September 04, 2020
The American Prospect
There is a very real possibility that China will have an effective vaccine against the coronavirus before the United States. China had four of the first eight vaccines to go into the final phase of clinical testing, so it’s not far-fetched to think that they will end up with the first one to prove safe and effective.
If the U.S. is even one month behind in getting a vaccine approved and distributed, at our current rate of 40,000 infections daily, and more than 1,000 deaths, a one-month delay would mean another 1.2 million infections and 30,000 deaths. If the delay is as long as six months, we would be looking at more than seven million additional infections and 180,000 deaths. In short, this is a really big deal.
China’s relative standing in the world would advance enormously if it is the country sharing a lifesaving vaccine with the rest of the world. It would also put either a second-term Trump or first-term Biden administration in an awkward position, as it tried to negotiate with China for access to a vaccine.
But stepping back from these geopolitical concerns, it is worth asking why we are in this situation in the first place. Specifically, why are we in a situation where a company or country can “own” a vaccine, and can set the terms under which people can gain access?
The issue here is that the Trump administration chose to go the route of privatizing vaccine research, with companies getting patent monopolies, rather than opting for a worldwide collective process to produce effective vaccines as quickly as possible for all of mankind. This alternative would have been possible, if the United States was prepared to take the lead in pushing it.
Contrary to common belief in policy circles, patent monopolies are not given to us by God, they are an explicit government policy to provide incentives for research and innovation. Arguably, they are a very poor tool for financing prescription drug research. Not only do they make drugs expensive when they would otherwise be cheap, they also provide perverse incentives to manufacturers.
Since the patent allows drug companies to sell for far more than the free-market price, they have enormous incentive to lie about the safety and effectiveness of their drugs. This is a standard practice that can have enormous consequences for public health. The most dramatic recent example is the opioid crisis, where several major companies have now paid billions of dollars to settle claims that they deliberately concealed evidence about the addictiveness of their drugs.
But the pandemic created an extraordinary opportunity for cooperative open-source research, breaking the patent monopoly paradigm. On this path, all results would be shared as quickly as practical, and all patents would be placed in the public domain so that anyone can use them. This massive international effort would have been a reasonable response to a worldwide crisis.
In the early days of the pandemic, as scientists struggled to understand the coronavirus, there was a large degree of international cooperation. This was noted in a May editorial in Nature magazine, which commented on the extraordinarily rapid progress in understanding the key features of the virus.
Instead of trying to build on this cooperation, the Trump administration decided to go it alone with Operation Warp Speed. This was quite explicitly a program designed to get vaccines and treatments for people in the United States, with the rest of the world coming second, at best. Other countries largely went the same path, as they both pursued their own vaccines and sought to lock in manufacturing capacity to meet the needs of their own citizens, leaving poorer countries out in the cold.
The Trump administration took its go-it-alone strategy one step further, pulling the United States out of the World Health Organization’s COVID-19 Vaccines Global Access. While this grouping of 170 countries is primarily designed to ensure access to developing countries, it would also allow sharing among wealthy countries. Trump’s decision could make it harder for people in the United States to get access to vaccines developed by other countries.
The Trump administration not only went the nationalist route, it also adopted a path that seemed designed more to maximize corporate profits than to provide early and cheap vaccine access. While it gave subsidies to a number of companies, in the case of Moderna, generally considered the leading U.S. vaccine contender, it essentially paid for its research costs up front. It provided Moderna with $483 million for its preclinical research and Phase 1 and 2 clinical trials. It then gave Moderna another $472 million to cover the cost of its Phase 3 clinical trial.
Incredibly, after picking up the research tab, the Trump administration also gave Moderna a patent monopoly on its vaccine, meaning that the company can dictate what price it wants to charge us. As a result, we may be waiting months longer than necessary, as China passes us by, to get access to an expensive vaccine where we paid for all the research in advance.
Unfortunately, the blame for this situation cannot be laid entirely at Donald Trump’s doorstep. Although some of the usual suspects among the Democrats have insisted that a vaccine largely funded with public dollars should be sold at a reasonable price, no major figure in the party objected to the path of patent monopolies and vaccine nationalism.
Had we decided to go the open-source route, instead of having U.S., German, Russian, and Chinese scientists competing against each other, they would be collaborating, quickly learning from the others’ successes and failures. Going this route would not preclude drug manufacturers from making a profit. They would be paid for doing research, just as was the case with Moderna. The difference is that they would not also be given a patent monopoly.
Since there would be no ownership of the science, as soon as a vaccine appeared promising, manufacturers anywhere in the world could begin to prepare facilities for mass production. They would not need anyone’s approval, apart from being able to certify that they met quality standards. This would make vaccines both widely available and cheap.
It’s understandable that Republicans would not want to go this route in developing a vaccine or treatments for the pandemic. It could set a highly visible bad example, showing the public that there are better mechanisms than patent monopolies for financing the development of new drugs. However, it is disappointing that Democrats seem to share the same concern.
In spite of its intentions, the Trump administration may still end up setting an example, for anyone who cares to use it. While the National Institutes of Health (NIH) has spent hundreds of billions of dollars over the last decade on highly respected biomedical research, the bulk of agency funding went to more basic research. The conventional view is that if NIH, or another government agency, spent money on actually developing drugs and going through clinical trials, it would be the same thing as throwing the money in the toilet.
If the funding for Moderna, and other recipients of Operation Warp Speed grants, leads to successful vaccines and treatments, it will show that government funding of later-stage research and trials can be effective. This should allow for a serious debate as to whether we are better off having taxpayers pick up the full tab for drug development, thereafter having new drugs available as cheap generics, or whether we should stick with patent monopoly financing. That would be an interesting debate, if we could ever have it.