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But the combination of national self-interest and pressure for the pharmaceutical industry to turn a profit is already triggering a geopolitical bust up over who actually gets access to the vaccine first. It’s a reminder that the spoils of drug research aren’t equally divided. The system is ripe for a rethink.
Already, the French government is hauling its national drug-making champion Sanofi (PA:SASY) over hot coals after the company suggested that the U.S. — and not Europe — would be first in line to get access to its proposed vaccine if it works out. The reason, according to Chief Executive Officer Paul Hudson (NYSE:HUD), is that the U.S. was first to contribute funding to the project. “Unacceptable,” came the reply from French Junior Economy Minister Agnes Pannier-Runacher. The head of Sanofi’s French business quickly sought to defuse the tension by promising that an effective vaccine would be “available to all.” But this debate isn’t going away. French President Emmanuel Macron plans to meet with Sanofi officials next week to discuss the issue. Elsewhere, AstraZeneca (NYSE:AZN) Plc is prioritizing the U.K. in its own vaccine project.
On the surface, Sanofi’s stance seems logical enough. The cost of researching a vaccine is between $500 million and $1 billion, according to a 2015 paper by physician and consultant Stanley Plotkin. If the U.S. taxpayer is willing to foot the bill, shouldn’t they reap some of the reward? Drugmakers know this is a vaccine that will have to be sold in bulk, and not at an eye-wateringly expensive price — Johnson & Johnson, for example, says its own plan is to produce the one it’s working on at cost, or about 10 euros ($10.81). Given some kind of prioritization is going to be necessary as production ramps up to millions of doses, it may as well start with those that funded the project, according to Sam Fazeli, senior pharmaceutical analyst at Bloomberg Intelligence.
But Paris has a point, too. Sanofi’s vaccine is not produced in a vacuum. The company benefits from European shareholders, employees, factories — and tax credits. It’s worth noting that research and development funding in France is the second-most generous as a share of GDP among countries tracked by the Organization for Economic Cooperation and Development, at 0.4%. (The U.S. comes in tenth.) That’s largely thanks to tax-incentive schemes awarded to companies like Sanofi to the tune of 150 million euros every year. French taxpayers might wonder why that shouldn’t be taken into account.
Simply rapping Sanofi on the knuckles isn’t going to be a durable solution, though. The risk is that, if countries take turns in shoving their way to the front of the line, the result will be a kind of vaccine trade war along national lines. That would make a mockery of the World Health Organization’s plea to view vaccines as a common public good, and would also echo the damaging scramble for masks and medical equipment that set European countries against each other. If France were to get hold of a vaccine first, would Italy or Greece get the same access?
It would be more productive if European countries backed up their indignation by working together more to take on the financial risk of vaccines. Then they could divide the spoils more equally. There is no reason why the European Union’s 27 countries couldn’t come up with their own version of the U.S.’s Biomedical Advanced Research and Development Authority and match the Trump administration’s deep pockets. The EU’s recent $8 billion vaccine fundraising is one good example, and its joint procurement vehicle for medical equipment and vaccines another.
The broader the cooperation, the more chance countries have to level the playing field with big pharmaceutical companies. Drugmakers have for decades focused on lucrative new treatments protected by patents, often putting them out of reach of people in developing countries. New organizations are fighting this: The United Nations-backed Medicine Patent Pool (NASDAQ:POOL), for example, has licensed patented HIV drugs for manufacture by generics companies at lower cost. The Coalition for Epidemic Preparedness Innovations has also brought together countries to fund vaccine research.
The pandemic has revealed a lot of problems in the pharmaceutical supply chain, from a dependence on emerging markets for vital drug supplies to a lack of interest in potentially unprofitable vaccine research. If the opportunity here is to ensure life-saving drugs get the funding they need, taxpayers around the world — not just in France or the U.S. — should also get better access to them.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.
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