Around the world, rich countries are celebrating as their COVID numbers fall. Their success is no mystery — it’s because of a massive rollout of COVID vaccines. While we should celebrate the development of these vaccines, their deployment highlights the tyrannies of capitalism.
Most of the basic research for COVID vaccines was funded by the public. Yet their manufacture is controlled by Big Pharma. The predictable result is that vaccines flow to the highest bidder and Big Pharma reaps the profit. Thus, the world is now ‘blessed’ with 9 new pharma billionaires.
Since we’re stuck with COVID for the long haul, we need to end the privatized vaccine model. The alternative is surprisingly simple. Let governments continue to fund basic science. And let private companies continue to manufacture vaccines. Just don’t let these companies have a monopoly on property rights. Instead, put vaccines in the Creative Commons. The result will be cheap vaccines, available to all.
To make the case for open-access vaccines, it helps to run the numbers. To date, the vast majority of COVID vaccines have gone to rich nations. It’s plutocratic healthcare in action: more money = more vaccines.
Let the data speak.
The global distribution of COVID cases
We’ll start by looking at how the global distribution of COVID cases has played out since the beginning of the pandemic. Figure 1 shows the global share of cases by continent since February 2020.
When the pandemic started in late 2019, Asia had 100% of all COVID cases — obviously because the virus arose in China. In March 2020, Donald Trump bemoaned the spread of the ‘Chinese virus’. But by then the vast majority of cases were in Europe, which had refused to lock down until it was too late.
After the early European (and then American) debacle, the spread of the virus slowed in these regions, but sped up in Asia and South America. By September 2020, the majority of cases were in the ‘Global South’. Then in the fall of 2020, the US and Europe brashly reopened and cases there skyrocketed. And so at the start of 2021, most COVID cases were again in the ‘Global North’.
Figure 2 shows this ‘North-South’ dynamic. I’ve plotted here the Global North’s share of world COVID cases since February 2020. (Remember that ‘North’ is code for ‘rich countries’. Here it consists of North America, Europe and Oceania.)
I’ve marked in Figure 2 the approval dates of the 4 major COVID vaccines. Shortly after these vaccines went on the market, COVID numbers in the Global North plummeted. Today, COVID is overwhelmingly a disease of the Global South. In other words, the pandemic is now a poor-country problem.
The global distribution of COVID vaccines
Let’s switch gears now and look at the global rollout of COVID vaccines. The most ethical way to distribute vaccines would be to send them where they are needed most. If we followed this principle, regions with the most cases would get the most vaccines. In other words, the vaccine rollout would mirror the COVID case load.
That’s not how things have played out.
COVID vaccines haven’t chased cases … they’ve chased dollars. As Figure 3 shows, vaccines have gone overwhelmingly to rich buyers in Europe and North America.
Figure 4 simplifies things by looking at the vaccine rollout in terms of a North-South dynamic. I’ve plotted here the share of fully vaccinated people who live in the Global North. In January 2021, when vaccines first rolled out in the UK and the US, this share was 100%. Thankfully, it declined thereafter, meaning some vaccines did make it to the Global South. But outside rich countries, the pace of vaccine distribution has been slow. As of June 4, 2021, 65% of all fully vaccinated people live in the Global North.
The truth is that the rollout of COVID vaccines has followed a simple plutocratic formula:
more money = more vaccines
My guess is that you can see this formula at many different scales. For instance, in Toronto (where I live) the vaccine rollout has been slower in low income neighbourhoods. And as we’ve seen above, at the global level vaccines have gone overwhelmingly to rich regions.
The same formula also holds at the national level, as shown in Figure 5 and 6. Across countries, the portion of people who are fully vaccinated is proportional to GDP per capita. In other words, the greater your income, the more vaccines you get.
If you’re familiar with global health statistics, the above trend won’t surprise you. Pick any health indicator (including other vaccination rates) and you’ll find that it gets better as per capita income grows. That’s because we live in a plutocratic world where money buys healthcare.
The truth about intellectual property
The unequal rollout of COVID vaccines brings me back to intellectual property. When drug patents expire, the drugs tend to become cheaper. Why? According to drugs.com, it’s because generic manufacturers have lower costs:
Generics are less expensive because the drug manufacturer does not have to duplicate the original clinical trials for effectiveness and safety, which lowers the cost to bring the drug to market.
Of course, it is true that generic manufacturers don’t do drug trials. But that’s not why drugs get cheaper when patents expire. The reality is that patented drugs are expensive precisely because they are patented. Drug patents are a government-sanctioned monopoly that gives the power to set prices. That’s the secret to Big Pharma’s thick profit margins (which tend to exceed the margins of most other companies on the S&P 500). Let the public fund the dirty work. Then get a monopoly on the final product.
Speaking of thick profit margins earned through intellectual property, perhaps the only firms that can compete with Big Pharma’s margins are academic publishers. In 2018, for instance, the publisher Elsevier reaped a profit margin of 37%. The reason academic publishers can compete with Big Pharma is because they’ve adopted the same business model:
- Let the public sector do the expensive basic science;
- In the last mile, put IP around the final product;
- Earn monopoly profits.
The key to these profits is intellectual property. It is the institutional fence that sanctions monopoly power. Without IP, Big Pharma’s hefty profits would vanish. That is the dirty truth that pharma execs dare not speak publicly. Instead, they’ll call their IP an ‘intangible asset’ that ‘generates value’. But inside the boardroom, Cory Doctorow notes, the doublespeak gets dropped. In the halls of power, ‘IP’ has a crisp meaning:
When you attune yourself to how businesses use “IP,” it has a very crisp meaning: “IP is anything that lets me control the conduct of my competitors, customers and critics.”
In other words, intellectual property is all about power. IP grants Big Pharma the power to restrict access to drugs. It’s no wonder that this power leads to unjust results. That’s what it’s designed to do.
Back to COVID vaccines. Big Pharma has been wielding IP for a long time, so there’s nothing new or surprising about the inequities of the COVID vaccine rollout. It’s just that the brutality of the pandemic makes these inequities more visceral. As a result, skepticism of drug IP is probably at an all-time high. A recent poll found that 85% of Americans oppose letting private companies have monopoly rights to vaccines.
Let’s put that skepticism to good use and end IP on all COVID vaccines. And when we’re done, let’s do the same for every other life-saving drug.
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Sources and methods
Data for COVID cases and vaccines is from Our World in Data. You can download the whole dataset here. I define the ‘Global North’ as Europe, North American and Oceania. Everything else is the ‘Global South’.
GDP per capita data is from the World Bank, series
Here’s a collection of articles about the public funding behind COVID vaccines and Big Pharma’s monopolization of the end product.
Public funding of vaccine science:
- For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork
- It Was The Government That Produced COVID-19 Vaccine Success
- ‘Government Money That’s Gone Into Vaccine Development Is Being Privatized by a Handful of Companies’
mRNA researcher Dr. Katalin Karikó persists despite academic rejection:
Hacking the mRNA vaccine:
Does this mean that you are waiving all IP/copywrite protections for your blog post? Your research stands on the backs of other economist that came before you. We all stand on someone’s back. Does this mean that we throw away all incentives that people have because of these IP protections? Where do we draw the line?
Perhaps you didn’t notice, but all my posts are in the Creative Commons.
I read this quickly Blair because I’m well disposed and have written a fair bit myself on the excessive IP protection we offer. Nevertheless I expected to find some treatment of the bit about how we’d fund the large sums necessary for clinical trials and ensuring drug safety and so on. I figured you might talk about prizes or something. Perhaps you did and I missed it, but could you elaborate a little on that.
First off, I think it is a huge conflict of interest for drug manufactures (i.e. big pharma) to do their own drug trials. I’m not sure how or why this was ever allowed, and there are so many examples of misuse. The obvious solution is to publicly fund drug trials just like we the rest of science. So yes, that would involve competing for grants, with all the pitfalls the go along with it.
Ultimately I’d like to see all life-saving medicine paid for by public healthcare. That means that the whole drug chain from basic research to eventual purchasing is going to be paid for by government. If government doesn’t want to do manufacturing, that can be subcontracted. Heck, the Pentagon already works this way. Why not apply the same principle to something useful?
Of course there are huge vested interests, so making the transition happen would be difficult.
It seems like you are asking a lot of government. The greatest threat to our freedom is the concentration of power. As the father of two kids with dual citizenship I recently had to fly my daughter home (Florida) because the bad medical care she was receiving in Canada. Pharmaceutical companies take on tremendous risk to develop drugs and there needs to be thick profit margins to justify that risk. The USA foots most of that bill and personally I don’t mind because we are a rich country. The pharma profit margins comes at American expense. The largest revenue line of almost every major pharmaceutical company is North America and predominantly US.
It is true that you can receive top-notch care in the US … if you have insurance. The underside is that a huge portion of the population has no insurance at all, and so gets shit healthcare.
I see no justification for Big Pharma’s fat margins. We’re talking about life-saving drugs, which are a public good. Any profit is money wasted.
I was hoping for something a little more worked out than pointing to other undoubted problems with the current system and then saying “therefore the government” with a nod to the political difficulties.
I was interested to see your contribution to discussing what are difficult policy dilemmas, but that doesn’t seem to be an area of focus for you — which is fine.
Well sense the government spends huge amounts of money on drugs for Medicaid and Medicare, there is is tremendous savings by making all medicine generic. The government already does the vast majority of the research and development, it only need to take over the testing of new medicines. And the cost can be potentially split between the US government and other governments that pay for drugs for their citizens.
This open research, development and testing will almost certainly speed up development of useful – lifesaving drugs, rather than the current system in which pharm companies do slight variants of existing drugs to extend that are used to extend monopoly pricing. (see insulin)
It would also avoid the evil crap that Slacker family and Purdue pharm did to push opiates on the American public.
[…] global distribution of COVID cases has played out since the beginning of the pandemic. Figure 1 shows the global share of cases by continent since February […]
[…] the global distribution of COVID cases has played out since the beginning of the pandemic. Figure 1 shows the global share of cases by continent since February […]
[…] virus especially chased those with less money, the vaccines quickly chased those with much money. Blair Fix has visualized this with animated graphs. Where GDP per capita is high, the rollout is, as it would have been […]