by David Whyte
Telling the story of the search for the COVID-19 vaccines puts capitalism under the microscope. It is a story that helps us to zoom in on why the pharmaceutical industry is set for one of the biggest profit windfalls in its history. And it magnifies our view of the commanding role of the capitalist state in a process that the likes of Boris Johnson present as driven by corporate ingenuity and naked competition – but in reality is driven by our wealth and by scientific knowledge that is part of the commons.
As we get to the end of the story, we find out that the search for the vaccine is not really a search for a cure at all, but a search to avoid dealing with the causes of the virus.
A sustainable business model
In April 2018, long before COVID-19 emerged from the zoonotic swamp, a report by Goldman Sachs analysts proposed that providing a “one shot” cure for diseases could never be a “sustainable business model.” Noting the advances made in gene cell therapy and gene editing – advances that paved the way for the COVID-19 vaccine – they said (with more than a hint of regret): “such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies”.
The Goldman Sachs analysts were only saying what everybody in the drug business knows: there is much less money in preventative medicine and vaccines than there is in treatment for chronic conditions. Until this virus came along, it was much more profitable to keep people with chronic conditions ill than to actually cure them. And, as the Prime Minister rightly says, Big Pharma follows the money. In 2019, the global vaccines’ market size was $47 billion. Sales of just four ‘treatment’ drugs matched this volume of sales (Humira, used to treat rheumatoid arthritis; Keytruda, the cancer treatment; Revlimid, used to treat multiple myeloma and Opdivo, also a cancer treatment). Before 2020, the vaccine industry was a classic oligopoly: four big players accounted for about 85% of the market (GlaxoSmithKline, Sanofi, Merck and Pfizer).
The concentration of power in the industry, and its constant benchmarking with the lower risk business model that shapes the rest of the industry explains why earlier coronaviruses SARS 1 and MERS had no vaccine. With both viruses, tests were initially conducted on animals but not on humans. As the virus died out, so did the research. The Ebola vaccine – largely funded by WHO aid – was finally approved in 2019, a full 6 years after the start of the epidemic in West Africa. The Zika virus is currently undergoing clinical trials, but no vaccine is expected on the market soon.
There can be little doubt that racial capitalism and geo-economics has shaped our response to this virus. Previous viruses did not threaten our economy. Contrast the costs of Ebola to West African countries (estimated at over $50 billion) and the costs of the 2015 Zika virus outbreak to Latin America and the Caribbean (estimated at $18 billion). The most advanced economies stand to lose at least 4.5% of GDP as a result of this pandemic, as cost to production that is estimated at $28 trillion. This is counted in the trillions. The COVID-19 vaccines were needed to save the people of the Global North (and of course our economic system).
Indeed, equity held by the richest investors jumped in value at key stages in the vaccines’ development. The first of the vaccine trials published hopeful results in early August. By the end of the month, the world’s stock markets were reporting the best August in decades. The ongoing recovery in shareholder value through the last quarter of 2020 encouraged by the imminent vaccine roll-out also saw hedge funds reporting the biggest gains in more than a decade.
The vaccines developed to deal with COVID-19 have undoubtedly given us a unique springboard to develop other vaccines in future. Yet this does not make up for years of neglect. We started from a low knowledge base about COVID-19 precisely because the big four had calculated that developing vaccines for the earlier coronaviruses was not worth the portfolio risk.
Our earlier Vaccinating Capitalism report on the profits being made by the main vaccine producers shows how this time portfolio risk was taken out of the equation. The reason the COVID-19 vaccines arrived at such warp speed is that the risk model changed overnight. Indeed, the normal risks associated with vaccine development were almost completely removed from investors. First, research and development, combined with direct subsidies, were mobilised on an unprecedented scale. Second, governments used our money to place the biggest drug advance orders in history and remove all market risk from future sales. Those two things prompted an unprecedented single-purpose investment in the sector. This unprecedented investment will, of course, be followed by unprecedented profits.
The development of this vaccine is part of a vast system of public subsidy that deceives the public into thinking that it is private capital in the form of Big Pharma that saves us through its innovation. Yet perhaps the biggest subsidy to those companies is hidden.
Universities provide trained scientists, a foundation of knowledge that has been built up over hundreds of years. It is in universities that the rules for clinical research are developed, and it is university researchers who establish the system of peer review and publish results in academic journals. Universities make the largest social contribution to verifying and disseminating scientific breakthroughs. It is knowledge that we hold in common. Part of the ‘commons’ it may be, but in economic terms, this knowledge production counts as an ‘externality’: an invisible subsidy that never shows up on a corporate balance sheet.
The infrastructure that produced the vaccines was nurtured in publicly funded universities, in public institutes and in heavily subsidised private labs. When we recognise this, we realise that it is we who are saving Big Pharma from its failure to develop an effective vaccine against similar viruses in the first place.
Most infectious disease experts expect that new viral diseases resulting from zoonotic ‘spillover’ – moving from animals to humans – will become ever more frequent occurrences. SARS-Cov-19 is not the first case, and we are likely to face many more. There are difficult issues that we need to face regarding this unprecedented vaccination programme: how it allows governments to avoid tackling the root causes of SARS-Cov-2, and indeed may help weaken our defences against the next pathogen that spreads from animals to humans.
We know some of the main drivers of spillover. One is deforestation. New pathogens are released when land that has been left relatively un-touched is cleared for development and industrial use by humans. Once wild animals carrying those pathogens are displaced, the pathogens then need to maximise the opportunity to ‘leap’ from one species to another in a process of genetic drift. This is not an easy process. But, as writers like Rob Wallace have been warning us for years, large scale industrial farming can vastly increase the chances of a virus mutating into a form that can make the leap. Once it is in the human pool, it finds its most fertile conditions in closely packed workplaces like factories, warehouses and call centres.
The problem is that it is not just us who are being vaccinated but capitalism itself. The danger is that the vaccines will merely provide a short-term “technofix” which helps ensure the survival of the system that keeps on killing us.
The entire public funding effort – furlough, government loans, suspension of the normal regulatory rules – has had one primary aim: to keep corporations on life support. Some of our most damaging and irresponsible corporations have been kept alive by public funding, often in ways that have allowed them to sack workers, rip-off customers, and profit from intensifying poverty. Meanwhile, the Covid crisis (despite all the celebratory news about falling pollution levels) has also been used to weaken efforts against climate change. Corporations in Europe and North America have taken the opportunity to lobby hard – with some success – for environmental deregulation and further weakening of Paris Agreement targets.
The development of the vaccines will save many lives, but there is a price to pay. The profit-maximising, risk-minimising model ensures that we, not the corporations, will ultimately end up paying the financial costs. But there is an even higher social cost that might be paid. If we don’t deal with the root causes of the problem, and simply continue to reproduce the same uncontrolled conditions of capitalist development and industrial farming, then we will keep being exposed to more and more zoonotic pathogens long after we have got rid of this one.