Thomas Jefferson famously declared, ‘Inventions then cannot, in nature, be a subject of property’. He did so on the basis of their being natural public goods. Sadly, in 1994 under pressure from a group of US corporations, lead by the CEO of Pfizer, backed by the US administration passed TRIPS, the Trade-Related Aspects of Intellectual Property which effectively globalised the US intellectual property rights system.
In the past few months, a global campaign has grown in favour of suspending the IP protection for Covid vaccines during the pandemic. Over 100 countries have joined the campaign, with a prominent role played by India. At the beginning of May, the Biden Administration backed it, reversing the Trump administration’s opposition. Sadly, the British government has been one of the few rigidly opposing the idea of a waiver. Profits must not be jeopardised!
In The Conversation, Farasat Bokhari has made a valiant attempt to defend the IP system, claiming that patent protection ‘provides incentives via short-term monopoly profits so that firms and individuals can invest in innovation’, and warning that even a ‘on-off waiver’ would make firms far less likely to invest in any future emergency and that it would be a ‘dangerous precedent’. In voicing her opposition to the waiver proposal, Angela Merkel has also asserted that it would dampen ‘entrepreneurial innovation’.
The trouble is that this ignores the fact that the IP system enshrined in TRIPS does not foster innovation. It is a rigged system foisted on the world. As reported in my book, The Corruption of Capitalism, Pfizer’s CEO at the time, Edmund Pratt, openly boasted of that fact.
What TRIPS does is guarantee monopoly profits for a patent holder for 20 years, with the prospect for pharmaceutical firms of up to another 20 years, in a process called ‘evergreening’. During that time, no other firm can produce the patented item unless licensed to do so by the patent holder. That is hardly ‘short-term monopoly profits’.
Careful comparative studies have shown that strong IP protection through the patent system is not correlated with any increase in innovation. On the contrary, many patents are filed simply to stop anybody producing something that the patent holder wishes to prevent becoming a source of competition. And the evidence suggests that the IP system does not boost economic growth.
In the case of the Covid vaccines, it is well known that the corporations only started to invest in the R&D for a vaccine after the US, German and British governments had provided huge subsidies. The CEO of Pfizer was being economical with the truth when saying that its vaccine development was ‘entirely self-funded’. Actually, the vaccine was developed by its German research partner, BioNTech, which received 375 million Euros from the German government and a further 100 million Euros from the European Union. In addition, the US and other governments provided non-refundable advance order purchase agreements worth billions of dollars.[1]
All the corporations were given huge subsidies, and did not do the R&D until they had been given them. The companies did not take the risk, the taxpayers did, backed by NGOs, including the Gates Foundation. And public subsidisation has been the case for numerous patents, of which there are now over 15 million in force across the world.
In short, we should actively support the campaign for a waiver, precisely because it would be a prospective thin end of the wedge for dismantling the IP system that is rigged in favour of huge rentier incomes gained by monopolistic corporations in general. While some defenders of the system think that a waiver would be a ‘dangerous precedent’, we should look at it as a ‘liberating precedent’, opening up the prospect of eroding an unethical system. Probably, the waiver in itself would not have nearly as much positive effect as its leading advocates claim. But the symbolism would be substantial.
It is almost amusing that while Pfizer’s CEO was expressing public fury at Biden’s support for the waiver, warning of huge job losses and damage to the US economy and retribution to the Democrats, the CEO of Moderna admitted that he ‘didn’t lose a minute of sleep’ over the prospect of a waiver, pointing out that it would be costly and very difficult for other firms in other countries to produce vaccines.
The global patent system needs to be dismantled in its entirety. But this particular debate brings to mind a wonderful interview on American TV in 1955, in which the iconic interviewer, Ed Morrow, who had brought down Joseph McCarthy, asked Jonas Salk, who had just invented the polio vaccine, ‘Who owns the patent on this vaccine?’ ‘Well’, said Salk, puzzled, ‘the people I would say. There is no patent. Could you patent the sun?’
In my book, I propose that as a first step, patents should be shortened to five years at most, and for much shorter where the research and risk have been publicly funded. Better would be to shift to a system in which substantial public prizes should be given to inventors and innovations of public goods, awarded by independent bodies. There is no nee for the existing monopolistic rent-seeking intellectual property rights system.
We should support the waiver campaign. But it does not help to exaggerate the potential positive effects. For instance, leading campaigners said on the BBC World Service that the EU leaders’ resistance to the waiver was the cause of the 4,000 deaths happening in India every day at the moment. That is deceiving exaggeration.
That horrendous death toll is a reflection of the long-term neglect of the Indian public health system (with total public health spending being 1.3% of GDP and with just over five hospital beds for every 10,000 people), coupled with incredible political complacency. Prime Minister Narendra Modi vaingloriously told the World Economic Forum on January 28 that India had beaten Covid-19, adding that it ‘has saved humanity from a big disaster by containing corona effectively.’ In reality, as in the UK, a long period of cuts to public health spending made the pandemic’s mortality much greater than it should have been.
Guy Standing is a PEF councillor, Professorial Research Associate, SOAS University of London, and author of The Corruption of Capitalism: Why Rentiers thrive and Work does not pay (Biteback).
[1] It is not as if Pfizer has an unblemished record of ‘entrepreneurial innovation’. It has been found guilty on numerous occasions of selling unsafe products, having to pay billions of dollars for malpractices. It has the dubious distinction of having had to pay the record corporate fine of $2.3 billion, for the illegal marketing of a painkiller. Other major vaccine producers also have records of serial misdoings. In 2010, AstraZeneca had to pay a federal fine of $520 million. Johnson & Johnson, new to vaccines with its Covid offer, has a criminal record as long as the proverbial criminal’s arm. One is surely entitled to ask why such companies should be regarded as safe holders of patents. [Full disclosure: The writer, by chance, has had the vaccine by the one major producer without a record of illegality, Moderna.]