JI Newsletter 2021-03-01

JI Newsletter 2021-03-01

Welcome to the March issue of the Justice Internationale newsletter.

In this issue of the newsletter; Yogthos examines what caused Canada to be so unprepared for the pandemic and Loljapes covers how intellectual property law is hampering the fight against COVID.

Private Sector Meets Pandemic Preparedness

Canada is struggling to secure COVID-19 vaccines and has now become the only developed country to shamefully dip into a fund for developing nations. Not only that, but despite having a whole year to plan for mass vaccination there does not appear to be a good distribution strategy in place either. At this point the United States is vastly outpacing Canada in their vaccine distribution effort with Canada holding 20th place globally.

It’s worth asking how we ended up in a situation where Canada is not able to produce its own vaccines, and why we had such poor pandemic preparedness overall.

Privatization was one major factor in this equation. The Harper-led conservative government chose to dismantle our national vaccine production capacity and let the private sector handle it. However, the problem with the private sector is that it’s primarily driven by profit incentives and there is no profit from investing effort into something that may happen at an undefined time in the future.

Businesses must invest their effort into actions that produce immediate and consistent profit or risk becoming bankrupt. Meanwhile, corporations have a further responsibility to their shareholders to demonstrate consistent profit to make their shares grow. Once again this incentive is at odds with spending time producing something that produces no immediate profit.

Incidentally, this is also the reason why we did not have sufficient PPE at the start of the pandemic, or the necessary testing capacity. Storing large amounts of protective gear is an expense that’s hard to justify. The Ford government discarded 90% of Ontario’s PPE stockpile when it came to power, presumably seeing it as dead weight. Unfortunately, once you do need this gear it’s needed quickly and in large volumes.

What the pandemic is illustrating is that the goal of generating continuous profit is directly at odds with the goal of having a robust system. Robustness requires having buffers and planning for the unexpected. However, these same buffers are seen as inefficiency from the profit perspective. This contradiction is one of the factors leading to recurring economic crashes in capitalist economies.

Since the system operates on thin margins it has difficulties adapting to rapid changes in the environment. This problem is further exacerbated by globalization which has resulted in local production being replaced by complex and fragile global supply chains.

What the pandemic is teaching us is that capitalist incentives are not compatible with having a robust economy that is able to survive market shocks like the one we’re living through now. This is especially true when it comes to providing for the essential needs of the public. We’re clearly seeing that the profit motive is not aligned with human wellbeing and does not serve the interest of the majority.

Canada must learn from this pandemic and ensure that we are much better prepared to handle the next disaster, whatever it may be. We don’t know when it will happen, or what shape it will take, but we can be certain that it will come at some point.

The solution is to create national capacity to ensure that necessities are available regardless of whether it’s profitable or not to produce and store them. Traditionally this has been achieved by growing the public sector. Not only does this approach allow us to start solving problems that are not profitable to solve, but it also has a number of other benefits. The public sector can be used as a tool to provide employment and guarantee that anybody who wants to work has a job, and it ensures a robust local industry that will not be outsourced to other countries.

As the immediate lesson from the pandemic, Canada needs to rebuild its public medical research capacity instead of continuing to rely on the whims of the private sector. This includes clinical trial capacity, vaccine production capacity and medical equipment stocks.

Patently absurd: IP in the age of COVID

Around a year ago, Western countries started coming to the icy realization that the COVID-19 outbreak would not be contained in Asia and had in fact likely already gone pandemic within their own borders. In response, governments around the world began the age-old practice of throwing money at the problem. One of the more productive exercises in money-flinging has been the creation of several vaccines against COVID-19*.

There is a lot that is admirable in how governments supported vaccine production. No-one knew a year ago what vaccines would be most effective against COVID, so it made sense to fund multiple candidates. Similarly, it would have been tragic to have had a viable vaccine but not have the manufacturing base necessary to create the vaccine in the amounts needed, so ramping up production capacity before clinical trials were concluded also made sense, although it was expensive. The whole exercise shows that a degree of planning in an economy can serve human needs better than relying on raw profit motive.

Less admirable was the decision to allow pharmaceutical companies to retain the intellectual property rights to the vaccines that have been produced. The usual story told about pharmaceutical patent rights is that companies take on large risks during drug research and unless the government grants them a time-limited monopoly in the form of a patent they will have no incentive to continue their work. Even before the pandemic this argument had certain flaws, but the support provided to vaccine companies during the pandemic completely destroys it. Several vaccine companies were given billions of dollars, completely risk-free, in order to let them create their COVID-19 vaccines (see below). Often this was done in the form of vaccine preorders, where governments agreed to pay money for shots irrespective of whether they were ultimately found to work or not. The support for vaccine companies didn’t end at the financial help that was given, governments around the world undertook other activities such as speeding up regulatory processes. This was likely especially helpful for the vaccines made by Moderna and Pfizer-BioNTech as they use novel mRNA technology that would likely have faced extra scrutiny in normal times. You literally can’t buy the sort of support given by governments in order to speed up vaccine production, and yet, at the end of the pandemic, it will be the companies who walk away with full control of the products of all that public spending.

There are some signs that vaccine companies know they’re in a delicate situation. Moderna has made a pledge to not enforce intellectual property restrictions on its vaccine until the pandemic is over (other companies have been more tight lipped, and even Moderna’s pledge gives them a big loophole to start charging once the pandemic is over). However, the problem is that these companies retain any rights at all to technology that wouldn’t have been developed without huge influxes of public cash. Western countries have put themselves in the position of paying once to build up manufacturing and research capacity for private companies, then paying again to take delivery of the product of that investment.

Canada could use this moment to reappraise patent law (which even pre-pandemic was looking incredibly rickety as a way to incentivize biomedical research). Unfortunately, Canada is instead doubling down on the current intellectual property regime. In October 2020, India and South Africa submitted a request to the World Trade Organization for a time-limited waiver of intellectual property restrictions on healthcare technologies related to the COVID pandemic**. The proposal is supported by around 70 countries, but Canada in not one of them, and has released a statement saying that they see no problems with the current international IP regime. This is setting the stage for an ugly battle where the US, UK and Canada (all countries that have secured enough vaccine doses to protect their entire population, four times over in the case of Canada) will be fighting to deny poorer countries access to COVID-related medical technology. For whatever reason, it’s a fight that Canada’s leaders are eager to pick.

Public Support received by COVID vaccine makers

AstraZeneca - University of Oxford

  • $1.2 billion USD (Operation Warp Speed)
  • 20 million doses preordered by government of Canada

Pfizer BioNTech

  • €375 million (government of Germany)
  • $2 billion USD (Operation Warp Speed)
  • 76 million doses preordered by government of Canada
  • 200 million doses preordered by the EU

Johnson & Johnson

  • $1 billion USD (Operation Warp Speed)
  • $456 million USD (U.S. Health and Human Services Office)
  • 38 million doses preordered by government of Canada

Moderna

  • $1.53 billion USD (Operation Warp Speed)
  • 44 million doses preordered by government of Canada
  • 80 millions doses preordered by the EU

Novavax

  • $1.6 billion USD (Operation Warp Speed)
  • 76 million doses preordered by government of Canada

Sanofi and GlaxoSmithKline

  • $2.1 billion USD (Operation Warp Speed)
  • $456 million USD (U.S. Health and Human Services Office)
  • 72 million doses preordered by government of Canada

* According to the WHO there are currently 182 vaccines in preclinical testing and 74 in clinical trials

** The move isn’t completely disinterested, India in particular has a huge generics industry which would love to be able to produce vaccines and medical technology license-free.

Credits

  • Private Sector Meets Pandemic Preparedness - yogthos
  • Patently absurd: IP in the age of COVID - loljapes
  • Web support - snoe, yogthos
  • Editing - loljapes, yogthos
  • Typesetting - loljapes

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