Solving global vaccine inequity requires new incentives for pharmaceutical companies

Abraar Karan and Thomas Pogge look at how we could subsidize the healthcare needs of the world’s poorest people into effective market demand

In a pandemic, we as a global community have two urgent interests: that life saving vaccines and treatments be created, manufactured, and distributed, and that the disease be quickly contained and eliminated worldwide without a potentially catastrophic resurgence.

The financial interests of pharmaceutical shareholders accord with our first interest, but not always with the second. Their companies earn more if the disease is not eliminated—whether or not that is their explicit intention. Moreover, product allocations go to the highest bidders, rather than to where need is greatest or the pandemic may be contained most effectively. Today, impoverished regions are disproportionately lacking access to covid-19 vaccines, largely as a result of financial and political inequities. 

Highlighting this divergence of interests is a criticism not of pharmaceutical firms and their shareholders, but of our governments and ultimately some citizens of wealthy countries who have played outsized roles in how the pharmaceutical industry operates. They have designed the sector so that if firms want to serve global interests well, they must decide and act against their own financial interests. We cannot expect them to always put their very best effort into this.

Scientists have been successful in bringing several highly effective covid-19 vaccines to market in record time. But manufacturing scale-up is slow—with a few companies holding the “know-how,” but unenthusiastic about licensing this to others. Current trends predict that 90% of people in 67 low income countries will not be vaccinated this year and that most poorer populations will not gain herd immunity even in 2022. This delay will facilitate the emergence of new disease strains that may endanger even those already vaccinated. More importantly, millions of people in poor countries will needlessly die, particularly those who are at higher risk of mortality, such as those who are older and immunocompromised.

To speed up manufacturing, some 119 developing countries have called for a temporary suspension of intellectual property rights related to covid-19 to allow manufacturers worldwide to produce and sell approved vaccines without the patentee’s permission. Patentees and the affluent countries representing them have opposed such a waiver: it would undermine incentives to innovate against future pandemics, they say, and it would not help much because patentees would not share crucial technologies and know-how with manufacturers who had not paid them for a license to produce and sell (as was the case with Moderna, which liberalized its intellectual property, but little else). And there is a further problem: even with generic manufacturers in the driver’s seat, the world’s poorest populations are still very poor, and thus would still be served last, if ever.

Ultimately, waiving global policy agreements like TRIPS is a stopgap measure; the system needs more fundamental change. The urgent needs of the world’s poorest people must be subsidized into effective market demand. This might be done through a massive increase in funding for the existing COVAX facility, which is currently projected to provide two billion doses per year, at best only around 20% of global vaccine needs. COVAX could then offer a generous payment per immunization to pharma companies, featuring a declining premium for early delivery and payment adjustment with regard to quality (for example, how much protection an immunization affords, for how long, against which variants).

Such a pay for performance scheme would give firms with approved vaccines a financial incentive to ramp up production for fast delivery. To this end, they would, competing with one another, seek to engage and expand available manufacturing capacity while fully supporting contracted manufacturers. Supplies produced would be directed to where they can be most effective in suppressing the pandemic, without consideration for the poverty or affluence of the various populations.

Even if such an initiative were to raise cost by a factor of 10—from the $6 billion COVAX currently has to $60 billion— this would still be a tiny fraction of the economic harm this pandemic has caused and might yet cause in the future. The US alone has just allocated $1.9 trillion to avert some of the economic damage it has sustained from covid-19. An extra $54 billion, spread over many countries, is a small price to pay for bringing this pandemic under control at least two years sooner.

A key lesson of covid-19 is that the great benefits the pharmaceutical sector has to offer must fully include the world’s poorest people. This is a firm command of justice and, at least with communicable diseases, an imperative of prudence as well. We must place advanced pharmaceuticals within reach of poor communities and must ensure that the diseases concentrated among them are lucrative targets of pharmaceutical research and development.

To achieve global pharmaceutical equity in a sustainable way, we should create a complementary reward mechanism, additional to patent monopolies, that is designed to pay for better health outcomes. This mechanism can be but is not limited to the Health Impact Fund (a system one of us, TP, co-founded), which gives innovators the option to have any of their new pharmaceuticals rewarded according to the health gains achieved with it, on condition that it is sold at the variable cost of supplying it. Here “health gains” would be understood to cover not merely the therapeutic improvements that users experience, but also wider societal benefits, such as reduced infections among non-users.

Moreover, pharmaceutical companies would be incentivized to effectively oversee and coordinate the delivery of therapeutics to end users, whether that be through national health systems or public-private partnerships. As an immediate example, such a system could effectively benefit latecomers to vaccine rollouts, given that there is an immense market potential remaining in low and middle income countries, which is largely uninteresting to early comers like Moderna and Pfizer whose supply has already been sold to high income countries.

With the Health Impact Fund in place, the global pharmaceutical sector would be much better prepared to respond effectively to future pandemics, and would have been for past ones too (we wrote about this in the context of the Ebola and Zika viruses previously). Furthermore, it would be able to profitably unleash its skills upon the enormously harmful diseases associated with poverty, including the 20 WHO listed neglected tropical diseases, which affect over a billion people, as well as tuberculosis, malaria, hepatitis, and pneumonia, which together kill millions of people each year. We can and must tackle these diseases. The investment for doing so would pay for itself many times over.

Abraar Karan is an internal medicine physician at the Brigham and Women’s Hospital/Harvard Medical School and a columnist at The BMJ. He previously worked on the covid-19 response in Massachusetts state. The views expressed here are his own and do not represent those of his employers. Twitter @AbraarKaran

Competing interests: none declared.

Thomas Pogge is a professor and director of the Global Justice Program at Yale University. He co-founded Incentives for Global Health, a team effort toward creating the Health Impact Fund. Twitter @ThomasPogge

Competing interests: nothing further to declare.