Corporate greed keeps the pandemic alive

More than two years on, it is hard to imagine there could be someone who is not sick of the pandemic. Although we can point to multiple reasons for the inability to bring Covid-19 under control, a prominent factor is corporate greed.

The elevation of the private profit of a few over the welfare of the many is, sadly, the ordinary course of events in a capitalist world. This is brightly illustrated by the failure of the world’s governments to prioritize health care over money as exemplified by the ongoing failure to make vaccines available to the Global South.

Business as usual, yes, and it would be easy enough to lament the standards of the United States and its wildly expensive health care system being exported to the rest of the world. The U.S. does play a role here, but this time the U.S. is not the biggest villain. The European Union, with its obstinate refusal to waive any intellectual property rule because of fealty to Covid-19 vaccine makers, has been the biggest roadblock.

As new variations and mutations repeatedly spread, achieving a critical mass of vaccinated people is the only way the pandemic will be brought to an end. Covid-19 may never be fully eradicated but it can be reduced to a background nuisance as are many other illnesses. Hesitancy among many in the Global North to be vaccinated has played a not insignificant role, whether by right-wingers believing the nonsense peddled by the likes of Fox “News” or by people on the Left who, not without reason, are skeptical of Big Pharma.

Nurse graffiti COVID-19 in Málaga, Spain (photo by Daniel Capilla)

Those in the latter category see nefarious motivations behind pharmaceutical companies’ promotion of Covid vaccines. But is this another instance of Big Pharma pushing unneeded or even dangerous drugs? Such things do happen; suspicion does have a basis. But let’s consider what Big Pharma wants, which is no different from any other corporation: To accumulate the biggest piles of money possible. Given the global health emergency that arose in the first months of 2020, the surest path to achieving that goal would be to become the first to develop a cure. The pandemic was that rare instance in which the interests of Big Pharma and the general population coincided, and the vaccine makers wouldn’t be, and indeed aren’t, at all shy about taking advantage of an emergency to rack up huge profits, even by their industry’s standards. And with the whole world watching, a vaccine had better work and not cause undue harm.

Thus, because of unique circumstances, creating a safe, effective product for a real problem was actually in a corporate interest. And the profits, thanks to these rare circumstances and government largesse, are gigantic, a topic to which we will return.

Intellectual property as a weapon

It should surprise no one that the vaccine makers are doing everything they can to keep windfall profits rolling in. That means clinging to intellectual property (IP) law, heavily skewed in their favor, to maintain a monopoly. Capitalist governments have rolled over for corporate interests for decades, making IP laws ever more rigid. National legislation has played a role, firmly augmented by so-called “free trade” agreements that are used as battering rams by the United States, the European Union and other advanced capitalist countries to force open less powerful countries’ economies and force the world’s governments, including themselves, to be subordinate to multinational capital. Seeking to undermine government health care systems, and especially the ability of governments to negotiate lower prices, is often a goal of “free trade” deals, most notably demonstrated in the efforts of the U.S. government to push draconian rules in the Trans-Pacific Partnership.

These developments are anathema to the interests of working people everywhere. It is unconscionable, or should be, when IP rules are used to keep life-saving vaccines away from most of the world’s people. Struggles to make Covid-19 vaccines available to the Global South kicked off quickly, and there is no sign that this issue will anytime soon be resolved. This is not only against the interests of those for whom vaccines remain out of reach, but, given that the pandemic won’t end until a substantial percentage of the world’s peoples are inoculated and thus end the risk of still more dangerous variants arising, it is against the interests of those countries whose governments continue to elevate corporate profits over human life.

What the world needs is for manufacturers anywhere in the world to be granted the unrestricted right to manufacture the vaccines.

To achieve this necessity, what is needed is something called a “TRIPS waiver.” This will require some explanation, as once again a trip into the weeds of global trade policy becomes unavoidable.

Traffic in a British village is reduced from two lanes to one so there would be sufficient space for walkers to maintain two-meter distances from one another. (Photo by Martinvl)

Under World Trade Organization (WTO) rules, IP rights are strictly enforced. As the neoliberal variant of capitalism became dominant with the decline of Keynesianism in the 1970s, economic decision-making has been separated from politics, leaving multinational corporations free to move production to the places with the lowest wages and least regulation, constantly on the prowl for locations that can be even more exploited. With components obtained from around the world, assembled in low-wage, low-regulation havens and finished products exported, barriers to trade such as tariffs were necessary and, having won those, corporate executives and financiers next sought to eliminate the ability of governments to regulate them. Thus the era of “free trade” agreements arose, and one of the institutions that was created to enforce corporate supremacy was the WTO.

One of the legs of corporate domination is IP law. How that relates to the pandemic is this: A handful of multinational corporations, interested in the biggest possible profits for their executives and shareholders, can decide who will receive vaccines and at what price. That human life is at stake — more than 6 million have died from Covid-19 — does not make for an exception. As Alain Supiot, writing on international law in the November-December 2021 issue of New Left Review, noted:

“On the one hand, the Preamble to the [World Health Organization] Constitution states that ‘The extension to all peoples of the benefits of medical, psychological and related knowledge is essential to the attainment of health.’ But on the other, since the creation of the World Trade Organization in 1994, this knowledge has become an object of private property, precisely opposed ‘to all peoples’ by virtue of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Until then, it was accepted in international law that the protection of public health interests took precedence over the interests of patent-holders. The TRIPS Agreement reversed this hierarchy and gave primacy to the protection of industrial property.

Negotiations to enact a waiver are stonewalled

A waiver of TRIPS rules, then, is what is needed. In other words, a comprehensive waiver that, even if temporary for the duration of the emergency, sets aside Big Pharma’s IP rights and allows all manufacturers of vaccines, wherever they are, to produce Covid-19 vaccines. The governments of India and South Africa proposed, in October 2020, just such a waiver to allow the production of one or more of the Covid-19 vaccines. A year and a half later, the world is still waiting, with no resolution in sight.

Sarah Lazare and Paige Oamek, writing for In These Times, recently wrote an article demonstrating the “big lie” of Big Pharma talking points as the industry, in particular Pfizer, furiously resist any weakening of their IP fortresses. They wrote:

“The lie relates to an October 2020 proposal from India and South Africa that the World Trade Organization suspend enforcement of key patent rules so that cheaper, generic versions of Covid-19 treatments and vaccines can get to more people more quickly. (The proposal is referred to as a TRIPS waiver, a reference to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.) The pharmaceutical giants Pfizer and Moderna, concerned with maximizing their present and future profits, emerged as virulent opponents of such a measure, which still has not passed more than a year later, even as just one out of 21 people in poor countries have been fully vaccinated. It is no anomaly that the industry would reject such a proposal — pharmaceutical companies had a big hand in shaping those WTO intellectual property rules in the first place, to protect pharmaceutical monopolies and their profits.”

Negotiations have centered on four-way talks among India, South Africa, the European Union and the United States. A report surfaced in March 2022 that an agreement had finally been reached, but that has been denied, most notably by the U.S. government. Text accompanying the reported agreement was widely and loudly condemned around the world as grossly insufficient, and possibly even adding additional barriers to global vaccine access. Weeks have gone by, and there is no word that any agreement has actually been reached. What the true state of the negotiations may be can not be stated with any certainty, but there is no indication that any deal is imminent. Or that any deal will resemble what is needed by the Global South.

A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín)

A surprise announcement by the Biden administration in May 2021, when President Joe Biden announced support for a TRIPS waiver, in a partial reversal of U.S. policy that has consistently elevated corporate profits above all other considerations, raised hopes. But the Biden administration pronouncement is less than meets the eye, and the European Union has remained obstinately opposed to any waiver. Providing a fresh demonstration of the anti-democratic nature of the EU, that the European Parliament has three times called for a waiver to be approved and many EU countries are in support have had no apparent effect on EU negotiators.

The U.S.-based watchdog group Global Trade Watch, in its analysis, says that accepting the EU proposal would be worse than having no deal:

“The European Union has been the primary obstacle to progress on the waiver. … The EU’s position had been to basically restate existing WTO flexibilities on patents that almost every WTO member already has, while requiring additional conditionalities. … Any proposal that follows the EU position is worse than no action at all, because it could further undermine current WTO rules that already allow governments to issue compulsory licenses. The need for far greater, not less, freedom to make and use medicines in a global health crisis like the COVID-19 pandemic is precisely why more than 100 countries have supported the waiver as introduced by India and South Africa.”

The EU, however, is not the only obstacle. The U.S. negotiating position isn’t for a full waiver. The Global Trade Watch analysis states:

“The longstanding U.S. position to support a waiver for vaccines only, excluding the tests and therapeutics, is shameful, particularly as President Biden recently lauded testing and treatment as key tools in fighting the pandemic at this stage. The new proposal only covers vaccines, with tests and treatments to be considered six months after the proposal is agreed, if it is agreed. Given the already seventeen-month delay since the waiver was introduced, it is irresponsible to suggest further delay for tests and therapeutics. … The U.S. had also reportedly suggested limiting the geographic scope of the waiver, which would only further limit the ability to scale up manufacturing all over the world. This demand was apparently agreed, as the proposal now on offer would only apply to developing countries that contributed less than 10% of the world’s exports of COVID-19 vaccine doses in 2021.”

Public statements by the Office of the U.S. Trade Representative have not been encouraging. The trade representative, Katherine Tai, “assured” the U.S. Congress that her office is not “working to give away American IP.” With the usual bipartisan commitment to corporate profits, congressional Republicans and Democrats oppose a meaningful waiver, echoing industry talking points to underline their disapproval. A bloc of Republican representatives is seeking to enforce this by introducing a bill that would grant Congress more oversight over negotiations.

Most of the world’s countries back India, South Africa

As many as 120 of the WTO’s 164 countries are said to be backing India and South Africa. Yet many of these countries would be excluded even from the limited and inadequate proposals put forth by the EU and U.S. As noted above, larger Global South countries would be excluded under the U.S. proposal to limit the countries eligible, while also limiting what would be available. Médecins Sans Frontières/Doctors Without Borders, for example, calls on WTO members to “tackle the current barriers to accessing all COVID-19 medical tools, including treatments and diagnostics, and also addresses patents and non-patent barriers in an effective way.” Dimitri Eynikel, EU Policy Advisor for MSF’s Access Campaign, noting the “considerable limitations” of what is on the table, said:

“It is incredibly concerning that the leaked text currently only covers vaccines, but neither treatments nor diagnostics. Excluding treatments and diagnostics is a critical weakness, especially as access to COVID-19 treatments remains a significant problem in many low- and middle-income countries, particularly in Latin America, in part because of patent barriers and restrictive licensing deals controlled by pharmaceutical corporations. Excluding countries with significant manufacturing and supply capacity like Brazil is highly problematic as it arbitrarily blocks potential critical avenues to increase access to COVID-19 medical tools for low- and middle-income countries.”

The severe limitations the EU and U.S. are attempting to impose make it unlikely that a “deeply flawed text” can be set right, according to Professor Jane Kelsey of the University of Auckland. Noting that by the end of 2021, more boosters had been given in high-income countries than total doses in low-income ones, Dr. Kelsey wrote, “The leaked ‘solution’ agreed by the informal ‘quad’ (US, EU, India and South Africa) is insufficient, problematic and unworkable. There are too many limitations to make any significant difference and it is a far cry from the original proposal from India and South Africa that would have effectively addressed the barriers.”

Perhaps activists and medical professionals going on the offensive as part of a public-pressure effort is one way that a fair deal might be forced. Nurses from 28 countries filed a complaint in November 2021 with the United Nations alleging human rights violations by the EU and four countries for “the loss of countless lives” in the pandemic. The nurses, representing more than 2.5 million health care workers around the world, named Britain, Norway, Singapore and Switzerland in their filing — the four countries known to be standing with the EU. The nurses charge that “these countries have violated our rights and the rights of our patients — and caused the loss of countless lives” through “continued opposition to the TRIPS waiver … resulting in the violation of human rights of peoples across the world.” The complaint notes human rights obligations to which WTO member states are legally bound.

Nurses demand safe staffing (Photo via National Nurse magazine)

The organizations behind the filing are mostly from the Global South, but among the 28 are ones from Canada (Canadian Federation of Nurses Unions and Fédération interprofessionnelle de la santé du Québec), the United States (National Nurses United) and Australia (Australian Nursing and Midwifery Federation)).

Deborah Burger, president of National Nurses United, which represents more than 175,000 members in the United States, was unsparing in her assessment. She said:

“The maldistribution of vaccines in the face of more than 5 million deaths, many of them preventable, is a devastating reminder of the deplorable disparity of wealth between the rich nations of the north and the global south. To refuse to act simply to protect the profits of giant pharmaceutical corporations is unconscionable, inhumane, and must be ended.”

Upon receipt of the complaint, Dr. Tlaleng Mofokeng, the UN’s Special Rapporteur on Physical and Mental Health, said, “The nurses’ core demand is one I share.” She said:

“States have a collective responsibility to use all available means to facilitate faster access to vaccines, including by introducing a temporary waiver of relevant intellectual property rights under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement). Nurses and health care workers have been on the front line keeping us safe and have witnessed the most painful and heart-wrenching effects of the Covid-19 pandemic. Their evident commitment to the right to physical and mental health provides them with moral authority.”

No executive or shareholder is any danger of starving

Let us now return to the profit margins of pharmaceutical companies and the massive windfall profits being racked up by Covid-19 vaccine manufacturers, which will provide some context to industry arguments. The business news agency Bloomberg reports that Pfizer’s vaccine generated $20 billion in pretax profit in 2021 while Moderna “is expected by analysts to earn $12.2 billion before taxes this year.” Pfizer’s vaccine may rack up $36 billion in revenue this year.

The pharmaceutical industry was already one of the most profitable. To provide some examples, health technology was found to be the most profitable of 19 broadly defined “major” industrial sectors in the U.S. for 2015 and 2016. A BBC report found that pharmaceuticals and banks tied for the highest average profit margin in 2013, with five pharmaceutical companies enjoying a profit margin of 20 percent or more — Pfizer among them. The most profitable pharmaceutical corporations spent far more on sales and marketing than they did on research and development. With little control exerted over pharmaceutical prices in the U.S., it is no wonder that U.S. health care costs are the world’s highest, greatly exceeding any other country.

Even by these rarified standards, the boost to profit margins from Covid-19 have been noteworthy. Pfizer reported almost $22 billion in net income for 2021, only $3 billion more than it reported for 2020 and 2019 combined. Moderna, which even self-described “capitalist tool” Forbes magazine says produced a vaccine “largely funded by taxpayer dollars,” reported $12.2 billion in profits for 2021. Moderna received a billion dollars in government subsidies for its vaccine, and has, overall, received $6 billion from the U.S. government to develop, test, manufacture and deliver its vaccine.

Johnson & Johnson reported net income of almost $21 billion for 2021, a healthy gain of 40 percent over the previous year, a much larger gain than the gain it reported in revenue. And AstraZeneca reported a 37 percent increase in its core earnings per share (a comparison apparently used to exclude special one-time costs from an acquisition).

So it appears that no executive or shareholder of these four pharmaceutical makers is in any danger of being out on the street.

What is the problem in sharing the technology that would finally put an end to the pandemic? The real reason is that the maximum possible amount of profit wouldn’t be accrued. No big corporation is going to admit that, so other excuses are offered.

Debunking Big Pharma’s favorite talking points

The director-general of the World Health Organization, Tedros Adhanom Ghebreyesus, had a revealing conversation with Pfizer’s chief executive officer. As reported by Bloomberg, Dr. Tedros, on a conference call with pharmaceutical executives, said, “Honestly, I’m not seeing the commitment I would expect from you.” The Pfizer chief executive, Albert Bourla, whined that Dr. Tedros was speaking “emotionally.” Consistent with that exchange, Johnson & Johnson’s chief scientific officer, Paul Stoffels, declared at an industry lobbying group gathering that there was no need for any waivers because the industry’s efforts are “sufficient.”

Letting the pharmaceutical industry have its way quite clearly hasn’t been “sufficient,” given the small numbers of vaccines available to the Global South well more than a year since vaccines became available and the inability to stop the pandemic given that lack of availability. The Bloomberg report admitted that “Vaccine inequality didn’t happen by itself. It was the result of decisions by corporate executives and government officials.”

Yonge-Dundas Square in Toronto during the pandemic (photo by Sikander Iqbal)

Big Pharma talking points have revolved around claims that restrictive patents are necessary to encourage research and development, without which supposedly nothing would be invented. (Yet Jonas Salk famously declined to pursue a patent on the polio vaccine.) A new line has emerged during the pandemic: That even if a full waiver were granted, the Global South is incapable of producing vaccines because of a lack of capability or capacity, and thus granting rights would do nothing to solve the pandemic. Government officials backing the pharmaceutical industry loudly echo these claims, among them former German Chancellor Angela Merkel, French President Emmanuel Macron, and members of the U.S. Congress who are recipients of Big Pharma donations.

The In These Times article “Big Pharma’s Big Lies About Vaccine Patents,” debunks these talking points:

“It’s clever messaging, because it has an air of expert knowledge, casting companies as patiently informing activists who are well-intentioned but don’t understand how vaccine production works. It also plays to pre-existing racist assumptions that the Global South does not have pharmaceutical sectors capable of producing quality goods, but must rely on its more sophisticated former colonizers. … We don’t have definitive proof that pharmaceutical executives sat in a room somewhere and said, ‘Let’s deceive the public about the world’s vaccine manufacturing capacity.’ But there have been enough activists, scientists, and heads of state pointing out holes in Big Pharma’s narrative to make it highly likely that the industry, at the very least, was aware of challenges to the veracity of its claims. And it was in its interest to ignore them. Remarkably, the industry has shown it would rather build its own facilities from scratch — like the BioNTech facilities in Rwanda and Senegal, which won’t even start construction until mid-2022 — than give Global South countries the ability to produce vaccines themselves.”

India, for example, ranks third in the world in producing pharmaceuticals, measured by volume, and generics already constitute 70 to 80 percent of the world pharmaceutical market. The Serum Institute of India is the world’s largest producer of vaccines by number of doses produced and sold.

It’s not only vaccines that are being held back

Beyond vaccines, what about pills that are being developed? Pfizer has developed a Covid-19 oral antiviral treatment and granted a royalty-free license for the pill to the United Nations-backed Medicines Patent Pool, but the license covers only about half the world’s population. The Associated Press reported, “The deal excludes some large countries that have suffered devastating coronavirus outbreaks. For example, while a Brazilian drug company could get a license to make the pill for export to other countries, the medicine could not be made generically for use in Brazil.”

The Medicines Patent Pool said on March 18 that 35 companies around the world will produce generic versions of the pill, which has received an emergency approval by the U.S. Food and Drug Administration. The countries where the generic producers are located include Bangladesh, Brazil, China, the Dominican Republic, Jordan, India, Israel, Mexico, Pakistan, Serbia, South Korea and Vietnam.

Nonetheless, health care activists note that the license is less than adequate. Yuanqiong Hu, senior legal policy advisor for Médecins Sans Frontières/Doctors Without Borders’ Access Campaign said:

“Pfizer’s license with the Medicines Patent Pool for its potential oral antiviral treatment offers supply to 95 countries by generic companies that take up the license, covering about 53% of the world’s population, but this again shows how voluntary licenses come up short and do not harness the full capacity available globally for sufficient and sustainable production and supply of lifesaving medical tools for all. Many upper middle-income countries, such as Argentina, Brazil, China, Malaysia and Thailand, where established generic production capacity exists, are excluded from the license territory. We are disheartened to see yet another restrictive voluntary license during this pandemic while cases continue to rise in many countries around the world. The world knows by now that access to COVID-19 medical tools needs to be guaranteed for everyone, everywhere, if we really want to control this pandemic.”

What is more important: Ending the pandemic or increasing corporate profits? Life or money? The world capitalist system is making its choice. Should that choice be allowed to stand?

One comment on “Corporate greed keeps the pandemic alive

  1. […] Pete Dolack Writer, Dandelion Salad Systemic Disorder, April 12, 2022 April 13, […]

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