Commentary: The Global Vaccine Crisis is a Trial of Capitalism | Commentary

But for now, that’s not the case. This is not about inequality that we have always known that capitalism can create. It’s about the inefficiencies that capitalism should avoid.

When it comes to the urgent need for the COVID-19 vaccine, capacity is wasted and innovation does not benefit everyone. Summing up all current projections, 12 billion vaccines could be produced this year. But in reality, there is nothing close to it. And the available doses are mainly swallowed by developed countries.

Can you produce more? In many developing countries, the capacity to manufacture medicines is underutilized. A Bangladeshi company states that with the right licenses and know-how, it can produce 600 to 800 million doses annually. Even if it’s an overestimate, too many such factories are idle, waiting for nods from regulators and patentees. Forty-one members of the vaccine manufacturer network in developing countries alone produce 3-4 billion shots of other vaccines each year.

Therefore, it is not surprising that during the pandemic of COVID-related drugs and vaccines, multiple countries are demanding a substantial suspension of intellectual property rights. It sounds like an attractive and even satisfying solution. But as my colleague David Fickling points out, if getting a new vaccine is as easy as ignoring IPR regulations, developing countries will issue so-called “compulsory permits.” Will do it. They are not.

Indeed, in some countries, issuing such licenses can be afraid of retaliation. Extensive IPR exemption will avoid that problem. But the bigger problem is that complex things like the COVID-19 vaccine cannot be easily reverse engineered. Just telling the company that you are free to give it a try is not very effective.

In other words, Big Pharma needs to work together to license the technology to as many manufacturers as possible. To my surprise, the vaccine industry seems to be working on this abnormally already. While the usual timeline for technology transfer is several years, one study looked at more than 70 such outsourcing and partnership deals during a pandemic, reducing the normal time between transfer and production to six months. I found out.

However, there are quite a few things that discourage Big Pharma from further expanding production. Not all of them are greedy capitalists who are worried about losing a little cash, despite what you might have read in that angry post on Facebook. After all, some have agreed to give up on making a profit while the pandemic is intensifying. Therefore, it is in their interest to ensure that COVID-19 switches from a pandemic to a fad as soon as possible.

More likely, the binding constraint is that they are already actually stretched internally. Every new licensee who signs up adds another location that needs to be scrutinized carefully to ensure that it meets good manufacturing practice. Takeda Vaccines Inc. As Rajeev Venkayya insisted on Twitter, “every aspect of vaccine production is tightly controlled”, “70% of production time is spent on quality control”, “all these challenges are production It has been taken over by a manufacturing partnership to expand capacity. “

Still, these are not considered insurmountable obstacles, not when the situation is so dire. Several prominent figures related to global public health and the World Health Organization last month in the British Medical Journal, urging companies to “voluntarily strengthen their licenses and share knowledge with multiple producers.” Coordinated efforts with multiple producers from a limited number of contract manufacturers. “

If that happens, the government will have to help. In particular, the governments of rich countries need to consider how to pay for the refurbishment and expansion of facilities in developing countries and prepare to make vaccines under authorization. Governments in developing countries need to step up their commitment to regulation and intellectual property in order to make their manufacturers look attractive as licensing partners.

If both sides do not meet this challenge, people around the world will wonder if all the systems that lead to capacity waste and market failure are being cracked down in the midst of a pandemic. Global trading rules, basic respect for intellectual property, and much more are in balance. Unless immediate response can be expanded, the reputation of capitalism could be hit harder in 2021 than in 2008 or 1929.

(Mihir Swarup Sharma is a columnist at Bloomberg Opinion. He is a Senior Fellow of the Observer Research Foundation in New Delhi and responsible for its economic growth program. He is the author of “Restart: The Last Chance for the Indian Economy.” Co-editor of “What I Need Now”.)

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