Patenting and Profiting from the Corona Virus Vaccine

Labour fanboy Owen Jones, writing in the Guardian, opines that The Covid vaccine will benefit humanity – we should all own the patent. I agree, but disagree with much of his reasoning as to why.

The Pfizer/BioNTech experimental vaccine itself uses a spike protein technology reportedly developed by the US government: without the state, this vaccine would probably not have been developed so speedily. While nearly 10,000 human lives are lost across the world each day to the pandemic, Pfizer’s CEO cashing in on the vaccine news by selling $5.6m in shares should cause more than discomfort.

Why? They have developed something the world wants. Why wouldn’t that cause investors to want to buy their shares?

“Essentially, pharmaceutical companies are global monopolies, which are given the right to charge whatever the market is willing to tolerate for the new medicines they produce,” says Nick Dearden of Global Justice Now, which is calling for patents on the Pfizer vaccine to be suspended. Patents award them exclusive rights to make and sell their drugs for 20 years, preventing the supply of cheaper, generic versions.

I am in complete agreement. The patent system no longer serves its purpose, which was to protect inventors. It has become a tool for corporate warfare, only available to and wielded by large companies.

Here is a sector not driven by curing illness but rather by shareholder profits: for example, recent research found that revenue from soaring insulin prices has been splashed on shareholders rather than research and development. When startup companies spring up developing innovative new drugs, big pharma buys them up and even shuts down the development of such novel treatments in order to stifle competition.

It’s fine for a company to shut down their own projects. It’s fine for companies to buy other companies. Insulin prices aren’t high because insulin is difficult for another company to produce and sell more cheaply. Here is a rare occasion where I agree with a socialist policy: having a public health care option, and making sure that the public health system is legally required to buy the cheapest drugs, can prevent the kind of collusion between big pharma and the health care providers that drives up prices in the US. That’s why insulin is far cheaper in Canada.

Take two particularly horrifying examples of this broken pharmaceutical industry. While millions of Africans were dying in the HIV/Aids pandemic, big pharma attempted to block cash-strapped governments importing cheaper versions of life-saving drugs.

If drug companies were actually competing, governments could (and should) simply ban anyone who tried to strong arm them from selling their products in country. Again, the patent system is used as a weapon to prevent competition.

Here’s another: the rise of infections resistant to antibiotics is an emergency perhaps even comparable to the climate crisis. Yet pharmaceutical companies have failed to invest in developing new drugs – shockingly, there has been no new class of antibiotic developed for nearly four decades – because it simply isn’t profitable. This colossal failure led the government’s former “superbug tsar” Jim O’Neill to suggest nationalised drug companies might be the only answer.

Pharmaceutical companies are under no obligation to spend their money on things that aren’t profitable. I’m open to publicly funding research in the area, but such research tends to be wasteful.

“We need to respond to Covid with cooperation, solidarity, and equity,” Diarmaid McDonald of Just Treatment, which is campaigning against secret deals between government and big pharma on any vaccines, tells me. “But the big-pharma model is the antithesis of this: it’s about closed business models, which are focused on competitive efforts done in isolation not to provide the best outcomes to all, but the highest possible profits to the company.”

We don’t need cooperation, solidarity, or equity. We need an effective vaccine as soon as possible. I agree cooperation could speed things up, but the profit motive is better able to do so.

In response to the early-2000s pandemic caused by Sars – also a coronavirus – governments committed to increasing investment in research, helping to develop promising vaccine candidates, which could have been used against Covid-19. But pharmaceutical companies abandoned the research. Why? Because it was unlikely to be immediately profitable. It gets worse: major pharmaceutical companies blocked an EU proposal in 2017 to fast-track vaccines for pathogens such as coronavirus.

Companies are under no obligation to spend their money and tie up their people based on government commitments. Government is notorious for prioritizing the wrong things. Only 774 people died worldwide from SARS. Pharmaceutical companies rightly saw this as wasted opportunity cost. If the EU wanted to research vaccines for future corona viruses, they should have done so in their universities.

Here’s some basic common sense. Last month, the Indian and South African governments asked the World Trade Organization to give countries the power to neither grant nor enforce patents linked to Covid-19 drugs and vaccines until global immunity is achieved. This week, they were backed up by leading UN human rights experts who called on governments to ensure universal access to a vaccine. Such proposals are being blocked.

I agree with the Indians and the South Africans that anybody should be able to reverse engineer and produce the vaccine. A company has no obligation to offer universal access to its products.

A small number of rich countries have struck deals for more than a billion doses of the Pfizer-BioNTech vaccine, leaving less than a quarter of what is planned to be produced for the rest of the world.

This is how capitalism works. Pfizer has something we want (the vaccine), and we have something they want (money). Why would Pfizer not agree to sell to someone who put up the money in a deal? They can then borrow capital against that promise, so the deal itself is valuable.

The race to find a coronavirus treatment has one major obstacle: big pharma.

Bullshit. Pfizer isn’t getting in anyone else’s way, and they are leading the way.

Rather than being a PR triumph for big pharma, coronavirus should serve as a reminder of the disastrous consequences of leaving a life-saving industry in the hands of a profiteering monopoly. Britain has it better than most countries: the National Institute for Health and Care Excellence (Nice) has considerable leverage over pharmaceutical companies by being able to judge whether their drugs are value for money for the NHS. But, while the US pays on average nearly four times more for drugs than other countries, everybody is being ripped off.

The profit motive is what drives innovation. Patents get in the way of innovation, and are the major cause of high drug costs in countries like Canada and the UK that have public health care. Don’t throw the baby (innovation) out with the bathwater (patents).

A pharmaceutical industry that has long made exorbitant profits by free-riding on public-sector research has been granted its most lucrative money-spinner yet. So yes, rejoice that a vaccine may well be coming, but don’t give kudos to a pharmaceutical industry that is as dysfunctional as it is morally bankrupt.

The purpose of publicly funded research is to make progress in science in areas that don’t have immediate application. This science then forms the bedrock on which new innovation is founded. If companies are merely taking research done on the public dime and patenting it, governments should put a stop to it. If they use university research as a basis for their own innovations, then that public money was well spent. That is the purpose of basic research.

One need only look to Merck, which found a cure for river blindness in 1987 and paid to have the cure distributed in Africa, to see that there are still people in industry who care about more than just money. Get rid of patents and other obstacles to true competition. These are what makes the industry dysfunctional.

About jimbelton

I'm a software developer, and a writer of both fiction and non-fiction, and I blog about movies, books, and philosophy. My interest in religious philosophy and the search for the truth inspires much of my writing.
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