Bill Gates is a pretty respected figure in EA circles. His commitment to helping people living in extreme poverty and to using evidence to inform his Foundation's work preceded EA but seems very well-aligned with EA's belief and efforts in global health and poverty reduction. I believe that the Gates Foundation has saved millions of lives.
This made it all the more surprising to hear that the Gates Foundation urged Oxford to abandon its plans to donate the rights to their COVID vaccine to a pharma company. The idea was to provide the vaccine at a low cost or free of charge. From Kaiser Health News:
"A few weeks later, Oxford—urged on by the Bill & Melinda Gates Foundation—reversed course. It signed an exclusive vaccine deal with AstraZeneca that gave the pharmaceutical giant sole rights and no guarantee of low prices—with the less-publicized potential for Oxford to eventually make millions from the deal and win plenty of prestige."
This struck me as a catastrophic move, turning a vaccine developed by a nonprofit institution into a way to make a company lots of money, with no clear upside. (I think if Oxford stuck to their original plan, they could control the IP and require that their manufacturing partner sell the vaccines at cost).
The article quotes James Love, director of Knowledge Ecology International, a nonprofit that works to expand access to medical technology:
"'[Bill] Gates has staked out this outsized role in the vaccine world,' Love said. 'He has an ideological belief that the intellectual property system is a wonderful mechanism that is necessary for innovation and prosperity.'"
A long-form article in the New Republic goes into much greater detail on what motivates Gates and the role he plays in global health. It describes how there was initial movement towards open collaboration on COVID research and efforts to ensure that knowledge was shared. Gates argued that IP restrictions like patents and trade secrets, wouldn't impede efforts to develop and distribute vaccines. His status as a global health heavyweight helped ensure that the response to COVID would respect existing international commitments to IP.
The article argues (persuasively in my opinion) that the global IP paradigm significantly impedes vaccine production. Companies that own rights to vaccines developed with enormous public investment and massive guaranteed government contracts are fighting any efforts to share the knowledge that could be used make more vaccines in more parts of the world.
Some objections are raised that there aren't many places that can manufacture vaccines that aren't already doing it (which strikes me as extremely unlikely, quite recently, J&J was forced by the US govt to let Merck help it manufacture its vaccine). With some projecting that poor countries won't be fully vaccinated until 2024, even if it takes a 1+ years to retrofit a plan to make the vaccine, it would be worth doing so.
The argument for companies being allowed legally enshrined monopoly rights to produce and sell vaccines is that developing a new drug is extremely expensive and risky, and companies won't do it if a competitor can copy their formula and undercut their sales. But in the cases of COVID vaccines, much of the cost of researching the drugs was publicly funded and risks were eliminated through government purchase guarantees. From a NYT Op-Ed:
"In fact, the novel technology at the heart of the Moderna vaccine, for example, was developed partly by the National Institutes of Health using U.S. federal funds. Moderna then received a total of some $2.5 billion in taxpayer money for research support and as preorders for vaccines; by the company’s own admission, the $1 billion contribution it received for research covered 100 percent of those costs."
In theory, companies use their profits to invest in further research, creating a dynamic and innovative industry that routinely churns out wonder drugs. In practice, pharma companies are far more focused on boosting their share price than on developing new drugs. For example, in 2018, "the 10 biggest pharmaceutical companies spent nearly 170 percent of their net income (tapping cash reserves and borrowing) on payments to shareholders and executives through stock buybacks and dividends".
Vaccines are a classic example of a global public good. It is in the interest of every individual and government to ensure that everyone gets vaccinated as quickly as possible, but it is in the interest of an extremely powerful industry (pharma) to ensure that the existing IP paradigm and for-profit vaccine production model are preserved, even if that comes at the expense of getting everyone vaccinated as quickly as possible.
A better system for vaccine development would be to have a prize system. The government decides that a cure for X is worth $5B. A pharmaceutical company believes they can develop the cure for X for $4B. The govt buys the rights to the cure for the prize price and open-sources it, allowing companies to make generic version of it and sell them at cost.
I would go further and return to a fully public vaccine development and distribution model, similar to what we had in the mid 20th century.
From another article by the Gates-article author:
"A public pharma sector would operate according to the norms and laws that have governed science for most of history. Because the system would not be based on the maximum pricing of drugs artificially protected from competition, there would be no incentive to erect barriers to science. Instead of licensing breakthroughs to private companies, U.S. labs could make contributions to global patent pools, not just when pandemics threaten, but as a matter of permanent policy. While private industry might not survive government competition in, say, the insulin market, companies could focus on lifestyle drugs, or perform niche roles in the public production of essential medicines. "
I think either system would be a massive improvement from the status quo, where companies under-invest in unprofitable drugs like vaccines and hoard useful research.
Gates, whose fortune is the result of the intellectual property system, is standing in the way of changes to that system which would increase the availability and decrease the cost of vaccines. I think the harms of this opposition could easily outweigh the positive contributions Gates and his foundation have made to fighting COVID.
The enormous global inequality in vaccine access is the most important story in the world, in my view, but I've seen very little EA writing on the topic. What do you think?
It's not too surprising that the top comment is a rehashing of market fundamentalism. Going through point by point.
If Oxford had required that their partner sell the vaccines for say 10% over the cost of production and distribution for the lifecycle of the patent, there would be no incentive to slow-roll production until the pandemic is deemed to be "over" so they can really start cashing in. The problem here is the cliff, not the price cap. Generic drugs are widely available even though the companies that make them don't have a legal monopoly. Better yet, a public sector pharma sector could just pursue research and production that has the highest social impact, with no concern for whether it's profitable (cures and vaccines will be less profitable than treatments and drugs that require indefinite prescriptions).
The paragraph after my quote from the NYT op-ed addresses this directly:
"Moderna has pledged not to enforce its “Covid-19 related patents against those making vaccines intended to combat the pandemic.” But as Doctors Without Borders has pointed out, that offer is less generous than it seems since other types of intellectual property, such as know-how or trade secrets, typically are needed to develop and produce vaccines."
I agree that some of the rhetoric around how easy it would be to spin up new manufacturing capacity, especially that which is related to novel tech, is probably inaccurate. But these problems were foreseen a year ago. Licensing and coordinating new production takes time, deals have to be negotiated and struck. If the IP were public, every company and govt with the capacity to manufacture vaccines could be working on it (or have begun retrofitting plants to build that capacity) . The fact that no companies contributed to knowledge sharing efforts is mentioned in many of the articles I linked.
The article you linked also doesn't say that other plants couldn't make the vaccines on a timeline that could impact the course of the pandemic, it just says that it's a myth that dozens of facilities stand ready to make more vaccine right now (which may actually be true of vaccines that aren't using mRNA approaches).
No, I understand this. Net income could be reinvested in R&D if a company chose to do so. The point is that vaccine development isn't as profitable as other, less socially useful drugs (like things to treat male pattern baldness). This article goes into a lot of detail on how market forces have diminished our research and production capacities over time:
"The AIDS pandemic focused attention on America’s own disappearing base of vaccine R&D, even as Washington accelerated the trend worldwide. In 1985, the nonprofit Institute of Medicine warned that America’s “reliance on market incentives to ensure vaccine availability may lead to a failure to meet public health needs [and] may not result in optimal levels of vaccine innovation.” Douglas MacMaster, the president of Merck, delivered a similar message before Congress a year later, warning that his company, one of the last to maintain a vaccine research program, might not be able to fund it much longer, given the “profitability of such products.”
Merck ended up keeping its vaccine department. But despite claims by the industry, U.S. drug companies have not produced a “renaissance” of infectious disease research on par with the achievements of the last century. Hoyt made a study of pharma’s post-1970 vaccine record and published her findings in her 2012 book, Long Shot: Vaccines for National Defense, revealing that vaccine innovation had in fact been in a decades-long slide—one tracking precisely to the rise of monopoly science and the related financialization of the drug business. "
If you think this is true, how do you expect the world to get vaccinated? It's already cost prohibitive for poor countries to secure enough vaccine for their citizens. Almost no one in the global South has been vaccinated and COVAX is underfunded and only promises to vaccinated 20% of the population of the countries it covers. How would these companies making even more money off of the vaccines improve this situation?