This week I came across an interesting, but controversial, write-up by Joseph Stiglitz and another author, Lori Wallach titled “Will Corporate Greed Prolong the Pandemic?” The first author, Joseph Stiglitz is a familiar name; a former chief economist of the World Bank (1997-2000), a Nobel laureate in economics and also a Professor at Columbia University. [...]

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Everyone likes the fruit, but…


The vaccination campaign in progress. Pic by M.A. Pushpa Kumara

This week I came across an interesting, but controversial, write-up by Joseph Stiglitz and another author, Lori Wallach titled “Will Corporate Greed Prolong the Pandemic?” The first author, Joseph Stiglitz is a familiar name; a former chief economist of the World Bank (1997-2000), a Nobel laureate in economics and also a Professor at Columbia University. According to the two authors, the “profit greediness” of the pharmaceutical companies doesn’t allow the COVID-19 pandemic to come to an end soon!

Apparently, the article has been subject to many criticisms too; some of the critiques have expressed that it is “unbelievable” that Stiglitz authored such an article and, reported that the article even contains “false” information.

Divided world

Well, it is not my intention to argue for either side of the above; rather, I want to highlight the “economics” of both sides so that we may be able to make a fair judgement.

First, I want to recall two articles that I wrote in this column in the past on the topics related to COVID-19 pandemic; today’s discussion is essentially related to them too: The first article was under the title “Beneficiaries of COVID-19”, published on May 17, 2020. By this time, the world had not invented a vaccine. However, many multinational pharmaceutical companies of which most of them were from the US, with the support of the governments and other organisations with research funds, had initiated research activity to invent a vaccine. And these companies which would also receive the “patent rights” will eventually enjoy the monopoly profits out of the global pandemic.

The second article was under the title “First the rich, then the poor”, published on January 10, 2021. By this time, about 12 vaccines had been produced by some of the pharmaceutical companies which had spent on inventing them. And there was a big rush from all over the world to buy them, while the rich countries wanted to buy more than their need. The way these vaccines were purchased by different countries in the world, it was clear that “income inequality” in the world is going to play a big role in its distribution among different countries as well as different people; it would be the rich who gets it first and then the poor.

Profits before lives

I believe that the whole world is eagerly waiting to see the end of the COVID-19 pandemic as soon as possible. The irony is that, however, it would not happen until and unless everyone is vaccinated – that is the 7.8 billion world population. In other words, the greater the number of people gets vaccinated, the faster will be the end of the pandemic. And for anybody to feel safe, “everybody” should get it and nobody should be left behind!

There is someone, who is against it happening – pharmaceutical companies, which have the vaccines!

As Stiglitz and Wallach argue in their paper, it is the pharmaceutical companies which prevent it happening. Why? Profit greediness, according to Stiglitz and Wallach. They invented the vaccines and obtained the patent rights to protect the monopoly powers of producing and supplying the vaccines to the market. If anyone finds the secret vaccine formula and starts producing and marketing, then that company is liable for infringing the exclusive rights of the patent right holder. The intellectual property law provides protection to patent rights, copyrights, trademarks, designs, and other.

If not for the profit greediness, these companies would have disclosed the vaccine formula, allowing any country to produce it freely. Then within a few weeks’ time the COVID vaccines would have been in each and every pharmacy in the world for sale like a paracetamol drug! Well; I am not sure whether every country has the resources and capacity to start and administer production of vaccines even if they have the formula. And the validation of the new vaccine production sites might also take months, if not years.

If it is not a possibility, then someone could still argue that the pharmaceutical companies can produce as much vaccines as the world needs and distributes it among all the countries. Even if the pharmaceutical companies volunteer to do so, I am not sure whether the inputs for an exponential increase in vaccine production can be supplied in such magnitude.

If we don’t have any of the above obstacles, obviously, the COVID-19 pandemic will be over within this year, but as of now it has been predicted to be stretching at least until 2023. After all, everyone agrees on the point that the concern for humanity is far superior to the profit motive! I must also say that some of the pharmaceutical companies have made commitments to supply the vaccine at the cost of production, without focusing too much on profits.

Roots of the fruits

Let’s look at the reality: Western medicine is the fruit, which has well grown roots – a global business in which the multinational companies have made big investments to produce drugs, vaccines, equipment, and other needs for the health sector. In order to carry out this business, they also must employ highly-skilled professionals – scientists, engineers, doctors, accountants, managers and others alike. They also invest constantly and competitively in research and development (R&D) to develop new drugs, new vaccines, new equipment and new machines.

If not for all that, the world would not have enjoyed the benefit of western medicine as we see it today. The goal of the pharmaceutical companies is clear – to maintain a bigger market for a longer period in order to make profits. Patent rights provide an assurance that the company has an assured market to recover its R&D expenditure, cost of production, and to make profits for a given period of time.

If the pharmaceutical companies had to commit that they should reveal the vaccine formula and will not receive the patent right, as business entities they would not have been committed to bring out vaccines for the pandemic. As long as they are profit-making business entities, they focus on market and profit, not the pandemic issue. By earning profits, they would invest further on R&D, when the next health issue or the next pandemic hits the world.

Yesterday’s profits were necessary for today’s medicines, while today’s profits are necessary for tomorrow’s medicines! It’s a growth process without which it is not possible to bear fruits. Because of this reason, it is not for anybody or any country to bring out fruits overnight without planting the tree.

It is a bluntly stated truth that the “profit greediness” of the pharmaceutical companies has enabled the production of COVID-19 vaccines. In other words, if we take “profit greediness” away from the equation, there won’t be any vaccines in the world.

Vaccine rush

That’s not all, however; there have been mixed developments on the part of the governments in many different countries. Everybody wanted the vaccines. But it has so far been mostly available in rich countries, while the poor countries are struggling to get a little.

As the BBC reported this week, the rich countries have been speeding up their vaccination programmes with 67 per cent of the population in the UK and 56 per cent of the population in the US already receiving the first dose of the vaccine. Some of the vaccine producing countries, including the US and the UK have banned or restricted the export of vaccines and the raw material required to produce it, which came under the criticisms of France and India. By the end of last month, in fact, it was India which had been the largest exporter of vaccines, followed by Germany.

India had argued for surrendering the patent rights so that its world-wide production would go up and the cost would go down. In the meantime, the US decided to grant a temporary waiver of the patent right, which means that its production by someone else will not be an infringement of the patent right. These new developments are likely to provide fresh breathing space for the COVID-hit world in the coming months.

(The writer is a Professor of Economics at the University of Colombo and can be reached at and follow on Twitter @SirimalAshoka).


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