Beyond COvid: The Digest

The political economy of a vaccine

November 18, 2020
  • Our (meaty!) In Focus section this week looks at the political economy issues surrounding Covid-19 vaccines.
  • ~~Topics include vaccine hoarding, intellectual property barriers to a "people's vaccine", the role of public innovation and more.
  • Read our In Brief and Reflections sections for the latest research and analysis around economic recovery and reform Beyond Covid.

In Focus: The political economy of a vaccine

  • A light appears. This week saw drugmaker Moderna announce that its Covid-19 vaccine was 94.5% effective in early clinical trials, following similarly successful results from Pfizer and the Russian Sputnik V vaccine last week. A representative from the Department of Health and Social Care has said that the results from the Oxford University/AstraZeneca vaccine trials are “imminent”, with a number of other vaccines in ‘Phase 3’ of trials.
  • The challenge of universal coverage. Assuming these early signs of success are borne out by the longer-term evidence, our ability to beat Covid-19 hinges on an effective global distribution that makes the vaccine available to all. Aside from the obvious ethical imperative for doing so, WHO Director General Dr Tedros Adhanom Ghebreyesus reminds us that “none of us will be safe until everyone is safe”.
  • ~~Without eradication, mutation. It is in everyone’s interest to bring the pandemic to a definite close as soon as possible, as SAGE member Dr Jeremy Farrar argues. Even if rich countries like the UK managed to achieve ‘herd immunity’ (NHS explainer), the continued prevalence of the virus in poorer countries would leave room for the virus to mutate in a way that complicates vaccination efforts and threatens future waves of disease.
  • Vaccine nationalism. Early evidence suggests that these vaccines will not be equitably distributed; Pfizer has already sold 82% of its annual vaccine production capacity to rich countries that represent just 14% of the world’s population. YouGov polling for the Wellcome Trust of the UK and other rich countries found overwhelming public opposition to hoarding and support for a more equitable global distribution of the vaccine.
  • ~~Hoarding would lead to avoidable deaths. It is difficult to put a number on the impact of future vaccine hoarding, but Gates Foundation-backed scientists have estimated how it would have impacted the spread of the virus had a vaccine been available in March 2020. They estimate that an equitable global distribution could have prevented 61% of deaths, compared to just 33% of deaths in the scenario where rich countries co-opted the vaccine.
  • Patents present barriers to widening access. Rapid, widespread delivery of Covid-19 vaccines obviously presents a huge logistical challenge, even for industrialised countries like the UK. Even before the issue of delivery, however, the danger is that universal access to the vaccine will be undermined by (a) prohibitively high pricing and (b) a lack of manufacturing capacity - both a function of the intellectual property arrangements covering pharmaceutical companies. (See explainer and campaign from Doctors Without Borders.)
  • ~~Learning from HIV/AIDS. Winnie Byanyima, Executive Director of UNAIDS, has underlined the need for this vaccine to be a “people’s vaccine” and for pharmaceutical companies to share their technology so that the vaccine can be produced as widely and as cheaply as possible. (VIDEO)
  • ~~A letter from serving and former heads of state and other world leaders in May warned of the dangers of vaccine hoarding and argued: “Now is not the time… to leave this massive and moral task to market forces... Access to vaccines and treatments as global public goods are in the interests of all humanity.” (FT)
  • ~~Blackrock and other major asset managers similarly demanded sharing of research and a hold on patent enforcements earlier this year.
  • TRIPS. Pharma companies have been called on to share their intellectual property through the WHO’s “Covid-19 Technology Access Pool”. In the absence of such voluntary action, India and South Africa have made a proposal to the World Trade Organisation to “suspend implementation, application and enforcement of the relevant provisions of the TRIPS Agreement [governing trade-related aspects of IP rights] in relation to prevention, containment, and treatment of COVID-19”. This has been supported by a number of UN Human Rights Experts. Nick Dearden of Global Justice Now has criticised the British government for “on the one hand… helping limit supply of these drugs by insisting on global patent rules... on the other... buying up as much of that limited supply as it can”.
  • Would this inhibit R&D? In response to the good vaccine news, some argue it shows that the “free market is close to fixing the crisis”, overcoming the constraints faced by governments. It is particularly relevant that Pfizer was the first to publish its early stage results, having refused to commit to not making a profit from the vaccine, unlike other pharma companies, and having foregone public funding through the US Operation Warp Speed.
  • ~~Public innovation. Pfizer’s and other companies’ development of the vaccine is reliant on technologies developed through publicly funded innovation. Professor Mariana Mazzucato wrote in March on the problem of granting “exclusivity to pharmaceutical companies to conduct later stage drug development on publicly funded inventions, without requiring that these drugs be widely affordable or accessible”.
  • ~~Transparency. Many companies (e.g. Moderna) have received $billions of public money directly for later stage Covid-19 drug development. Doctors Without Borders have written on the need for much greater transparency in these public-private deals.
  • ~~Pricing. There is a growing body of evidence to suggest that pricing in pharmaceutical companies does not reflect the need to fund R&D, but rather increased financialisation and profiteering, using patents to free-ride on public innovations.
  • ~~Alternative approach. The Boston Review essay “The Economic Case for a People’s Vaccine” details an alternative approach to research incentives and pricing that would allow for universal access.
  • No going back. It is tempting to see the vaccine as the route back to normalcy, but even if we secure universal access to Covid-19 treatment, environmental breakdown will continue to make infectious disease outbreaks more frequent. This is why many groups argue that it is crucial that our economic recovery from Covid-19 is used to put us on a greener path.
  • ~~Pharma reform. We also cannot allow simplistic narratives around private-sector brilliance to obscure the need for reform of an industry that relies on public sector innovation. Earlier this year, we spoke to former Goldman Sachs Chairman Lord O’Neill, who as UK superbug tsar previously proposed “nationalised drug companies” to deal with chronic underinvestment in antibiotics and vaccines.
Beyond Covid spoke to Lord Jim O'Neill, former Chairman of Goldman Sachs Asset Management and "superbug tsar", and Global Justice Now's Heidi Chow on the political economy of vaccines and Pharma earlier this year. Watch on YouTube.

In brief

  • UK green recovery: The Prime Minister announced his 10-point green recovery plan yesterday. The Guardian has an explainer and analysis of the key policy areas. NEF’s environment lead Chaitanya Kumar has welcomed the £12bn announcement but highlighted that this is less than half of French green recovery spending.
  • ~~Detailed analysis: Carbon Brief Policy Editor has a megathread analysing the announcements here, praising them as a move in the right direction but arguing they are not enough to meet net zero.
  • ~~IPPR laid out their proposals for how the Government should use its 10-point plan in the run-up to COP26 last week.
  • Tax rises? A report from the Resolution Foundation argues that future fiscal consolidation should rely on tax rises, and not spending cuts. Proposals include a health and social care levy, improved wealth taxation, environmental taxes and corporate windfall taxes (with cuts to NI to protect low-income households).
  • ~~Not “paying for the crisis”. The report rejects the framing that these taxes are needed to pay for Covid-19 measures, but rather to meet longer-term demands on public spending from demographic and other pressures.
  • ~~Why consolidation? NEF Chief Economist Alfie Stirling has questioned the logic behind the Resolution Foundation’s estimate of the need for fiscal consolidation (thread here).
  • Taxing income from wealth. The Office for Tax Simplification’s review into capital gains tax (CGT) called for closer equalisation of income and capital gains taxes.
  • ~~Criticism. The FT editorial board argued “the government will not earn as much as suggested from the reforms”, as “many investors will restructure their holdings before these proposals are implemented”.
  • ~~Rebuttal. Robert Palmer, Director of Tax Justice UK responded, citing research showing the “revenue maximising rate from capital gains tax is 38%-47%” in the US and suggesting that equalising CGT with income taxes will raise money through other behavioural changes.
  • Greening the central banks. NEF and Positive Money convened a group of economists in a letter to the chancellor and the governor of the Bank of England, calling for urgent changes to the Bank’s mandate to help the UK hit its net-zero target. (FT coverage here)
  • ~~Climate Risk Assessments. IPPR’s Carsten Jung and Positive Money’s Simon Youel were quoted in the Financial Times on the new climate disclosure rules for large businesses and financial institutions, arguing the new reporting rules are only a ‘baby step’ and at risk of becoming a tick-box exercise.
  • Black Lives Matter. The parliamentary Joint Committee on Human Rights Committee has produced its damning Black people, racism and human rights report. (See race equality think tank the Runnymede Trust's response here.)
  • Corruption. The National Audit Office has criticised the lack of transparency and potential conflicts of interest surrounding the awarding of £17bn of Covid-related contracts, while the Runnymede Trust and Good Law project are taking the Government to court over its hiring process for Baroness Dido Harding as head of Test and Trace.
  • Local Green New Deal. Common Wealth released an interactive project to visualise how a Green New Deal would remodel Glasgow.
  • ~~Regional Inequality. The Northern Health Science Alliance (NHSA) published a report exploring the impact of the Covid-19 pandemic on health and productivity in the ‘Northern Powerhouse’.
  • Reset Inquiry. The APPG on the Green New Deal released "How to Reset: policies to deliver on the public desire for a fairer, greener Britain after Covid".
  • Public Wealth Funds. UCL’s Institute for Innovation and Public Purpose (IIPP) publishes a policy briefing on the role of public wealth funds in supporting sustainable economic recovery and sustainable growth. (FT coverage here)
  • Just Transition. Ben Tippet wrote for the Transnational Institute on the costs of Covid-19 and outlines ten progressive proposals for how to pay for recovery and a just transition.


  • Test, Track and Trace. Miriam Brett wrote for Novara on the failures of the test, track and trace system, making the case for a publicly managed system as part of a comprehensive zero-Covid strategy, which ‘will be key to breaking the cycle of lockdowns’.
  • Learning from Mistakes. A group of international scientists, including members of Independent-SAGE, published an article in the Lancet, outlining 7 recommendations for a sustainable strategy for COVID-19.
  • London Climate Action Week. LCAW is organising a wide-range of online events to bring together world leading climate professionals to help accelerate systemic change.
  • ~~COP26. The ECIU’s Steve Herz outlined strategies to advance climate action during the run up to COP26.
  • ~~UK international emissions pledge. Richard Black, Director of the Energy and Climate Intelligence Unit (ECIU), wrote on the issues behind the UK’s Nationally Determined Contribution - i.e. the UK’s emissions reductions pledge in advance of COP26 - to help us make sense of the government's announcement of the figure in December.

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