Should vaccines be considered ‘global public goods’?
The Daily Star newspaper recently announced on its front page, "COVID Vaccines. One Lakh Pfizer Shots to Arrive Next Month" (May 19, 2021). This news obviously comes at a good time for Bangladesh as it struggles to find more vaccines for the nation of 160 million people. As is well-known, Bangladesh and Beximco Pharmaceuticals Ltd had signed a deal last year with the Serum Institute of India (SII) to procure 30 million shots of the Oxford-AstraZeneca vaccine, but SII halted delivery of these doses after providing only 10.2 million units, because of its high domestic demand amid severe Covid-19 infections in India.
A legitimate question to ask: Why couldn't have Bangladesh procured millions more of these life-saving jabs from other countries or in the open market to meet its growing demand? A related question is, if Bangladesh, India, South Africa and other developing nations have installed but idle pharmaceutical manufacturing facilities, what is preventing them from mass-producing vaccines created by Pfizer, Moderna, or AstraZeneca, and why do they have to wait for months to get a response from COVAX on this matter?
The answer to these questions is complex, but the simplest way of looking at it is: Covid vaccines are private goods and are sold to the highest bidder or only to those who can pay the going price. More on that in a minute.
It has been known for some time that many third-world companies, including pharmaceuticals in Bangladesh, are already locally making vaccines against hepatitis, flu, meningitis, rabies, tetanus, and measles. Abdul Muktadir the MD of Incepta said he fully appreciates the extraordinary scientific achievement involved in the creation of Covid vaccines this year but wants the rest of the world to be able to share it and is willing to pay a "fair price" for the blueprints and technical know-how.
Like Muktadir a few others around the globe, including the WHO, have been asking pharmaceutical companies to voluntarily share or pool the knowledge that they gained to facilitate universal and speedy access to vaccines.
WHO director-general, Dr Tedros Adhanom Ghebreyesus, told the health ministers from its 194 member states on May 24 that more than 75 percent of all vaccines had been administered in just 10 countries. At the current rate of vaccination, only 30 of the world's population would have been inoculated by the end of 2021. He warned no country should assume that it's "out of the woods", as long as the virus and its variants spread elsewhere. WHO data shows that high- and upper-income countries with 53 percent of the world's population have secured 83 percent of the world's supply of vaccines. Low- and lower-income countries, meanwhile, make up 47 percent of the population and have received just 17 percent of the vaccine supply.
So, the 64 Billion Dollar question is: how to accelerate vaccination in the face of a global shortage of vaccines? If we have idle vaccine-making plants all around the globe, what stands in the way of greater production and supply? The shortest answer, as stated earlier, is that vaccines are private commodities. One could next ask, why can't vaccine be considered a "global public good"? A public good is one like air and national defence which allows each of us—often within a geographical boundary—to enjoy the product free and without excluding anyone else.
UNESCO first called for COVID-19 vaccines to be considered a global public good (GPG) last year in February 2020. Earlier, in 2006, the International Task Force on Global Public Goods came up with a list of six possible GPG candidates but did not include vaccines. In contrast, Ursula Von der Leyen, head of the European Commission, used the phrase "global common good" to describe the vaccines.
The technical conditions for "public goods" were first formulated by the Nobel Prize-winning economist Paul Samuelson who in the 1950s clearly enunciated two necessary conditions. First, consumption of the item is non-rivalrous, and second, it is nonexcludable. Let me elucidate. Non-rivalrous consumption implies that one consumer's usage does not preclude the use of another. "Nonexcludability", on the other hand, means that the cost of keeping nonpayers of the good from enjoying the benefit of the good is prohibitive. A good example of a public good is sunshine.
At first glance, Covid vaccines developed by Moderna, Pfizer, or AstraZeneca are not public goods since each of these vendors are making these products for commercial gains and billions of people are excluded since there aren't enough supplies. Therefore, they are not public goods in the sense Samuelson or other modern economists use this concept. However, one could make the case that in the current pandemic situation, vaccines can be categorised as "global" public goods, since vaccination benefits everyone and the social cost of exclusion is very high. In addition, vaccine exclusion could be costly and mean the difference between life and death.
The concept of GPG focuses on goods that are public in the most general sense of the term. A GPG used by a person in Bangladesh does not reduce the amount that someone else in the USA can consume, or the positive externalities are so extensive that private firms could not expect to capture or receive all of the social benefits. Here are some examples of global public goods that have been discussed in the literature: Biodiversity and the natural environment.
For Covid-19, it would be a stretch to consider a biomedical innovation such as a diagnostic test, drug or vaccine as a GPG. As a practical matter and in the context of this pandemic, there is a strong case to create policies to facilitate a diversity of manufacturers and provide for open licensing of intellectual property rights for drugs and vaccines effective against the virus, since the "world has an overwhelming interest in ensuring these will be universally and cheaply available."
The obstacles that stand in the way of implementing a policy that considers vaccines as GPGs are many but two of them stand out: i) the patent or intellectual property (IP) rights of vaccine developers; and ii) lack of technical know-how for the production and distribution of vaccines. Vaccines and all Covid-related medicines and technologies are protected under the WTO agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A patent waiver was proposed jointly by India and South Africa at the WTO meeting in October last year for a temporary waiver of TRIPS, and the objections were fast and furious. Pfizer's partner BioNTech is a German firm, and Angela Merkel, the German Chancellor, said, "The protection of intellectual property is a source of innovation and it must remain so in the future."
In addition, ensuring adequate raw materials and supplies is essential for scaling up vaccine production, but global Covid-19 vaccine supply chains are complex and fragile, and have experienced shortages as production has scaled up. The US has invoked the Defence Production Act over a dozen times in the last year to increase access to raw materials and capacity for domestic manufacturing purposes.
India and South Africa both are large producers of generic drugs, but they have less expertise and capacity to make complex biologics like mRNA vaccines. A recent incident at a US plant in Baltimore raised the alarm about the potential hazard of licensing vaccine manufacturing facilities in an unregulated environment. "And above everything, patient safety must always come first," an AstraZeneca spokesperson said.
Governments and health experts have offered two potential solutions to the vaccine shortage: One, supported by WHO, is a patent pool modelled after a platform set up for HIV, tuberculosis, and hepatitis treatments for voluntary sharing of technology, intellectual property and data. But no company has offered to share its data.
Another proposal that has not gained currency yet, is to ask President Biden to move toward a government purchase of patent rights under "eminent domain" after which the US, as owner, would coordinate worldwide distribution.
In the meantime, some countries and companies plan to do their own bilateral vaccine donations, bypassing COVAX. "These bilateral arrangements run the risk of fanning the flames of vaccine inequity," said WHO's director-general.
Dr Abdullah Shibli is an economist and works in information technology. He is also Senior Research Fellow, International Sustainable Development Institute (ISDI), a think-thank based in Boston, USA.