[CTC] We Can’t Trust Big Pharma to Make Enough Vaccines

[Arthur Stamoulis]

https://www.thenation.com/article/world/covid-vaccines-pharma/ <https://www.thenation.com/article/world/covid-vaccines-pharma/>
We Can’t Trust Big Pharma to Make Enough Vaccines

By Christopher Morten, Matthew Herder
5/31/21
 
Almost everyone agrees the world needs more Covid-19 vaccines. As we write, some countries have yet to administer <https://www.sfgate.com/business/article/Vaccine-deserts-Some-countries-have-no-Covid-19-16163051.php> even a single dose of vaccine, and current projections suggest many countries will have to wait until 2023 <https://www.washingtonpost.com/world/2021/05/06/vaccine-intellectual-property-world-reaction/> to start widespread vaccination.

Yet debate rages as to why the world is short on vaccines, and what barriers need to be overcome in order to make and distribute more. Intellectual property has become a flashpoint <https://www.statnews.com/pharmalot/2021/05/13/covid19-coronavirus-vaccine-biden-waiver-wto-patent-poll/> in the discussion.

According to the large European and American drug companies currently making Covid-19 vaccines, the status quo—vaccine scarcity for all except those who live in a few dozen rich countries—is inevitable and unfixable. These companies consistently reiterate a basic factual premise: They are the only ones that can make these vaccines, and they are making them as fast as they can. Moderna, Pfizer-BioNTech, AstraZeneca, and Johnson & Johnson are currently on track to ship enough vaccines to vaccinate <https://launchandscalefaster.org/covid-19/vaccinemanufacturing> a majority of adults in the rich countries of the world and to donate and sell a significantly smaller number <https://www.cnbc.com/2021/05/03/covax-gets-a-boost-from-moderna-deal-swedens-donation-of-covid-vaccines.html> of doses to low- and middle-income countries, at least until next year <https://www.theglobeandmail.com/world/article-pfizer-and-biontech-pledge-to-deliver-two-billion-covid-19-vaccine/>. These companies insist they would make more doses and reach more people, if only they could—but, alas, they cannot. Moreover, they say, sharing intellectual property—especially vaccine manufacturing know-how—will only slow down production.
 
What prevents vaccine makers from making more vaccines, they say, are material problems hardwired into the world economy: lack of quality-controlled factories and ingredients to make vaccines, lack of freezers to store vaccines, lack of engineers and other professionals to oversee everything, and so on. “The scarcity of vaccines is not because of intellectual property but because of regrettable production and distribution challenges,” wrote Michelle McMurry-Heath <https://www.economist.com/by-invitation/2021/04/20/michelle-mcmurry-heath-on-maintaining-intellectual-property-amid-covid-19?utm_campaign=&utm_medium=IAmBiotech&utm_source=twitter>, president of one of the leading Big Pharma trade groups. Moderna’s CEO said earlier this month, <https://www.washingtonpost.com/us-policy/2021/05/06/biden-patent-waiver-developing-world-long-road/> “There is no mRNA manufacturing capacity in the world”—and thus no way to make mRNA-based Covid-19 vaccines any faster than Moderna and Pfizer-BioNTech are already doing. 
But we doubt Big Pharma’s premise. Global vaccine scarcity is not inevitable—or, at least, it is not primarily dictated by fixed constraints in the world’s physical capacity to make, store, and distribute vaccines.

Numerous <https://www.washingtonpost.com/us-policy/2021/05/06/biden-patent-waiver-developing-world-long-road/> independent <https://apnews.com/article/drug-companies-called-share-vaccine-info-22d92afbc3ea9ed519be007f8887bcf6> experts <https://www.prep4all.org/news/hit-hard-hit-fast-hit-globally> have <https://www.citizen.org/article/25-billion-to-vaccinate-the-world/> surveyed supply and distribution chains, interviewed pharmaceutical companies around the world, and concluded that additional vaccine manufacturing could be brought online quickly—if not tomorrow, then in a matter of weeks or months. These estimates are much shorter than the 18 months or more <https://www.washingtonpost.com/us-policy/2021/05/06/biden-patent-waiver-developing-world-long-road/> that Moderna and other current market leaders often claim. In fact, in recent weeks, drug companies in Israel <https://www.ft.com/content/4c72242f-fb8b-4c1c-b19e-f5c199b8e3a7>, Canada <https://theintercept.com/2021/04/29/covid-vaccine-factory-production-ip/>, Bangladesh, South Africa, and Denmark <https://apnews.com/article/drug-companies-called-share-vaccine-info-22d92afbc3ea9ed519be007f8887bcf6> have all said they have unused vaccine manufacturing capacity that could be brought online in a matter of months, not years, to fight Covid-19—but only if the existing incumbent manufacturers (or the governments that oversee and subsidize those manufacturers) share resources and knowledge, and create a legal pathway for new entrants to sell their vaccines.

Shouldn’t a rational incumbent be “eager to find partners with the capabilities to expand production,” as some scholars have written <https://blog.petrieflom.law.harvard.edu/2021/05/05/covid-vaccine-patent-waiver/>, so as to sell more doses of its vaccine? Aren’t “all of the vaccine manufacturers…trying to increase supply as quickly as possible,” as another has claimed <https://marginalrevolution.com/marginalrevolution/2021/05/ip-is-not-the-constraint.html>? In our view, there are at least two reasons to be skeptical of that refrain.
 
First, it is of course true that these companies can make more money when they sell more doses, and partnering with competitors to outsource steps of their manufacturing processes may enable them to sell more doses. (For example, Moderna <https://www.cnbc.com/2020/05/01/moderna-and-switzerlands-lonza-strike-a-deal-on-a-potential-coronavirus-vaccine.html> and J&J <https://www.cnbc.com/2021/03/02/jj-ceo-on-merck-vaccine-deal-extraordinary-times-take-extraordinary-efforts.html> have done some outsourcing, cautiously.) But these partnerships impose a tradeoff. They require the manufacturer to share some of its closely guarded trade secrets <https://science.sciencemag.org/content/369/6506/912/>—precise ingredient lists, detailed instructions for production, and so on. Patent-holders share these secrets judiciously <https://news.bloomberglaw.com/?target=https%3A%2F%2Fwsauth.bna.com%2Fwsauth%2Fblawauth%3Ftarget%3Dhttps%253A%252F%252Fwww.bloomberglaw.com%252Fbloomberglawnews%252Fhealth-law-and-business%252FX931MDUG000000%253Fbna_news_filter%253Dhealth-law-and-business%26v%3D0.1159.0#jcite>, protected by nondisclosure agreements and other contracts that strive to keep control of the valuable knowledge in the their hands, but inevitably some knowledge “leaks” to the competitor. Incumbents eager to guard their first-mover advantage in the Covid-19 vaccine marketplace—and extend that advantage into other disease areas—may refuse the tradeoff, choosing to keep their secrets close (and forgoing wider sales of their existing products). Indeed, Moderna <https://www.modernatx.com/pipeline> and BioNTech <https://biontech.de/science/pipeline> have told investors they are currently applying their mRNA technology to develop a wide range of new vaccines and treatments for cancer, heart disease, influenza, HIV, and other diseases, which could become global blockbusters—unless their global competitors beat them to the punch.

Meanwhile, the Financial Times reported in April that certain conspicuously unnamed companies “have warned in private meetings with US trade and White House officials that giving up intellectual property rights [to Covid-19 vaccines] could allow China and Russia to exploit platforms such as mRNA, which could be used for other vaccines or even therapeutics for conditions such as cancer and heart problems in the future.”

Second, incumbent vaccine makers might, for rational economic reasons, choose not to make more Covid-19 vaccines. This point is somewhat counterintuitive, but, to put it bluntly, perpetuating the pandemic is better for business than ending it. Vaccine makers have strong financial incentives to keep the virus spreading, at least to some extent. (Matt Stoller has aptly described <https://mattstoller.substack.com/p/why-joe-biden-punched-big-pharma> these incentives as “ghoulish.”) This observation is no conspiracy theory; the companies themselves have acknowledged the profits to be secured over a medium- to long-term horizon, if the virus endures. Pfizer’s CFO announced a few months ago that the company “sees significant opportunity <https://www.documentcloud.org/documents/20514141-pfe-usq_transcript_2021-03-11>” in Covid’s becoming endemic in the United States, Canada, and other rich countries—a recurring, perhaps even permanent, fixture of our lives—which could make Covid-19 vaccines a durable “franchise <https://www.documentcloud.org/documents/20514141-pfe-usq_transcript_2021-03-11>” for the company. Particularly devastating from a public health perspective, and particularly appealing from a franchise-building perspective, are so-called variants of concern, which may evade existing immunity. Pfizer’s CFO pointed specifically <https://www.documentcloud.org/documents/20514141-pfe-usq_transcript_2021-03-11> to “these emerging variants” in response to a Wall Street analyst’s question about “the need to revaccinate annually.” Pfizer has also said <https://www.fiercepharma.com/pharma/pfizer-eyes-higher-covid-19-vaccine-prices-after-pandemic-exec-analyst> that it plans, at some point in the foreseeable future, to end its so-called “low-cost” “pandemic pricing”—approximately $20 per dose—and begin charging more “normal” prices—perhaps as much as $175 per dose. Moderna’s CEO has similarly stated <https://www.cnbc.com/2021/04/14/covid-vaccine-moderna-hopes-to-have-booster-shot-ready-by-the-fall-says-ceo.html> that Moderna expects to sell annual Covid-19 vaccine booster shots for the foreseeable future <https://www.cnbc.com/2021/05/06/moderna-ceo-expects-more-covid-variants-to-emerge-in-coming-months-this-virus-is-not-going-away.html>, as the virus is “not leaving the planet.” Moderna’s CEO went on <https://www.cnbc.com/2021/04/14/covid-vaccine-moderna-hopes-to-have-booster-shot-ready-by-the-fall-says-ceo.html> to contemplate Moderna selling an annual booster shot “at your local CVS store” “that would protect you against the variant of concern against Covid and the seasonal flu strain.”

As the first-mover vaccine makers have admitted, demand for lucrative booster shots in rich countries will depend, at least in part, on the emergence of new variants of concern. Those variants will emerge if—and only if—the virus continues to spread to some extent. This simple fact gives the incumbent vaccine makers strong, and horrifying, incentives to leave people—even large numbers of people—unvaccinated. (Or, perhaps, half-vaccinated, as people who receive just one dose of a two-dose regimen remain at substantial risk <https://www.nytimes.com/2021/04/29/well/live/skipping-second-dose-coronavirus-vaccine.html> of infection and illness). Pfizer’s <https://www.yahoo.com/news/pfizer-could-sell-nearly-100-162753172.html> and Moderna’s <https://www.nasdaq.com/articles/whats-2022-looking-like-for-moderna-stock-2021-05-23> projections of handsome profits flowing from their annual booster shot franchises rely, quietly, on the prospect of unvaccinated people continuing to become infected by SARS-CoV-2. Their investors are already coming to rely on these projections.
 
Would a drug company really do such a thing? Leave people to die when it has the capacity to save them—either by manufacturing more, or by sharing with other would-be producers the knowledge and the rights required to manufacture more? One data point: In the midst of another, slower-moving epidemic—hepatitis C—one multinational drug maker, Gilead, “asserted that its primary concern <https://www.finance.senate.gov/imo/media/doc/1%20The%20Price%20of%20Sovaldi%20and%20Its%20Impact%20on%20the%20U.S.%20Health%20Care%20System%20(Full%20Report).pdf> in developing and marketing [its bestselling hepatitis cure] was to treat the largest number of HCV patients possible.” Yet a bipartisan Senate investigation concluded, “In reality, Gilead’s marketing, pricing, and contracting strategies were focused on maximizing revenue—even as the company’s analysis showed a lower price would allow more people to be treated.”

We have no proof that Moderna, Pfizer-BioNTech, J&J, and AstraZeneca are stretching the truth when they say <https://www.politico.eu/article/vaccine-producers-reject-offers-to-make-more-jabs/> that they are trying to increase global Covid-19 vaccine supply as quickly as humanly possible. But we’ve heard these kinds of claims before—and they have been proven wrong.

In the 1990s and 2000s, for example, HIV drug makers based in the United States and Europe sometimes <https://www.nytimes.com/2000/12/01/world/selling-cheap-generic-drugs-india-s-copycats-irk-industry.html> claimed <https://www.nytimes.com/2001/04/24/business/lifting-the-curtain-on-the-real-costs-of-making-aids-drugs.html> that manufacturers in other countries lacked the technical sophistication to make the drugs safely and reliably; in reality, manufacturers in India and other countries of the Global South succeeded in making these drugs, in high quality and on a massive scale, and ultimately did so more efficiently <https://www.ft.com/content/bd8dccee-f976-11dc-9b7c-000077b07658> than the original makers. (Arguments about manufacturing or distribution capacity in the Global South often veer into patronizing, even overtly racist, tropes about “the West’s” supposed scientific supremacy, as when, in 2000, the editorial board of The Washington Post asserted <https://www.washingtonpost.com/archive/opinions/2000/01/06/fighting-aids/d00ab881-6465-42d4-8044-768b2426b57f/>, incorrectly, that anti-HIV drugs could not be deployed in the Global South because the “drugs need to be administered with a precision that rudimentary health infrastructures cannot aspire to.”)

More recently, earlier in the pandemic, the United States faced shortages <https://www.nytimes.com/2020/07/28/opinion/remdesivir-shortage-coronavirus.html> of the anti-Covid-19 drug remdesivir. Gilead, which manufactures remdesivir and holds patents on the drug, contended that it was making as much remdesivir as global supply chains permitted. Faced with calls to license its patents to generic competitors, in an effort to expand supply, Gilead insisted <https://www.gilead.com/news-and-press/company-statements/gilead-sciences-statement-on-state-attorneys-general-letter-on-remdesivir> that such licenses would be futile: “Proposals to allow generic manufacturers to make remdesivir ignore the fact that it takes six to 12 months to manufacture remdesivir.” In reality, a generic manufacturer in Bangladesh succeeded in making remdesivir on commercial scale in less than six months <https://asia.nikkei.com/Business/Pharmaceuticals/Bangladesh-s-Beximco-thrives-on-coronavirus-challenges>, without help or permission from Gilead, and began exporting to other countries—though not to the United States <https://www.cnn.com/2020/09/09/health/covid-remdesivir-us-vs-other-countries/index.html>, where Gilead’s patents and other legal barriers prevent competition.
Why might today’s Covid-19 vaccine-making giants—Moderna, Pfizer-BioNTech, J&J, and AstraZeneca—insist on the premise that they are making vaccines as fast as they can, even if they know the premise is false? Because they—like HIV/AIDS drug-makers in the 2000s <https://www.nytimes.com/2001/10/31/opinion/the-urgency-of-cheaper-drugs.html> and Gilead during remdesivir shortages <https://www.reuters.com/article/us-health-coronavirus-remdesivir-idUSKCN250248>—face real pressure from governments, civil society, and patients to make more vaccines, and faster. In the face of mass death and horrible suffering in India, Brazil, Iran, and other countries, Americans are increasingly calling <https://c4aa.org/2021/04/may-5-dc-rally-for-a-peoples-vaccine> on their government to intervene more actively <https://blogs.bmj.com/bmj/2021/05/10/the-covid-19-vaccine-patent-waiver-a-crucial-step-towards-a-peoples-vaccine/>, to use existing legal authority to exert greater control over Covid-19 vaccines. (The mRNA and J&J vaccines rely on <https://www.citizen.org/article/leading-covid-19-vaccines-depend-on-nih-technology/> foundational coronavirus vaccine technology invented in a US government lab <https://science.sciencemag.org/content/372/6538/109>—the National Institute of Allergy and Infectious Diseases, led by Dr. Anthony Fauci. Other key components were developed in universities; the Pfizer-BioNTech vaccine, for example, would not work without a lipid-based delivery system technology developed by researchers at the University of British Columbia <https://cihr-irsc.gc.ca/e/52424.html>. All of today’s Covid-19 vaccines were <https://publicmeds4covid.org/dashboard> funded <https://www.forbes.com/sites/niallmccarthy/2021/05/06/which-companies-received-the-most-covid-19-vaccine-rd-funding-infographic/?sh=4c5b48f14333> in substantial part by government funding all over the world, strengthening the case for greater public oversight and control of vaccine manufacturing and distribution.) Thoughtful, detailed proposals from Public Citizen <https://www.citizen.org/article/how-to-make-enough-vaccine-for-the-world-in-one-year/>, PrEP4All <https://www.prep4all.org/news/hit-hard-hit-fast-hit-globally>, and others in civil society <https://www.washingtonpost.com/business/2021/03/25/moderna-vaccine-patent-nih/> include calls to waive (or issue compulsory licenses to) the incumbents’ patents; to compel the incumbents to share their secret manufacturing processes; and to invest billions in publicly governed vaccine-manufacturing facilities.
To dismiss these calls out of hand, avoid difficult policy debates, and protect the status quo, the incumbents fall back on their shaky premise: Vaccine scarcity is lamentable but inevitable. They claim that any government intervention will, at best, be useless and foolish, and, at worst, devastating to the entire pharmaceutical and biotech sectors.

Given the incentives that the incumbents have to maintain control over Covid-19 vaccines—to, in effect, manufacture scarcity—we think there is ample reason to doubt their account of what is and what is not possible. Prior to the pandemic, few would have thought <https://www.nytimes.com/interactive/2020/04/30/opinion/coronavirus-covid-vaccine.html> developing, manufacturing, and distributing even a single vaccine in less than a year would be feasible. Moderna’s factory in Massachusetts is a former Polaroid facility <https://www.wsj.com/articles/drugmaker-moderna-delivers-first-coronavirus-vaccine-for-human-testing-11582579099>, which had never produced a single commercial drug or vaccine prior to Covid-19. Through unprecedented efforts and collaboration across industry, academic researchers, health care professionals, government agencies, and multilateral organizations all over the world—and massive amounts of public funding directed to vaccine developers alongside other incentives—we succeeded in generating safe and effective Covid-19 vaccines in record time.

To get vaccines to everyone who needs them, we need to do even more. We can indeed expand supply significantly by the end of 2021, but only with bold government action <https://www.nytimes.com/2021/05/14/opinion/biden-covid-vaccines-world-india.html?referringSource=articleShare> that combines big public investment with compulsory transfer of the incumbents’ trade secrets. (This transfer could be achieved by the US government’s using the Defense Production Act <https://lpeproject.org/blog/how-to-vaccinate-the-world-part-2/>, or perhaps the threat of a patent infringement lawsuit brought against vaccine manufacturers by the US government itself <https://www.ft.com/content/d0c70cc2-0ffa-42dd-b0d0-0f76eeb273f0>.). It will take months, not weeks or days. We won’t know how long it will take unless we try. Other vaccines are in the pipeline <https://extranet.who.int/pqweb/sites/default/files/documents/Status_Covid_VAX_04May2021.pdf>, but given the dire need in many parts of the world we should make every effort to scale up global production of the vaccines we already know work—including by compelling Pfizer-BioNTech, Moderna, J&J, and AstraZeneca to share the manufacturing know-how they have come to control.
What we should not do is accept big pharma’s premise, or trust big pharma to solve the pandemic on its own initiative, any time soon.

Disclosures: Christopher Morten legally represents PrEP4All (pro bono) and has collaborated with Public Citizen and PrEP4All in its research and advocacy for broader global vaccine access. Matthew Herder is a member of the Patented Medicine Prices Review Board, Canada’s national drug price regulator, and receives honoraria for his services.
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Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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