COVID19-XXVII: The Vaccine Race: Nationalism and Crony Auctioneering

Ayushi Singh

Screenshot 2020-10-05 000025

This is the 27th post in our Covid19 series.

Today, Union Health Minister Harsh Vardhan announced that by July 2021 India would receive 400-500 million doses of the Covid vaccine for 20-25 crore people. As the race for the vaccine heats up, this article analyses emerging issues in the international fora. 


The invention of a safe and effective COVID-19 vaccine is an aspiration that spans across national and cultural boundaries. The prevalent chauvinistic turn in international relations; that has stoked the flames of protectionism, blinding self-interest and realist power politics will make the wait longer and arduous.

The race towards inventing THE vaccine has turned countries into auctioneers with leaders placing investments on the success of the most promising vaccines. Vaccines developed by BioNTech, Pfizer and Fosun Pharma have received billion dollar contracts from countries such as USA, EU and Japan for the assured delivery of millions of doses. The trials of the AstraZeneca vaccine is supported by a grant of $1.2 billion from USA and has entered into an agreement for delivery of 400 million doses to the EU. While on the one hand, these investments and licensing contracts act as effective incentives for the R&D efforts of vaccine companies, delivery and accessibility of vaccines should not be based on the capability to fund/invest/negotiate a contract with companies before-hand. Such a reality risks freezing out the citizens of the developing and least-developing world who are economically incapable of reserving a batch of vaccines with multiple companies, especially when the success of the same is unknown.

Countries have made an unreasonable turn to “vaccine nationalism”, motivated by glorious feats of not only being the one that finds the cure but also cures the rest of the world. The urgency to win this competition has come at the expense of scientific methods of vaccine trials and imposition of unreasonable time-frames. Covaxin, under development by ICMR, Bharat Biotech was given a launch date of August 15 to stoke nationalistic fervour, until it was rightly delayed to early 2021. Russia announced the efficacy of Sputnik V before the Phase 3 trials even began, a claim that was later rolled back. Russia has already negotiated contracts for delivery of its vaccine with Brazil and Mexico in the midst of scepticism from medical researchers.

The race of find and acquire the “vaccine that cures them all” is scientifically dangerous and risks division of countries into winners and losers subject to which successful vaccine they placed their bets on, creating a dystopian form of polarisation in international affairs. Instead, the invention of a safe and effective COVID vaccine has to be supplemented with international cooperation and transparency between countries, private parties, researchers and civil society so as to ensure prior planning and execution of a strategy based on accessibility and affordability.


Vaccine Development and Funding Mechanisms

Currently there are 38 vaccines in the human trial stage and at least 93 vaccines at the animal testing stage.  Vaccine Development is a scientifically and logistically complex process. The inventor requires a vaccine manufacturer capable of emulating the quality-controlled environment for treating active ingredients, intermediate manufacture processing and fill-and-finish packaging, which may or may not be based in Country A. For example, British-Swedish Astra-Zeneca has commenced human trial in England, India, Brazil, USA and South Africa and will be producing its doses through the Serum Institute of India.

Production of sophisticated vaccines has been predominantly carried out by multinational pharma companies in USA, EU and UK with very few manufacturers capable of meeting the demand in scale of billions. It is important to note that rich countries possess a clear upper-hand in ensuring accessibility for their own citizens due to presence of adequate manufacturing capacity and ability to reserve access to doses. A disturbing manifestation of this advantage and nationalist self-interest was highlighted when USA offered German CureVac a sum of $1bn to shift manufacturing from Germany to USA under an “exclusive licensing agreement”. USA claimed entitlement to first access to doses of the Sanofi vaccine on grounds of its large investment in its development.

In order to tilt the vaccine market in favour of accessibility and affordability goals, an internationally united front is required that pledges investments, grants and effective push incentives based on equitable distribution and development for all, irrespective of the time and quantity of funding. The Access to COVID-19 (ACT) Accelerator is one such global collaboration based on the aims of accelerated development, equitable allocation and scaling-up delivery of vaccines. The vaccine pillar of ACT i.e. COVAX acts a platform for research, development, manufacturing and negotiating pricing of vaccines on behalf of lower-income countries that are unable to afford pre-orders or enter into bilateral agreements. However, it is disheartening to note that only 35 countries have signed this, with glaring absences of countries like USA, India, Russia and China, along with a funding gap to the tune of $35 billion.

Another eventuality that requires urgent planning and international collaboration is the question of which country will get first access to the vaccines and in what proportion. Between the spectrum of complete hoarding of initial supply with one country and access to all, a balance has to be struck where the initial supply is distributed to all those parties who need it the most. As of now, various computations for distribution have been suggested i.e. WHO’s “Fair Allocation Mechanism” suggests identification of target groups whose access to initial doses can be further prioritised. The highest priority group suggested include groups of frontline health and social workers; elderly population over the age of 65; and high-risk patients with co-morbidities. Another proposal prioritises countries with low health care facilities and high capacity for vaccine distribution that have participated in the development and testing phases.

The H1N1 virus acts as sorry precedent of how hoarding is the natural progression of rich economies who were able to pay for the entire world supply of vaccines and agreed to only share 10% of the vaccines after their own population had been inoculated. The intricacies of a vaccine distribution policy, especially during the initial stages of discovery, is a complex one which requires multilateral collaborative efforts to arrive at an international distribution agreement. Such an agreement must denote an international organisation like the WHO with already functional distribution and regulatory mechanisms and know-how to maintain a “Vaccine Bank”. As per the agreed upon proposal, doses of vaccines can be released to the countries as per the suggested gradual coverage scheme. Access to low-income countries can be subsidised through large scale funding drives from government aid, donations and grants from organisations (e.g. Bill and Melinda Gates Foundation is a participant of ACT) designated for procurement and equitable distribution. In this way, all countries would be assured access irrespective of which companies eventually invents the vaccine.


Vaccine Patenting and Licensing Terms

Currently, vaccine companies are reliant on voluntary bilateral licensing agreements with countries to incentivise their research and manufacturing capacities. This option is attractive as it ensures freedom to contract with unrestricted pricing that confirms profitability. These agreements are also heavily opaque, anti-competitive and skewed in favour of countries able to pay. While patent and licensing rights are an essential economic inventive for R&D, companies must consider according reasonable flexibility over their terms of licensing and pricing to prioritise the goal of open knowledge.

Some vaccines under development are based on already existing patents i.e. Sanofi is based on its pre-existing influenza vaccine, Flubok. In such cases, researchers may be financially burdened with licensing costs to seek access to an important patent technology or be forced to pay royalties to the IPR owner. Moderna unsuccessfully attempted to invalidate a pre-existing patent being used in development of its own vaccine; instead of having to pay such licensing fees or royalties. On the other hand, some vector and protein-based vaccines are based on absolutely novel research that have not been patented and licensed. In such cases, a balance must be made between the rights of the innovator and the requirement of accessibility and affordability.

Based on the foundations of open knowledge and flexible licensing terms, patent pooling is recommended as an effective option to create a repository for pre-existing and emerging technologies and as a fair platform for negotiating terms of access and pricing. As part of WHO-Costa Rica’s Solidarity Call to Action, COVID-19 Technology Access Pool is based on pre-existing mechanisms like Medicines Patent Pool for HIV vaccines whose model involves bundling of two or more patents which can be sub-licensed to generic manufacturers on low-cost terms. Membership into such pools is on voluntary basis and licenses are non-exclusive.

As of now, the vaccine market is heavily fragmented with voluntary licenses and low-income countries could find respite in the Compulsory Licensing (“CL”) provisions under Article 31 TRIPS. Governments can invoke this provision for supply in domestic market [Article 31f] and allow production of a patented product without express consent of the patent holder. A pre-requisite for invoking a CL is an attempt to obtain a voluntary license from the patent holder,  however, Article 31b circumvents this in cases of “national emergencies” or “circumstances of extreme urgency”; an international health emergency like COVID-19 meets this criteria. By virtue of the 2001 Doha Declaration, Article 31b allows invocation of CL for production of pharmaceutical products for export to an “eligible importing country”. Therefore, if India invokes such a CL, generic manufacturers can export vaccines to low-income countries. But, in lieu of a provision to opt-out of the “eligible importer” status, 37 countries including USA, UK, EU, etc. would not be able to import cheap generic vaccines under CL. This is probably why they are motivated to apply for bilateral agreements for assured access or manufacturing in their own territory. However, the effectiveness of CL provisions are unknown as it has only been invoked once when Canada exported AIDS therapy drugs to Rwanda in 2007. It is premature to assess whether  low-income countries would consider this  to be an attractive option..


Conclusion

Auctioning of vaccines and Vaccine nationalism will have a sliding effect on other sectors of the economy, international affairs and diplomacy. As of now, civil society and media backlash has been effective in rolling back on nationalistic agreements. Even if a country immunises all of its citizens, the rest of the world would still be virus ridden. The economic consequences of the pandemic will not be solved by selfish inoculation if the global supply chain is dysfunctional. Revival of international consumption and trade is dependent on the health of international consumers and their ability to spend on imports. Most importantly, it would simply mark a dark chapter in history and international diplomacy. Taking inspiration from the historical images of Dumbarton Oaks and Yalta Conferences, crisis-struck nations and its leadership must reject chauvinism for international cooperation.


The Author is a Final year student at National Law University, Jodhpur

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s