- Countries with 13% of the global population have pre-ordered half of all vaccines that will be made available
- The historic attempt to have one global purchasing point is seriously underfunded
- Rich countries have blocked a proposal by South Africa and India to produce the vaccine without patents until there is global immunity
- There are few mechanisms in place to stop industry profiting from mostly publicly-funded vaccines
The world got euphoric when global pharmaceutical giant Pfizer, and its partner — the German company Biontech — announced that they had created a vaccine for Covid-19. It is even 90% effective, the company proclaimed.
The November 9 news set many things in motion.
Two days later, Russian researchers said that their country’s vaccine, Sputnik, could be 92% effective. Another five days, and the American company Moderna came with the announcement that its own vaccine provides 94.5% effectiveness against the virus. Then, Biontech-Pfizer raised the stakes, claiming 95% efficacy of its candidate. Less than a week later, Astra Zeneca shared its news, citing studies which show that its vaccine prevents Covid-19 in 70-90% of trial participants.
All four vaccines are currently in the third phase of clinical trials, so these results may yet change. But the world is certainly getting closer to a breakthrough in the fight against the coronavirus. From the financial markets‘ point of view, this means that the end of the crisis is on the horizon. And, it comes with financial opportunities: investors are pumping money into the markets while oil prices and stocks are rising on the exchanges.
For vaccine manufacturers too, this is an opportunity, a gateway to huge success. The very prospect of controlling the virus — which has paralysed the global economy and seen vaccine development shrink from many years to just a few months — has caused Moderna’s share price to rise by over 390% since the start of the year. The developments have also made its boss a billionaire. As news about the excellent results of the Pfizer vaccine circulated around the world, and the company’s stock price jumped 15%, its own CEO sold shares worth USD 5.6 million.
According to The Guardian, Pfizer and Biontech expect to earn £9.8 billion from global sales of their coronavirus vaccine in 2021.
1. A race between companies — and states
Are the reports about the vaccine a real breakthrough, or are they mainly PR for the stock market? The world is unsure, eagerly awaiting the positive results of clinical trials, while 10,000 people die every day from the virus. But the atmosphere remains a horse race — who will be first? Who is already a favourite? Is it Moderna? Sanofi? Pfizer? Astra Zeneca? A Chinese candidate? Or the Russian vaccine?
At stake in this race, however, is not only who will provide the vaccine first. This year’s vaccine push has largely been made possible by huge public funding for research and development. The eventual vaccines, however, will be owned by private companies. Will those companies profit a second time by selling their vaccine to governments? And will the distribution of this much-awaited vaccine be fair?
In the general excitement after recent announcements, hardly anyone has paid attention to the below data, collated by the Duke Global Health Innovation Centre. The graph demonstrates that rich countries will take half of the vaccine doses available as soon as they leave factories. These potential beneficiaries are wealthy states like Canada, Australia, UK, USA and EU member states. What about Mexico, Costa Rica or Egypt? The risk is that less prosperous countries will have to wait — for how long, nobody knows —to vaccinate their citizens.
Sources: Duke Global Health Innovation Centre’s Launch and Scale Speedometer (2020, GAVI (for Covax) and World Bank (for population figures) | As of November 20, 2020
*Covax is a global initiative with 185 countries in its portfolio (90% of the world’s population). It has secured 700 million doses so far, but does not intend to vaccinate the entire population of the countries covered, but only the most vulnerable.
Canada has indicated that it will donate some of its vaccines to countries in need.
„Estimates show that more than 50% of the first vaccine batches have been bought up by rich governments that represent only 13% of the world,“ says Kate Elder, senior vaccines policy adviser at MSF’s (Médecins Sans Frontières/Doctors Without Borders) Access Campaign. „So far, a few countries have purchased most of the planned supply. They do not have the largest population or necessarily the greatest need. They were simply able to use their economic position and their wealth, to push ahead in the global line. This is very worrying.“We saw similar government behaviour (where the richest get the vaccine first) during the swine flu pandemic in 2009,” she adds.
This time around, this is happening despite historic initiatives undertaken to promote fair access to vaccines. Initiatives such as CEPI (Coalition for Epidemic Preparedness Innovations) and COVAX, a project run by the vaccine alliance between GAVI (a public-private health partnership), CEPI and the World Health Organisation (WHO).
2. Norway defends rich countries’ direct purchases
John-Arne Røttingen is a professor of medicine and epidemiology with a past at the Norwegian Institute of Public Health. He is also the first CEO of CEPI. Røttingen headed a global WHO study to test medication against the coronavirus. Recently, the Norwegian government appointed him to be the country’s ambassador for global health.
The comparison between the Covid-19 pandemic and the swine flu pandemic is wrong, he says. „In the case of the swine flu, the production capacity of the vaccines was based on existing infrastructure, and the discussion was about how to divide the cake. This time, the vaccine did not exist. If rich countries had waited for agreements with producers until the COVAX initiative was established, this would have slowed down the start of production. In fact, the agreements that these countries made were decisive in taking us to this level of development and production,“ argues the ambassador.
He adds that the Biontech-Pfizer vaccine candidate largely has been financed by US and German public funds, partly through at-risk procurement contracts (at-risk procurement means the company will not have to cover the losses if the undertaking fails). This, he says, has made it possible to expand production volumes at a faster rate than would otherwise be possible. Two days after Pfizer’s announcement about its vaccine, the MSF published a call to governments, demanding that pharma companies make all Covid-19 vaccine licensing agreements public. Societies deserve transparency on such agreements, as well as about the costs of clinical trials and data, stated MSF.
The aid organisation pointed out that billions of dollars of public money — taxpayers‘ money — have been spent on developing potential vaccines.
„Without decisive action by governments demanding greater transparency from companies, equal access to Covid-19 vaccines is under threat. Until we know what is in these contracts, companies will have the right to decide who gets access, and when, and at what price,“ says Kate Elder of the MSF Access Campaign. „These issues relating to access to future vaccines are carried out bilaterally, secretly, while public health is at stake. This is a very specific practical matter, because responsibility also extends to society, to its right to information. It is taxpayers‘ money, spent both on research and development of the vaccines, on scaling up manufacturing capacity and on advance purchases by governments,“ she adds.
A few days after the Pfizer vaccine news broke, and when Moderna announced its own vaccine, MSF reacted again. Moderna must share information about its COVID-19 vaccine in a transparent way and sell it at cost, said MSF, claiming that almost 80% of the predicted initial doses of the Moderna vaccine are already linked to opaque agreements with the richest countries. MSF points out that vaccine patents grant large pharmaceutical companies the exclusive right to produce and sell their medicines for 20 years, preventing the provision of cheaper, generic versions. For the time being, pharmaceutical companies are declaring that they will not profit from the vaccines for as long as the pandemic lasts. But mechanisms to prevent industry from profiting seem weak. In a leaked contract with a Brazilian producer, Astra Zeneca was seen giving itself the right to declare an end to the pandemic after July 2021. This implies that after July, the company can charge governments and other buyers for a vaccine that has been almost entirely financed by the public.
John-Arne Røttingen is not ready to accept this. „When these contracts were entered, there was a hope that the pandemic might be over by next summer. I will expect that Astra Zeneca pushes the date until we actually control the pandemic. I expect them to honour their promise not to profit in light of the pandemic.”
The small print in these contracts has passed relatively unnoticed amid widespread vaccine euphoria. Tired people all over the world keep waiting for a rescue raft.
3. Why not have everyone buy together for good price and fair distribution?
The pharma industry makes what critics believe to be exorbitant profits from sales of medication developed with the help of publicly-funded research. Will that also be the case with the Covid vaccine?
There are two structures in place to put some brakes on the profit-driven system — mechanisms that did not exist during the swine flu pandemic of 2009: CEPI and COVAX.
The vaccine coalition CEPI brings together governments and industry to fund and develop vaccines that will be offered to those who need them, at fair prices. The vaccine candidates in their wide portfolio are included in COVAX, a new structure supported by the World Health Organization that aims to buy vaccines for the whole world and to make sure the supplies are fairly-priced and distributed. However, COVAX is dramatically underfunded. It has raised 2 billion USD, but needs at least another 5 billion USD in 2021. And although most developing countries have signed up to get vaccines through a truly global purchase, rich countries have preferred to allocate some funds to COVAX, while still making their own vaccine orders directly with the producers.
Every government has a duty to secure the life and health of its population. But all governments are not equally equipped to do so. And there is a dilemma to face, even for those who might argue that responsibility stops at national borders. Seth Berkley, CEO of the vaccine alliance GAVI has lamented this. “If only the wealthiest countries in the world are protected, then international trade, commerce and society as a whole will continue to be hit hard as the pandemic continues to rage across the globe,” he said recently.
4. From South Africa with defiance: a potential game-changer
In an October meeting in the World Trade Organisation’s so-called TRIPS council, India and South Africa proposed to allow countries to ignore patents relating to Covid-19 drugs and vaccines until global immunity is achieved. They were supported by 99 countries, as well as by MSF. But the richest states opposed the proposal. Among them are the US, the EU, the UK, Japan, Canada, Brazil, Australia, Norway and Switzerland — countries that have separately secured agreements for so many doses for themselves that they leave much too little of what is to be produced for the countries with the largest populations. Through COVAX, African countries are guaranteed access to at least 220 million doses of the vaccine. But in October, Dr John Nkengasong, Director of the African Centre for Disease Control and Prevention, revealed that this allocation is completely insufficient for a continent with a population of over 1.3 billion people.
The South African/Indian TRIPS proposal is an attempt to gain some solidarity and take bold steps that are not business as usual, argues Umunyana Rugege, director of Section 27, a South African public interest law centre.
“Rich countries that have opposed the waiver act in the interests of corporations, rather than in the public interest,” she tells Investigate Europe. „However, they should not stand in the way of governments that are trying to protect public health, and who are not rich enough to have bought up all the future supplies.”
In defence, Norway’s ambassador for global health explains why his country voted against the South African/Indian initiative: John-Arne Røttingen believes that it would have been a merely symbolic act which would have hurt the industry’s willingness to transfer knowledge, and would have cost valuable time. Norway, he adds, believes in voluntarism.
5. European vaccine nationalism is in the past, or not completely
At the beginning of the pandemic, European countries fought each other to get their hands on face masks and other protective gear that was suddenly in short supply. The EU’s joint vaccine pre-orders on behalf of all member states — plus Norway and Iceland — is one step taken to ensure that there is no repetition of the past. The European vaccine strategy would help avoid potentially harmful competition, and would deliver ‘tangible European solidarity‘, said Ursula von der Leyen, the EU Commission president, when it was introduced.
Marcin Piróg, CEO of the Polish company Biomed, which specialises in the production of plasma drugs, supports this approach. „If we buy the vaccine centrally in the EU, there will be no question of nationalism, no country has the right to circumvent it,” he explains. „When the EU negotiates with manufacturers, it collects orders from individual countries. It is not only Pfizer that is preparing to produce the vaccine. Astra Zeneca, Moderna, Johnson& Johnson and Chinese Sinovac are also in the game.“
But how much is the demonstrated inner EU solidarity worth? According to a statement by Jens Spahn, German Minister of health, it appears that the German government seeks to procure about 100 million doses of the vaccine in 2021. Their current distribution, negotiated by the European Commission, takes into account the population of the country, to ensure fairness. From this calculation, Germany will receive around 57 million doses. But the country wants to obtain the missing vaccines on its own, and is conducting bilateral negotiations with the Biontech-Pfizer consortium.
Earlier this year, the German Ministry of Education and Research launched a vaccine research support programme worth €750 million (including non-refundable grants). Biontech — like several other manufacturers — received €375 million of subsidies from the federal government for this purpose.
But the picture is not black and white. Since the beginning of the pandemic, Germany — as well as the UK, Norway and others — have also paid great attention to the distribution of the vaccine at preferential prices to developing countries. Among other things, they participate in the international GAVI and CEPI initiatives, with Germany funding these programmes to the tune of around € 765 million.
Germany also declares that it will be able to sell some of its doses of the vaccine to other countries (there are speculations in the media about possible transfers at low prices to countries in the Western Balkans). The EU’s bilateral contracts with a handful of vaccine producers (see factbox) also include this option.
6. The industry’s way: sharing technology without giving up patents
Is MSF right in claiming that corporate profits will again be put before human lives, unless governments throw their support behind the Indian/South African initiative?
“The issue of patents is not the biggest obstacle to fair access. The biggest barrier is the lack of production facilities in the global south,” believes John-Arne Røttingen. “There has been an extensive transfer of technology from companies that develop vaccines, such as Astra Zeneca and Novavax, to the Serum Institute in India. The transfer of vaccine technology is facilitated by the CEPI vaccine development coalition.”
So what is the difference between the ongoing transfer of technology, and the need — from South Africa, India and other countries — for intellectual property rights to be suspended during a pandemic?
“These are two very different things,” says Røttingen. „There is a political and ideological discussion about whether patents are the best regime to encourage innovation. That is another, broader discussion. Technology transfer protects all intellectual property rights of companies while making production available.”.
Patent rights are the heart-blood of the pharmaceutical business model. Technology transfers do not threaten these rights and do not stop big pharma from earning money.
Marcin Piróg, the CEO of Biomed, conveys a credo that suits many companies in the industry: “I personally support full transparency. But free patents? This would equate companies that spend billions on research and development with companies that spend nothing. This makes no sense. It would kill research and development in serious pharmaceutical companies,” he says.
7. History in the making
Meanwhile, the publicity race continues: The Biontech-Pfizer vaccine needs to be stored at minus 70 degrees, probably making it less great news for Bangladesh than for Belgium. A German company, Curevac, says their candidate — still only in phase 2 of clinical trials —can be stored in the fridge. So can the Astra Zeneca vaccine, which is apparently both the cheapest of the frontrunners and part of COVAX. It will be sold to low- and middle-income countries at maximum 3 USD a dose.
But some key questions remain unanswered: how will doses be allocated, who will receive the first batches and how and when will the rest be distributed?
This is a critical moment for global health, says Sidney Wong, executive co-director of MSF’s Access campaign.
“Governments need to ask themselves which side of history they want to be on when the books on this pandemic are written”.
The EU orders: “An extremely solid vaccine portfolio”, says Ursula von der Leyen
As of November 25, 2020, the EU has entered into vaccine purchase agreements with six separate companies: Astra Zeneca, Sanofi-GSK, Janssen Pharmaceutica, Biontech-Pfizer, Curevac, and Moderna. Altogether, the pre-orders take the EU’s potential stock of covid-19 shots to nearly 2 billion, meant for a European population (including EEA countries) of 553 million.
Timeline of contracts:
November 24: With Moderna, to buy up to 160 million doses of their vaccine.
November 17: With CureVac for an initial purchase of 225 million doses on behalf of all EU Member States, plus an option to request up to a further 180 million doses
November 11: With Biontech and Pfizer for initial purchase of 200 million doses, plus option to request further 100 million doses. “Member states can decide to donate the vaccine to lower and middle-income countries or to redirect it to other European countries.”
October 8: With Janssen Pharmaceutica NV, of Johnson & Johnson, for vaccines for 200 million people, with additional option for 200 million more.
September 18: With Sanofi-GSK, for up to 300 million doses. “Sanofi and GSK will also endeavour to provide a significant portion of their vaccine supply through a collaboration with the COVID-19 Vaccines Global Access (COVAX) facility – the vaccine pillar of the Access to COVID-19 Tools Accelerator for lower and middle income countries – in a timely manner”.
August 27: With Astra Zeneca for 300 million doses, plus an option for a further 100 million doses.