Vaccine shortages and capitalist business

By Reynaldo Saccone * 

For International Correspondence 46, April 2021, magazine edited by IWU-FI

On Tuesday 8 December 2020, British Margaret Keenan, 89 years of age, was the first person in the world to get the allowed jab as part of an official immunisation programme. Since then and up to 24 March 2021, around a hundred days, 489 million vaccination doses have been administered worldwide at a rate of 6.27 per 100 inhabitants. The most optimistic estimates are that, if the current rate of vaccination can be maintained, it would take a minimum of two years to reach at least 70 per cent of the world’s population with at least one dose. Why are vaccines scarce?  
Given that most vaccines require two doses, it would not be possible to achieve immunity through the so-called “herd effect” before three and a half years. But there is an additional and more serious problem that worsens if immunising the population is deferred, and that is the emergence of new strains. The pandemic has so far produced 125 million confirmed infections, has accumulated 2,750,000 deaths and is, in recent weeks, on an upward trajectory. It is not just active. A new problem appeared: the virus mutation.

There are several new strains, two very dangerous ones, the so-called Manaus virus, born in Brazil, and the South African mutation. Both have proved to be more contagious and virulent than the original strain. They are also capable of evading vaccine-generated defences. According to experts, Brazil, where the circulation of the virus is limited by few restrictive measures, is proving to be a fertile ground for the emergence of vaccine-resistant mutations. “Viruses are always mutating. The mutations that are favourable to it, when there are no restrictions on transmission, will be selected and will predominate” (Denise Garrett, BBC, 25/3/2021). The longer it takes to vaccinate a population, the more likely it is to generate resistant and more dangerous and aggressive strains.
Vaccination: the crisis of hope

While pandemic turns more dangerous, a vaccination crisis arises, with its two faces: a production crisis and a delivery crisis. We already saw the figures for the production shortage. Let’s see the delivery ones. First, there is a delivery shortage. There is an abyss between the doses bought or booked and the ones truly delivered. According to a survey by the Argentinian Foreign Ministry, in March 2021, twenty-four high and middle-income countries bought 3.9 billion vaccines, but only 513 million were delivered, or 13.16 per cent of the ordered amount. This situation has led to angry clashes between the buying states and the multinationals. The European Union’s complaints against Pfizer, Moderna and AstraZeneca for non-compliance are public. A recent example of these clashes is the dispute between AstraZeneca and the Italian government over the discovery of a consignment of thirty million doses of Oxford vaccine in a warehouse near Rome, which the government may end up seizing. Prepared for export to the UK, their existence was not reported to the Italian government or EU authorities, according to La Stampa newspaper. Second, the delivery crisis reveals the inequality with which it is implemented. On this point, the figures are stark. While the world average of vaccinated people is 6.27 per cent, the United Kingdom 46 per cent and the United States 39 per cent, the EU average is 14 per cent, more than double the global average. The case of Israel, which has a special agreement with Pfizer, and those of Chile and the Emirates, which respond to special purchasing policies, mark the sharpest peaks of inequality. 

Whereas Brazil (7.5), Panama (7.42), Argentina (7.37) are near the world average. Russia and China, though they export vaccines to the world, have vaccinated each only 6.71 per cent and 5.76 per cent of their population. Despite these inequalities, in these countries the population is better off than the rest of the world. They received around “90 per cent of the vaccines applied so far“. Whereas, as Gavin Yamey, professor of global health and public policy at Duke University in the United States, reveals, “some 130 countries, home to over 2.5 billion people, have not received a single vaccine“. 

A plan to make gigantic profits off the vaccine for pharmaceutical companies 

Eleven days after the first cases of Covid-19 were made public in Wuhan, the genome of the new virus was discovered. Only 333 days had passed when the first regulated vaccine was administered and a massive global immunisation campaign was launched. Never so fast in history. It took twenty years for the flu vaccine and, after thirty years of research, a vaccine for HIV-AIDS has still not been achieved. However, this extraordinary achievement of science fell prey to the laws of capitalism and the market. The monopolies’ lust for profit and national borders became obstacles to the development of vaccines.

So the contradictory situation arises that humanity has a weapon to face the pandemic but cannot use it as it should. 
How did the multinational corporations seize control of the vaccines? Three weeks after the prototype vaccine was unveiled to begin human clinical trials, Bill Gates stated for the prestigious New England Journal of Medicine a kind of declaration of principles of the multinational pharmaceutical companies which in its decisive parts reads: “Government funding is needed because pandemic products are extraordinarily high-risk investments; public funding will minimise risk for pharmaceutical companies and get them to jump in with both feet. Besides, governments and other donors will need to fund — as a global public good — manufacturing facilities that can generate a vaccine supply in a matter of weeks. These facilities can make vaccines for routine immunisation programs in normal times and be quickly refitted for production during a pandemic. Finally, governments will need to finance the procurement and distribution of vaccines to the populations that need them”.

Billions in public funds to the pharmaceutical industry 

To obtain the vaccine was the aim of the great imperialist powers: The US, the UK, and the EU, but also of China and Russia. To get it first not only gave a strategic advantage to sell it globally but also to get international prestige amid frictions and commercial and political disputes. These needs help explain the case of China and Russia which, despite being large-scale producers and exporters of vaccines, have lower vaccination rates than Brazil and Argentina.  Two months after Bill Gates’ statements, Donald Trump’s government had already allocated a fund of over 10 billion dollars with public-private partnerships, called Operation Warp Speed, which was allocated among the main multinationals. Moderna received $2.5 billion, Pfizer $2 billion, AstraZeneca had to partner with a US company to get $1.2 billion, Novax $1.6 billion, Johnson and Johnson $1.5 billion and GSK/Sanofi $2.1 billion (WHO and Evaluate Pharma data). 

With this multi-billion-dollar funding, the big pharma companies rushed into phase I and II trials by reducing the stringent research protocols and shortening the steps. In mid 2020, when the massive phase III trials for each vaccine had not yet started, the companies sold their future production in the astronomical quantities we have outlined. The above mentioned Argentinian Chancellor’s survey reveals that Germany, for a population of 82 million, bought 311 million doses and Japan, for 127 million, bought 564 million. Based on research by Duke University, pharmaceutical companies have pre-sold 7.3 billion doses that would have been enough to vaccinate half the world’s population by 2021 if they had been dispersed. This overselling has become a new subsidy.
Special legislation to guarantee monopoly profits 

Not satisfied with using state subsidies for production, the monopolies also demand that governments pass laws to protect their interests and guarantee their profits. Argentina is an example of this. In November 2020, Congress passed, with the favourable vote of the ruling party’s legislators and the bourgeois opposition (the Left Front-Unity voted against), a law tailored to the demands of the multinationals. It guarantees them immunity from legal action against claims that could arise from side-effects, the confidentiality of contracts as regards prices and payments, secrecy of manufacturing processes, legal extraterritoriality and conditions of property indemnity regarding compensation and other pecuniary claims. This demand of the imperialist monopolies was admitted by the Argentinian Minister of Health himself, who, upset by the failure of his negotiations with Pfizer, told the press: “We gave them a law as they asked for, but it was not enough, they wanted more”. 

Confidentiality in the deals is a significant advantage that allows them to establish differentiated prices depending on the purchasing state. All negotiations have been carried out in secret, which shatters claims the to transparency in bourgeois democracy. “Just to give an example, with the prices that Europe has agreed with the producers -the secrecy was broken by a Belgian minister-, the bill for the doses for 40 million people in Spain with the Pfizer vaccine would exceed 1,000 million euros, while with the AstraZeneca vaccine we could vaccinate the same number of people paying only 140 million” (Rafael Vilasanjuan,, 3 February 2021).

Patents guarantee monopoly and hold back vaccine production 

State subsidies and advance purchase of production – as Bill Gates advises – largely, perhaps entirely, finance the production of vaccines. But it is with patents that the monopoly of the multinationals is established, ensuring that
each company has the exclusive right to produce and sell them. None can produce a patented product, unless the owner of the patent expressly allows it, i.e. gives a licence, which is paid for. Through patents, multinationals
monopolise the production of vaccines, although these are the result of a collective elaboration based on decades of development and research in universities, hospitals and scientific centres all over the world which is heavily financed by public budgets. As a result, scientific activity in each country is turned into a free provider of inputs for monopoly profits. Biologist Rob Wallace, from Minnesota University, reveals that, in the framework of the global influenza surveillance network, countries send annual samples of strains to the WHO, which offers them free to the multinationals that make flu vaccines.

Patents and intellectual property are not only enforced by national legislation, also they are protected at an international level through WTO agreements that force countries to comply. 
Why do vaccines fall short? 

We have seen the enormous advantages obtained by the pharmaceutical industry for vaccines: immense subsidies, advance purchases, protective laws and, to top it all off, the exclusivity guaranteed by international patents. However, vaccines supply is insufficient even for the most developed countries. The obvious shortage has unleashed a crisis that has provoked strong friction between multinationals and governments, especially in the European Union. So much so that the chairperson of the commission’s executive, Charles Michel, has threatened first Pfizer and then AstraZeneca to apply article 122 of the EU statute, which allows governments to disregard patents temporarily.  The companies argue that as the factories are new; they are not prepared for a larger production. This is a fallacious argument because a feature of the capitalist industry is its ability and speed to adapt to new production requirements. We know the example of Ford, which, during WWII, reconverted itself to make warplanes and produced over ten thousand a year. A sole company produced almost a quarter of the total aircraft the rest of the American industry produced in the same period. The supplies or raw materials depletion is irrelevant to the power of modern industry. That is not the actual issue.  

The labs have already got enormous profits. Subsidies, advance sales and the likely prospect that, as with influenza, vaccination will be annual and then production will be permanent, have raised the value of the shares of these companies. For example, Moderna’s shares raised 30 per cent in one day after getting Trump’s subsidy in May 2020. Since then, Moderna’s shares, as well as those of the other pharmaceutical companies, have remained at high levels. Therefore, the industry does not go beyond the limit set by its profit rate. Why risk more capital if you are earning very high profits for so little investment? With the reassurance of patents, which prevents competition, multinationals do not need to increase production. 

We need to allow free vaccine production by nullifying patents 

People’s and workers’ interests differ from big business. They want to crush the pandemic, to defend their health and their lives. Patents stand up as a barrier to prevent the production of the vaccines the world needs. In the WTO agreements, some loopholes allow governments to halt patents, as in Doha Declaration, point 2. This is what the head of the WHO, Tedros Ghebreyesus, said at a press conference: “Many countries with vaccine manufacturing capacity can start producing their vaccines by waiving intellectual property rights, as provided for in the TRIPS agreement”, said Tedros, referring to the 1994 accord adopted by all 194 members of the World Trade Organisation (WTO). “Those provisions are there for emergencies… This is an unprecedented time, and WHO believes that this is a time to trigger that provision and waive patent rights”. 

However, these statements do not go beyond the realm of intentions. Workers’ and peoples’ mobilisations are necessary to create a balance of forces that will force governments to disregard patents on vaccines and other inputs necessary to confront the pandemic. Vaccines, the result of collective creation, must be recovered for the workers and the people to be used in the fight against the pandemic. There will not be enough vaccines while production is in the hands of the multinationals. As we struggle against patents, we maintain that the entire pharmaceutical industry should be state property to fight not only the pandemic but also be at the service of all the health needs of the workers and the people. 

*MD, former president of CICOP (Union of Health Workers of the province of Buenos Aires, Argentina, and a leader of Socialist Left, IWU-FI)