Communism in the Vaccine World

It is finally the time to introduce communism into markets involving large-scale humanitarian crises such as these.

Co-authored by: Varish Seth & Gautam Sodani

(9 Minute Read)

The vaccine race has nearly come to an end with various pharmaceutical companies across the world having developed their own version of COVID-19 vaccine. The most prominent player which emerged out of this race was the US based Pfizer-BioNTech vaccine. Other major players included the Moderna, Johnson & Johnson, Oxford-AstraZeneca (Covishield), Sputnik V and Covaxin vaccines.

However, today, when anyone thinks about a COVID-19 vaccine, the Pfizer vaccine comes to mind. Almost anyone who has a choice chooses this vaccine as it is widely regarded to be the most reliable and effective amongst its competitors. It has now developed a hegemony, perhaps not in the market as a whole but in the minds of the vast majority of people. Former US President Donald Trump's enthusiastic endorsement and admiration further aided this vaccine's rise to prominence and prestige. It has also gotten a lot of political and philanthropic aid from well-known personalities. However, it has recently come to light that Pfizer-BioNtech has been abusing this power and is focusing on its own gains rather than humanitarian needs.

On the one hand, developing countries such as India have given free vaccines to impoverished countries, while pharmaceutical giants like Pfizer are harassing governments with their bizarre demands. They are, in effect, holding governments to ransom, interfering with their legislation and even demanding sovereign assets as guarantees. 

Consider the case of Latin America. Pfizer has signed a vaccine deal with eight Latin American countries including Chile, Columbia, Costa Rica, the Dominican Republic, Uruguay, Panama, Peru and Ecuador. However, two major Latin American countries are missing from the list - Brazil and Argentina. Both countries, in their respective negotiations with Pfizer, ‘failed’ to secure a deal.

Talks between Argentina and Pfizer began as early as in June 2020 (even before the Pfizer vaccine got authorisation). In July, President Alberto Fernandez held a meeting with Pfizer’s CEO in Buenos Aires where the company demanded to be compensated for the cost of any lawsuits against the vaccine. This implied that if anyone filed a lawsuit against Pfizer and won the case, the compensation was to be paid by the Government of Argentina*. Argentina, despite this being unprecedented, made an exception to desperately get this life saving vaccine. The country’s parliament passed a new law in October, 2020, allowing the government to take on this liability. However, Pfizer was not satisfied with the legal phrasing, which stated that ‘Pfizer needed to pay for its own negligence’ and so rejected the deal. Argentina then offered to amend the law by defining ‘negligence’ more clearly by stating that ‘only vaccine distribution and delivery’ was to be classified as negligence. Pfizer, still dissatisfied, demanded the law to be amended to a new decree. Argentina refused. Pfizer then asked Argentina to purchase an ‘International Insurance’ to pay for potential future cases against the company. Argentina agreed to this. In December 2020, when Pfizer’s vaccine yielded superior results in terms of efficacy and affordability, it came back with more demands. Now, Pfizer wanted Argentina to put up its bank reserves, military bases and embassy buildings as collateral. In effect, Pfizer wanted Argentina to put its sovereignty at stake to secure the vaccines. Here, the deal collapsed. 

In Brazil, the world’s third most affected country, Pfizer went a step ahead and apart from compensation relief, it asked Brazil to create a ‘guarantee fund’ and deposit money in a foreign bank account. As a result, the deal of Pfizer with Brazil failed too.

Pfizer is playing politics with life saving drugs. It is grossly abusing its position and creating unnecessary hurdles for various governments for procuring vaccines. This is the reason why Pfizer’s deal with India failed too in February 2021. Eight Latin American Countries, Mexico and the Caribbean nations accepted Pfizer’s demand but Indian government refused to put its sovereignty at stake for a single company’s greed. 

But how did these corporations amass such political clout? A single corporation cannot have the resources or influence to create such a situation. It is the US government’s virtually unending support to its domestic vaccine manufacturers which has empowered companies like Pfizer to create such havoc. The government has also, quite possibly, purposefully tried to sabotage the production process of competitor vaccines from other countries - such as in the case of India.

India has supplied more than 93 African, Asian & Latin American nations with vaccines - either through the GAVI-COVAX initiative or direct aid. However, now, when the country is witnessing an unprecedented surge in COVID-19 cases and shortage of vaccines, instead of coming to its aid, the country was rewarded with an embargo - on raw materials needed to produce the Covishield and Covaxin vaccines - imposed by the USA. Pfizer-BioNtech had recently cut its production target in half due to shortage of raw materials in the USA and Europe and this would hinder the newly elected US President Joe Biden’s 100 day plan to administer 100 million doses of COVID-19 vaccines. The US government implemented the ‘Defence Production Act’ which grants it power over the distribution of raw materials required to manufacture vaccines. They diverted raw material supplies which rightly belonged to the Serum Institute of India (SII) and Bharat Biotech to Pfizer-BioNtech. 

The move was met with global backlash. Vaccine hoarding has been a concern since the very onset of vaccine development in early 2020. Rich countries hoarded up vaccines and the raw materials needed to produce them. Now, they are also indulging in politics, keeping the lives of millions of humans at stake. The US has already administered more than 200 million doses of vaccines, ordered more than 600 million from Pfizer & Moderna and additional from Johnson & Johnson and the country also has an existing stockpile of almost 60 million doses of the Oxford-AstraZeneca vaccine which is yet to be even approved by its government. Now, with this move, the US was evidently trying to strangle out its competitor (in terms of volume of production) - the AstraZeneca vaccine. However, this ban was soon lifted after intense diplomatic pressure from India and possibly from several European nations including the UK, as they also rely on the SII for their vaccine supply. The restrictions on raw materials for Covaxin, which was recently praised by Dr. Anthony Fauci (top US medical expert), is yet to be even acknowledged. Since the Covaxin does not carry the fanfare and support of the Covishield/AstraZeneca vaccine, no news has been published in its regard. 

All these instances show that even in the times of a global crisis, political prowess and support of a company and/or country(s) determine who’s lives will be saved. Pfizer, with a strong backing from the US government, is bullying other countries for supplying its vaccines - despite these countries agreeing to pay the market rate for these vaccines - as we see in the cases of Argentina and Brazil. It also tried to establish an absolute monopoly in the vaccine market by stifling raw materials for other vaccine manufacturers - with active and shameless support from the US government. AstraZeneca and SII - who also enjoy mighty support - were able to evade these efforts, while a smaller firm like Bharat Biotech, which arguably produces a better vaccine than AstraZeneca, is still caught in the crossfire. 

Bharat Biotech’s Covaxin has a reported efficacy rate of 81% for absolute prevention of the disease and 100% in the case that the virus will not make a person seriously ill. While it is lesser than Pfizer’s 95% and 100% respectively, it (Covaxin’s) is still a strong figure and has become popular amongst countries India distributed the vaccine in. 

Pfizer, threatened by the prospect of being dethroned by Covaxin as the world’s preferred vaccine and to capture the extensive Indian market, is possibly colluding with the US government to restrict Covaxin’s manufacturing. The company has recently restarted talks with the Government of India to get expedited approval for their vaccines in the country. To gain the government’s goodwill, they have also promised to donate $70 million worth of medical supplies. However, only time will tell when Pfizer’s vaccine will be approved in India and when Covaxin’s raw materials will be supplied by the US. 

Coming back to our opening statement - Is it finally the time to introduce communism into the vaccine world ?

Ideally yes !

With a seemingly never-ending rise in cases, acute shortage of vaccines and devastating impacts of lockdowns on the economy, it is high time the governments of various nations collaborate, perhaps forming a pact under GAVI or the People’s Vaccine Alliance, and cut out the politics being played by companies like Pfizer (and in extension the US government). A ‘communist regime’, if imposed, in the vaccine world shall ensure equitable distribution of vaccines and the materials needed to produce them at a regulated but fair market price, and shall help bring an end to this pandemic quicker and more effectively. Putting humanitarian needs above the greeds of certain capitalist economies (who always look to cater for themselves first) shall also be more beneficial for those economies themselves - as international mobility and businesses will restore faster. This shall help maximising the social benefit (society’s benefit as a whole) and prevent the deadweight loss caused by companies looking to monopolise the remedy to this crisis. 

The big question then arises - Will this Politicisation of Vaccines ever end ?

Probably not. 

Looking at the situation from a macroeconomic & geopolitical perspective, it is shocking to see how the world's richest economy is actively working to stifle the development of other vaccines to help its own corporations monopolise the vaccine market. A ‘communist regime’, in the vaccine world, would help alleviate many of these problems. But alas, in today’s world, where political powers and financial backing are given more importance than saving human lives, such a mutually beneficial pact is unlikely to happen. 

* In the United States, the PREP Act (Public Readiness and Emergency Preparedness Act) gives total immunity to companies like Pfizer and Moderna from any lawsuit filed against them, but only if something goes wrong ‘unintentionally’ and not for negligence. But Pfizer went ahead and demanded for ‘fraud insurance’ from its international buyers.