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Drug companies prevent poor

countries getting vaccines.

This is how they do it.

Back in the 1970s the big American drug companies, led by Pfizer, were seriously worried about their continued ability to set prices for their products around the world.

Their problem was that intellectual property – patents and copyright – were not covered by the rules of international trade.

Instead, they were subject to national laws and  a web of agreements like the Patent Cooperation Treaty, which were largely limited to rich countries. Under that regime, many developing countries could, and did, allow their manufacturers to produce generic versions of medicines at cheap prices that could be afforded by the health systems of poorer nations – but which didn’t boost the profits of the big US or European originator companies.

One of the lucky ones ... in Malawi, few get a vaccine

 LOBBYISTS RULE. OKAY?

The US pharmaceutical lobby has prodigious influence over Congress and White House administrations. It extends almost seamlessly between the parties and is largely unaffected by changes of government. That lobbying power was used successfully to put intellectual property at the centre of US trade policy.

So when the decisive Uruguay round of international trade talks began in 1986, inclusion of tough protections for the pharmaceutical industry was aggressively pursued by the American negotiators and their counterparts from European drug-making countries.

In that six-year round of talks, the World Trade Organisation was born – and with it was a treaty binding 123 countries to protect the rights of patent-holders – even when that endangers lives and prevents the free spread of information. It was known as the Trade Related Aspects of Intellectual Property (TRIPS). And it is TRIPS that subjected developing countries with generic manufacturers – Brazil, India, Thailand and elsewhere – to harsh sanctions if they infringed big-company patents.

The agreement required every member state to extend its patent protection to 20 years, rather than the 15 years that was previously the rule in most countries (in Australia, it was 16 years). This measure ensured world drug prices remained artificially high and has earnt the American pharmaceutical giants trillions of dollars by keeping generic competition out of the market for an extra five years, to the detriment of health systems globally.

The pharmaceutical lobby in Washington has grown ever since in size and in power. In 2019, according to the Center for Responsive Politics, an independent and non-partisan think-tank, 1,467 lobbyists were employed; 61% were former government employees. And in that year alone, the industry spent A$454 million on its lobbying efforts.

But there was pushback.

WE’VE BEEN HERE BEFORE

As death rates soared through the millions during the worst years of the global AIDS crisis, these corporations continued to deny affordable access to drugs from which they had already made many fortunes. According to UNAIDS, about 14 million people died from AIDS between 1996, when effective antiretroviral treatment became available in rich countries, and 2005, when treatments finally became more widely available in poorer countries and the death rate began to fall.

During that time, public and political pressure on the big drug companies grew.

Finally, a new round of negotiations began under the WTO to address the issue. At a ministerial meeting in 2001 a new pact, known as the Doha agreement, amended the TRIPS measures to allow for certain exemptions in situations of public health emergency. It permitted countries to issue compulsory licenses, allowing their own drug-makers to produce generic versions of medications for diseases like HIV/AIDS, malaria, tuberculosis and “other epidemics” against the wishes of the patent holders.

A study of 13 African countries found that between 2003 and 2008, the annual price of first-line antiretroviral therapy fell from $A1,802 to $A147. Each reduction of $A15 produced an increase of 0.16% in the number of people on treatments. But it had taken too long and cost too many lives.

AND NOW IT’S HAPPENING AGAIN

Vaccination is the principal tool in controlling this pandemic. But because of those manipulated trade roles – and all that lobbying – this is a rich country’s game.

These current figures from the World Health Organisation show the proportion of people who have been fully vaccinated (that’s with two shots, not the boosters):

 

Who’s been vaccinated – and who hasn’t


% fully vaccinated

% with 1st booster

High income countries

73.01

40.96

Low income countries

11.85

0.72

Australia

83.45

50.84

Germany

75.98

58.78

France

80.15

70.55

United States

64.19

28.61

Nigeria

4.64

0.38

Malawi

4.50

-

Papua New Guinea

2.88

0.11

Haiti

1.01

-

Burundi

0.083

-

 

There are many barriers to vaccinating the poorest peoples of the world – scratchy distribution chains, overstretched health workforces, and cultural impediments. The biggest problem, though, is that the vaccines cost too much.

It took a decade for the World Trade Organisation to grant a waiver under TRIPS to allow AIDS drug patents to be set aside, finally allowing access to millions of people in Africa and elsewhere. Now, the industry is holding out again.

Negotiations have been tortuous. Various compromises have been proposed, including one that would cover vaccines but not tests and other treatments. This has been widely rejected by low-income countries, who argue that without testing, vaccines are likely to be of limited use. Anti-viral and anti-inflammatory drugs are also essential weapons in the medical armoury. Australia, the EU, the United States and New Zealand have supported the limited proposals, which seem unlikely to succeed, but are holding out against a more comprehensive and – effective – program.

WHAT IS THE INDUSTRY SCARED OF?

The line from the industry is that a waiver just isn’t necessary and, instead, will distract “from addressing the real challenges in scaling up production and distribution of COVID-19 vaccines globally”, according to the official statement.

F Street, Washington ... pharma lobby HQ
Just how a waiver would impede equitable access across the globe is not explained. Instead, the industry’s proposed solution is that rich countries should buy the vaccines at the full price, and then give them to poor countries.

A more plausible explanation is that the companies just want to go on making as much money as possible, regardless of the human impact. But it’s not immediately clear how allowing poor countries to have access to vaccines, drugs and tests would dent corporate profits. After all, poor countries are in no position to pay top-dollar for these products anyway, apart from limited international vaccine-buying by international charities like Covax.

But the industry has a long-standing, visceral fear of benchmark pricing. That’s where a buyer – Australia’s PBS, for example – demands to pay no more than someone else who’s paying much less. The PBS doesn’t do this, but versions are being used more and more widely, including in the EU. But these schemes have only a limited effect, because they tend to compare rich countries with other rich countries. Using as a benchmark the prices in poor countries which were achieved only by TRIPS patent waivers did not happen when HIV drugs were made available – despite industry fears.

An even more basic industry attitude is to fight hard against any concession in the present, highly profitable, system of trade restrictions. The central object of all pharma lobbying is to be allowed to charge the highest prices possible in any market.

The best example is the US market, where their control of public policy is almost total, whichever party is in power. In 2019, Americans spent an average of US$1,126 on prescription pharmaceuticals. That’s 159% more than Australia and 198% more than Sweden.

And that’s what this is all about.

 

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