Vaccines boost Big Pharma’s image, but won’t change its ways

In 1955, Jonas Salk, the inventor of the polio vaccine, was asked a question about who owned the patent to the drug. “Well, the people I would say,” he told a journalist. “There is no patent. Could you patent the Sun?” 

The widespread availability of an affordable polio vaccine in subsequent years has almost eliminated the disease from the world, saving millions of children from paralysis and death. 

A few months back, large American and European pharmaceutical companies in the race to make Covid-19 vaccines were being pushed to follow Salk’s path and keep their research in the public domain. 

That would have helped generic manufacturers in countries such as India to ramp up production and deliver vaccines, even in poorer countries.

Yet none of the pharma bigwigs including Pfizer, AstraZeneca, GSK or Johnson and Johnson (J&J) participated in the patent sharing pool created by the World Health Organisation (WHO). 

Experts say the Covid-19 pandemic afforded an opportunity to the industry to rebuild its image tarnished by recent scandals involving price-gouging practices and the opioid crisis. 

By luck or by design, the industry seemed to have redeemed some of its reputation with vaccines produced in record time. 

“Covid-19 gives a handful of companies a chance to come forward with a vaccine that may help us return to the pre-Covid normal faster than we would have otherwise,” Gerald Posner, the author of Pharma, a book that takes a deep dive into how the industry works, told TRT World.

“As a result, this will have a temporary good effect for them. But the question is: will that fundamentally change the business? — no I don't believe so. They will go back to their ways very quickly which is putting profits ahead of patients.” 

With governments under public pressure for their handling of the pandemic, politicians desperately sought a magic pill that would make lockdowns disappear. The virus has killed more than 1.7 million people and millions more have lost their jobs. 

The urgency to deal with a global health emergency means the scrutiny that was directed at the pharma industry until very recently will have to take a back seat, says Posner. 

In 2018, a US court ordered J&J to pay $4.1 billion in damages for the talc products that caused ovarian cancer. The story of Martin Shkreli, aka the Pharma Bro, who raised the price of a drug used to treat a life-threatening infection by 5000 percent overnight, continues to rile people. 

Those stories are a distant memory. Moderna and BioNtech, the startups that pioneered mRNA technology, which prep human cells to make a protein that kicks in an immune response to the virus, are enjoying overwhelmingly positive media coverage.  

Though the vaccines have gone through the necessary three-tier trial process, America’s Food and Drug Administration and its counterpart in the UK have been unusually quick with approvals. For a medicine maker, an FDA nod is as good as cash — it's an official stamp of authenticity for the drug. 

The industry itself has been betting on the coronavirus vaccine to rescue its image as executives have indicated in multiple interviews, hoping that it will deflect negative publicity. 

“We went from having been a political piñata in January to a recognition, at least in the minds of many policymakers, that this is an industry that we must support,” Jeremy Levin, chairman of the industry association BIO, told the Financial Times, in July. 

And the governments have indeed come out in full support. They have not just allowed the companies to use publicly-funded research and paid them money to accelerate vaccine development — they also spent billions of dollars to buy the vaccines. 

A numbers game

Posner says it goes to the pharma industry’s credit that it hasn’t put a steep price tag on the Covid-19 vaccines. 

Prices range between $3 a dose to $50 a dose with AstraZeneca’s the cheapest and Moderna’s the most expensive. 

But there’s a catch here. What the industry gives up on price, it makes up in volume. Also, instead of selling the vaccine at pharmacies, the companies have struck deals directly with governments which have taken the responsibility to administer them to the public. 

“They are going to vaccinate the entire population and you have to do it twice. That is a huge, huge, volume of vaccines. So even a very small profit for each dose means billions of dollars of income even at a modest price,” John Rother, the President of National Coalition on Health Care, which lobbies for health reforms in the US, told TRT World.

Rother said pharma companies in the US spend as much as 40 percent of their revenue on advertising and marketing. With Covid-19 vaccines, they don’t need to spend a dime on convincing people to buy their products. 

If the virus mutates, as is evident from different strains that have already emerged, then the Covid-19 jabs could become an annual feature, bringing in additional cash in the coming years.  

Pfizer and Moderna alone are expected to generate $32 billion in revenue from vaccine sales in 2021 alone. 

Two giants — AstraZeneca and J&J — say they don’t intend to make immediate profits. The caveat here is that their commitment to keep the price near cost of production lasts only till mid 2021. 

AstraZeneca is also among a handful of companies which are part of the Gavi vaccine alliance that aims to distribute the shots to more than a hundred developing and low-income countries. But the distribution of its vaccine has lagged behind others. 

The most publicised vaccines to be approved up until now are mRNA-based BNT162b2 and mRNA-1273 developed by the Pfizer-BioNtech duo and Moderna, respectively. China and Russia have also reported that their vaccines are effective and many countries are preparing to roll them out. 

But most Pfizer and Moderna jabs have gone to wealthy nations which have mopped up the supplies months before production even started. The European Union just bought 100 million doses of the Pfizer vaccine, taking its total to 300 million. But that doesn’t compare to Canada's stockpile - enough to vaccinate all its citizens five times over.

Activists have severely criticised the practice and warned that “vaccine nationalism” can hinder efforts to stop the pandemic. 

That money is at the heart of vaccine distribution was evident as Saudi Arabia and the UAE, which have not helped develop the vaccines, got a share of the precious drugs coming off manufacturing plants of Pfizer.  

“I guarantee you that it is only about one thing — price,” said Posner about how the oil-rich Arab countries struck deals with pharma companies and rapidly built a cold supply chain. 

“I would be flabbergasted — if we ever saw the documents — to find if those were not the highest prices paid for the vaccine.” 

Your money, their choice 

Many more countries could have benefited from the first wave of vaccine distribution if patent rights and manufacturing know-how had been shared, says Dr Enrico Bonadio, an intellectual property (IP) law expert who is a Reader at the City Law School, London. 

“This was an unprecedented situation. But still what we witness was that the governments in the US, UK and EU supported their pharmaceutical lobbies. Even a pandemic didn’t change their perspective,” he told TRT World. 

In October, India and South Africa mounted a challenge at the World Trade Organisation (WTO), arguing that patent rights, confidential information and trademarks should be shared with the rest of the world. The West balked at the proposal. 

The Wall Street Journal (WSJ) carried an editorial backing the pharma industry’s long held argument that intellectual property is to be protected because it’s their money that has gone into the expensive research. 

Bonadio said he’s not surprised by the decision of pharma corporations to vigorously defend their patents. “It’s like a sacred belief for them. They need IP protection to recoup their investments.” 

But that’s just part of the story. Starting from the first antibiotic, penicillin, many drugs have been funded by governments in the US and Europe through public funding. 

The messenger RNA or mRNA technology behind Moderna’s vaccine comes from Washington-funded National Institutes of Health (NIH). 

“From the late 1930s to 2018, the US government spent $930 billion on the NIH to fund public research that was then taken by the pharmaceutical industry. They put a patent on it, made it their own intellectual property and then charged high prices, in some cases making billions of dollars,” said Posner. 

Pfizer repeatedly said that it didn’t receive anything from the $10 billion Operation Warp Speed, which was created by US President Donald Trump to hasten vaccine development. 

But the vaccine was not an American multinational’s own creation. Instead, it struck a deal with Germany’s BioNtech which did the R&D for the drug partly funded by $445 million it received from Berlin. 

In the past there have been cases where governments in developing countries have stepped in to forcibly take over the patents, said Bonadio. 

One high profile case involved South Africa, which in the late 1990s decided to introduce generic drugs to treat HIV/Aids in a bid to counter the high-priced treatments sold by multinational companies. 

Despite Aids killing millions of people in sub-Saharan Africa, 39 companies took South Africa to court. “That legal action was later abandoned because the companies realised their position had a kind of boomerang effect as they were being seen as greedy pharma companies,” said Bonadio. 

This time the pharma companies have evaded similar scrutiny by keeping the Covid-19 vaccine price low and striking deals with governments, which are desperate to revitalise their economies. 

 But there’s no consolation for hundreds of millions of people in the developing world who have to wait years to get the jabs. 

And there’s no Jonas Salk around to help them.