Ian Powell : Vaccines and antibiotics: commodities or public good?

Ian Powell : Vaccines and antibiotics: commodities or public good?

The coronavirus crisis afflicting the planet raises the issue of vaccines as a commercial commodity made profitable through patents rather than a public good. As a family of genetically related viruses affecting respiratory systems, coronavirus is not new.  Covid-19 is its most recent and serious family member.

Coronavirus was first discovered in chickens in the 1930s and then in humans in the 1960s.  It came to prominence in 2003 with Severe Acute Respiration Syndrome (SARS).  SARS’s impact was much less than Covid-19.  It was an epidemic rather than pandemic affecting 26 countries compared with around 170 affected by Covid-19.  Over 8,000 people globally were infected with SARS of whom nearly 800 died (over 3,000,000 have already been infected by Covid-19 of whom around 220,000 have died to date).  There was no vaccine available for SARS which had to be addressed by effective public health measures.

Since SARS in 2003 there have been other virus outbreaks with variable risk factors from the same genetic family including HCOV NL63 (2004), HKU1 (2005) and MERS (2012).   While Covid-19 is new, the genetic family it comes from is not.

It was clear that eventually epidemics would become pandemics.  It was also logical to assume that substantive progress on the development of a vaccine would have occurred.  As a small country New Zealand did not have the capacity to develop a vaccine although, learning from SARS, good work on pandemic planning has been done, which has served us well in responding to the current crisis.

Universal public health systems such as New Zealand’s consider health to be a public good rather than a commercial commodity.  They provide healthcare for patients, many of whom require clinically appropriate pharmaceuticals.  But these drugs are provided primarily by international companies (also known as ‘Big Pharma’) who are driven by profit maximisation to see pharmaceuticals as commercial commodities, not a public good.  The objective of public health systems and its delivery mechanism for an essential component of that system are fundamental opposites.  Pharmaceutical patents give ‘Big Pharma’ powerful economic leverage to control the market.

This conflicting motivation is a powerful contradiction.  It is why we have Pharmac as a state-owned drug purchasing agency.  Ironically one of the proponents for the formation of Pharmac in the early 1990s was up-and-coming politician Bill English whose right wing ideology was tempered by fiscal prudence.  Pharmac seeks to provide some balance in the uneven field when negotiating with the companies.  ‘Big Pharma’ hates Pharmac with a passion and endeavours to use multilateral trade agreements to reduce its effectiveness as well as strengthen the power of its patents.

Exemplar for professional conduct

Biologist Alexander Fleming provides an exemplar for professional conduct after his discovery of the antibiotic penicillin in 1928.  He took the honourable decision not to patent his discovery.  Fleming rejected claiming ownership, and therefore personal financial benefit, of a natural substance.  This kept prices down.  In response, after World War 2, major drug companies promoted high volume sales.  In addition to hospital patients, penicillin was promoted for ointments, throat lozenges, gum, toothpaste, inhalable powders and lipstick.

The goal of ‘Big Pharma’s’ research and development efforts were not better drugs for patients but different drugs that could be patented and consequently sold at a higher price than generic penicillin.  Another means of increasing sales and prices was to create patentable combinations of existing drugs.

The marketing strategy of ‘Big Pharma’ has been to make and sell drugs that make the biggest profits, including those of dubious value.  From 1991 to 2015 American pharmaceutical companies paid US $35.7b to settle 373 federal and state actions mainly related to drug-pricing fraud and unlawful promotion of drugs.

As long ago as 1978 the World Health Organisation observed that the promotional activities of pharmaceutical manufacturers created a demand greater than the actual needs.  In 1982 an Oxfam study found that intensive promotion by pharmaceutical manufacturers led directly to overprescribing and misuse of antibiotics becoming widespread in the global South.

Over time bacteria has found ways to resist new antibiotic drugs.  Most pharmaceutical companies have now moved away from searching for new antibiotics.  This is not because they are not profitable but because they are not profitable enough.  Antibiotic research doesn’t fit their business model.

For Covid-19 it means that, despite the long heads-up about its likelihood of occurring, there was no profit incentive for ‘Big Pharma’ to invest long-term in vaccine research.  A pandemic was predictable for years (hence New Zealand invested in pandemic planning) but when, and the full extent, was uncertain.  Had vaccine preparation been undertaken well in advance it may have been eventually profitable but, as with antibiotics, not profitable enough.

Resolving the contradiction

Health systems committed to the provision of a public good cannot allow themselves to be thwarted by a key delivery mechanism (‘Big Pharma’) whose sole goal is to produce a commercial commodity. The failure of ‘Big Pharma’ to even progress the development of a vaccine for coronavirus presents an opportunity to break this firm monopolist grip on the production of vaccines and antibiotics.

New Zealand as a small country cannot resolve the contradiction over pharmaceuticals between commodities and a public good.  There has been a call for New Zealand to develop its own vaccine.  But, despite this country’s proud ingenuity and ability to punch above its weight, Director-General of Health Ashley Bloomfield is wise to cast doubt over the practicality of this, although he does not rule out us collaborating with international partners.

But the World Health Organisation could work on resolving this contraction.  WHO could extend its role by taking the lead in pharmaceutical research and development either by building up its own capacity to do so or through commissioning non-profit driven research institutions.  The objective would be to achieve non-patented vaccines and antibiotics.  Now that is something a prime minister like ours, with exceptional communication skills along with a good value base and intellect, might advocate.


Ian Powell was formerly the Executive Director of the Association of Salaried Medical Specialists for over 30 years until December last year.  He is now a health commentator based in Otaihanga on the Kapiti Coast.


This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.