Vaccinating policy

Topics Coronavirus | HIV Aids | Lockdown

The global pharmaceutical industry is racing to create a vaccine for coronavirus and the winning companies are certain to generate billions of dollars in revenue and wealth for shareholders. But the bigger concern once the vaccines enter the market is balancing intellectual property (IP) regimes with public health interests. In a recent article, Joseph Stiglitz, Arjun Jayadev, and Achal Prabhala have argued that current IP regimes, which enable Big Pharma monopolies to extract large profits from consumers, are unnecessary and they make the case for the benefits of “open science” instead. They point to the World Health Organization’s Global Influenza Surveillance and Response System, involving experts from a laboratory network in 110 countries funded by governments and some foundations which convene twice a year to analyse the latest data on emerging flu strains, and to decide which strains should be included in each year’s vaccine. This global not-for-profit, knowledge-sharing architecture for the flu vaccines has been around for 50 years and could be a useful template in the quest for the coronavirus vaccine. But much will also depend on whether domestic regimes privilege public health over pharma industry profits. Profits are hardwired into vaccines since they need to be administered almost universally (such as the triple antigen), so that monopolies and quasi-monopolies can extract billions of dollars from public health budgets. India has experienced the benefits of freely available vaccines such as those for kala azar, polio, and smallpox to eliminate these diseases.

It has also faced the downsides of drug monopolies after it changed its IP laws in 1995 in line with the TRIPs (trade-related intellectual property rights) agreement. For instance, as the article mentions, Pfizer holds the patent for the multi-strain pneumonia vaccine, which is unaffordable for most Indians, and accounts for some 100,000 infant deaths. Vaccines have to be near-universally administered, like the triple antigen, so they create a humanity-wide market. Monopolies and quasi-monopolies for private companies in such a context can lead to billions of dollars being extracted from public health budgets, for private benefit. Like the treatment for HIV-AIDS, this can lead to battles where the choice is between public interest and private profit. An Indian drug company fought this battle over AIDS treatment, and won — thereby dramatically lowering the cost of treating AIDS, especially in poverty-stricken Africa. 

But these issues should not be left to individual public-spirited businessmen to fight, nor should the same battle have to be fought over every new vaccine. In other words, the state has to step in. The government has a range of policy options and tools at its disposal to ensure that the coronavirus vaccine is widely and cheaply (or freely) available. The country has already decided to speed up vaccine trials (six firms are in the fray) and the government can deploy the TRIPs-compliant tool of compulsory licensing to enable the vaccine to be produced by third-party manufacturers at affordable prices. It could strengthen these initiatives by passing legislation to, say, reduce the patent period for vaccines, since the development and testing schedule for vaccines is a fraction of the time it takes for a regular new drug to be developed and tested. Either way, the deleterious economic effect of Covid-19 makes it imperative that public interest should prevail over profit.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel