Big pharma lobby’s self-serving claims block global access to vaccines
The self-serving arguments used by big pharma lobbyists at meetings with the European Commission to defend monopoly intellectual property rights on vaccines are demonstrably false. Corporate Europe Observatory has uncovered new documents from December 2020 which reveal how big pharma’s arguments – essentially, to ‘keep the patents in our hands, and trust us to distribute vaccines’ – contrast sharply with the current state-of-affairs: few in low-income countries will be vaccinated any time soon.
‘Everything is in good hands, industry will make sure vaccines reach everyone across the globe, there is no need for extraordinary measures. Trust us.’ Paraphrasing, this is the core message the pharmaceutical companies used in meetings with the Commission in early December 2020, in their argument against sharing of technology through loosening intellectual property rights to fight the pandemic. Corporate Europe Observatory has uncovered these big pharma lobbying arguments for the first time through freedom of information (FOI) requests; and given the current vaccine scarcity around the world, they appear very flimsy indeed.
Intellectual property rights, including patents, on COVID vaccines and medicines have been a key battle ground worldwide since early in the pandemic. In an early phase, the Commission seemed to take a surprising position: “This vaccine will be our universal, common good,” Commission President Ursula von der Leyen stated in April 2020. However, as things stand today, we see a close alignment between the Commission and the big pharma lobby group positions, their arguments and rhetoric echoing one another. But a clash over intellectual property rights is intensifying, and it is unlikely to go away. In October 2020, the Indian and South African governments tabled a proposal at the World Trade Organization (WTO) to waive intellectual property rights on vaccines and medicines in order to allow countries to produce more themselves, and which would also ramp up production in general. In the face of dire scarcity of vaccines, and the ongoing pace of the pandemic, such a proposal has a lot going for it. But the EU negotiators from the Commission have rejected the idea all along.
Corporate Europe Observatory set out to investigate how big pharma lobby group EFPIA (the European Federation of Pharmaceutical Industries and Associations) has influenced the Commission in these matters. EFPIA is Big Pharma's main lobby group in Europe, enjoying far-reaching access to and influence over EU decision-making, fueled by its lobby spending of up to €5.5 million in 2020, involving 25 lobbyists (an increased spend from €4.6 million in 2019). Lobby documents released as a result of our FOI request throw new light on EFPIA’s lobbying. While it was no surprise to find EFPIA fighting any easing of intellectual property rights (this has been their priority through the pandemic as shown our report ‘Power and profit during the pandemic’), the arguments turned out to be so barefaced and self-serving that it is hard to take them as anything but ridiculous and manipulative today.
Right before the vaccines
The internal documents released to Corporate Europe Observatory show that several branches of the Commission have stayed in close contact with EFPIA since the outbreak of the pandemic. This includes discussions on supplies – particularly in the early days – and regular discussions on political issues, not least intellectual property rights. Mid-pandemic, EFPIA frequently met with EU civil servants to discuss how to secure stronger rules on intellectual property rights in bilateral trade agreements (with countries such as Australia, New Zealand, Canada, Indonesia, Chile) as well as enforcement.
And more recently, EFPIA has lobbied for a clear EU rejection of the proposal currently being debated at the WTO. The key meeting in that regard took place on 9 December 2020 between two EFPIA lobbyists and DG Trade, the Commission branch responsible for the WTO negotiations. The two big pharma lobbyists came with the happy message that in their view the current global strategy was pointing in the right direction, in no small part thanks to pharmaceutical companies. According to the minutes, two EFPIA lobbyists “presented the landscape of collaborations that the vaccine developers as well as those working on COVID-19 treatments engage in to increase the manufacturing capacity and the overall supply of vaccines and treatments”.
At the time, the three main vaccines (Pfizer-BioNTech, AstraZeneca, and Moderna) were in the final stages of emergency approval, and the big question was if there was now an end in sight: given the circumstances, would the vaccines be rolled out quickly on a global scale, or were there obstacles remaining that could make the pandemic linger on globally for years? And crucially: would technology sharing be necessary to defeat the pandemic?
In connection with the meeting, EFPIA left the Commission with a document outlining the position of the pharmaceutical lobby. The document was authored by the pharmaceutical sectors’ global association, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), which shows a high level of unity among Big Pharma. All the more worrying.
An “unidentified problem”
As for the India-South Africa proposal to waive patents for COVID-19 treatments at the WTO, the EFPIA/IFPMA position is clear: “This proposal represents an extreme measure for an unidentified problem.” According to them, there is no proof there is a problem in the first place!
This proposal represents an extreme measure for an unidentified problem. (EFPIA/IFPMA, December 2020)
But today, only a few countries across the globe are anywhere close to a substantial roll-out of vaccines (the UK, the US, and Israel); the number of daily deaths are higher than at any point before early December 2020, and the same goes for the number of active cases and newly infected. Alarming new variants are gaining traction in several countries. And most importantly: when viewed globally, a significant part of humanity has no prospect of getting a vaccine anytime soon. According to an assessment written in January 2021 by the Economist Intelligence Unit, 85 countries will not see a substantial roll-out until 2023, and in the months since that assessment things have not improved. At the time of writing (10 April 2021), only 3 of the 54 African countries have been able to inoculate one percent of citizens. Indeed the WHO has described the current situation as a “catastrophic moral failure”; others describe it as “vaccine apartheid”.
Meanwhile scarcity has unleashed vaccine nationalism. Export restrictions are in place in the EU, the US, India, and elsewhere, and pharmaceutical companies are under immense pressure to deliver on their promises, which in many cases they can’t. The immediate losers are low-income countries, but in the longer term, with a pandemic that lingers on, new COVID-19 variants could appear that will require a new round of vaccines, and many more lives lost.
Despite this situation, at the meeting in December 2020, EFPIA listed a large number of companies involved in research and development, involving “1100 potential treatments and vaccines”, and argued that everything was in good, private hands. Industry has the “capacity to address the pandemic”, EFPIA claimed. The only hurdles to a rapid vaccine roll-out globally, were “country preparedness”, “timely regulatory approvals”, and “supply chain scrutiny”. True, there are logistical challenges at many levels. But eg. in Africa, countries have been shown to be prepared, yet they are waiting in vain for supplies. That's why increasing production is what the vaccines debate is about. The problem is identified.
‘Local production is not a panacea’
That begs the question of how to find extra manufacturing capacity, given that pharmaceutical companies have not lived up to expectations and contracts so far. An obvious first choice is to look at the country that dominated vaccines production before the pandemic, India. According to one analysis, the country’s pharmaceutical industry can produce 2.4 billion doses annually. But at the moment, only one single factory in India, the Serum Institute of India, has concluded an agreement to produce one of the key vaccines, and is set to produce ‘only’ one billion vaccines this year. Much more could come from India, and this over-reliance on one company is risky (see below).
The challenge is that right now the companies that have got established vaccines are really hesitant to form partnerships, particularly with some developing country manufacturers. Nicole Lurie (CEPI)
Or how about the 21 generic manufacturers from across the globe that have pledged to work together to manufacture vaccines. This abundant manufacturing capacity is currently lying idle. Perhaps the most important source to answer the question of whether there is idle production capacity, is the Coalition for Epidemic Preparedness Initiatives (CEPI). One of their experts, Nicole Lurie, stated in February this year at a webinar organised by Columbia University: “There is excess capacity out there, still. The challenge is that right now the companies that have got established vaccines are really hesitant to form partnerships, particularly with some developing country manufacturers.”
And the list should not be limited to generic producers only. In Denmark, Bavarian Nordic offered a while back to produce vaccines from their factory while waiting for approval of their own. On 2 February 2021, a frustrated CEO of the company said to the press that he was “a bit frustrated about hearing about shortages and lack of capacity. I would also like to have a vaccine and our staff are ready to do our part for Denmark, Scandinavia and Europe, but it’s clear that people have to want to use us.” He had been trying to reach an agreement with the companies behind the vaccines, but without luck. This is remarkable, given that Bavarian Nordic could produce the needs of Scandinavia in a single week – and in the area of 240 million doses in a year!
Allowing more companies to produce vaccines wouldn’t solve all supply problems instantly, but yes, local production is a panacea, given the extreme circumstances.
‘IP has not been a barrier to access’
If, as Big Pharma claims, intellectual property rights are no barrier to vaccine access, why is access still so limited? Why are dozens of local producers not being put to work to supply the globe with vaccines?
According to the EFPIA document from December 2020, where possible and necessary, “developers of the approved vaccines may engage in manufacturing agreements, which may include technology transfer, process with carefully selected licensees or contract manufacturers”.
True, no rules on intellectual property rights prevent vaccine developers from negotiating licenses with other producers, or to agree on ‘contract manufacturing’. But rules on intellectual property rights mean they rarely have an interest in doing so. Bigger money can be earned by handling the supplies themselves, and due to the nature of some if not all purchasing agreements, it is difficult if not impossible to hold them liable for delays.
The rights conferred on the vaccine monopolies have allowed them to turn their backs on international attempts to share technology – with a unified block of big pharma groupings rejecting the COVID Technology Access Pool, the C-TAP initiative, set up under the auspices of the WHO to secure access for all. As a consequence, that pool of shared technology remains empty, leaving eg the aforementioned 21 generic producers without the means to manufacture.
‘IP underpins the capacity to address the pandemic’
Leaving the rights to the vaccines to a few companies, means leaving them with the power to decide whether to allow production in emerging economies – or not. And vaccine owners have shown very little interest in expanding production via licensing or contract manufacturing. For instance, Pfizer-BioNTech has concluded no agreement of the kind outside Europe and the US. The one company that has indeed made agreements with five companies in the global south to produce vaccines is AstraZeneca – due to its partners at Oxford University – with deals made in Indonesia, India, Japan, Australia, Mexico, India and elsewhere. The terms of all these agreements remain secret, but most of them concern relatively small amounts, with a few notable exceptions. Without the Serum Institute of India, low-income countries would be in serious trouble.
Moreover, given that there are now some safety concerns over the AstraZeneca vaccine for sections of the population, the global roll-out of vaccines face a real disaster.
When compared to what is needed, this does not go anywhere near providing for a sufficient production capacity. Billions of people are set to pay a price for the vaccine owners’ lack of interest in concluding agreements on licensing. Leaving these decisions up to a few private companies is mind-boggling in the face of a global pandemic, not least when looking at the results so far in the case of the concerted, global effort to provide vaccines to all.
‘Equal access at the same time’
The big players in the pharmaceutical industry have been involved in designing the global response to the pandemic from day one – with powerful governments insisting on putting them in key positions. And industry’s global lobby group IFPMA, as well as its European arm EFPIA, are keen on highlighting their presence in the main initiatives set up to provide medicines and vaccines to all corners of the globe. The international public-private partnership, Access to COVID tools (ACT) Accelerator, sees industry sit side by side with governments and international institutions, including in its vaccines arm, COVAX – a setup engineered in no small part by the European Commission.
Middle- and lower-income countries that cannot fully afford to pay for COVID-19 vaccines themselves are expected to get equal access to COVID-19 vaccines as higher-income self-financing countries and at the same time. (EFPIA/IFPMA, December 2020)
There is nothing wrong with the objectives. In Big Pharma’s own words used in the document shared with the Commission: “Through the COVAX facility, 92 middle- and lower-income countries that cannot fully afford to pay for COVID-19 vaccines themselves are expected to get equal access to COVID-19 vaccines as higher-income self-financing countries and at the same time.”
However, even in December 2020, it was already clear that such equal access would never come about through the limited toolbox provided by COVAX. And today the claim rings completely hollow. On 8 April 2021, a press release was issued to celebrate the first phase of the programme – with “over 100 economies reached” and 38 million doses distributed through the programme, including to 61 of the 92 middle-and lower income countries covered by the charitable arm of COVAX, the Advance Market Commitment programme.
38 million doses, an undisclosed number of which have reached the most disadvantaged countries, is unimpressive to say the least. A disaster in slow-motion would be a more apt description. And there doesn’t seem to be light at the end of the tunnel. At the moment, the prediction is that come June, COVAX will reach a mere 20 percent of its target for 2021.
‘COVAX is the only viable way’
There is certainly a financial question at play, but COVAX has come a long way with funding from governments and charitable funds with corporate links, not least the Bill and Melinda Gates Foundation. Its real problem is supply. At the moment, COVAX has an agreement with Pfizer for the delivery of a mere 1.2 million doses through the programme, whereas AstraZeneca has signed up to a deal on 340 million doses. So in the short term, the fate of COVAX rests on the supply of AstraZeneca.
The supply of AstraZeneca for the COVAX programme is supposed to come from a single factory, the Serum Institute of India. According to SII, they boast a capacity of 1 billion doses, but so far the contract with AstraZeneca has unleashed a dogfight over the products, with the UK claiming 10 million doses, the EU asking for a further 10 million, and finally the Indian government stepping in and stopping all exports until June 2021 to secure supply from SII to India itself.
Though it is difficult to blame the Indian Government for mimicking the vaccine nationalism of high-income countries – in India the pandemic is soaring – it does leave the global charitable programme in a serious fix. But the heart of the problem is not vaccine nationalism – it’s the disinterest in mounting extra production capacity that comes from the privileges awarded to pharmaceutical companies by rules on intellectual property rights. Given all this, having the same industry claim they are part of an effort to secure equal access for all, could hardly be more misleading.
So when the pharmaceutical lobby claims, as in the document at hand, that “COVAX is the only viable way”, it contrasts with the current state of affairs under which COVAX does not appear viable at all. COVAX will not secure early delivery of vaccines – and that will cost many lives.
‘IP is an enabling force for investors’
Intellectual property rights have not been a ‘barrier to collaboration’ between the public sector and private companies, the EFPIA document claims. They have been an ‘enabling force’ and they ensure that “the next generation of inventors and investors remain engaged”. It is undoubtedly true that windfall profits attract investors. And it is a bonanza for an investor when public institutions and governments leave a few companies with the exclusive rights to vital vaccine recipes for the entire globe. But besides the question of whether it is the right way forward under the circumstances, there is another question about when a company can legitimately even claim such ownership.
There has been massive financial support from public institutions for the vaccine research, and evidence suggests we are witnessing a major rip-off. One early assessment of the public funding of vaccine development shows the six most prominent vaccines having received on average around €1.5 billion of public money in support.
So what proportion of the research costs does this cover? That question cannot be answered for all the vaccines, due to lack of transparency on part of both the companies and public authorities. In the case of AstraZeneca, the most recent assessment is that public funding constituted 97 percent of the research and development costs. And the annual report from one the players, BioNTech in Germany, gives us a hint too. That company, along with its partner company Pfizer, has received in the area of €2 billion in public support, of which €370 million came from the German Government, and about US$2 billion from the US Government. They seem to be well covered. According to its annual report for 2020, the research and development costs amounted to €645 million, an increase of about €420 million compared to the previous year, mainly due to expenditure for developing the Pfizer-BioNTech vaccine – slightly more than the amount received from the German Government. Since costs were split equally between the two companies, a rough estimate of the cost of vaccine development puts it slightly below €1 billion euros, or half of the public funding from an estimate by Medicins Sans Frontiéres.
But it doesn’t end there. Projections are that Pfizer-BioNTech are looking at a flood of money coming in this year. In one conservative estimate, the US$15 billion revenue from Pfizer sales of the vaccine this year, will make it “the second-highest revenue-generating drug anytime, anywhere, according to industry reports,” with an estimated €4 billion of profits (second only to a drug against arthritis). Other analysts reach a much higher figure when taking a recent decision to increase production to 2.5 billion doses into account, and a US$3 - 5 profit per dose: between $7.5 and $12.5 billion profits (ie €6.3 - €10.5 billion). This level of profiteering should have no place in a global pandemic, and when scarcity is an integral part of the model, it becomes even more egregious.
‘Key to success with HIV/AIDS was not weakening IP’
This is not the first time developing countries and high-income countries have clashed at the WTO over intellectual property rights, and it is not the first epidemic that has been the cause of such conflict. In the late 1990s, HIV/AIDS was spreading fast in the developing world, not least in Africa, and due to IP rights, prices on medicines were prohibitively high. Pharmaceutical companies with patents were fiercely hostile to licensing, and so some countries – South Africa is the most prominent example – took matters into their own hands and allowed ‘compulsory licensing’ whereby generic manufacturers could produce cheaper drugs. What ensued was an important chapter in global trade history: in 2001 the EU, the US and others were forced to allow import of generic medicines during emergencies through compulsory licensing under the TRIPS agreement. Even if this concession was minor – compulsory licensing remains very difficult and cumbersome – the measure had an effect. A number of African countries used their right to issue a compulsory license, and HIV-AIDS medicine prices plunged for a while. As one WHO report noted: “the TRIPS flexibilities, particularly compulsory licensing, became the favoured option for securing affordable ARVs by developing countries.”
In its final form the TRIPS agreement still did not do away with all the problems caused by intellectual property rights when confronted with eg the HIV/AIDS epidemic; the concessions made were simply too marginal. Tragically, they had only a temporary and limited impact in Subsaharan Africa. But the episode clearly showed how IP rights can be a threat to public health, and why they need to be changed. So far, so obvious – but not to the pharmaceutical industry apparently. From EFPIA/IFPMA’s perspective, the HIV success story is about the success of IP protection: “Intellectual property has never been more important than it is now,” they state in the December 2020 document. “This has been true for any previous responses to global health crisis such as in HIV. The key to success in these responses has been partnership, not weakening of IP.”
All of this notwithstanding, it is remarkable to see the European Commission – itself embattled over lack of vaccine supply on its own doorstep – mimic all the industry arguments on intellectual property rights in the political battle over the waiver. In the WTO at the beginning of March 2021, the message from the EU was that a more strategic partnership with industry is needed to solve the problems with access. “Intellectual property is a key factor in providing a framework that enables this cooperation,” the EU representative said.
The little information that has been uncovered from the discussions between EU member states is equally disappointing: no member state had challenged the Commission’s close affinity with industry on the waiver, and saw no need to discuss anything but perhaps appearances: several member states representatives have urged the Commission to sell its arguments better and to show a readiness for dialogue.
Revamping a strategy
There are too many signs of abject failure in the EU’s current strategy to reach a global roll-out of vaccination. In Europe and in the US, the states with the deepest pockets picked a few big pharmaceutical companies to set the terms of the effort by leaving them with the monopoly rights to the vaccines. That is the heart of the problem we face today, with billions in half of the world’s countries having few prospects of seeing a comprehensive roll-out of the vaccines. Such a failure must be addressed swiftly, and the first step must be for politicians and public institutions to take the steering wheel and neutralise the threat from exorbitant intellectual property rights.
This will include going back on ill-advised promises made to Pfizer-BioNTech, AstraZeneca, Johnson & Johnson and the like, and roll back intellectual property rights. At the moment, the waiver proposed at the WTO by India and South Africa has the support of more than 100 countries. Recently, 175 former world leaders and Nobel Laureates called on US President Biden to support the waiver proposed by India and South Africa, “a vital and necessary step to bringing an end to this pandemic.” Pressure is mounting.
The ones blocking are the pharma giants with excessively generous purchasing agreements, united in EFPIA and backed by rich country governments like the EU and US. They can defeat the waiver, for now, but they cannot make the problem go away.