Rachmi Hertanti
Member of the International Organizing Committee of the Asia Europe Peoples’ Forum (AEPF)
Executive Director of Indonesia for Global Justice (IGJ)
(The article was presented at the Side Event 47th Session of the UN Human Rights Council: Big Pharma VS The People in the times of Covid19: Ways to safeguard the Right to Health)

Rachmi Hertani shows how Intellectual Property Rights of the WTO contribute to vaccine inequality during the Covid-19 Pandemic. Large numbers of countries and peoples in the global South are victims of this inequality and will remain unvaccinated till 2023.

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Vaccine Inequality

We are  witnessing inequality in access to vaccines and medicines needed to combat Covid19 in the world. From this picture above, we can see that many regions especially in the Global South  are  far behind in the vaccination program.

Based on a global database of Covid19 vaccinations published in the Nature Journal on June 2021, it was mentioned: “There are large differences in vaccination rates between countries. The data reveal large differences in the scale of the vaccine rollout across countries. As of 7 April 2021, the cumulative number of doses administered per 100 people ranges from 118 per 100 in the case of Israel, to less than 0.1 doses per 100 in countries that have just begun their vaccination campaigns, such as Mali and Namibia.”

It can be seen that Africa is the region that lags behind most  in vaccinating and is far behind until it reaches herd immunity. Furthermore, with the worsening of inequality, a lot of poor countries can be  fully vaccinated  only by 2023. 

Indonesia is no exception, although it has secured  94 million doses of vaccines,  yet this figure is only 20% of its total needs. Indonesia needs around 426 million doses of vaccines to cover 181 million people. We still need about 300 million more doses of vaccines. All these facts keep us away from the reality of the end of the pandemic, because “No one is safe until everyone is safe”.

Intellectual Property  Controls

The cause of inequality in access to vaccines and medicines is due to limited production and supply of vaccines worldwide and this cannot be separated from the root of the problem, namely the control and monopoly of big pharmaceutical companies over Intellectual Property Rights (IPR).

Since the beginning of the pandemic, pharmaceutical companies have continued to adopt a ‘business-as -usual’ approach, either by maintaining tight controls over their intellectual property rights or by pursuing secret commercial deals and monopolies and excluding countries that are badly affected by COVID-19.

The monopoly of Intellectual Property has been impeding the production needed to ensure fair global access to the vaccine and other health products.  Defending the protection of the IPR monopoly also goes against the goal that COVID-19 medicines and vaccines  be treated as global public goods. 

In handling COVID-19, almost everything is related to IPR. Almost all health products, such as test kits, diagnostics, masks, medicines, vaccines and ventilators are protected under patents, trade secrets and industrial designs. This in turn opens up opportunities for the pharmaceutical industry to take advantage of a pandemic situation to extract profit as much as possible from the abuse of IPR protection and encourages monopolistic practices of knowledge, production, price, and supplies.

Profit Taking/Making  Behavior

An article written by Brooke Baker¹ (March 2021) mentioned how much Big pharmaceutical companies profit from the IP Monopoly that are supported by the governments in the north countries, while we know that they were funded by public money. 

…we can realistically hazard a guesstimate that total R&D expenditures on the vaccine were $1 billion or less. And don’t forget, BioNTech got $445 million from Germany to speed up its vaccine development and for initial investments in expanded manufacturing capacity. Compare these R&D expenditures with projected earnings.  Pfizer is already on record predicting $15 billion in earnings from the vaccine this year.  BioNTech’s estimate is $11.5 billion.  But these projections are based on 1.4 billion doses only. The partnership is planning to increase production up to 2.5 billion doses by end of the year. Selling those additional .9 billion doses at $19.50, the U.S. price, would yield another $17.55 billion in revenue (note:  Pfizer had already predicted another possible $15 billion in sales).

In fact, the big pharmaceutical companies showed little interest in the race for vaccines. This is due to past experience, making vaccines, especially in acute health emergencies, has not been shown to be beneficial or rather profitable. Only when governments and international agencies step in with funding agreements, that is when they like to work on it. Governments and multilateral organizations have agreed to buy billions of doses at fixed prices. Pharmaceutical companies selling to wealthy countries will certainly be able to start seeing returns on their investments². 

Big pharma like Pfizer and BioNTech  claimed that they have not made enough money to justify their vaccine R&D investments, but looking at the numbers on their balance sheets reveal that their claims of loss  are ridiculous. We can see from comparisons that Pfizer and BioNTech earned hundred times more than the R&D cost. 

Furthermore, the vaccine developed by AstraZeneca and the University of Oxford brought in $275 million in sales from about 68 million doses delivered in the first three months of this year, most of which came from sales in Europe. Even though AstraZeneca has pledged not to profit on its vaccine during the pandemic. They have been selling the shot to governments for several dollars per dose, less expensive than the other leading vaccines³. That is why these companies need to keep a control and monopoly on IPRs, so they get more profit even from the poor countries. 

How they Control?

The race to secure vaccines has encouraged more bilateral deal practices. The bilateral agreements between companies and the states have been done under the trade secret protections clauses. These clauses ensure the enclosure of all information required by the public, such as prices given, the quantity of supplies, including delivery schedules.

For example,  price differences  are impacted from bilateral deals. The impact of a bilateral agreement between richer governments and producers of Covid19 vaccine (read: vaccine nationalism) has raised concerns over rising prices and lack of supply for low- and middle-income countries. This is where the big pharmaceutical companies have a chance to take advantage of the price game. We have heard about the issue of South Africa where Last January 2021, The Guardian reported on the issue of inequality regarding vaccine prices experienced by South Africa. In its article, it was stated that South Africa paid 2.5 times more than the European Union for the vaccine. South Africa has ordered 1.5 million doses of vaccines from the Serum Institute of India (SII) with a price per dose of around 4.32 Euros, which is compared to the price per dose obtained by the European Union which is only around 1.78 Euros⁴.

The control of pharmaceutical companies over vaccine production cannot be separated from licensing practices that are often implemented in the midst of a pandemic. According to Medicines Sans Frontiers (MSF), companies holding IPR protection can apply for licensing terms to other licensed producers, such as limiting supply to a limited geographic range and other conditions that limit the benefits of global competition and supply. This licensing practice is definitely implemented with an agreement that is highly confidential in nature. This is why vaccine production cannot be carried out on a massive scale and only limited to certain manufactures that require special permission from IP owners.

Even more, the bilateral deal has potentially become a tool for big pharmaceutical companies to threaten the poor and developing countries. They are afraid that in the future there will involve legal cases from the states for the adverse effects of the vaccine. Pfizer made  controversial demand where governments put up sovereign assets guaranteeing and indemnity against the cost of any future legal cases. These two articles gave examples from Latin America and South Africa, where Pfizer tried to put irresponsible requests in the midst of a pandemic crisis⁵. This should be considered as an unethical practice.

Our demand:

Therefore, to end corporate monopoly and impunity, we need to push more demands:

First, NO IP Monopoly on Covid19 Health products. TRIPS Waiver is being negotiated at the WTO and this is a pretty tough battle because the different positions between the rich countries and the sponsoring countries still haven’t been resolved. In fact, the next challenge after the TRIPS Waiver still has the potential to hinder efforts to open access to just COVID-19 vaccines and medicines due to control over technology and know-how.

Second, we need alternatives. We need to support developing countries that are currently developing vaccine candidates or medicines which can then be directed to south-south cooperation to realize global solidarity.

Third, the very important aspect to end corporate impunity is: How can we ask Big Pharmaceutical Companies for accountability that has prevented the states, especially in developing and underdeveloped countries, to implement their obligations fulfilling the right to health in their countries?. Therefore, it is really important to continue the negotiation on the legally binding treaty on transnational companies at the UN with constructive engagement from the states. 

Also Watch:

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(1) https://healthgap.org/pfizer-and-biontech-profiteering-exposed-more-than-enough-is-enough/
(2) https://igj.or.id/stop-ipr-intellectual-property-rights-monopoly-against-covid-19-implement-trips-waiver/?lang=en
(3) https://www.nytimes.com/2021/04/30/business/virus-astrazeneca-vaccine-revenue.html
(4) https://igj.or.id/stop-ipr-intellectual-property-rights-monopoly-against-covid-19-implement-trips-waiver/?lang=en
(5) https://readersupportednews.org/news-section2/318-66/69029-held-to-ransom-pfizer-demands-governments-gamble-with-state-assets-to-secure-vaccine-deal