IP over humanity

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The pandemic has forced certain things into focus. As lives paused and options dwindled, long obscured patterns became clear. Business leaders taking egregious salaries were told their efforts were non-essential, while many minimum wage workers were deemed essential. The latter group could either brave the circumstances or forego their income. That choice came at a time when millions of families with children were reporting challenges with feeding themselves, and there wasn’t a single state “in which a person working full time for minimum wage (could) afford a one-bedroom apartment at the fair-market rent.”

It’s in these circumstances where I’ve started to notice some pre-celebrations for the end of the pandemic. But if you’re expecting to be evicted as the virus recedes, the light you see at the end of the tunnel is a train. 

This moment has long been predictable. Milton Friedman gave birth to a movement that excused greed by claiming enlightened self-interest. His perverse logic told us that we would somehow make everyone better off by taking as much as possible. It fueled growth at all costs putting us on the path of climate change. It taught the education system to confer $1.7 trillion in student loans upon millions of us. It infected a medical system that bankrupted 42% of cancer patients within two years of diagnosis. It squeezed over 40% of American adults until they couldn't cover a $400 emergency.

A new article in Barron’s questions the veracity of the last claim by calling out the fact that some people had enough cash on hand to cover the emergency expense, but that they wouldn’t if you netted out their credit card debt. I’m going to suggest that the person writing for a finance pub understood that while they could pay the emergency expense, doing so would put them in problematic circumstances.

In each of these extractive examples, people in positions of power used their authority to enrich themselves to society’s detriment. Now the financial industry is buying up trailer parks and jacking up rents. What choice do you have but to pay when you’ve parked your house and it can cost $10,000 to move it?

Immense power now sits in the hands of pharmaceutical firms with approved vaccines. They’re telling billions of human beings to wait their turn while vaccines developed with public funding are employed to maximize profits. In doing so, the lie is made plain.

In April 2020, Oxford University pledged to donate its vaccine, but the Bill & Melinda Gates Foundation intervened, and the university then signed a deal that gave Astrazeneca sole rights to produce the vaccine without guaranteeing low prices. Bill Gates is on record stating that free intellectual property would not “have improved anything related to this pandemic.”

While he is free to believe that the system that long made him the world’s wealthiest human being benefitted vaccine development, the notion that it is now maximizing the availability of doses is patently false. As economist Dean Baker notes, “because one incredibly rich person is opposed to having a corrupt, inefficient, and antiquated system reformed, it will not be reformed.“ In discussing the circumstances, Michael Barbaro looked at Gates’ efforts to develop a fairer vaccine distribution system, and came away asking “whether the entire system, top to bottom, needs to change.”

Gates has done much to facilitate the development and production of vaccines, but intellectual property is his personal third rail. Breaking the thing that gave him obscene wealth, only temporarily and only for pandemic medicines, was something he chose to intervene against. His maneuver delayed the arrival of vaccines for people throughout the developing world, leaving them at risk for far longer than they otherwise might have. The maneuver was unconscionable. I only hope he soon realizes the mistake and puts his weight behind ongoing efforts to drop IP protection during the pandemic.

Friedman shared Gates’ concern. As he put it, an inventor would “find it difficult or impossible to collect a payment for the contribution his invention makes to output.” We’re told that if we waived intellectual property rights, private firms would no longer invest in the development of vaccines. I see three problems with this argument.

• The polio vaccines were given to humanity to eradicate a disease. In doing so, a few sacrificed the potential for enormous fortunes, while humanity benefited enormously. While firms aren’t currently following in Salk and Sabin’s footsteps, it doesn’t seem that the pharmaceutical industry has wilted since their time. In 2019, medicine pulled in a half-trillion dollars in the US alone. That was over a 250% increase above the industry’s revenue in 2002.

• Public funding covered much of the research costs for these vaccines. “All in all, U.S. agencies committed about $2.5 billion to help develop Moderna’s vaccine and buy doses.” This point may feel a little contradictory, but the first point was about the industry’s growth in normal times. This one is about investment in the time of a pandemic. Pharmaceutical firms behaved like the industries mentioned above, taking full advantage of their power. With our backs against the wall, the US government picked up the tab, and the firms have so far managed to retain the IP for their publicly-funded vaccines.

• Those who profit from pharmaceuticals are human, and therefore at risk of contracting diseases. They’ll gladly take home outsize profits if allowed, but would they really sit out a pandemic if they were not allowed extreme returns? The thought seems absurd to me, but maybe I’m naive.

Given all this, I can’t see any way to square the arguments against waiving IP in our circumstances. Even if it did reduce future investments from pharmaceutical firms, we’d pick up the tab like we’re doing now.

Last week we had the chance to waive IP protections for pandemic-related medicines, but a handful of wealthy nations — including the US, EU, and the UK— stood against the proposal that was sponsored by 57 countries. Australia, Canada, and Chile requested evidence that the IP waiver would deliver additional vaccine manufacturing and help fill the need. But as Burcu Kilic, research director for access to medicines at Public Citizen, noted, “What they are hoping is they can discuss and drag this issue out and that things will be OK by the summer,” before adding that, “COVID-19 is not going anywhere.” Many lives will be lost thanks to this delay. The leaders of both groups of nations (the blockers and the delayers) should be held accountable for their actions.

It’s also worth considering the economic outcomes for the people first and economy-first approaches to the pandemic. In the US, we’re actively choosing to preference the economy over people. We’re told that doing otherwise would cause more harm than the virus. But outcomes have told us the opposite. Countries that chose people-centered approaches to the pandemic, like China and Vietnam, are doing better than the US with their economies and far better in terms of human lives. If we were truly attempting to save the economy from short-term harm, we did a terrible job of it. 

How is it that we’re continuing down this path when results are so clear? The disparate outcomes beg the question of whether the brief lockdown the US endured in Spring 2020 may have represented an existential threat to Friedman’s economy. How long do you think the system could have continued to function with the contradictions between essential and non-essential workers highlighted?

Given the divergent outcomes of the people-centered and economy-centered approaches, it’s hard to view the US’ continued choice of preferencing the economy as being done in good faith. Instead, it seems ever more likely that the goal is not to save the economy in the short-term for the benefit of the people as a whole, but rather to save Friedman’s monster from the pandemic’s microscope.

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