On April 24, Elizabeth de Carvalhaes, executive president of the Brazilian pharmaceutical company trade group Interfarma, said out loud what the drug industry had up until then avoided uttering in public. In an interview with Folha de São Paulo, the most widely-read newspaper in Brazil, de Carvalhaes declared that if the South American country were to green-light compulsory licensing to expand access to Covid-19 vaccines, pharmaceutical companies might respond by withholding supply of the vaccines. “This is not retaliation,” she proclaimed. “The demand is much bigger than the supply, and they may find it more advantageous from an economic point of view to sell to countries that do not break patents.”
This was not an idle threat. Interfarma represents Pfizer, Gilead, AstraZeneca and other major pharmaceutical companies. The trade group’s spokesperson made the remarks at a time when Brazil was pushed to the point of desperation: The same day the article was published, more than 71,000 new Covid-19 cases were reported in Brazil. The country’s outbreak has been so severe and uncontrolled that it’s spawned the Gamma variant, which has since spread around the world.
Some countries hope to find relief in compulsory licensing, when a government allows the production of a vaccine without the consent of a patent owner, a move floated in Brazil as a way to urgently expand vaccine access while the pandemic rages. (A compulsory licensing bill has passed Brazil’s Senate but has not yet officially been signed into law.)
Interfarma’s implied threat against such a measure underscores a dynamic that public health advocates say is particularly pernicious during a pandemic: Countries that run afoul of drug companies by supporting measures to override patents risk facing the wrath of an industry that has the power to decide whether a huge swath of their population lives or dies.
Domestic efforts to start compulsory licensing aren’t the only way patents are being challenged: Global South countries are also leading an effort at the World Trade Organization (WTO) to suspend key international patent rules to enable the mass production of cheaper, generic vaccines. Public health advocates worry that government officials face a climate of intimidation against challenging patent rules domestically or globally — a position the pharmaceutical industry has made it clear it doesn’t like. While there is no proof of clear and overt threats made by the industry, other than the one said by Interfarma’s leader, advocates note that it’s difficult to know what’s said behind closed doors. And either way, they argue, the threat is implied, in a global environment where countries negotiate directly with powerful pharmaceutical companies for vaccine contracts.
“The company can stop supply, there are no consequences,” said Felipe Carvalho, a campaigner for Médecins Sans Frontières — Brazil, a humanitarian medical organization. “There are many protections for the companies. My thinking is that these are perfect conditions for companies to make threats against governments.”
Peter Maybarduk is the director of Public Citizen’s access to medicines and knowledge economy group, which speaks out against high pharmaceutical prices. He told In These Times, “Countries exploring compulsory licensing are looking for ways to increase supply to bring as much capacity as they can and as many products as they can to market, most especially during a pandemic. We shouldn’t have monopoly barriers standing in the way of access to vaccines that can end the pandemic for everyone, everywhere.”
Maybarduk worries that implied threats could have an impact, even if pharmaceutical companies have no intention of following through on them. “It’s unfortunately not entirely uncommon for the pharmaceutical industry and more aggressive trade groups to make implied threats,” he said. “It’s also unlikely to occur, because the purchase of existing vaccines is not directly related to patent policy. The market is available to the companies either way: Brazil needs vaccines. It’s a scare tactic, and one Brazil should not give much credence to. ”
Brazil’s compulsory licensing bill may very well pass into law. But advocates say any intimidation is bad, even if it’s not ultimately successful. Besides, there are signs it is having an impact when it comes to international patent rules.
Muted support for global patent waiver
At a May 6 hearing at the Senate Commission on Foreign Affairs, Brazil’s Minister of Foreign Affairs, Carlos Alberto França, expressed reluctance to support an effort to suspend patent rules under the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Proposed by South Africa and India in 2020, the measure has the backing of more than 100 countries, but is fiercely opposed by the pharmaceutical industry. França was responding to the Biden administration’s May 5 declaration that it would no longer block this proposal — an unexpected reversal that now leaves Germany as the most powerful obstacle to the measure.
”We are still analyzing the North American position. Tomorrow, I already have a videoconference scheduled with Ambassador Katherine Tai,” França told the Senators, referring to the U.S. Trade Representative.
França went on to state that it was unclear whether the new U.S. position would create global consensus, and whether a TRIPS waiver would actually secure more vaccines. “Our impression is that most countries will continue to depend on the cooperation of pharmaceutical companies,” he said. “I think that Brazil cannot stay away from investors and exporters of vaccines, nor affect the negotiation with the one we have here with Astrazeneca and other producers,” concluded França.
Brazil’s government has backed down from its hard-line opposition to the TRIPS waiver, recently warming up to negotiations, but it’s still holding back from supporting the proposal. In a June 14 release, Amnesty International said that while the right-wing government of Brazil’s Jair Bolsonaro has espoused “certain willingness to support negotiations at the WTO,” it criticized another government statement on the matter as “ambiguous and imprecise.”
This is in keeping with trends across Latin America, where Covid-19 infection rates are some of the worst in the world. In most of the region, at least some government officials have made statements supporting the temporary suspension of patents for Covid-19 vaccines, although just Bolivia and Venezuela formally sponsored the proposal within the WTO. Colombia and Chile have remained reluctant to support the waiver, and while Mexico gave conflicting signals early on, President Andrés Manuel López Obrador called for the suspension of patents in a speech in May. Argentina did not sponsor the proposal, but President Alberto Fernández has called for the temporary suspension of key patent rules under TRIPS.
Observers say the response from the region overall has been muted. Carvalho noted that “historically, these countries have been quite active in supporting this kind of collectivization of intellectual property. At the same time, the region is highly affected by the pandemic. The Americas are having a terrible time.” The World Health Organization warned last month that 9 out of the 10 countries recently suffering the highest number of Covid deaths proportionate to their populations are in Latin America and the Caribbean, where vaccination rates, for the most part, are low.
A June 28 article on Deutsche Welle, one of the few English-language articles to give a broad overview of Latin America’s hesitancy to support the TRIPS waiver, identifies concerns about angering pharmaceutical companies as a key reason. “Desperate to speed up vaccinations, governments have been forced to strike bilateral deals with vaccine makers such as Pfizer and J&J,” Ashutosh Pandey writes, citing the observations of public health experts. “They worry that supporting a patent waiver could potentially jeopardize their agreements with pharma companies, which have been zealously defending their patents.”
Patricia Campos, Latin America and Caribbean bureau chief for the AIDS Health Foundation, a global health nonprofit based in Los Angeles, agrees that fear of industry retaliation likely explains some Latin American countries’ reluctance to support the TRIPS waiver. “I think yes, that’s a big part,” she told In These Times.
She added that many Latin American countries “have segmented health systems — for example, social security, public security, etc. — that do not have efficient purchasing mechanisms, and most of the drugs they purchase, especially those with high specialty or chronic diseases, are patent drugs, and a lesser proportion are generic. Faced with such a scenario, confronting the pharmaceutical companies would mean running a high risk of going through a shortage of medicines like the one Mexico is currently experiencing.”
“In 2019,” she explained, “López Obrador launched his ‘war against corruption’ against the monopolies of distributors and pharmaceutical companies.” In retaliation, she said, some pharmaceutical companies are refusing to bid to sell key drugs to the country, leading to tragic shortages of potentially life-saving medicines before the Covid pandemic began.
A history of retaliation
This would not be the first time the pharmaceutical industry has retaliated against countries. In 2007, the U.S.-based Abbott Laboratories refused to supply Thailand with a new HIV treatment in response to the country’s decision to override patent rules on three drugs the company produces, including a cheaper, generic version of the HIV treatment Kaletra. Abbott deliberately withheld a new heat-stable version of Kaletra, which is best suited for countries with hot, muggy climates, and the company was explicit about its punitive intent. “This is a consequence, directly, of the Thai government’s decision not to support innovation by breaking the patents of numerous medicines,” said Dirk van Eeden, director for Abbott’s public affairs, according to a 2007 article in Financial Times. (A few weeks later, Abbott reversed its decisions following global outcry.)
But one can look to more recent history to find other forms of industry retaliation. As journalist Lee Fang reported in March, pharmaceutical industry trade groups pressured the Biden administration to impose sanctions on Hungary, Chile and Colombia for their efforts to override patent rules in a bid to improve access to Covid-19 vaccines. This kind of retaliation is not new or unique to the Covid-19 pandemic. Pharmaceutical companies and American lawmakers have threatened India with sanctions for its production of a cheaper version of a cancer drug, and threatened Malaysia with sanctions for its use of a cheaper version of a Hepatitis C drug. Such actions can have a chilling effect. “As a result of these and other instances, countries have, understandably, been reluctant to develop more flexible domestic [compulsory licensing] policies and are certainly out of practice in using them,” writes Rachel Thrasher, research fellow at the Global Development Policy Center.
Pharmaceutical companies and trade groups steer clear of public threats to retaliate for TRIPS waiver support. But industry trade groups are warning that if patent rules are suspended, companies may decide not to pursue research and development for vaccines in the future — a wholly different kind of threat. (In reality, publicly-funded research has been essential to the production of Covid-19 vaccines.) Meanwhile, pharmaceutical companies have other avenues for exerting pressure. Madlen Davies, Rosa Furneaux, Jill Langlois and Iván Ruiz reported for the Bureau of Investigative Journalism in February that “Pfizer has been accused of ‘bullying’ Latin American governments in Covid vaccine negotiations and has asked some countries to put up sovereign assets, such as embassy buildings and military bases, as a guarantee against the cost of any future legal cases.”
It’s difficult to know exactly what discussions pharmaceutical companies are having with government officials in private, and contracts are largely shrouded in secrecy, despite the fact that they involve expenditure of public money on vaccines developed with public funding. Critics say that any signs at all of industry threats, or government fears of retaliation, likely indicate a far broader problem.
According to Asia Russell, executive director of Health Gap, a global health advocacy organization, there is a fundamental injustice in giving the private, for-profit pharmaceutical industry power over vaccine production and supply, an asymmetry that’s even more pronounced when companies are negotiating with countries that have little geopolitical power, or are simply desperate. “It’s a cartel that kills people,” said Russell. “We’re not talking about the tobacco industry: This is the pharmaceutical industry.”
Ria Modak contributed research to this article.
Maurizio Guerrero is a journalist based in New York City. He covers migration, social justice movements and Latin America.