How Big Pharmas benefited from the COVID-19 crisis, and why TRIPS agreement should be scrapped

Excerpts from the publication by Peoples Over Profit and Asia Pacific Research Network, produced with the financial assistance of the European Commission:

The world is in dire need of vaccines. Close to two years into the coronavirus crisis, the global death toll has reached 5 million. Deaths are feared to be higher than recorded. Despite expedited development of vaccines for COVID-19, access to them remains limited, especially for low and middle-income countries. The monopoly of big pharmaceutical companies over vaccine production and supply hampers access among poorer nations. More lives are lost, when vaccines could have saved them. Graver is the fact rich countries cornered 70-80 percent of the global vaccine supply.

On October 2, 2020, the governments of India and South Africa sent a communication proposing to waive the Trade Related Aspect of Intellectual Property Rights (TRIPS) for the prevention, containment and treatment of COVID-19. On May 21, 2021, delegations from Bolivia, Egypt, India, Indonesia, African groups, Pakistan, Venezuela, and other least developed countries revised the waiver to include the urgency arising from the continuous mutations of the virus, and to add specificity and time frame. They proposed that certain provisions of the TRIPS agreement be waived for the prevention, containment and treatment of COVID-19.

The draft waiver proposed to set aside certain sections of Part II and the whole Part III of the TRIPS Agreement. These sections refer to health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials and components, and their method and means of manufacture.

The proposal received strong opposition from the United Kingdom (UK), Japan, Canada, and other European Union members. It is important to note that the United States, under the Biden Administration, supports the TRIPS waiver negotiation, but not the waiver itself. The TRIPS waiver is among possible agenda in the upcoming 12th WTO Ministerial Conference in Geneva, Switzerland.

What is the WTO TRIPS?

The WTO Agreement on Trade Related Intellectual Property Rights (TRIPS) is a multilateral agreement on intellectual property rights. Since inception in 1995, it has set the minimum standard of protection — copyright, trademark, geographical indications, industrial design and trade secrets, among other things. Intellectual Property Rights (IPR) are given to persons over the creation of their mind.

The IPR generally gives the creator exclusive rights over their creation for a certain period of time.

With this type of legitimized protection, Big Pharmas are assured of super profits by virtue of their control over the production and market. Aside from Big Pharmas, manufacturing plant owners and other related enterprises; and those directly involved within the vaccine supply chain, be it directly or indirectly, benefit from these exclusive rights.

While originally meant to incentivize new ideas, inventions, and innovations, IPRs today have become a major tool for monopoly. Most notably, Big Pharmas have abused it together with TRIPS to control and monopolize the market, making lifesaving medicines less accessible to those who need them.

What provisions of the TRIPS agreement are requested to be waived?

The communication sent by India and South Africa last October 2020 to the WTO requested the council to waive the implementation, application and enforcement of Section 1 (Copyright and Related Rights), (Industrial Design), (Patents) and (Protection of Undisclosed Information) of Part II (Standard Concerning the Availability, Scope and Use of Intellectual Property Rights) of the TRIPS Agreement in relation to prevention, containment or treatment of COVID-19.

These said sections are designed to protect the ownership of the industrial designs and prevent any parties from producing or reproducing without the consent or authorization from the Big Pharmas or Transnational Corporations (TNCs). Moreover, these are subject to domestic procedures and remedies for the enforcement of IPR3.

Impact of patents and attempts to prevent TRIPS waiver proposal

Uneven accessibility of medical treatment between rich and poor nations is one of the most glaring impacts of the WTO TRIPS Agreement. In recent history, antiretroviral drugs on HIV/AIDS saved millions of lives in wealthy nations during the 1990s. But the same could not be said for the Global South. In 1998, antiretroviral drugs cost more in South Africa (on an adjusted GDP per capita basis) than in Sweden or even in the US.

In 1998, citing patent laws and the TRIPS agreement, 39 Pharmaceutical Companies sued Nelson Mandela and the South African government. In a callous show of corporate greed, Big Pharmas sought to penalize South African for accessing generic versions of AIDS drugs from abroad. The US government under Clinton, and other European governments backed up the Big Pharma companies. After immense pressure from the international community, the Big Pharmas would later withdraw their lawsuit in 2001.

The TRIPS agreement remains to be Big Pharmas primary tool to acquire big profits. Take for example – the prescription drug Lipitor (Atorvastatin Calcium) which lowers cholesterol in the blood. It was patented by Pfizer, launched and commercially available in the US on December 17, 1996. After 15 years of exclusive rights assured by the TRIPS agreement, Pfizer’s Lipitor raked in $125 billion in sales, becoming one of the best-selling drugs in the history of the pharmaceutical industry.

At present, the Big Pharmas have quickly reacted against the proposed COVID-19 TRIPS waiver. Anthony Bourla, Pfizer Chairman and CEO said that the proposed waiver will only create more problems than improve the supply situation. He said the waiver “threatens to disrupt the flow of raw materials.” Bourla also belittled the capacity of new vaccine manufacturers and claimed that they are “likely to chase the very raw materials we require to scale our production.” Pfizer even went as far as insisting that such waiver will put the “safety and security of all at risk”.

Moderna, meanwhile, said that it saw no impact on the accessibility to COVID-19 vaccine, and arrogantly claimed that rivals would face significant hurdles in scaling up manufacturing. Instead, Big Pharmas demanded that rich countries should simply give more vaccines to poorer countries through COVAX, a public-private initiative created with the help of World Health Organization (WHO) for a more “equitable” vaccine distribution.

In reality, COVAX has been at the mercy of vaccine producers such as Moderna which has prioritized bilateral deals with individual countries leaving poorer nations at the end of the queue. Meanwhile, the European Union (EU) rejected the TRIPS waiver, and claimed that IPR is not the barrier to upscaling the manufacturing of vaccines and other COVID-19 health-related products. The EU, who also temporarily imposed export control on vaccines, further suggested that sharing IPR would not immediately speed up manufacturing.

This argument, however, can easily be debunked by the fact that there already are manufacturers with the capacity to produce Covid-19 vaccines and other health products. Factories in Bangladesh, Canada, Denmark, India, and Israel are capable, but are unable to contribute only because they do not have the proper licenses. Therefore, the refusal to lift the patents despite the global clamor to increase production, and overcome hindrances to accessibility, all the more exposes the Big Pharmas’ position to value profit over people’s lives.

Ninety percent of the global value in vaccine manufacturing remains concentrated within four large manufacturing firms: (1) GSK; (2) Pfizer; (3) Merck; (4) Sanofi, while 60% of the global volume comes from: (1) Serum Institute of India; (2) GSK; (3) Sanofi; (4) BBIL; (5) Haffline Pfizer has 42 manufacturing sites globally, with a significant number of plants in the US. While, BioNTech has its own manufacturing plant in Germany and recently announced that they will set up a plant in Singapore, and a joint-venture with Fosun Pharma for the production and marketing of its COVID mRNA shot in China.

While this paper mainly tackles the manufacture of vaccines, the vaccine supply chain also includes transportation and logistics, and cold chain facilities. A supplementary resource on COVID-19 vaccine supply chain may be found on this site. In a policy brief of “The People’s Vaccine”, the Big Pharmas charged excessive prices for COVID-19 vaccines while rich countries blocked the faster and cheaper routes to global vaccination. New estimates of the vaccine production cost for mRNA COVID vaccines suggest as little as $1.18 per dose. Big Pharmas also prioritized high-priced contracts with rich countries at the direct expense of protecting more lives in more countries.

Also, Pfizer/BioNTech and Moderna allocated more than 90% of their supplies to rich countries. Important to underline is that taxpayers from wealthy countries funded the research and development for COVID-19 vaccines through private-public partnerships.

In this time of public health emergency, the Big Pharmas engaging in a profiteering scheme is shameless, callous, immoral, and inhumane. People in the Global South are left behind in terms of vaccine accessibility. The shortages have resulted in massive loss of lives especially among poor people, most of them have died without any medical attention in cases recorded in India, Africa, and in Southeast Asia.  

The TRIPS agreement is a binding treaty in which corporate power prevails, with the WTO itself enabling the profiteering scheme of the Big Pharmas. The shameless display of greed continues as working people suffer enormous hardships before and during this pandemic. Testament to this are the 255 million people who have lost their jobs and are burdened by wage theft, unemployment, debt traps, homelessness, inaccessible social services, and rising cost of living.

Waiving some provisions of the TRIPS agreement is crucial for equitable access of COVID-19 vaccines and other related medical therapeutics. However, the moral and just call to scrap TRIPS remains the people’s demand. We have to, once and for all, get rid of the TRIPs agreement if we truly want to speed up development, scale up vaccine manufacturing, and have equitable access to them.

Not only will this benefit the poorest of the poor in the developing countries during these health emergencies, but will also pave the way to the democratization of life-saving medicines and therapies.

In conjunction, governments must also bolster the capacities of their countries’ healthcare systems through the building of new hospitals, increased hiring and just compensation of health workers, and the creation of necessary infrastructures that will allow local manufacturers to produce vaccines for the needs of the people. These should be the priorities of governments across the globe.

Nations should be allowed and encouraged to develop and build their own industries that can manufacture vaccines, among other most pressing needs of the people. This has been proven possible by Cuba’s healthcare system. Despite economic blockade, the Caribbean nation-island has built one of the best healthcare systems in the world. The country has focused on primary care as the core of healthcare, effectively yielding one of the highest doctor-to-patient ratios.

They also developed their own medical research and recently announced the production of the Soberana, their own COVID-19 vaccine which they intend to share to the world. Now more than ever, the peoples of the world are determined to fight and end Big Pharmas’ monopoly control over vaccine production. Vaccines are a public good, thus private interest and corporate profits must not corrupt its availability and dictate the world’s pandemic response.

COVID-19 vaccines and other anti-COVID-19 medicines should be nationalized and reclaimed from corporate monopoly. The days that the TRIPS agreement secured super profits for Big Pharmas, while depriving the peoples of the world of much needed vaccines, must end.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s