In the first week that the Omicron variant sparked global fears of a new wave of infections, a small handful of investors and executives with Pfizer and Moderna—currently the world’s preeminent makers of Covid-19 vaccines—saw over $10 billion in new wealth, with the Moderna’s CEO alone adding over $800 million to his personal fortune.
Based on data compiled by Global Justice Now and released Saturday, “just 8 top Pfizer and Moderna shareholders” added a combined $10.31 billion to their fortunes last week after stock prices soared in response to the emergence of Omicron. According to a statement by the group: Continue reading →
A coalition of global health justice organizations on Monday urged Congress to ensure that the $3.5 trillion budget resolution recently introduced by the Senate Democratic Caucus includes $34 billion in funding to ramp up the worldwide manufacturing of Covid-19 vaccines.
In a letter addressed to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) as well as six committee chairs, a half dozen groups—Public Citizen, Health GAP, Oxfam America, Partners in Health, PrEP4All, and RESULTS—called on lawmakers to allocate a tiny fraction of the funding proposed in Democrats’ reconciliation package to accelerate the global vaccination effort and help bring the ongoing coronavirus pandemic to an end. Failing to do so, the groups warned, will only prolong suffering around the globe. Continue reading →
As leaders of the G7 were criticized for failing to rise to the challenge of the Covid-19 pandemic during their summit in the United Kingdom this weekend, Oxfam International on Saturday warned that failure of the world’s richest nations to fully embrace a lifting of intellectual property protections for life-saving vaccines could ultimately raise the cost of administering shots to the entire world by as much as $74 billion with most of that money going directly into the wallets of pharmaceutical companies and their wealthy shareholders.
Oxfam calculates that if patent protections were waived by the World Trade Organization (WTO) and vaccine production ramped up worldwide people in low- and middle-income nations could be adequately vaccinated for an estimated cost of $6.5 billion, but that if pharmaceutical companies are allowed to retain their for-profit stranglehold on production and distribution that cost would soar to $80 billion. Continue reading →
Months into a debate at the World Trade Organization over suspending patent protections for Covid-19 vaccines in order to end the global pandemic, the delay has left Africa facing a third wave of deadly infections as countries across the continent confront dwindling supplies of vaccines.
As The Guardianreported Tuesday, eight countries have seen cases rise by more than 30% in the last week and officials have raised alarm over possible looming shortages of hospital beds and oxygen, unless the outbreaks can be brought under control. Continue reading →
As rich countries that have hoarded vaccine doses and technology for months begin to accelerate their reopenings as coronavirus case counts level off or decline, India, Brazil, Nepal, Thailand, and other developing nations are in the grip of deadly and uncontrolled Covid-19 surges that experts fear could prolong the global pandemic and endanger the entire world.
On Tuesday, India became the second nation after the United States to surpass the 20 million-case mark, with the South Asian country reporting at least 357,000 new infections and 3,449 deaths over just the past 24 hours—the latest figures from a wave that is overwhelming strained hospitals and leaving facilities with fatal shortages of oxygen and other critical supplies. Continue reading →
More than 200 environmental groups, labor unions, and civil society organizations from 67 nations sent a letter to global heads of state on Wednesday demanding “transformational change” at the World Trade Organization, a relatively new institution that critics say is structurally inadequate and much too corporate-friendly to confront the planet’s most pressing challenges.
“The Covid-19 pandemic has exposed how the WTO model exacerbates insecurity, inequality, and instability,” argues the coalition, which includes Public Services International, Third World Network-Africa, and Public Citizen. “Legitimate global commercial rules should facilitate the improvement of the livelihoods, health, and wellbeing of all people around the world and the long-term survival of the planet. The WTO system has not met these goals: It was never fit for purpose and certainly is not now.” Continue reading →
“Pfizer has spent the past year making billions of dollars in profits while people continue to die from Covid-19,” tweeted Health GAP on April 22, 2021. “It’s time to #FreeTheVaccine so the whole world has access to these life-saving vaccines!” (Photo: Twitter screengrab via Health GAP)
As vast global inequalities in access to Covid-19 vaccines exacerbate the ongoing pandemic, a coalition of progressive groups in the U.S. kicked off a week of action Thursday to urge President Joe Biden to support a temporary suspension of patent protections and to pressure pharmaceutical corporations to share technology in order to maximize the worldwide production of life-saving doses.
In the coming days, public health campaigners will gather at the headquarters of Pfizer, Moderna, and Johnson & Johnson in an attempt to push the major drugmakers to share relevant technology through the World Health Organization’s Covid-19 Technology Access Pool. Continue reading →
Eager to capitalize on the lasting presence of the coronavirus, executives at Johnson & Johnson, Moderna, and Pfizer—the pharmaceutical corporations that supplied the Covid-19 vaccines approved for use in the U.S.—are quietly planning to hike prices on doses “in the near future,” once they decide the pandemic is over, The Intercept’s Lee Fang reported Thursday.
Although the rapid development of coronavirus vaccines—made possible by large infusions of public resources—has given Big Pharma companies “a boost in goodwill… the public is still sensitive to drug pricing and the reputational risk has, so far, curtailed their ability to reap large financial rewards,” Fang noted. “But that environment, they hope, will change once the pandemic ends: a date that drugmakers themselves reserve the right to declare.” Continue reading →
U.S. President Donald Trump signed a trade deal with China on Jan. 15 intended as a first phase toward a more comprehensive agreement between the two countries.
In exchange for some tariff relief, China promised to buy an additional US$200 billion in American goods and services over the next two years and make structural reforms that would provide more protection for U.S. intellectual property. It still leaves about $360 billion in punitive tariffs on Chinese imports in place – and more sanctions would be triggered if China fails to meet the terms of the deal. Continue reading →
The tariffs are meant to address two problems: intellectual property theft by China and a steep and persistent trade deficit.
As an economist and expert in international trade, I don’t see how the proposed tariffs will resolve either one. In fact, it’s more likely that they will create two new problems by hurting both consumers and businesses.
IP theft and trade deficits
The administration formally justified its tariffs by invoking Section 301 of the Trade Act of 1974, which allows the president to impose tariffs on countries in violation of international trade deals.
Intellectual property theft has been a major complaint of American companies doing business in China for decades. Sometimes this theft occurs through illicit means, such as industrial espionage. It also occurs through legal channels, such as when U.S. companies are forced to form a joint venture with a Chinese business. In other cases, technology transfers are a precondition of doing business in China.
The other problem that has long irked the president is the significant trade deficit. Since the U.S. normalized trade relations with China in 2000, the deficit ballooned from less than $84 billion to over $375 billion in 2017.
This “China shock” of cheap goods has caused considerable disruption in the U.S. economy. The labor market has been surprisingly slow to adjust, leading affected workers to earn far less money over a lifetime.
The wrong solutions
It remains to be seen, however, whether the tariffs will alleviate either problem.
The administration’s calculation seems to be that China will back down on intellectual property theft if faced with less access to U.S. markets.
But China is less dependent on U.S. trade now than it was a decade ago, making its economy resilient to these sorts of punitive measures. The U.S. accounted for 18.4 percent of Chinese exports in 2016, down from 21 percent in 2006.
The U.S. likely would have better luck resolving this problem at the WTO, which China joined in 2001 and must abide by its rulings. The best part about a WTO ruling is that it would affect all of China’s exports, not just those to the U.S.
The U.S. personal savings rate has fallen steadily since the late 1970s. At the same time, the government has run persistently large budget deficits, both of which have increased the level of borrowing in the U.S. economy.
As a result, foreign investment, particularly from China, has become increasingly critical to financing U.S. economic growth. This is great news in terms of helping Americans buy cheap Chinese goods and the government finance its budget deficit. But all that foreign cash going into the financial market isn’t being used to buy the stuff Americans are producing, like Harley Davidson motorcycles and Iowa corn.
This results in lower exports and a higher trade deficit. Tariffs will not change this reality.
Two new problems
While the full details of the tariffs have yet to be released, it’s clear they’ll cause at least two immediate problems.
One is that U.S. consumers will be hurt. The typical consumer has about $260 in extra purchasing power as a result of trade with China. Those benefits, which disproportionately go toward working-class Americans, will fall due to the U.S. tariffs, as American importers will pass some of their increased costs along to consumers.
Particularly vulnerable to Chinese retaliation are the pork and soybean industries, which are concentrated in the Trump-friendly Midwest. This list could grow if a trade war with China escalates.
A broader concern is that, by acting unilaterally, the Trump administration is undermining the broader system that has facilitated the growth of international trade and adjudicated grievances between countries since World War II.
While far from perfect, organizations such as the WTO have limited the scope of trade wars since the chaos of the 1930s. Failing to uphold these institutions could have major consequences in the future.