Trump gave Moderna all the patent-waivers it needed to make a vaccine
There’s a lot of competition for the title of “Most On-The-Nose Symbol of Late Stage Capitalism,” but I think there’s a strong case for awarding the crown to “Vaccine Apartheid” — the decision to deny covid vaccines to billions of poor people in the Global South.
Here’s how that went down: countries in the poor world were arm-twisted into signing the WTO agreement on pain of being shut out of global trade (these former colonies had all been forcibly converted to export crop economies that relied on rich-world countries for seed and Big Ag tech, so opting out of trade wasn’t an option).
Part of the WTO is the TRIPS (AKA “Agreement on Trade-Related Aspects of Intellectual Property Rights”) — a treaty that binds WTO members to respect each others’ patent rights. This is an inarguably bad deal for poor countries, which is why the USA didn’t respect foreign patents until they became a net patent exporter.
One way this can go horribly wrong? Pharmaceuticals. The marginal costs of producing most drugs are very low, but Big Pharma wants to charge all the traffic can bear — markups of tens of thousands of percent! They say this is to recoup R&D, but R&D costs are largely borne by public institutions, with pharma giants privatizing the gains from those public expenditures.
Once a drug is invented and tested, it can be made very cheaply, so poor countries could benefit from it, even given their very modest means, and poor countries can’t afford to pay rich world prices. Cheap drug prices for the global south won’t cut into full-price sales for the poorest 3 billion people. They’re not ever gonna pay US prices.
But this still would be bad for pharma’s business model, which is predicated on raking in those five-figure margins from people in the rich world, some of whom are quite poor (thanks, inequality!). If there’s a low-cost source of pharma’s products somewhere else in the world, then desperate people in the rich world will figure out how to import those low-cost drugs, and a giant pharma company’s stock buybacks and dividends will be reduced from hella-billions to mere umpty-billions.
So if you’re a poor country, signing onto the WTO and the TRIPS means that nearly everyone in your country just won’t have access to lifesaving drugs. This is such an obvious bad deal that the WTO negotiators from the global south balked at it, so the WTO threw them a bone: IP Waivers.
https://pluralistic.net/2021/05/25/the-other-shoe-drops/#quid-pro-quo
Here’s how those (are supposed to) work: if there’s a terrible emergency, say, a pandemic, then the WTO can grant “IP Waivers” to poor countries, which say, “Since this is such an humanitarian disaster, we’re going to temporarily lift your obligation to respect rich, offshore corporations’ patents. You can make their drugs, or import them from another poor country that’s doing so.” Sometimes these waivers make it free to use foreign companies’ patents, other times, they set a fixed cost (a “compulsory license”) for practicing a patent.
IP Waivers are as much as part of the global patent system as patent protections are: they’re the quid-pro-quo that justified poor countries’ tying their own hands and agreeing not to make drugs that would improve the quality of life for the people who live there.
But corporatists and Ayn Rand trufans hate IP Waivers. Back when South Africa and other global south countries were in danger of collapsing under the AIDS pandemic, they petitioned the WTO for an IP Waiver for AIDS drugs, which were otherwise priced beyond their means.
They had a real shot at it, too! But then, the Gates Foundation (yes, that Gates Foundation) sent its operatives to Geneva to argue against any such thing, insisting sovereign countries should beg rich foreigners to donate medicine to them, and if the rich foreigners didn’t want to, they should just let their people die and their nation fail:
https://pluralistic.net/2021/04/13/public-interest-pharma/#gates-foundation
Gates and his Foundation epitomize the idea that the only way to organize public health issues is through the whims of unaccountable billionaires, rather than democratically elected governments. When Oxford University announced plans to make its vaccine patent-free, Gates changed their mind, talking them into an exclusive deal with Astrazeneca instead:
https://khn.org/news/rather-than-give-away-its-covid-vaccine-oxford-makes-a-deal-with-drugmaker/
Rather than trusting billions in the global south to decide how to make and distribute vaccines, Gates set up a program called COVAX, whereby rich people and rich countries could donate covid vaccines — enough to treat just a tiny slice of the world’s poorest people.
https://newrepublic.com/article/162000/bill-gates-impeded-global-access-covid-vaccines
Meanwhile, at the WTO, the global south showed up calling for an IP Waiver for covid vaccines. The rich world’s pharma companies having laid out plans to delay vaccination until 2025 for 2.5 billion people in 125 countries, the case for a covid vax waiver was very strong.
Big Pharma went on the offensive. They paid ghoulish “experts” — like Howard Dean, now an unregistered pharma lobbyist — to spread the racist lie that poor brown people are too stupid to make their own vaccines (the largest vaccine factories are in the global south).
https://pluralistic.net/2021/05/21/wait-your-turn/#vaccine-apartheid
They also promoted the dangerous, medically incoherent theory that poor people should “wait their turn.” This isn’t merely an inhumane, vicious ideology, it’s also a recipe for cooking up lot of covid variants, including those that escape vaccine immunity and re-infect people in the rich world. Leaving 2.5 billion people unvaccinated for years and years, incubating variant after variant, is the gift that keeps on giving…to the virus.
The idea that we can deny vaccines to half the world is like the idea that we can create a swimming pool with a “pissing” and “non-pissing” end, and doom all the people who can’t afford the pay toilets to swim in the pissing end - without all of us marinating in piss.
It’s…ironic? Tragic? Tragironic? Because, of course, the vaccines were made with public money — direct state intervention in the market, in the form of R&D and production subsidies and purchase guarantees. The people insisting that unfettered markets are the only way to produce vaccines are manifestly wrong.
https://pluralistic.net/2021/05/16/entrepreneurial-state/#patient-zero-money
To its credit, the Biden administration backed the IP Waivers, but they didn’t throw a lot of weight behind it, and the corporate lobby outmaneuvered them, killing waivers by arguing that any kind of IP Waiver would be the end of vaccine production forever:
https://pluralistic.net/2021/05/10/comrade-ustr/#vaccine-diplomacy
But now, a trove of Trump administration documents that Knowledge Ecology International (KEI) forced the US government to release shows that these very same pharma companies enjoyed luxuriant, expansive IP Waivers of their own. Writing in The Intercept, Lee Fang details how Moderna, in particular, demanded and received waivers:
https://theintercept.com/2022/08/23/covid-vaccine-patents-moderna-big-pharma-section-1498/
All in all, the Trump admin granted IP Waivers to 62 US companies making drugs, PPE, and medical equipment. These waivers allowed their recipients to march into their rivals’ patent rights and seize them, without permission, in order to produce the drugs, supplies and equipment needed to fight the virus.
These waivers were granted under 28USC§1498 (aka Section 1498), a rule that allows government contractors to demand a compulsory license to their rivals’ patents, indemnifying them — and often, the government — from patent liability. Beneficiaries of the S1498 waivers include Moderna, but also Corning, Eli Lilly, Merck, Qiagen, Sanofi and Siemens.
S1498 dates back to 1910 and came into widespread use in WWI, when the US government expropriated the Wright Brothers’ airplane patents to create an air force. S1498 got another lift in WWII, under similar circumstances.
It has been quiescent since, and, indeed, the Trump administration kept its use of waivers a secret. KEI was tipped off to their use thanks to a lawsuit filed by two of Moderna’s competitors, who complained that Moderna “simply used the patented technology without paying for it or even asking for a license.”
KEI cofounder James Love told Fang that he supports the use of waivers for covid vaccines: “I’m glad they did it.” But he pointed out that even as Moderna was relying on these waivers, they were also denouncing the idea of waivers for poor countries as an existential risk to all pharma research.
Meanwhile, Moderna’s vaccine was “really one of the most profitable biopharmaceutical products of all time.” The CEO who oversaw its production has liquidated $400m in stock. The company received $2.48b in public subsidy to make the vaccine.
Anyway, enjoy your variants. Mask up, everyone!
[Image ID: The Earth, floating in space, with its southern hemisphere in flames; it is being irradiated by a beam-weapon fired by a Death Star-style coronavirus molecule, bearing the Moderna logo.]
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