Covid vaccine patent waiver: Biden vs EU

10 May, 2021

A physician protests demanding more than a temporary patent waiver
A physician protests demanding more than a temporary patent waiver

The Covid vaccine patent waiver has become the subject of global debate following the announcement on May 5th that the US will push for a “waiver of patent protection” at the WTO. Although sold as a humanitarian measure driven by the need to stop the slaughter in India and other countries, the reality is quite different: it is part of a competitive strategy opposed especially by Germany, which is determined to use Covid to capitalize its biotech sector and become the “pharmacy of the world.”

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What do intellectual property and the pandemic have to do with each other

Will the US's proposed patent waiver correct the disaster caused by intellectual property in this pandemic?
Will the US’s proposed patent waiver correct the disaster caused by intellectual property in this pandemic?

The impact of vaccine patents on the pandemic so far could not have been more negative. Vaccine patentability has meant riskier and less resilient developments in the face of new variants, using less production capacity than is available, and making vaccination almost impossible in regions of financially weaker states. All in all: hundreds of thousands of preventable deaths and the path for the disease to develop more aggressive variants.

It was the predictable result not only of a legal framework, but of the general context of a long-standing anti-historical capitalism whose needs can only clash more and more virulently with the most basic universal human needs. All the characteristics of contemporary capitalism concur to aggravate the pandemic and to lengthen its impact on a planetary scale.

Decadent modes of production share quite a few things in common. They commonly react to class struggle and the development of internal contradictions by enlarging the state; they all force an agonizing growth of their own productive frontiers; they all exacerbate their characteristic forms of property in an attempt at final entrenchment; they all suffer particular forms of militarism; and they all exert an increasingly predatory relationship both on the exploited classes and onto conquered territories and their resources. And, in one way or another, all these common characteristics concur to turn infectious outbreaks into pandemics of systemic scale.

Read also: Intellectual Property and the Pandemic, 9/2/2021

What is the US proposed patent waiver about

Official statement from the US representative to the WTO, advocating a patent waiver that is actually temporary
Official statement from the US representative to the WTO, advocating a patent waiver that is actually temporary

Last Wednesday, the United States appeared at the World Trade Organization assembly with a proposal to implement a temporary waiver of the protection that patents ensure for companies that own intellectual property in vaccines. Until now, the U.S., Germany, France, Britain and Japan had blocked attempts by India and South Africa to get the agency to accept the manufacture of generic versions of vaccines.

Patent liberalization is part of an open strategy defined by Nature magazine as follows, using the words of the head of an NGO linked to the US government:

First we need to remove patent obstacles, second we need to transfer the knowledge on how to make them [vaccines], and step three is a massive investment in manufacturing capacity

To put it in plain English: the US sees patent waiver, which would also be temporary and limited to certain regions and countries, as a way to generate massive investment opportunities in countries in Africa, South America and Asia.

Why does Germany oppose patent waiver and why is the EU offering “dialogue”

Patent waiver whips up competition between Germany, US and France for capital flows to the biotech industry.
Patent waiver whips up competition between Germany, US and France for capital flows to the biotech industry.

One of the big themes of the German election campaign run-up is how to turn Germany into the world’s pharmacy. Merkel has been openly talking and fighting for this since 2020, when she saw the door open for the German biotech industry with the first announcements by BioNTech and Curevac. Contenders to succeed her, such as Bavarian President Markus Söder, are vying to offer public support for the opening of factories. And capital is flowing in with a volume that can only be rivaled by the Green Deal.

Never before has so much money been invested in the German biotech industry as last year, mainly due to the two vaccine developers BioNTech and Curevac. The biotech industry raised more than three billion euros from financial investors through capital increases during the first year of the Covid crisis. More than three times as much as in 2019 and more than twice as much as in 2018. However, around half of this funding went last year exclusively to Biontech and Curevac, which raised around €1.5 billion. Of this, €300 million came from the federal government’s holdings in Curevac .

Der Spiegel

The timing of the US proposed patent waiver coincides with the publication of the first news on the Curevac results. Curevac-Bayer’s vaccine claims to be effective against variants, turns out to have a low production cost and high scalability – it is manufactured using chicken eggs – and also doesn’t even need special refrigeration. It’s the ideal product for the same countries aspiring to produce generic versions themselves.

That’s why Germany slammed any patent waiver proposal. If it moves Curevac to India, South America or South Africa it wants to use that to pay off investments in European factories or at the very least to put its own capital into factories or partnerships based on large public contracts in those countries.

It initially drew Brussels and France into its rejection of patent liberalization. The European Commission, which has lost much more internal and external credibility with its disastrous management of vaccines than with its diplomatic juggling with Russia and Turkey, has opened itself to dialogue, without changing its alignment with Berlin in its positions, surely advancing a series of conditions restricting the U.S. proposal. Conditions that are nothing more than a way of haggling over markets between the US and Germany… while thousands of people continue to die every day.

By contrast, in France, the Macron government has become a sudden champion of patent waiver. In some countries’ press it has been interpreted as subservience to the US. In fact, one need only look at Roche’s strategy during the pandemic to understand what is at stake: France wants US investment in its biotechnology sector – both human and veterinary – to avoid displacement by a German industry which already dreams of a pan-European monopoly.

Read also: VaccinaVaccination problems and the German instrumentalization of the EU, 15/1/2021

The patent waiver debate opened by Biden is not about saving lives or securing incentives, but about who captures and places capital on a profitable basis

Tedros Adhanom Ghebreyesus, General Director of the World Health Organization.

It goes without saying that the arguments of both sides are spurious. The fears that patent liberalization would reduce incentives for research are not only false… but are refuted even by the most orthodox economic literature, i.e., that consumed by financial institutions.

They are not afraid of losing incentives. In fact, with EU purchases alone, big pharma has already recouped the cost of R&D several times over, they are afraid of losing monopoly rents. Monopoly rents that bring in huge capital inflows. German capital does not fear a disincentive to develop vaccines in the face of new emergencies out of fear of patent waiver. It fears a decrease in the flow of capital with which it intends to create a new profitable domestic industry, win foreign markets and direct investments in third countries.

What about the WHO? According to Tedros Adhanom, WHO director general, the U.S. decision is a show of leadership and will have a monumental impact. But the impact remains to be seen and will depend on the terms the negotiation arrives at. It will certainly never be equivalent to a full patent waiver. The enthusiasm is more about the interests of the agency’s own bureaucracy, which depends on regaining funding from the US, and that of its major funders and internal groups, led by China, India and South Africa… who hope to leverage their own industry and become the vendors of generic vaccines in their areas of influence.

Finally, there is no substance to the U.S. argument either. It is not doing this to save lives or to defeat variants. It is doing this as a way to find new opportunities for its capital and consolidate its hegemony in big pharma. In fact, they are not going to propose a worldwide patent waiver, they are not even going to propose that patent waiver be total and affect derivatives and improvements. They will soften the monopoly in some places, for some uses, for some time… to gain markets and capital placements. Nothing more. There is nothing humanitarian, just the same old murderous imperialism as usual crunching the numbers.