Covid-19 Vaccines: Australia on the side of wealthy countries and Big Pharma

May 3, 2021
vaccine shortage
Image by Reuters

The Covid-19 vaccination program is becoming an ethical discussion of the difference between national vs global, private vs public, and whether to co-operate or to compete. It is also about who pays and who benefits.

A pandemic is not a race between countries, but a race between humanity and the virus. But are we really “all in this together”?

Fair distribution of vaccines is in our interests

Let’s try to make the numbers simple. Modelling done in 2020 assuming 3 billion vaccine doses (of a single dose 80% effective vaccine) found that a co-operative scenario – meaning fair, equitable world-wide distribution averted 61% of Covid deaths, while a scenario where 2/3 of those doses went exclusively to rich countries, averted 33% of deaths.

Economically, it has been estimated that hoarding of vaccines by wealthy countries (which is in effect what is happening now) costs the global economy in GDP terms from $US1.2 trillion or, depending on assumptions between $US1.5 and $9.2 trillion. About half of that cost would be borne by high income countries.

The more the pandemic rages uncontrolled in Low- and Middle-Income Countries (LMICs), the greater the opportunity for more new virus variants to emerge which may be more infectious, more injurious to health, and more resistant to the current vaccines.

Finally, if our aim is to “open our borders and return to normal”, that will only really be safe when the rest of the world is as safe as Australia. If this is not achieved, we will face the need for quarantine for travellers entering Australia – be it citizens returning or tourists and students “boosting our economy”, for a very long time to come.

The nuts and bolts

At the time of writing the worldwide Covid-19 pandemic has seen 148 million cases and over 3 million deaths.

Through April there has been a global surge of cases, and increased deaths in India, Pakistan Bangladesh, Mongolia, Thailand, Cambodia, the Philippines, Timor Leste, and Papua New Guinea. Surges are predicted in Ethiopia and Kenya.

This surge is also likely to result in new variants of the virus. The more cases, the greater the chance of variants which may be resistant to existing vaccines.

Ongoing Covid transmission and death will likely be concentrated in LMICs in Latin America, the Middle East and Asia.

Vaccination is well underway, but is being delivered unevenly around the globe. As of last week, approximately 1 billion vaccines doses have been administered worldwide, with around 40% delivered in the 27 wealthiest countries and a further 35% in India and China, meaning less than 25% have so far gone to the poorest 85 countries.

COVAX (the global mechanism for equitable distribution of vaccines), under guidance from the public-private vaccine alliance GAVI, and with support of many governments, including Australia’s , has delivered around 40 million vaccine doses across 114 LMIC countries, but to date 31 countries have not received any vaccines at all. COVAX needs an additional US$3.2 billion to achieve even its modest target of 20% vaccine coverage in participating countries.

The majority of the vaccines that have supplied this process for COVAX have come from the Serum Institute of India, currently the single largest vaccine manufacturer in the world. Given circumstances there at present it seems, understandably, there is unlikely to be further exports of vaccines from India in the immediate future.

Continual and large outbreaks will lead to new variants of Covid that may be more infectious and more resistant to the current vaccines. While the existing measures like hygiene, masks and physical distancing remain vital tools to fight these outbreaks, vaccines remain an essential part of the required response.

The is perhaps the world’s biggest ever single public health challenge.

To vaccinate the world.

And there is no one single or simple way of doing that, but we certainly need:

  • more support for COVAX,
  • more donations by wealthy countries (including Australia)
  • support for vaccine development in LMICs
  • More voluntary licensing by vaccine developers to manufacturers all over the world. . It is rarely used (AstraZeneca (AZ) has been an exception to this – they have more freely licenced their vaccine.)
  • Release the Intellectual Property owned by pharmaceutical companies to avoid it being a barrier to global dissemination of the vaccines, referred to as the “TRIPS waiver” (but more on that later).

To date Australia should be commended for a number of worthwhile contributions. Those include giving $80 million to the global COVAX facility specifically for LMICs. The Australian government has also pledged $523 million to the regional Vaccine Access and Health Security Initiative, providing logistics and health system support to vaccination programs. It has also promised $100 million to the ‘quad initiative’ (India, Japan, USA and Australia) with the aim of delivering 1 billion vaccine doses in the Indo-Pacific region by 2022. In addition, Australia has provided nearly 9,000 AZ doses for PNG front line health workers, and pledged 10,000 doses to PNG, Timor Leste, Solomon Islands and Vanuatu.

But the situation overall is still highly unequal between nations. By last November, wealthy nations accounting for just 14% of the global population had contracted to buy 51% of the first 7.48 billion doses of candidate COVID-19 vaccines. That number should be enough to vaccinate almost half the global population – 3.76 billion of 7.8 billion people. But Canada, Australia, Britain, Japan, the European Union and the US have all bought up more than their fair share. Canada has reserved about 4.5 courses per person; Australia and the UK close to 2.5.

Vaccine science as property

Currently a small number of multinational pharmaceutical companies own the exclusive rights, or Intellectual Property (IP), to make and sell Covid-19 vaccines. IP rights are protected by a treaty, the World Trade Organization (WTO) Agreement on Trade -Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS, signed in 1995, is primarily about protecting the rights of IP owners. It includes a provision to allow a ‘bypass’ of those strong exclusive rights, which enables patented inventions – such as vaccines – to be produced without the consent of the patent owner in emergency circumstances. However, the bypass procedure is cumbersome, is done on a product-by-product basis (rather than a category of products), and countries that seek to use this provision come under enormous trade and diplomatic pressure to NOT use these provisions. Not surprisingly most of that pressure comes from countries where the companies owning the IP reside and do business, that is, the rich countries.

Another difficulty is that the provisions only apply to patents, not the technology, expertise and data needed for complex manufacture of vaccines. There is vaccine manufacturing capacity in Asia, Latin America and Africa that is not being used due to IP issues. Some manufacturers in advanced countries (e.g. Canada) have volunteered their capacity to generate vaccines exclusively for LMICs if they can access the IP.

Economics of the vaccines

Some argue that if ‘Big Pharma’ is not permitted to make vaccines economically profitable, confident in control over their IP, they will not invest in the research and development, or they will even go out of business and we won’t have any vaccines for future disease.

That argument does not take account of the enormous ongoing financial investment of governments around the world in the underpinning scientific research that allows vaccine development. Nor does the argument recognise the recent specific commitments of about US$12 billion by governments into developing Covid-19 vaccines, such as the Oxford AstraZeneca vaccine being 97% publicly funded according to recent estimates.

And the vaccine business remains vastly profitable. It was recently estimated that Pfizer and Moderna are expected to generate US$15 billion and $18.4 billion in revenue in 2021 based on existing contracts, with presumably more contracts still to come. Oxfam has estimated that Pfizer, Johnson and Johnson and AstraZeneca combined have paid out US$26 billion in dividends and stock buy backs to shareholders in the past year. Such funds would be sufficient to vaccinate roughly 16% of the world’s population.

A meeting of the TRIPS Council at the WTO on Friday (30 April) will consider a proposal supported by more than 100 countries (out of 164 WTO member countries) to establish a time limited waiver for Covid-19 medical products. It appears that this motion is currently not being supported by the USA, the EU, Japan, Canada, Switzerland, Norway and Australia. Most of these countries are net exporters of pharmaceutical products, but Australia is not. In fact, Australia could benefit from the TRIPs waiver.

Other moves are on foot. The World Health Organization (WHO) in May 2020 established the COVID19 Technology Access Pool (C-TAP), for the purpose of sharing IP, data, technology and expertise relating to the pandemic. So far, 40 countries have endorsed this initiative. But many countries who actually have that technical capacity, including Australia, have not. This scheme has yet to be used. It relies so far on voluntary agreements from pharmaceutical companies which have not eventuated.

Perhaps provisions need to be made in government funding of pharmaceutical efforts, be it basic or applied research, or other contracts, to require more co-operation from big Pharma in these kinds of arrangements.

Unchecked, the pandemic will devastate LMICs and further increase the gap between the rich and poor countries of the world. The aspirational Sustainable Development Goals will become nothing more than a pipe dream. The health systems of many countries will collapse – as we are tragically seeing in India this week.

Without urgent action the best estimates suggest the world-wide population will not be vaccinated by 2023 and even later.

The TRIPS waiver proposal up for discussion at WTO on Friday is not a magic bullet, or the only solution. But it can make an important difference.

If you want to encourage Australia to support the TRIPS waiver, you can consider signing up your support for this open letter to the Prime Minister, which has been led by MSF and PHAA.

Atrribution: the content of this article comes largely from the work of Prof Mike Toole and Assoc Prof Deborah Gleeson, presented at a Webinar on 22 April 2021.

Share and Enjoy !

Subscribe to John Menadue's Newsletter
Subscribe to John Menadue's Newsletter


Thank you for subscribing!