AT TIMES of great crisis, governments veer towards socialism. Massive public expenditure and state intervention is simply the fastest way to achieve certain goals. The most impressive scientific accomplishments of the 20th century required immediately putting cutting-edge research into practice and mobilising thousands of scientists alongside other workers for a single goal.
 
One of the most famous examples is the Manhattan Project: the largely US effort to construct the atomic bomb. Despite initial research from Britain, the bomb was a massive engineering problem that was taken up by a superpower. A whole industry was summoned into existence to isolate a rare isotope from naturally occurring uranium, requiring more than 100,000 workers.
 
Another WWII success story was penicillin. Its story is told in William Rosen’s book Miracle Cure (2018). Also stemming from initial British research, the phenomenal and rapid increase in manufacturing capacity would not have occurred without American dollars. By the middle of 1943, penicillin was a priority for the US. Yet that year the whole country had only produced enough penicillin to treat around 40 patients.

With thousands of soldiers who could benefit from the drug, let alone thousands of patients at home, it was excruciating to know that the drug existed but could not be made fast enough. The government had to act. Rather than commandeer the factories, the US government chose to allocate public resources to private corporations.

As one observer recalled, the committee in charge of the programme “found itself in the awkward position of needing to devise a system by which private companies would gain patent rights to processes and products developed, at least in part, with public money.” The promise made to them was unprecedented: they were to be given simultaneously access to all available knowledge about penicillin together with the right to patent whatever they found while manufacturing. They did just this.

The effect on the small number of companies chosen was extreme. As Rosen notes, the choice of which companies were included in the penicillin programme “was equivalent to giving the winners a two-decade head start on the rest of an entire industry.”

Their profit margins soared. Modern pharmaceutical companies such as Pfizer owe their success to this initial injection of US public money. The scandals of price-fixing and patent-hogging that happened in the decades to come stemmed, in part, from the creation of cartels with government funds.
 
In the 21st century, these companies have once again been relied upon in a health crisis. To be clear, there are differences between the Covid-19 vaccines and penicillin. Chiefly, penicillin was known to be a life-saving drug. The problem was how to scale up manufacturing. In the case of Covid-19, it was not known if any vaccine would be successful. There was genuine risk involved, the speculation of capital on avenues that might not be successful. But, unlike penicillin, the threat was so severe that governments all over the world totally overhauled normal market approaches.
 
As early as May 2020, the organisation Gavi (Vaccine Alliance) called for an Advance Market Commitment (AMC) mechanism for Covid-19 vaccines. With an AMC, governments and organisations commit to purchasing doses at a fixed price prior to vaccine efficacy being known.

Similarly, for penicillin, the US government promised $200 per million units as a guaranteed price for manufacturers. When this price support was removed, the price determined by the market immediately fell to 10 times lower. It eventually reached $6. Just 3 per cent of the initially agreed price.

Wealthy governments such as Britain also adopted a spread-betting approach, not only committing money in advance but committing to far more doses than were needed on the principle that some bets might fail. Arguments were advanced that the AMC mechanism could open the market to small manufacturers from the global south, producing a “diverse vaccine market.”

This has not transpired. In reality only companies who possessed the necessary economies of scale could operate at the top-level. It has been phenomenally profitable. Pfizer reported a 92 per cent growth in operational revenue in 2021 compared to 2020. Around $36.9 billion of this revenue was due to its Covid-19 products, including its vaccine co-developed with BioNTech from initially publicly funded research.
 
Given the current structure of global health, the research and manufacturing capacity of pharmaceutical companies were needed to react to Covid-19. But a corporation is a profit-making machine that is legally constructed to return profits for shareholders. Asking a corporation to operate for public good is a losing cause. Trying to “incentivise” them is effectively the same thing. Yet it's baked into the way global health system works. the WHO body Covax is simultaneously an official inequity tracking mechanism, vaccine distribution pipeline and incentives provider for corporations all rolled into one.
 
Today, as in the past, governments pour money into corporations at times of crisis, given that they represent concentrations of scientific capital and manufacturing capacity. But you don’t have to be a socialist to think that governments have a duty to exert control when they do so. There has been widespread public support for this investment during the greatest health crisis for decades, but this support extends naturally to oversight, direction and control of the way the money is spent to stop the excesses of profit. Without this, global vaccine inequity was guaranteed.
 
A minor action to improve this inequity would be to waive most intellectual property rights on vaccine manufacture. This is not a radical demand despite opposition by wealthy countries where corporations which benefit from restrictive IP are based. Elsewhere companies lobby against intellectual property rights where they would be able to profit from producing a vaccine; the waiver was proposed in October 2020 by India and South Africa, both countries with large pharmaceutical sectors.
 
As MSF noted in August 2021, technology transfer between corporations is essential to scale up vaccine production in precisely the regions where supply is “urgently needed.” But companies have to be made to do this. The global pharmaceutical industry has had no incentive to build manufacturing capacity in Africa.

As the major financial backers, governments are now even better placed to make that happen. Starting mRNA vaccine manufacture at an existing manufacturing site and producing 100 million doses annually within 10 months would cost just $127 million. The world urgently needs this capacity, not just now but for the future.
 
If action is not taken at the moment of crisis, normal service resumes. Last week there were rumours that some sort of IP waiver compromise might finally be approaching at the World Trade Organisation, as it becomes clear even to neoliberals that one is necessary. There is, as yet, no such agreement.