The board of directors at its meeting held on Tuesday, approved the sale of the company's business undertaking i.e., manufacturing facility together with the land, plant and machinery, assets, software and equipment located at Vemgal, Karnataka, to Hetero Labs Ltd. GlaxoSmithKline Pharmaceuticals on Wednesday said its board has approved the sale of its manufacturing facility located at Vemgal in Karnataka to Hetero Labs for a consideration of Rs 180 crore.
The board of directors at its meeting held on Tuesday, "approved the sale of the company's business undertaking i.e., manufacturing facility together with the land, plant and machinery, assets, software and equipment located at Vemgal, Karnataka, to Hetero Labs Ltd," the company said in a regulatory filing.
The transaction is expected to be completed by September 30, 2021, it added. An unprecedented push to manufacture billions of doses this year alone has led to supply bottlenecks, putting firms such as Pfizer and AstraZeneca Plc in the firing line of angry government customers. The potential adverse effects of sticking needles into people’s arms are dominating headlines, as seen with the halting of the Astra vaccine in Canada and Europe even as regulators insist the benefits outweigh the risks.
Now the industry is taking heat for closely guarding its intellectual property. That’s blamed for what the World Health Organization dubs a “catastrophic moral failure”: the immunization gap between the developing world and deep-pocketed rich countries, which have ordered enough doses to cover their populations several times over.
If vaccine makers were to waive exclusive rights to manufacture their product — an idea pushed by 58 countries at the World Trade Organization including India and South Africa — advocates say that supply would bloom and we would exit the pandemic quicker. The push for a “people’s vaccine,” backed by the likes of Bernie Sanders, is popular with three-quarters of British voters and almost two-thirds of French people polled by YouGov.
As with a lot of the inoculation blame game, the truth is a little more complicated. The rich-poor divide is a glaring one that needs to be narrowed for many reasons, not least the epidemiological risk that new variants could better resist the vaccines we have. But lifting patent protection won’t on its own do the trick.
Unlike in past crises such as HIV/AIDS, cracking open the recipe for Covid vaccines, especially those from Pfizer and Moderna Inc., is only half the battle given the complexity of genetic technologies making their debut in this pandemic. Manufacturing is a challenge too, and there isn’t much time for trial and error. Ken Shadlen, a professor at the London School Economics, last year warned it would be counter-productive to force companies to drop their patents if it discouraged the more essential step of sharing know-how and technology.
This situation should not be allowed to fester, though. It’s not a sustainable solution to simply dismiss such proposals as “nonsense” and lobby rich countries to keep blocking them at the WTO, the path drugmakers seem to be walking. If manufacturing problems and inequitable distribution keep plaguing the vaccine rollout, pharma companies will keep getting the blame. Praise for their scientific research, which U.K. Prime Minister Boris Johnson recently attributed to a good kind of “greed,” could start ringing hollow.
Fraying trust and an increasingly fraught relationship with governments — however hypocritical the rich world’s finger-pointing may be, given its hoarding of doses and nationalistic export curbs — would be bad in this pandemic and beyond.
Instead, companies should take the hint and commit to more voluntary partnerships and technology transfer around the world to boost manufacturing, with incentives from their government backers to price the end-product affordably where needed. Countries don’t have to actually use the stick of immediate patent removal, but they can make clear that if vaccine producers don’t do the right thing now, “they risk punishment later,” as LSE’s Shadlen puts it — like intervention to ensure more affordable drug pricing in more normal times.
Governments have their own role to play: As the text of a recent pandemic pledge signed by dozens of world leaders put it, there needs to be more “shared responsibility, transparency and cooperation.” That means more investment in manufacturing capacity and fewer beggar-thy-neighbor export curbs.
We haven’t quashed this virus yet, and letting the pharma industry’s pandemic halo crash to the floor won’t help get us there any faster. Finding constructive ways to keep the public’s romance with drugmakers last a little longer makes sense, even if it doesn’t make money.