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Morals and the vaccine market
Read more on - Polity | Economy | Schemes | S&T | Environment
- The story: As the second wave of the covid pandemic beats the severity of the first, a clear global bifurcation is emerging. The pandemic is abating, gradually and unevenly, across richer countries, but flaring up in several developing and emerging economies, most notably India, but also to varying degrees in countries such as Bangladesh, Pakistan, Turkey, the Philippines, Ethiopia, and Kenya.
- Why the divide: There are many reasons for this divide, but uneven access to health care — particularly the glaring inequity in access to covid vaccines — is visible. On 18 January, the director-general of the World Health Organization (WHO), Tedros Ghebreyesus, noted that more than 39 million doses of covid vaccine had been administered in at least 49 higher-income countries. By contrast, he said, “Just 25 doses have been given in one lowest-income country. Not 25 million; not 25 thousand; just 25."
- Today's numbers: More than one billion vaccine doses have now been administered worldwide, but vast disparities remain. Seychelles tops the list, having fully vaccinated 59% of its citizens, while Israel (56%), Chile (34%), and the United States (30%) also rank high. Brazil, however, is 43rd globally, with just 5.9% of its population fully vaccinated, while India and Bangladesh are much lower, at 1.8% and 1.7%, respectively. And in some countries, mainly in Sub-Saharan Africa, virtually no one has been vaccinated.
- Given that a covid vaccine is an essential good like food and shelter, the world should be ashamed of such grave inequities. Making the problem worse, many rich countries are stockpiling vaccines beyond what they need, as a precautionary buffer.
- Until a few months ago, activists for access to medicines and open science were hopeful that the enormity of the pandemic would lead to a rejection of proprietary science and patent-based market monopolies. In May 2020, for example, the WHO launched the global Covid-19 Technology Access Pool (C-TAP) with the aim of encouraging the widespread voluntary sharing of pandemic-related intellectual property.
- Covax update: The Covid-19 Vaccine Global Access, or Covax facility, also established in 2020, was supposed to provide subsidized vaccines to poor countries, with financial support from the rich world. But even by then, the optimism and sense of possibility that defined the early days were long gone.
- The failure is both intellectual and moral. With the best of intentions, many activists’ plans and proposals paid little attention to individual incentives. But while it is right to campaign for corporations to behave morally, it is folly to assume they are moral.
- There can be a future where people invest in knowledge creation and then contribute their findings to an open-access pool, instead of trying to make money. But for now, let the private players acquire rights over the intellectual property they create to ensure that they invest in costly research.
- At the same time, there is scope for cutting the profits of pharmaceutical firms considerably—by compelling them to sell products more cheaply and enable generic producers to sell in certain regions—without killing the pharmaceutical industry’s incentives to spend on research.
- Vaccine markets today: Currently, the ‘market’ is a mishmash of competition and side deals. Governments and pharmaceutical companies in 2020 concluded 44 bilateral covid vaccine deals, many of which have undisclosed details and poorly understood escape clauses. Poor countries were, by and large, left out. The market resembles what oligopoly must have looked like before Augustin Cournot captured its essentials in 1838. Cournot’s breakthrough later enabled the development of the first antitrust laws, like the US Sherman Antitrust Act of 1890, which allowed firms to set prices but prohibited secret multilateral deals to prop up prices. These laws gradually became sharper.
- IPR laws: It is clear that intellectual-property (IP) rights must continue to play a role, at least for now. On the other hand, pharmaceutical firms are arguably making vastly larger profits than needed to sustain their incentive to innovate (especially given how much of their IP has resulted from publicly funded research). In large pandemics such as the current one, we should compensate drug companies with lump-sum payments to cover costs, revoke some of their patents, and allow generic firms to mass-produce essential vaccines.
- The right way: The popular slogan, “None of us will be safe until everyone is safe", amounts to urging the rich to be more selfish, because helping others is in their self-interest. But the pandemic is a clarion call to start thinking beyond the narrow confines of economic rationality and identify others’ interests as part of our own.
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