The Vaccine Shortage:
A Result of the Government and Corporate Policies

Mar 31, 2021

The following article is excerpted from issue #215, Lutte de Classe (Class Struggle), April 2021, the magazine of Lutte Ouvrière (Workers Struggle), the revolutionary workers group (Trotskyist) active in France.

As the coronavirus which causes Covid was spreading across every continent, giant corporations saw an enormous possibility for markets opening up before them: that of a new vaccine for billions of human beings, which might even need to be renewed every year like the flu vaccine.

The pharmaceutical industry was already extremely concentrated. About ten big U.S. and European companies dominate the global market. The industry’s profits are among the largest of all sectors of the economy, more or less on the same level as the banking sector. And the vaccine sub-sector is even more concentrated. Four multinationals divide up most of the market between them: the U.S. Pfizer and Johnson & Johnson, the British GSK, and the French Sanofi. These companies have close and privileged ties with governments, with whom they negotiate drug prices. They can charge a fortune, since with state heath systems, the markets are already acquired. And the governments are the ones who advance them the money.

The spread of the coronavirus intensified their appetites for profit and stoked the rivalries between them, at the same time partially reshuffling the deck.

The Race for Market Share and the Intervention of States

The four giants of Big Pharma jumped into the race. Some of them alone, like Johnson & Johnson, others in alliance, like Sanofi and GSK, and still others by grabbing up vaccine start-ups, as Pfizer did with the German company BioNTech. Then other heavy hitters of the pharmaceutical industry, even those not specializing in vaccines, joined in, enticed by this new market. This is the case for the Anglo-Swedish AstraZeneca, which got its hands on the vaccine developed by the University of Oxford. Start-ups like Moderna also tried to stand out from the crowd and play in the big leagues.

From the beginning, all of them had state financial support. For the big companies, this was obvious. But even Moderna has privileged ties with the U.S. government. Moncef Slaoui, the head of Operation Warp Speed, which Trump established on May 15, 2020 in order to distribute 10 billion dollars to subsidize vaccine research, had first been an upper-level executive at GSK and then a member of Moderna’s Board of Directors.

The U.S. government uses its financial power to call the tune, serving up access to the vaccine market of its population on a platter to those corporations which it favors. In February 2020, it passed the first agreements with Big Pharma companies. Starting in June, it pre-purchased hundreds of millions of doses from Johnson & Johnson, Pfizer, Moderna, AstraZeneca, and Sanofi, which has one of its headquarters in the United States.

In May 2020, Paul Hudson, the chief executive of Sanofi, declared that the United States “will get vaccines first,” because they were the first to pay. This was a way of pressuring Europe to also reach into its pockets and order hundreds of millions of doses.

The European governments took more time to compete with the United States, since they lacked agreement on a mechanism for the most powerful countries to support the champion of their own national industry while speaking as representatives of the entire European market. They managed to do it, but it took several extra months. And all of the big European companies were served: the Anglo-Swedish AstraZeneca; Janssen, the Belgian subsidiary of Johnson & Johnson; and the German-Swiss company CureVac, which is collaborating with Bayer and Novartis. The E.U. did not cancel the contract it signed with Sanofi for several hundred million doses, despite the technical disappointments from this company. It simply delayed delivery of its promised vaccine until next fall.

The richest governments in the world have purchased a total of 4.6 billion doses, even though their total population does not represent even one billion people. This means that an average of more than four doses per inhabitant have been bought, although today only a minority of the population is vaccinated. These numbers show the degree to which the pharmaceutical industry has been subsidized and the extent to which it has not delivered the doses which it promised.

A Barely Veiled Protectionism

As soon as this first division of the spoils was made, each company set off on its own path for the development and production of vaccines. And the governments did all they could to favor their own national industry.

Today, even though European governments are begging for millions of doses from AstraZeneca, this company has not even succeeded in getting its vaccine approved in the United States. In November 2020, despite the fact that the British government had begun to inoculate millions of people with this vaccine, the FDA refused to authorize it, demanding a new clinical trial with U.S. participants. The company was forced to comply, and on March 22, it published new results. But the FDA found another way to avoid accepting its vaccine. During all this time, Pfizer, Moderna, and finally Johnson & Johnson were flooding the U.S. market with their vaccines.

The worst is that AstraZeneca has already produced 30 million doses at its U.S. manufacturing facilities. For now, these vaccines cannot be used on U.S. soil. But the government has forbidden them from being exported to Europe, which provides even more profits to these same U.S. competitors of AstraZeneca, since they can sell more doses on the European market.

The Russian and Chinese vaccines, for their part, have had no access either to U.S. markets or to those of the richest European countries. All the propaganda and health pretexts for not authorizing them are nothing more than protectionist measures. During the standoff between the European Union and AstraZeneca, the German chancellor Angela Merkel threatened to order doses of the Russian vaccine Sputnik V. This is proof that she considers this vaccine to be effective and that she is only boycotting it for commercial reasons. In fact, it was only a symbolic move, since the CureVac vaccine produced by the giants Bayer and Novartis was scheduled to be approved in the second quarter of this year.

In France, Sanofi announced that it will use one of its plants to formulate and fill vials of the Johnson & Johnson vaccine at 20 million doses per month starting in September. The French government congratulated itself for this collaboration, presenting it almost like an act of altruism. But the reality is that Sanofi has the means to produce many more doses and that it is reserving them for its own vaccine, which is scheduled to come out late this coming November. This is what the president of Sanofi France stated before a French Senate commission on March 17, declaring that his company had “very strong industrial capacities,” with “19 factories in France, in 9 regions” and that these factories can produce “one billion doses per year.” His company made the choice to use an adenovirus vaccine, and he will stick to it: “We know that it will take longer, but we have a superior guarantee that this technology will work.” And the French government will do all it can to allow Sanofi to carve a place in the national and European markets.

Big Pharma Did Not Truly Invest in Production or in Research

At the same time that some means of production are underused, others are overloaded, like Pfizer and AstraZeneca’s European factories, which are running 24 hours a day. But even those companies which actually have a vaccine to sell have no interest in investing to increase their production. Just the opposite—the vaccine shortage allows them to sell their doses at a high price. This is the old Malthusian policy of big corporations in every sector of the economy when they are in a monopoly position and can divide up the market. They restrict production to create or intensify a shortage in order to sell at a higher price. Moderna revealed in its financial report that it had managed to sell its vaccine at such a high price that the cost of production was only 4% of total sales. And it was not the investment in research which cost it. Although messenger RNA vaccines like those of Moderna and Pfizer-BioNTech are a truly revolutionary technology, they are based on more than 30 years of research in U.S. and European public university laboratories. The private corporations simply harvested what public investment had sown.

As for the billions of dollars made from the sale of vaccines not produced, these companies use them to speculate, especially in the biotechnology sector. Moderna stock market values have multiplied by almost six in one year, those of BioNTech by more than three, and those of Novavax, another start-up which is planning to launch a vaccine with GSK, by more than 15. There are dozens of start-ups, and their shares are fodder for speculation. The prizes in this financial casino can be even larger and more immediate than in the sale of vaccines.

Healthcare systems were overwhelmed, and deaths continue to mount. But what is most deadly is not the virus. It is this social organization dominated by the war between corporations and the governments that support them, by a financial parasitism that enriches a tiny minority to the detriment of the great majority. This is worthy only of disgust.

Interviewed one year ago, at the beginning of the epidemic, during a program on the race for the vaccine, the economist Sylvie Matelly stated that pooling the research of all the laboratories in the world and all the production capacities would be terrific but remained a “pleasant dream.” Her analysis was correct and a foregone conclusion. As long as private property governs the means of production, humanity will face this nightmare.