to $81.3bn, and it expects to make record sales of $98bn to $102bn this year, half of which will come from Covid products – $32bn from Comirnaty and $22bn from Paxlovid.

On the issue of sharing intellectual property, Pfizer said others would struggle to produce its mRNA vaccine – one of only two on the market – arguing that “it is not as simple as sharing the ‘recipe’”. Manufacture of its vaccine involves more than 280 materials from 86 suppliers in 19 countries.

Yet the other producer of an mRNA vaccine, Moderna, waived their vaccine patent for the past year for 92 middle and low income countries, and offered their product at a measly $7 per shot to the African Union, much lower than what Pfizer has priced their shots.

Excepting Pfizer to value human life over their profit margins might be setting the bar a little too high. Of course, we are talking about the same company that destroyed a working class Connecticut neighborhood in the landmark case Kelo v. City of New London for a drug research facility that never materialized and skipped town, leaving the city hanging with 1400 fewer jobs and $80 million in less revenue.