PUBLIC GOODS • September 1, 2021 • Peter Rossman
he multilateral trading system anchored by the WTO is not confined to cross-border trade in physical goods. It was also designed to protect corporate knowledge monopolies. Developing countries were told that strict adherence to the rules of ‘free trade’, codified and enforced by the WTO, would enhance their productive capacity through technology transfer and upskilling. The COVID-19 crisis tells a different story. The global distribution of patent-protected knowledge is highly skewed along the North/South axis reflected in the geography of vaccine production and vaccination rates.
Eighty-five per cent of vaccinations to date have been in wealthier countries, where COVID death rates have dropped dramatically. But at the current rhythm, it would take decades, not years, for people in low-income countries to be fully vaccinated. Surpluses and untapped productive capacity amid desperate shortages are characteristic of the global order. But the vaccination gap is shocking even by comparison with, say, the hideously unequal access to the world’s food resources.
Two things are essential to close the gap and accelerate mass vaccination: full utilization of existing capacity and expanded vaccine production in developing countries. This requires loosening the vaccine makers’ grip on the monopoly of knowledge and technology embodied in their manufacture: the companies intellectual property rights (IPR). This knowledge is embodied in patents and other forms of intellectual property which allow their owners to determine who produces and sells the product, on what terms and when.
When governments funded vaccine development, they refused to condition their support on open access to the results. By choice, they invested the vaccine makers with exclusive rights to their production, pricing and distribution. Limited supplies sustain a sellers’ market in which, for example, Pfizer’s price of $19.50 per dose brings a profit margin estimated at 60-80%. In a February 2021 call with investors, the company’s Chief Financial Officer called this “pandemic pricing” and said the company expected ‘to get more on price’ post-pandemic….