[CTC] Drug Lobby Asks Biden to Punish Foreign Countries Pushing for Low-Cost Vaccines

[Arthur Stamoulis]

https://theintercept.com/2021/03/03/vaccine-coronavirus-big-pharma-biden/

DRUG LOBBY ASKS BIDEN TO PUNISH FOREIGN COUNTRIES PUSHING FOR LOW-COST VACCINES
Big Pharma is fighting for tight control over Covid-19 vaccine production, limiting availability worldwide while reaping billions.

By Lee Fang

PRESIDENT JOE BIDEN’S administration is being asked to punish Hungary, Colombia, Chile, and other countries for seeking to ramp up the production of Covid-19 vaccines and therapeutics without express permission from pharmaceutical companies.
 
The sanctions are being urged by the drug industry, which has filed hundreds of pages of documents to the Office of the U.S. Trade Representative outlining the alleged threat posed by any effort to challenge “basic intellectual property protections” in the response to the coronavirus pandemic.
 
The drug industry has sharply criticized any attempt to share vaccine patents or the technological knowledge needed to manufacture them, despite global need. According to one estimate, wealthy countries representing just 16 percent of the world’s population have already secured more than half of all Covid-19 vaccine contracts. And current projections show that much of the middle-income and developing world will not achieve widespread vaccinations for years. Some projections predict that low-income countries such as Mali, South Sudan, and Zimbabwe may not achieve significant levels of vaccination until early 2024.
 
The delay will undoubtedly cost countless lives and risk future, potentially dangerous mutations of the Covid-19 virus. The AstraZeneca-Oxford vaccine, initial tests showed, is far less effective against the Covid-19 variant that has spread rapidly through South Africa, for example. A prolonged pandemic will also threaten to extend and exacerbate a global economic downturn.
 
In response, governments around the world are considering a temporary exemption to traditional intellectual property rights in order to rapidly produce coronavirus treatments at low cost, a demand intensely opposed by American lobbyists for the pharmaceutical industry.
 
The push by foreign governments to unilaterally set the price and pace of production of coronavirus vaccines, drug lobbyists with the Biotechnology Innovation Organization, or BIO, argued, will place “American jobs and the workers who rely on them at risk, and impede scientific advances from reaching society.”
 
The Pharmaceutical Research and Manufacturers of America, or PhRMA, another drug lobby group, requested that the Biden administration “pursue a variety of enforcement initiatives” and “use all available tools and leverage to ensure America’s trading partners” do not suspend traditional intellectual property rights in the fight against the coronavirus.
 
BIO and PhRMA represent the largest drug firms in the world, including Pfizer, Gilead Sciences, and Johnson & Johnson. The two groups collectively spent more than $38 million lobbying federal officials last year, and member companies maintain extensive ties to prominent think tanks, lawmakers, and academics active in shaping the policy response to the pandemic. Other drug industry-funded groups, such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the Alliance for Trade Enforcement, and the Intellectual Property Owners Association made similar demands to the administration to take action against countries that challenge corporate intellectual property rights in response to the pandemic.
 
Albert Bourla, the CEO of Pfizer, mocked proposals for sharing intellectual property as “nonsense” and “dangerous” at an industry forum last year. The vaccines are netting drug companies $21 billion this year alone, according to one estimate by Bernstein Research.
 
THE LATEST FILINGS show the specific demands made by the drug industry to influence the Biden administration’s so-called Special 301 Report. Every year, the U.S. Trade Representative allows the public to comment on countries that fail to protect intellectual property rights. The countries named in the annual Special 301 Report are then targeted by the U.S. for World Trade Organization settlement disputes, which can result in retaliatory tariffs and other sanctions.
 
“If you look at the pharma submissions this year, they are now directly complaining about Covid-related responses at the country level,” said Brook Baker, a Northeastern University law professor and expert on intellectual property. “Pharma’s response to the pandemic is: ‘Our system is perfect. All the monopoly rights we have need to be preserved and extended, and anyone who’s not giving us what we want should be condemned by the U.S. government.’”
 
Burcu Kilic, the director of Public Citizen’s Access to Medicines Program, noted that the Special 301 Report has historically reflected the priorities of the drug industry, though it is unclear whether Biden’s trade team will follow the pattern set by previous administrations. “Most of the time, the Special 301 Report copies and pastes [the drug industry’s] arguments,” said Kilic.
 
In previous years, the Special 301 Report has been used by the drug lobby to exert pressure on international challenges to its intellectual property. In 2006, following the decision by Thailand to issue compulsory licenses for the generic production of a range of cancer treatment and HIV/AIDS medications, the drug industry petitioned the U.S. Trade Representative, which then targeted Thailand in its 2007 Special 301 Report. The U.S. government followed up by suspending tariff-free treatment on a range of Thai exports, including flat screen televisions and gold jewelry.
 
Kilic noted that in 2013, following a decision by the Indonesian government to issue compulsory licenses for the production of HIV and hepatitis B drugs, the Obama administration added the country to its Special 301 Report, in accordance with the drug industry’s demands. “I was in Indonesia when the report came out,” Kilic said. The government officials, she noted, were terrified of the U.S. response. “If the U.S. is your main export market, you need to take it seriously. This is how IP policy is made.”
 
The U.S. Trade Representative did not respond to questions about its plans for the Special 301 Report this year. PhRMA spokesperson Brian Newell, in a statement, noted that “IP protections are actually allowing partners to more easily share technology and information to find new ways to fight the virus and scale-up of manufacturing of vaccines.”
 
“Undermining the very policies that have helped research companies move so quickly against the pandemic won’t provide relief for people and will leave us all less prepared to confront future public health threats,” Newell said. “A better approach is to continue the intense collaboration already taking place between companies, governments and other partners around the world.”
 
BIO also did not provide comment to The Intercept. Tom DiLenge, the president of public policy at BIO, told the Wall Street Journal that his group opposes intellectual property-sharing arrangements. “You cannot have private entities engage in a partnership if you’re going to take their intellectual property and restrict how they can price and market their products,” said DiLenge.
 
THE STARK DIVIDE in global coronavirus vaccine distribution has stoked an intense debate around the exclusive monopoly rights afforded to pharmaceutical patent holders under World Trade Organization rules. Wealthy nations such as Canada, the U.S., and Japan have secured ample vaccines for all willing residents within this year and have generally supported global policies that allow drug companies to negotiate and voluntarily set the price and production level of coronavirus vaccines. The U.S., the U.K., and Switzerland, echoing the concerns of drugmakers, reportedly opposed efforts early in the pandemic to share intellectual property and technology for coronavirus vaccines and treatments.
 
Instead, the U.S. has backed the so-called COVAX Facility, an underfunded, multinational public-private partnership designed to distribute vaccines to middle- and low-income countries through donations and private purchases of vaccines. Under the COVAX plan, which the U.S. is supporting with $4 billion in funds, pharmaceutical companies either directly distribute or license partners to manufacture vaccines abroad.
 
The Serum Institute of India has partnered with AstraZeneca to manufacture more than 300 million doses through COVAX for over 100 low-income countries by June. But that total represents about 3 percent of the population of the countries slated to receive the vaccines.
 
Efforts to radically expand the capacity to produce coronavirus treatments, meanwhile, have been advanced by a range of countries, including the Hungarian government and leaders in Indonesia.
 
Chile, for instance, has advanced rules to allow so-called “compulsory licensing” to import and manufacture coronavirus-related medical treatments, including vaccines, without the permission of the patent holder. The Chilean Chamber of Deputies voted overwhelmingly last year in support of a resolution to allow public agencies or generic drugmakers to produce coronavirus-related medical treatments.
 
Other countries have advanced multilateral agreements to provide a collaborative approach to increasing global manufacture of coronavirus vaccines. Last October, a coalition led by South Africa and India advanced a proposal to the World Trade Organization to issue exemptions to member nations from enforcing patent protections for pandemic-related treatments. Costa Rican President Carlos Alvarado Quesada has called for a global “technology repository” to share technology and patents for rapidly addressing the pandemic, including tests and vaccines.
 
The World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, the agreement that covers intellectual property rights, includes exemptions for public health needs. The pharmaceutical lobby, however, is calling on the U.S. to lead the way in blocking any such exemption.
 
The Intellectual Property Owners Association, a group funded and led by Pfizer and Johnson & Johnson, filed a letter to the administration earlier this year calling out the South Africa-India initiative to the World Trade Organization as among the “dangerous proposals” that are “counterproductive to responding to this and future pandemics.”
 
PhRMA, in its filing, called the South Africa-India proposal a “significant escalation in anti-IP global activism” that “will further polarize legitimate conversations on countries’ engagement to combat the pandemic.” BIO and PhRMA both list several nations for inclusion into the Special 301 Report, citing drug pricing regulations and the push for intellectual property exemptions in response to the pandemic.
 
THE STRIDENT CORPORATE opposition to any intellectual property flexibility has rankled public health advocates, many of whom note that much of the vaccine technology has been financed by the public sector and transferred into the private domain.
 
“So the patent system is, you risk private capital, you can get a monopoly in exchange as a reward for that,” said Achal Prabhala, coordinator for the AccessIBSA project, which advocates for global access to medicine. “Except as we know, for pharmaceutical companies, it’s not private capital, it’s actually public actors.”
 
The Pfizer vaccine, noted Prabhala, was developed in partnership with the European firm BioNTech, which received $445 million from the German government to help accelerate vaccine development and manufacturing. The U.S. government provided about $1 billion for the research and testing by Moderna to create its coronavirus vaccine.
 
Johnson & Johnson received over $1.45 billion in funding from the Biomedical Advanced Research and Development Authority, a division of the U.S. Department of Health and Human Services, for its recently approved Covid-19 vaccine.
 
While the federal government has tended to side with the interests of the drug industry, there is much that could be done to increase capacity for vaccine production.
 
The Bayh-Dole Act of 1980, which codifies the transfer of university- and government-funded research to private entities, includes a provision on “march-in rights” that allows patents to be shared in the public domain for health-related purposes. That provision, which could be used to grant the U.S. government temporary ownership of coronavirus vaccine patents, however, has never been utilized.
 
The Defense Production Act could also be applied to force collaboration between pharmaceutical companies to increase vaccine supply by expanding manufacturing output. So far, Biden has only used the DPA to increase the capacity of vials, syringes, and other materials but has not enforced the law on drugmakers.
 
And the U.S. could simply change course in terms of its approach to World Trade Organization negotiations, ignore the demands by the drug industry, and embrace proposals to share patents and intellectual property that could go toward helping end the coronavirus pandemic.
 
But the opportunity to share vital intellectual property, including vaccine patents and the technological process for building out vaccine manufacturing, Prabhala said, would require a radical change in approach that contrasts sharply with the drug business-first ideology that dominates Washington, D.C.
 
“There’s actually a lot of capacity that could be repurposed to make more vaccines, but in order for that to happen, there has to be something from the federal government that compels it to happen,” Prabhala said. “If the Biden administration goes to Pfizer and says, ‘We’re compelling you to expand supply,’ it would essentially be going against what the official U.S. administration policy has been on these issues for decades.”

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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