The trade-off between current distribution and future innovation is tough, even without a pandemic. Who could fault the Biden administration for deciding that the urgent need to vaccinate 7 billion people outweighs the long-term risks?
No one, if that’s what the administration had done. But this step isn’t going to do much to get more shots in arms, because patents aren’t what’s holding up vaccine production. Indian firms have licensed multiple vaccines from rich-world pharma, and more are licensed to Chinese and South African pharmaceutical firms. Global manufacturers are simply struggling to meet unprecedented demand: Never before have 7 billion people needed a new vaccine all at once.
“India’s manufacturing capacity is basically tapped out at the moment,” says Chad Bown, a senior fellow at the D.C.-based Peterson Institute for International Economics. “It’s not as if their massive pharmaceutical industry hasn’t been able to figure out how to get vaccine technology.”
The constraint on expanding that capacity isn’t the patents. It’s manufacturing capacity, and skill. Vaccines, it turns out, are a lot harder to make than pills.
“This stuff is so hard to do,” Bown says, “especially the newer ones, the mRNAs.” Moderna and Pfizer-BioNTech are scaling up their production, and they “don’t really have a whole lot of staff ready to send around the world to teach other people to do it.” Nor is breaking the companies’ patents likely to encourage them to cooperate with that technology transfer.
Even if it could, however, that wouldn’t magically unleash all the resources needed to ramp up vaccine production. As pharmaceutical researcher Derek Lowe notes, in addition to a shortage of skilled workers, pharmaceutical supply chains are struggling to source reagents, filters and other vaccine components.
“The pharmaceutical manufacturers at the end of the line, they’re not actually making money hand over fist,” he told me. “If they were, they could go to their suppliers and say, ‘We will pay you double.’ They’re still not making enough, because they’re not making enough to call up the supply chain.”
Rich countries, including the United States, should be doing whatever it takes to uncork those bottlenecks. That won’t solve the problem overnight; skilled workers take time to train. But Bown points out that most of the businesses making those inputs are small firms that can’t afford to invest massively in rapid expansion unless they know that investment will be repaid. Tabarrok suggests generously funded procurement auctions could make investments in new capacity more profitable, and speed vaccines to the countries that need them.
It certainly doesn’t help to score symbolic points off the industry that just handed the world a science-based miracle: multiple life-saving, pandemic-halting vaccines made in less than a year. Unfortunately, this is not the first time the administration has chosen symbol over substance with vaccines.
President Biden’s team initially announced lowball vaccination targets, ones that seemed designed to let it take political credit for the natural ramp-up of vaccination programs established under Donald Trump, instead of setting challenging goals that could spur greater effort, even at some risk of political embarrassment. Team Biden also sat on warehouses of the AstraZeneca vaccine as India’s covid nightmare worsened, though it isn’t even authorized for use in the United States, apparently for fear of the optics of shipping vaccines abroad. And now this.
Waiving IP rights for coronavirus vaccines is what I call a “Washington Issue”: a policy proposal of negligible impact but immense popular charm. Washington Issues are not on the table because they represent real solutions to hard problems but because they are intuitively appealing and can be described very quickly to a low-information voter.
Embracing this particular Washington Issue may bring some political benefits to the Biden administration. It will please progressive activists who view the pharmaceutical industry as a parasite, and no doubt please the South African and Indian governments, which have sizable pharmaceutical industries and which have, not coincidentally, long pushed this issue.
It will not, however, address the deadly pandemic that is still raging around the globe and potentially giving rise to dangerous new variants that could kill even more people. Including Americans. At such a moment, neither our country nor the rest of the world can afford to chase political side issues. Not until we’ve hunted the virus into extinction.