BERLIN, Germany — Hours before the release of the second draft of the Pandemic Accord on Monday, German Health Minister Karl Lauterbach told the World Health Summit that a pandemic agreement with “major limitations” on intellectual property (IP)  rights protection will “not fly” for Germany and most of its fellow European Union (EU) members. 

“For countries like Germany and most European countries, it is clear that such an agreement will not fly if there is a major limitation on intellectual property rights,” said Lauterbach. “That is a part of our DNA … we need intellectual property security in order to invest into vaccines, invest into therapeutics, diagnostics, and so forth.” 

Lauterbach’s announcement is a victory for the pharmaceutical industry, which has been lobbying hard to influence negotiations on the pandemic treaty at the World Health Organization’s (WHO) International Negotiating Body (INB). 

“We need to be open about what can move forward and what cannot be moved forward,” said Lauterbach. 

Pharmaceutical companies like Pfizer and Moderna, which developed the most widely used mRNA COVID-19 vaccines, argue that IP protections were fundamental to them being able to take the financial risks that resulted in record-speed vaccine development at the height of the pandemic.

“The record speed at which new vaccines and treatments were developed in response to COVID-19 was the result of an innovation ecosystem, underpinned by intellectual property,” Thomas Cueni, Director General of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) told Health Policy Watch.  “In the first year alone, COVID-19 vaccinations saved 20 million lives.” 

Europe and the United States, home to many of the world’s largest pharmaceutical companies, are aligned in their opposition to major limitations on IP protections in a pandemic accord.

Other countries, such as India, South Africa and Brazil, argue that IP waivers are needed for equity and would have saved millions of lives during the COVID-19 pandemic.

Another non-starter for Europe and its allies outlined by the German health minister is any relinquishing of executive power to the treaty.

“An agreement is not likely to be successful if there is even the slightest impression that executive power moves from the countries to the agreement or the World Health Organization,” said Lauterbach. “It must be quite clear that all the countries that sign up to the pandemic agreement when there is a pandemic, their full executive power is by no means curtailed or infringed upon.

“This is an agreement on standards, on norms and on responsibilities,” he added. “Executive power is always within the countries where the action takes place.”

Big Pharma and medicines access groups deadlock on vaccines 

Shortly after the World Health Summit kicked off in the glitzy ballrooms of the Mariott Hotel in central Berlin on Sunday,  medicines access groups and big pharma had their first major clash over vaccines. 

At a panel organized by the IFPMA, executives from Pfizer and Gilead retold a familiar story about the pandemic: Historically rapid innovation, spurred by strong intellectual property protections, saved millions of lives and restarted the global economy.

Gilead’s Public Policy Director, Hemal Shah, described the company’s antiviral remdesivir as a triumph of IP protections, arguing that the company’s ability to provide an important treatment option in the early days of the pandemic was enabled by its existing research on remdesivir’s potential antiviral activity against coronaviruses.

“[Remdesivir] is a story about how intellectual property protections enabled Gilead to provide an important treatment option … when we had no vaccines available,” said Shah. “It’s also a story of how IP protections actually enable the risky undertaking of emerging viruses research.” 

Killian Mullett, Senior Director of Commercial Supply Strategy at Pfizer, pointed to the 280 different components required to create its mRNA vaccine and the record speed at which pharma was able to mount supply chains to produce vaccines. 

“When we start looking at COVID, a lot of the supply chain had to be built up from scratch,” said Mullett. “We literally have gotten up to 4.7 million doses of the vaccine, which even for Pfizer, is an incredible amount.” 

Meanwhile, the People’s Vaccine Alliance released a scathing report on the eve of the World Health Summit, pointing out that the world’s 20 largest pharmaceutical companies paid out nearly as much money to shareholders and executives as they claim to have spent on developing new vaccines and medicines during the COVID-19 pandemic.

The top 20 pharma companies handed shareholders and executives more than $1 million every five minutes between 2020 and 2022, spending a combined $377.6 billion on dividends, share buybacks, and executive compensation. This adds up to more than 90% of their reported research and development spending.

“There is a rewriting of history going on here,” Anna Marriott, Senior Health Policy Lead at Oxfam International, told the panel. “There was monopoly control over the successful vaccines, and that monopoly led to pharmaceutical companies paying out a million dollars every five minutes to executives and shareholders.” 

The nine new billionaires spawned from Covid-19 vaccines with combined wealth greater than the cost of vaccinating world's poorest countries, according to The People's Vaccine Alliance: "The nine new billionaires have a combined net wealth of $19.3 billion"#AFPGraphics pic.twitter.com/Kt5Xbhynbj

— AFP News Agency (@AFP) May 24, 2021

Moderna and BioNtech, companies responsible for the two most widely used COVID-19 vaccines, reaped incredible profit margins of 51% and 54%, respectively, during the COVID-19 pandemic – far higher than any other major industry. 

In comparison, ExxonMobil, which generated record-breaking profits of $56 billion in 2022, averaged a net profit margin of just 19%. The notoriously high-profit margins of the oil and gas sector as a whole averaged 17% in 2022.

The record profits of Moderna and BioNTech have come at a time when global inequality has soared. The world’s richest 10% of people now own more than 76% of global wealth, while the poorest 50% of people own just 2%. Both the CEOs of Moderna and BioNTech were among the new billionaires minted during the pandemic.

“Corporations have never stopped trying to capture the policymaking process, using misleading arguments to enable the continuation of profiteering,” former UN Secretary-General Ban-Ki Moon said of the report.

“We see this in climate policy, with the increasing presence of fossil fuel lobbyists at COP, and we can see it in global health, with pharmaceutical companies trying to hollow out equity from the Pandemic Treaty,” said Moon, “Tackling the great challenges of our age requires standing up to vested interests and placing the needs of all humanity above the wealth of a few corporations.” 

Fighting words 

In response to a request for comment on the People’s Vaccine report, IFPMA’s Cueni defended the pharmaceutical industry but did not comment on the profit margins or shareholder and executive compensation numbers highlighted by the report.

“These medical countermeasures were central to bringing to an end the pandemic which cost millions of lives and an economic cost of 13 trillion dollars,” Cueni told Health Policy Watch.  

“To question the very foundation of the innovation system which got us out of the COVID-19 pandemic, as the People’s Vaccine Alliance does, would severely hamper our ability to prevent, prepare, and respond to a future pandemic.” 

On Monday, BioNTech wrote down around €900mn in expected earnings from its COVID-19 vaccines due to low demand. The majority of write-offs were the result of expired raw materials needed to make the vaccines purchased during the pandemic, BioNTech said. 

To the pharmaceutical industry, BioNTech’s write-off is an example of the high-risk game of vaccine development. But to critics, €900mn is a drop in the bucket compared to the historic profits reaped during the pandemic. 

“Listening to the pharmaceutical industry, it is as though they are trying to wipe from history the decades of publicly funded research that went into COVID-19 countermeasures, and the brutal inequity of the global pandemic response,” Valentina Montanaro, global campaign head of the People’s Vaccine Alliance, told Health Policy Watch. 

“If humanity had worked together to combat COVID-19, instead of monopolising vaccine technology and withholding it from the global south, the human and economic costs of the pandemic would have been far less tragic,” said Montanaro. “Today’s panel was a masterclass in disingenuous spin.” 

Finger-pointing continues as the next pandemic looms 

There is a 27.5% chance that a pandemic as deadly as COVID-19 will take place in the next decade, according to modelling from Airfinity, a health company that specializes in monitoring and forecasting trends in the global disease. 

Airfinity’s modelling also shows that if the original COVID-19 wild type had been as transmissible as Omicron, more than 300,000 people would have died in the UK alone, nearly three times more than the actual death toll.

Despite the looming threat, the world is not yet any better prepared than it was for COVID-19. Airfinity estimates that a “strong pandemic defence system” which enables effective vaccines to be rolled out within 100 days after the emergence of a new pathogen could decrease the threat of a COVID-19-like pandemic in the next ten years to 8.1%. 

“A robust pandemic preparedness system is the world’s insurance against a COVID-19-like pandemic or something even worse,” said Airfinity CEO Rasmus Bech Hansen. “We have calculated the real risks, but also the potential risk reduction that can be achieved. This can help inform decision-makers to the level of ongoing pre-emptive investment in the space to keep people safe.”

The Pandemic Fund, the key instrument established under the auspices of the World Bank to improve the resilience of low- and middle-income countries to the next pandemic, is vastly underfunded. It has only raised $2 billion of the $10 billion minimum annual budget it needs to meet its goals – and officials fear this could drop even further as the memory of the pandemic fades. 

“The pandemic fund is based on a recognition that the world has suffered from this cycle of panic and neglect: from SARS, to MERS, to avian influenza, to Zika, to Ebola, to COVID,” Priya Basu, executive director of the Pandemic Fund told the World Health Summit on Sunday.

“And each time we panic, and then there’s neglect. So this time around we really have to make those investments during peacetime, so to speak, so that the world is better prepared,” said Basu. 

The investment case, Basu said, is simple: the Pandemic Fund needs $30 billion per year over five years to get low and middle-income countries ready for the next pandemic. 

“That’s $150 billion over five years. Compare that with the trillions of dollars that the world just lost because we were not prepared, not to mention the millions of lives that were lost,” said Basu. “That is the investment case: the enormous economic and social returns that are produced from just getting the world better prepared.

“If any corner of the world is not prepared, then the rest of the world can suffer,” she added. 

Image Credits: World Health Summit.