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MEIG Highlights, Latest News 30 novembre 2021

Highlight 32/2021 – Salus populi suprema lex esto

Vidhya Kumarswamy, 30 November 2021

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As U.S. approves booster shots, just 3.5% vaccinated in Africa. More than 7 billion shots administered, but less 25% vaccinated in more than 50 countries. Global booster shots Outpace Vaccinations in Poorer Nations. ‘Lift ban on export of vaccine raw material’.

The above headlines showcase the unfortunate reality of the ongoing fight against COVID-19. However, this contrast goes beyond just the availability of vaccines being affected due to the disrupted global supply chain. This issue comes down to the fact that the patent is owned or, in harsher terms, monopolized by pharmaceutical companies.

So, how can we break this monopoly? It is necessary to pay! The states or the other vaccine manufacturers can buy the vaccines or buy the licence to manufacture them. But, can every state or manufacturer afford them? The answer is, unfortunately, no. Or else, we would not be subjected to seeing the above headlines.

However, this can be overcome by permitting generic producers across the world to manufacture the vaccines by freely licensing the effective vaccine formulae to them. In simple words, waive off the patent on vaccines through the implementation of eminent domain, globally. The eminent domain refers to the power of the government to take private property and convert it into public use. In the case of vaccines, the government should waive off the patent on vaccines by providing adequate compensation to the patent owners of the effective vaccines and let generic manufacturers to produce them at lower cost. As easy as this sounds on paper, its practice does not come without any opposition – legal and economic.

Today, we live in a world where many firms, including the pharmaceutical companies, have their interests vested in more profit than in just adequate profit or public interest. This is shown to the world behind the mask of intellectual property (IP) rights. The firms and policy makers of the rich countries are of the belief that IP rights cannot be waived off. They argue that “freeing”the IP rights would be detrimental for the future research as companies would lack incentives to invest in the development of vaccines. They also objected that such a practice is unfair considering the expenses undertaken by private firms for the vaccine research and development under the expectation of being rewarded through IP rights. So, they want the continuance of IP rights’ existence related to the vaccines in order to incentivise the vaccine inventions.

What if these incentives are provided through sufficient public support? Then, such a monopoly would not have been needed. Such a support was indeed provided through substantial public money, but without any demands for any transfer of IP rights. Why? Maybe the rich States, who can afford to buy these vaccines, wanted preference over the obtainment of these vaccines, and allowed the monopoly to remain.

But, whatever the objections, it can be resolved through just one measure : compensation. Compensate the firms for their expenses and efforts in research in return for freeing the IP rights and allowing their developments to be available to everyone for the sake of public interest (at a global scale). How to determine the adequate level of compensation? There are two ways to determine it – one of them being cost-based and the other being profit-based. Cost based approach would be to pay the firms for their actual expenses undertaken and also an additional payment for the risks undertaken by them. Profit based approach would be to pay for their foregone earnings of the monopoly rights. So, which approach would be the best solution? I would say both.

States, firms, and civil society should come together to form a global commission and discuss and decide upon a balanced compensation approach. Such a decision has to be taken as expeditiously as possible because the world will not be able to bounce back without adverse repercussions on their economy if the ongoing pandemic continues on its path of economic disruptions. In addition, this global commission could be a blueprint for future crisis, like another pandemic, because in the words of the Secretary General of the UN, Mr. Antonio Guterres, “COVID-19 won’t be the last global pandemic”.

If the world wants to be back on the track towards normalcy, the usage of eminent domain is a necessity. In the end, the economic benefits of widespread access to vaccines outweigh the costs of the compensation payments to the pharmaceutical companies. How? Well, the loss to the global economy due to the pandemic is in trillions, but the expenses undertaken by these firms are in billions. Maybe it’s time the world pulls a Novartis vs Union of India (where the Supreme Court of India refused the patent for a cancer drug invented by Novartis so that the poor are able to afford the drug through generic producers) and let welfare of the people be the supreme law.

Vidhya Kumarswamy, Salus populi suprema lex esto, Highlight 32/2021, available at www.meig.ch

The views expressed in the MEIG Highlights are personal to the author and neither reflect the positions of the MEIG Programme nor those of the University of Geneva.

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