When big pharma has all the power, what choice do countries like South Korea have?
By Sinhye Ha, Advocacy Advisor for Southeast, East Asia, Pacific, MSF Access Campaign
With previous hard-earned experience dealing with health crises, it was little surprise when South Korea’s response at the start of the COVID-19 pandemic was widely regarded as exemplary. From dealing with Severe Acute Respiratory Syndrome (SARS) in 2003, influenza H1N1 in 2009, and Middle East Respiratory Syndrome (MERS) in 2015, each event boosted the country’s disease preparedness.
But who knew COVID-19 would become a pandemic that would last this long? With confidence in the country’s response capacity, and perhaps some trust in the COVAX Facility to deliver vaccines in a timely manner, and optimism around the global capacity of vaccine manufacturers, Korea was not among the first countries to stampede to acquire and hoard vaccine supplies as seen elsewhere in the world. Now, the country faces its worst wave of infection: the capital area has implemented the highest level of social-distancing measures, amid small businesses closing down at a record rate. Although still well-contained compared to many other contexts, Korea is now anxious to get the timely delivery of its belated vaccine orders from the manufacturers.
That’s why Korea’s position in the debate on the TRIPS intellectual property (IP) waiver before the World Trade Organization (WTO) may seem at first glance, surprising. Supporters of the proposal, which would see IP rights on COVID-19 technologies put to one side for the duration of the pandemic and potentially open up for multiple manufacturers to increase supplies, include the US, a country with which Korea is often keen to align its diplomatic positions. And yet Korea has not spoken up in favor of the waiver — in fact, rumors are that Korea remains as one of the passive opponents to the waiver. When the Biden Administration first expressed its support for the waiver back in May this year, many thought South Korea would soon move too to back the proposal and shift from its previous opposing stance. To many people’s surprise, however, this hope has not yet materialized.
Some wonder why South Korea does not support the waiver, when it appears to be one of the countries whose industry might benefit the most from the implementation of the waiver where companies can proceed with research and development (R&D) without fear of IP breach or trade retaliation.
After all, Korea has existing advanced R&D capacity (South Korean companies have over 900 new products in the drug pipeline, accounting for 4% of total pipelines in the world); a regulatory environment with high-level quality assurance (Korea has been a member of PIC/S since 2014 and ICH since 2016, is included in the EU drug whitelist, and has over 10 vaccines in the WHO prequalified vaccines list); and considerable public and private investment funds available. Also, leading Korean companies have had the painful experience of losing patent-opposition cases against global pharmaceutical companies, or are struggling to develop products within the vast IP net cast by these companies. It seems like Korea and its industry would want the waiver to be adopted and legal uncertainties around IP to be removed.
But in May 2021, when Korean companies were appealing to the US and global pharmaceutical companies to receive technology transfer of the new COVID-19 vaccine technologies, hoping to become a global vaccine manufacturing hub, some Korean media outlets and policymakers held back, expressing pessimism over Korea’s industrial capacity to make high-level tech transfer happen. They claimed Korean companies could not match up to the global pharmaceutical corporations’ expertise, and instead said that local companies should be satisfied with the far simpler ‘fill-finish’ type of contract for vaccines manufacturing, rather than pushing for full tech-transfer contracts from global companies.
Clearly Korean companies did not buy into these arguments and moved full steam ahead to invest in full manufacturing capacity. Over 10 Korean companies formed a consortium for mRNA vaccine study and manufacturing — the consortium allows immediate production of mRNA vaccines without any additional facilities needing to be built. Korean company Samsung Biologics recently signed a deal to carry out ‘fill-finish’ for Moderna’s mRNA vaccine and additionally announced it will build drug-substance production capacity for mRNA vaccines by the first half of 2022. SK bioscience, another local company that already makes the AstraZeneca vaccine in Korea, is also heavily investing to increase production capacity for other vaccines too, including mRNA vaccines. Adding to that, the administration promised a US$1.9 billion state investment for vaccine development over the next five years.
With all of these investments, Korean companies and the Korean government are appealing loud and clear to be seen as attractive manufacturing partners for global pharmaceutical companies, and so it may not be in the government’s interest to offend the companies by supporting the waiver, which would remove IP control.
And in fact, it is a reality that so far in this pandemic, these global corporations have retained the final say on who gets what, including who gets a peek at their technology and know-how. Recently, a Korean senior government official confirmed this reality saying that despite requests to the US for technology transfer for vaccine production, US officials said it is something to be decided by the private sector. Given this, countries that might benefit from bilateral tech transfer, such as Korea, might not have the appetite to join the supporters of the TRIPS IP waiver, given the main client they need to please is the global pharma industry.
So far, what the pandemic has demonstrated most clearly is that big pharma is still calling all the shots. When that is the reality, countries at the “mercy” of big pharma do not have much room to maneuver, practically speaking. What if the IP for vaccines does indeed get waived at the WTO but without any obligation of meaningful tech transfer or knowledge sharing? What if those who supported the waiver are left on their own and exposed to the full retaliation of big pharma and sent to the back of the queue for any meaningful knowledge transfer and licensing deals?
As we face the long haul of a future living with the COVID-19 virus, decisionmakers need to take a serious look at the market power imbalance. The fundamental problem of the pandemic world is that the pharma industry always has the final say, and most countries cannot do much about it. As global policymakers continue to gather to discuss ways to end the pandemic and prepare for the next one, perhaps now is the time to meaningfully change the current system and level the playing field for all countries and their industries.
We are still in the middle of a pandemic that has hit the world for over one and a half years and has taken the lives of over 4 million people; public investments of $2.5 billion have been invested into the field of mRNA vaccine R&D; and vaccine companies have signed agreements with governments that have practically de-risked them from any failure — if all of this is not enough for policymakers to make up their minds and tilt this power imbalance, what is?
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