Covid-19 vaccines: why are they so expensive and inaccessible?
Jorge Marchini[1]
The emergence of a new wave of COVID-19 infections has once again highlighted the conditions and limitations of the global vaccine supply. The hopeful alternative provided by science in record time to combat the biggest pandemic of the last century is overshadowed by the evidence of slow and uneven progress toward the essential and urgent need for widespread global vaccination.
The international supply of vaccines is not only limited by the production and delivery capacity of manufacturers, but is also completely distorted by countries that prioritize their own demands (e.g., the US, Europe), and the fact, as President Alberto Fernández of Argentina indicates, that "the sale is concentrated and laboratories decide to negotiate with national governments."
The repeated assertions by world leaders and pharmaceutical company executives that the priority should be to unite, not disperse, efforts to guarantee fair, safe, and rapid access to vaccines for the world's population without discrimination have remained mere promises or, in many cases, worse still, empty or cynical public relations rhetoric. The truth is that, in the immediate term, the gap between a restricted and concentrated supply and an urgent and desperate global demand was driven by power and business interests, not by the defense of humanity. This is evidenced by the fact that, at the time of writing in April 2021, only 811 million doses had been administered worldwide.[2]Only 38 million have been provided through COVAX, the alliance promoted by the World Health Organization for "equitable global access to the COVID-19 vaccine"[3].
Fans of the "invisible hand of the market," both here and everywhere, explain the current difficulties as a temporary bottleneck that will automatically and virtuously correct itself in short order. This is not the case. The web of interests and businesses that has developed around vaccination has nothing to do with the proclaimed freedom of choice and transparency of fair competition, but rather with disputes over privileged positions in a market that is estimated to quickly reach more than US$73.000 billion annually.[4].
leonine conditions
Large pharmaceutical corporations routinely justify the high price of medications by claiming they must invest enormous sums in initial development, which, in many cases, fails to yield the expected results and therefore ends up being a loss. For this reason, they argue, retail prices should not only reflect actual production costs but also recoup these risky prior investments. To this end, they advocate for international recognition of intellectual property, patent protection, and the monopoly right to production and marketing, demanding that their products face no competition from companies or countries that could manufacture products without having to cover initial investments in research and development.
Paradoxically, in the case of COVID-19 vaccines, the claim of a guaranteed long-term technological rent based on the patent monopoly claimed by companies for a period of 20 years is not justified. Their investments were overwhelmingly funded and/or supported by governments through enormous subsidies, advance payments for risky purchases, allocations to public research institutes, and direct assistance in conducting and monitoring field trials.[5].
However, due to the interplay of pressures and private interests at play, vaccine negotiations within the context of the global health emergency have taken on an unbalanced and disrupted dynamic. From the outset, suppliers have demanded that governments keep the negotiations confidential, hence the mystery surrounding the prices being paid.[6] and the demands set forth in contractual clauses which, if made transparent, would reveal to society other inconceivable advantages and privileges demanded by the bidders (large advance payments, conditional delivery, guarantees of not being exposed to the risks of lawsuits in local courts, logistics and insurance costs and many more) and the subordination and prostration of the plaintiff[7].
This explains why the poorer and smaller a country is, the worse the conditions are for its population to access vaccination. Hence the inconsistency—which could also be characterized as naivety or irresponsible rhetoric—of claiming that the best conditions would be achieved if all vaccine purchases were made by local governments or private entities, while falsely asserting that "we are not left free to protect the public interest." In this way, not only is it ignored that the already glaring inequality would be exacerbated (those who pay, not those who need it most, are vaccinated first), but also the development of a black market with all the dangers of counterfeit vaccines and the dispersal and/or loss of essential public health control.[8].
Universal vaccination vs. monopolistic privileges
Healthcare for the protection of human life must be an urgent societal priority that cannot be subordinated to unjustified, self-serving profits for private interests. Real costs and reasonable profits cannot be confused with the cunning expectation of extraordinary super-profits.
The pandemic requires ensuring the broadest and most immediate possible access to vaccines, medicines, and supplies, based on the recognition that the primary challenge must be to address a general social need that cannot be distorted or diverted. To this end, the technologies that enable vaccine manufacturing must also be socially available and subject to public oversight, both to achieve greater production and supply of products with quality assurance and at better costs. This is particularly imperative for developing countries with limited foreign exchange resources, as is currently the case in Latin America.
India and South Africa recently submitted a joint proposal to the World Trade Organization (WTO) requesting the temporary suspension of intellectual property rights related to COVID-19 vaccines and treatments. This proposal was initially vehemently rejected by developed countries such as the United States, the European Union, and the United Kingdom—the home countries of current vaccine suppliers—who argued that restricting intellectual property rights could be considered an infringement and would limit private incentives for future investment in research and development.
Latin America must take an active role in a debate that has begun to unfold globally and which must be strengthened given the disproportionate and unequal access to vaccines. This should not only involve supporting the demands being made by intra-governmental organizations in peripheral countries, such as the South-Central America Group (of which several Latin American countries are members), for the "security" exception stipulated in Article 73(b) of the WTO's TRIPS Agreement on International Trade-Related Aspects of Intellectual Property Rights.[9]but also to put forward concrete proposals for complementarity and cooperation in public and private research and production between countries. For now, it would be a substantial reason to revisit, with full historical and practical awareness, a concrete perspective of regional integration in a harmonious, realistic, and useful way that would bring clear common benefits without any burden or marginalization for any country participating.
[1] Full Professor of Economics at the University of Buenos Aires. Coordinator for Latin America of the International Debt Observatory, member of the CLACSO Working Group on Regional Integration and Latin American Unity. Director of the Foundation for Latin American Integration (FILA) and collaborator of the Latin American Center for Strategic Analysis (CLAE). www.estrategia.la). Article originally published at: https://estrategia.la/2021/04/18/por-que-son-tan-caras-e-inaccesibles-las-vacunas/
[2] https://www.nytimes.com/interactive/2021/world/covid-vaccinations-tracker.html
[3] https://www.who.int/news/item/08-04-2021-covax-reaches-over-100-economies-42-days-after-first-international-delivery
[4] See the estimate published by Bloomberg, based on a study by the consulting firm Coherent Market Insights. https://www.bloomberg.com/press-releases/2020-12-23/global-corona-virus-vaccine-market-to-surpass-us-73-2-billion-by-2027-says-coherent-market-insights-cmi
[5] A recent study published in Switzerland by the Graduate Institute of Geneva asserts that 98,2% of the funds have been public contributions. https://www.graduateinstitute.ch/vaccines-RD
[6] For information with specific examples of the enormous price differences paid for the same vaccines around the world, it is recommended to read the comparative report by the British Medical Journal. https://www.bmj.com/content/372/bmj.n281
[7] Days ago, the text of the exploitative contract for the supply of vaccines from Pfizer was leaked on the website of the Brazilian Ministry of Health. The "error" was immediately denounced by the multinational pharmaceutical company as a "violation of the confidentiality clause of the contract." - See original texts reproduced by Agencia Paco Urondo of Argentina. https://www.agenciapacourondo.com.ar/relampagos/que-dice-el-contrato-que-pfizer-firmo-con-brasil-por-santiago-gomez
[8] World Health Organization (WHO) alert on https://www.who.int/es/news/item/26-03-2021-medical-product-alert-n-2-2021-falsified-covid-19-vaccine-bnt162b2
[9] Open Letter from the Executive Director of the South Centre, Dr. Carlos Correa: https://www.southcentre.int/?s=covid+open+letter&submit=Search
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