The American vaccination campaign is finally humming, a seemingly night-and-day difference from the mad scramble to obtain the minuscule number of vaccine doses available just two months ago. But because nothing is simple, there's a catch. You see, the speed of the U.S. vaccination program is built on a series of contracts the federal government signed with pharmaceutical companies at the start of their race for a vaccine.
These contracts have resulted in a massive stockpile of doses promised to Americans — while preventing that stockpile from being shared with the rest of the world. It's an untenable situation that President Joe Biden needs to use all his leverage to change.
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Vanity Fair contributor Katherine Eban reported this week that the Trump administration's agreements with Pfizer, Moderna, AstraZeneca and Janssen when Operation Warp Speed was set up all include a clause that the U.S. government "may not use, or authorize the use of, any products or materials provided under this Project Agreement, unless such use occurs in the United States." (Bloomberg News first reported that language in the Pfizer contract in March.)
American law guards drug companies from being held liable for any reactions resulting from new vaccines developed to treat public health emergencies, Eban explained. The Trump administration then basically promised that none of the doses provided to the U.S. as a result of their efforts could make their way outside that legal shield.
The result is the opposite of what Biden said last month when he announced the purchase of 100 million doses of Johnson & Johnson's vaccine. The apparent unspoken caveat was his pledge to share any surplus with the world if countries receiving those doses agreed to extend the same liability shield to the drug companies. That was apparently the case in the "loan" the Biden administration made of 4 million doses of AstraZeneca's vaccine to Mexico and Canada last month.
I understand, to some degree, why the U.S. opted to sign the contracts with the hoarding clause. But that was over a year ago, when it wasn't clear that any vaccine would be developed, let alone that three varieties would be widely available to Americans. And while there have been some uncomfortable mishaps — like the 15 million doses of Johnson & Johnson's vaccine that had to be discarded recently because of contamination — more than enough are already promised to the U.S. that we need not be stingy with the supply we have.
In all, the U.S. has managed to vaccinate around 20 percent of its population, including a quarter of all adults. That's over 66 million people fully protected from Covid-19 as of Thursday, according to the Centers for Disease Control and Prevention. But most of the world is still waiting to vaccinate its people. "Many countries will be lucky if by the end of the year they are close to where the U.S. is now," Public Citizen's Zain Rizvi told The Washington Post. In the interim, hundreds of thousands more people are likely to die from Covid-19.
It's a bad look the U.S. has sported before, as activists have noted, comparing the situation to the years Western drug companies spent refusing to lower the cost of HIV/AIDS drugs in Africa. Global health campaigners and countries like India and South Africa have been calling for the World Trade Organization to waive drugmakers' intellectual property rights to the vaccines, allowing other companies to produce generic versions, as well.
The PR problem doesn't end there. As the U.S. stockpile grows, Russia and China are producing vaccines of their own — and they have also been much more generous with their supplies globally, boosting their alliances with midsize and smaller countries. And from a pragmatic view, the longer the world waits to be fully inoculated, the greater the chance that even more coronavirus variants will mutate and develop.
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The pressure building on the White House, both internally and globally, means the Biden administration needs to use its leverage to renegotiate the terms of its contracts with the vaccine producers.
So far, the U.S. and other rich countries have beaten back the WTO proposals — but what happens if, say, the drug companies get the sense that this might change? The White House has been mulling just such a move, CNBC reported March 26. A set of signals from the administration that the proposal is close to being approved should be an incentive to bring the companies to the table.
Once they are there, the Biden administration should propose that in exchange for lifting the barrier to exporting American purchases of the vaccine, the U.S. will facilitate negotiations between the drug companies and the countries in need to reach voluntary licensing deals to produce the vaccines locally.
Rachel Silverman, a policy fellow with the Center for Global Development, explained that in such an agreement, the generic-drug makers "get permission, know-how and assistance from the patent-holder to produce the vaccine for sales in specified markets; in exchange, the patent-holder can ensure quality of the generic product and may receive royalties on its sales, usually representing less than 10 percent of sales value."
They may take a hit to their profit margins in that arrangement, but that feels like a less than pressing matter given that these drugs exist only because of billions of dollars in subsidies from the U.S. government. And the revenue from the voluntary arrangements would have to be better than the results should the companies lose their patent protection broadly.
When Cipla, an Indian drug company, began producing cheap generic AIDS drugs for African countries in 2001, its chairman, Yusuf Hamied, was asked whether he was trying to corner the market in Africa. "What do I want with market share?" he replied. "I don't have a monopoly, and the only way to make real money in drugs is with a monopoly. In this disaster, there is room for everybody." I'm sure other companies would feel the same absent the threat of lawsuits from major pharmaceutical companies.
So, let's recap: Boosting the number of vaccines the world has is a national security issue, a public health issue and a moral issue. The Biden administration can't let liability shields and protecting corporate profits keep it from doing the right thing on each of these fronts.