Grotesque profits in the time of COVID-19

The pandemic has made us obsessive about figures. The number of novel coronavirus disease (COVID-19) cases; the grim statistics on fatalities; and the progress of the deadly virus across regions, states, districts and villages have all been of frightening fascination since early 2020. As every new wave of the pandemic hit different parts of the world, the figures have had a way of overwhelming individual tragedies. The numbers were always too big, not least in India.

But in the midst of the worst pandemic in 100 years, where the tragedy of lost lives and economic ruin still deepens, come a set of figures that can only be described as grotesque: The revenues accrued by the leading developers of a new kind of vaccine to fight the virus. The top earners are Pfizer Inc and Moderna Inc, whose revenues have rocketed in the first half of this year with their messenger RNA or mRNA vaccines that were produced in record time and have turned the vaccine business on its head.

Market caps of even relatively unknown companies with COVID-19 vaccines have zoomed, as have their revenues and profits. As for the marquee names, it has been a dream run that is unlikely to end any time soon. In July, Pfizer raised its forecast of sales for the year by 30 per cent to $33.5 billion (nearly rs 245 crore). That has turned out to be an extremely conservative estimate; that figure was surpassed in the first half of this year itself with the company reporting overall revenues of $33.6 billion, a 68 per cent jump over the tally for the same period last year.

The case of Moderna is more spectacular. It had no approved product in its portfolio before the pandemic struck. Now its market cap is an astronomical $149.7 billion, pushing a number of Big Pharma companies into a black hole. For the first half of this year, Moderna’s total revenue zoomed to $6.3 billion from just $75 million in the corresponding period of 2020.

In early August, both companies jacked up the price of their vaccines, with their shots now costing between $23.15 and $25.50 a jab. With the US administration recommending that citizens get a booster shot after the two doses, the outlook couldn’t be rosier for these two vaccine makers.

But there is a telling inequity here. AstraZeneca plc, which is the largest supplier of COVID-19 vaccines — it has shipped one billion doses globally and is hoping to double if not treble production this year — has reported revenues of only $1.2 billion in the first half of 2021. What accounts for this anomaly?

AstraZeneca’s vaccine is the cheapest of the major COVID-19 vaccines, costing just $2.15 a shot in the EU and slightly over $5 elsewhere, because it has promised to hold the price line till the pandemic lasts. But this is set to change. The chief executive of the company, who has been slammed by investors and market analysts, appears to be throwing in the towel. Prices will be raised sometime in the future, he says, because “we cannot be a non-profit forever.” However, he promises to not seek large profits.

Should we be appalled at this state of affairs? Corporate greed has been long encouraged by rich countries; British Prime Minister Boris Johnson recently paid tribute to the "greed is good" philosophy of the 1980s when he told his party members that “the reason we have the vaccine success is because of capitalism, because of greed my friends.”

It is the old shibboleth that is trotted out every time corporate greed breaks new barriers. Without patents and other intellectual property (IP) rights, there would be no incentive to innovate.

It’s a view that conveniently ignores what is widely known these days thanks to a relentless campaign by Nobel Prize winners, academics, health activists and unbiased IP experts: Invariably it is research conducted in public institutions that has provided the scientific breakthroughs exploited by the pharmaceutical industry. In the case of mRNA vaccines, it was Hungarian-born scientist Katalin Kariko and her dedicated colleagues at the University of Pennsylvania who did the hard slog on harnessing the power of synthetic mRNA to fight disease.

If biotech companies are making money hand over fist on the vaccines, is the world getting vaccinated any faster? The global vaccination atlas shows little change. The bright spots where 50 per cent and more of the population has been vaccinated remain the same — the rich countries — while a large swathe of the developing world remains dark.

Many of the poor countries have been unable to access any vaccines at all. The Joe Biden administration's decision in mid-August to push booster shots in the US in September will only exacerbate the vaccine inequality. Scientists and health experts have slammed the decision because they say there was no compelling data to show booster shots were necessary; the two-dose vaccine regime is still holding up well against the possibility of severe infection and hospitalisation.

Among the sharpest critics of the US measure has been the World Health Organization (WHO), which emphasises that there is no evidence to support the idea that people who are fully vaccinated will need additional doses so soon. WHO chief scientist Soumya Swaminathan thinks boosters may be required after a year or two; but not at this point, just six months after the primary dose.

WHO is urging the countries that are promoting the booster shot to reconsider their decision because it would sharply reduce the already strained supply of vaccines. It calculates that if 11 high- and upper-middle income countries decide to go for a booster for their populations or even subgroups, this will require an additional 800 million doses. This means the most vulnerable groups worldwide that need the vaccine — frontline health workers and older people — will have to wait far longer.

Global vaccine inequity is needlessly prolonging the pandemic, says an opinion piece in the latest issue of BMJ, better known as the British Medical Journal. It argues that the inequity is a direct consequence of commercial greed and political self-interest. “Corporations aided by their political allies are once more doing what they do best: making a killing.” As a result, preventable deaths and illness are rife across Africa, Asia, and Latin America. The authors, signatories to the People’s Vaccine Campaign, have no doubt what is causing this: a free market, profit-driven enterprise based on patent and IP protection, combined with a lack of political will.

This is reflected in the stasis at the World Trade Organization, where the proposal for a limited waiver of IP protection has not moved since October 2020.

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