Part IV - Toward Dynamic Protection of Public Health in China, Africa, and Latin America

13 China, the TRIPS Waiver, and the Global Pandemic Response

Peter K. Yu

In October 2020, India and South Africa submitted an unprecedented proposal to the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) of the World Trade Organization (WTO), calling for a temporary waiver to help combat the global pandemic.¹ This waiver aimed to suspend Sections 1, 4, 5, and 7 of Part II of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the related enforcement obligations under Part III to facilitate the “prevention, containment or treatment of COVID-19.” This proposed waiver covered not only patents, but also copyrights, industrial designs, and the protection of undisclosed information (such as test or other data for pharmaceutical products).

Although China was neither a proponent nor a cosponsor of the waiver proposal, it supported the initiative. As the Chinese delegation declared at the TRIPS Council when the proposal was submitted in October 2020:

China is willing to discuss access to commodities in relation to the prevention and control of COVID-19, including medicines and vaccines under the framework of the TRIPS Agreement, and supports the discussions on possible waiver or other emergency measures to respond to the pandemic, which are “targeted, proportional, transparent and temporary”, and which do not create unnecessary barriers to trade or disruption to global supply chains.²

Such a middle-of-the-road position – or what Jeremy Youde has described as “ambiguous positioning” in global health governance³ – put China between the proponents and opponents of the waiver, the latter of which included most notably the European Union, the United Kingdom, Switzerland, and, to some extent, the United States.

Thus far, China has played several important roles in the global pandemic response, which ranged from vaccine donation and distribution, to transfer of health and medical technology, to support for international intellectual property (IP) reforms. To provide a deeper understanding of these myriad roles, this chapter closely examines China’s position in the debate on the COVID-19 TRIPS waiver at the WTO. While the chapter attributes that position to the country’s changing pharmaceutical landscape and growing ambition to become an IP power, it identifies two additional contributing factors: complex international politics and choices for pandemic diplomacy.

This chapter further explores China’s more assertive position toward the end of the waiver debate – specifically during the deliberations on the proposal that provided the basis of the Ministerial Decision on the TRIPS Agreement (Ministerial Decision) adopted at the Twelfth WTO Ministerial Conference in Geneva in June 2022 (MC12). This later position contrasts significantly with the deferential position China took in the first year and a half of the waiver negotiations at the TRIPS Council. Drawing eight lessons from the international debates on both the waiver and the Ministerial Decision, this chapter offers insights into the roles China can or will play in future international policy debates at the intersection of IP and public health, including those involving the next pandemic.

1 The Changing Pharmaceutical Landscape

Although some policymakers and commentators remain fixated on the somewhat outdated and oversimplified debate on China’s piracy and counterfeiting problems, which have been widely documented in IP literature since the 1980s,⁴ the country experienced an “innovative turn” in the mid-2000s, and its IP landscape has since dramatically changed.⁵ In June 2008, the State Council adopted a National Intellectual Property Strategy, which “provided a comprehensive plan to improve the creation, utilization, protection, and administration of intellectual property rights.”⁶ Paragraph 7 specifically emphasized the need for the active development of independent or self-controlled IP (zizhu zhishi chanquan). Although this term has been frequently translated as indigenous IP – or, in a larger policy context, indigenous innovation – independent IP can be developed through the acquisition of foreign IP assets.⁷ There is no requirement that the IP or innovation involved has to be home-grown.

A few months after the adoption of the National Intellectual Property Strategy, China undertook a complete overhaul of its Patent Law – the first revamp of a major IP law following the country’s WTO accession in December 2001. Known officially as the Third Amendment to the Patent Law, this overhaul allowed China to make substantial adjustments to the patent system based on internal needs, as opposed to external considerations.⁸ As Guo He recounted, “The impetus for the early amendments [in 1992 and 2000] came from outside, whilst the need for the third amendment originated from within China, that is to say, the majority of the third amendment was to meet the needs of the development of the domestic economy and technology originating in China.”⁹

Since the Third Amendment, China has introduced important legislative amendments in different areas of IP law, including trademark, unfair competition, copyright, and patent yet again. In the pharmaceutical area, for instance, China adopted the Fourth Amendment to the Patent Law amid the pandemic in October 2020. Entering into effect on June 1, 2021, article 42 of the amended statute grants a limited extension of the patent term for up to five years to compensate for the time lost when a pharmaceutical product undergoes regulatory review.¹⁰ This new provision parallels the Hatch–Waxman Act of 1984 in the United States and similar provisions on patent term extension in TRIPS-plus bilateral, regional, and plurilateral agreements. Article 76 of the amended Patent Law, along with the Provisional Measures for the Implementation of Early Resolution Mechanisms for Drug Patent Disputes, further introduced a new patent linkage system that would prevent the marketing approval of the generic version of a patented drug until after the expiration of its patent. Similar provisions can also be found in TRIPS-plus bilateral, regional, and plurilateral agreements.¹¹

In addition, in April 2018, the National Medical Products Administration of China released the draft Provisional Measures for the Implementation of Test Data Protection for Pharmaceutical Products. Article 5 provides six years of market exclusivity to undisclosed test or other data for innovative drugs (chuangxin yao) and twelve years of similar protection for innovative therapeutic biological products (chuangxin zhiliao yong shengwu zhipin). While the WTO accession protocol already required China to offer the former, the latter would put China in parity with the United States, which offers similar protection.¹² The proposed standard would also increase the protections for biological products in China to a level higher than those found in regional and plurilateral trade agreements, such as the Trans-Pacific Partnership Agreement (which has been incorporated into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership following the United States’ withdrawal), the United States–Mexico–Canada Agreement, and the Regional Comprehensive Economic Partnership (RCEP) Agreement.¹³

As if these recent and proposed legislative and regulatory changes were not revealing enough, the past decade has seen the State Council issue important policy documents that called for the strengthening of the biotechnology sector and the active development of medical products and technologies. Released in May 2015, the Made in China 2025 strategic plan identified biomedicine and high-performance medical devices as among the ten priority sectors.¹⁴ The medical products and technologies that China intended to develop included “biologic-based therapeutics, such as antibody drugs, antibody-drug conjugates, new structural proteins, polypeptide drugs, and new vaccines; technologies to support individualized drug treatments (i.e., precision medicine); and breakthrough technologies, such as induced pluripotent stem cells.”¹⁵

More recently, the State Council released the Outline for Building a Powerful Intellectual Property Nation (2021–2035), setting the 2025 targets for contributions of the local patent industries to the country’s gross domestic product at 13 percent. This new fifteen-year plan brings to mind the earlier National Patent Development Strategy that the State Intellectual Property Office (now the China National Intellectual Property Administration) adopted in November 2010.¹⁶ That earlier plan set a highly ambitious target of 2 million patents per year by 2015, which China surpassed three years before.¹⁷

The country’s ambition in the IP and pharmaceutical arenas is clear. No longer content to serve only as the world’s leading supplier of active pharmaceutical ingredients (API),¹⁸ China now wants to become a major player in the development of research-based pharmaceutical and biological products.¹⁹ As I observed in a recent book chapter:

Today, [China] has the world’s second largest pharmaceutical market, behind only the US. With a market “worth more than $120 billion,” China “account[s] for 20% of total global API output” and “produces over 2000 API drug products, with annual production capacity exceeding 2 million tons.” In addition, the country produces about 4 percent of the world’s new pharmaceutical products. It also has a strong and vibrant market in traditional medicine, which in 2015 “account[ed] for 28.55% of the total [output value] generated by the country’s pharmaceutical industry.”²⁰

In terms of health patent publications, the Global Innovation Index 2019 report placed China among the top three in the world in the areas of biotechnology, pharmaceuticals, and medical technology, based on publications from 2010 to 2017.²¹

In the past decade, China has made important strides in pushing for the greater use and development of artificial intelligence and machine learning in the health area. As Tencent CEO Ma Huateng observed in the same Global Innovation Index report:

Th[e] growth in national health expenditures is creating opportunities for medical AI in China. According to Tractica’s forecast, China’s AI medical market is developing rapidly, with the market size soaring from 9.661 billion yuan in 2016, and 13.65 billion yuan in 2017, to 20.4 billion yuan in 2018, maintaining a compound annual growth rate of more than 40%. At the same time, Chinese medical institutions and businesses are taking a proactive attitude towards AI. Nearly 80% of hospitals and medical companies are planning to, or already have, carried out medical AI applications and more than 75% of hospitals believe that such applications will become popular in the future.²²

From 1985 to 2017, “China ranked fourth in the total number of healthcare AI patent applications filed, contributing to 12% of the total.”²³ In 2016, China already “surpassed Japan and the European Union to become the world’s second largest healthcare AI applicant … which reflects the strong momentum of medical technology innovation in China.”²⁴

Taken together, all of these developments illustrate the dramatic transformation of China’s pharmaceutical landscape following its innovative turn in the mid-2000s and the country’s growing ambition to become an IP power. The push for a TRIPS waiver that would suspend close to half of the provisions in the TRIPS Agreement during the COVID-19 pandemic therefore did not sit well with the country’s current policy position, even if such a waiver would have benefitted certain sectors in China as well as those in need of greater access to COVID-19 vaccines, diagnostics, and therapeutics. Being at the forefront of the waiver debate could also have created complications, if not confusion, over the country’s overall strategic direction in the IP area. After all, the rhetoric used in many recent IP policy documents in China goes in the opposite direction of the arguments used to support the waiver.²⁵

2 Complex International Politics

Although China’s changing pharmaceutical landscape and growing ambition to become an IP power have explained its reluctance to move to the forefront of the debate on the COVID-19 TRIPS waiver, there were two other contributing factors. The first concerned the complex international politics at the intersection of IP and public health. These politics caused China to maintain a lower profile than many policymakers and commentators would expect from a country with strong developmental needs and serious pandemic-related public health challenges.²⁶ The second contributing factor, which the next section will discuss, related to the availability of a wide array of choices for the country’s pandemic diplomacy.

Historically, China has kept a rather low profile in international organizations – be it the WTO, the World Health Organization (WHO), or the World Intellectual Property Organization (WIPO).²⁷ Such a low profile can be traced back to former Chinese leader Deng Xiaoping’s plea for practicing self-restraint in the early 1990s, or even earlier.²⁸ Among his guiding words were “hide our strength and bide our time” (taoguang yanghui) and “be good at keeping a low profile” (shanyu shouzhuo).²⁹ Despite the plea of the late elder statesman, the past decade has seen China becoming more assertive in the international arena. Examples include the country’s dominant role in the RCEP negotiations,³⁰ its high-profile development of the Belt and Road Initiative,³¹ and its active mask and vaccine diplomacy during the COVID-19 pandemic. Beyond the IP arena, one could also add other instances where China has shown what commentators have referred to as the “wolf warrior” mentality, a term derived from the name of a popular nationalistic Chinese film franchise.³² This mentality was on full display in the highly contentious exchange between Chinese Communist Party politburo member and former foreign minister Yang Jiechi and US Secretary of State Antony Blinken in the first major US–China meeting under the Biden Administration in Alaska in March 2021. This heated exchange was widely covered by mainstream media and China observers.

There are at least four reasons why China kept a low profile during most of the debate on the COVID-19 TRIPS waiver at the WTO. First, China struggled considerably at the domestic level in the early days of the pandemic. It was also conscious of the need to prepare for later waves of the pandemic and the emergence of new variants, such as Delta, Lambda, and Omicron. When a country was busy addressing domestic challenges and priorities, it understandably devoted less attention to international matters. This experience brings to mind China’s approach in the first few years of the WTO accession. As Henry Gao observed in the mid-2000s:

As a newly-acceded Member, China [was] required to undertake a lot of commitments, many of which [were] more onerous than those of existing WTO members. It [was] already a humongous challenge for China to try to implement these commitments. After having been in the spotlight for fifteen years, what China need[ed was] some quiet breathing space. Shouldering a leadership role would put China back on the front stage again and encourage other Members to pressure China to make more concessions.³³

Second, because the outbreak of the SARS-CoV-2 virus was first reported in Wuhan, the origin of the virus continued to attract attention from the United States and other members of the international community.³⁴ In early 2021, the WHO undertook an investigation in China as part of a larger global study of the origins of the SARS-CoV-2 virus.³⁵ Although the WHO released its report in March, many countries and mainstream media remained dissatisfied with that report, with some calling for a new investigation. Policymakers, commentators, and the media also expressed concern about the lower efficacy of the COVID-19 vaccines produced in China, which were developed using an inactivated SARS-CoV-2 virus rather than the more innovative mRNA or adenovirus technologies.³⁶

Third, China remained entangled in disputes over the TRIPS Agreement with both the United States and the European Union. In 2018, the United States Trade Representative (USTR) released a lengthy report on its Section 301 investigation into Chinese laws, policies, and practices in the areas of IP, innovation, and technology development.³⁷ This report was quickly followed by a substantial update.³⁸ Among the problems identified were forced technology transfer, discriminatory licensing restrictions, computer hacking, trade secret theft, and industrial espionage. Based on the first report, the United States filed its second TRIPS complaint against China, alleging that “China deprive[d] foreign intellectual property rights holders of the ability to protect their intellectual property rights in China as well as freely negotiate market-based terms in licensing and other technology-related contracts.”³⁹

More than two months later, the European Union filed a similar but more extended complaint in China – Certain Measures on the Transfer of Technology.⁴⁰ Like its US counterpart, this complaint concerned what commentators have referred to as “forced technology transfer.”⁴¹ That issue directly relates to the COVID-19 TRIPS waiver, a key goal of which is to bypass the protections offered by the TRIPS Agreement to facilitate the transfer of technology to developing countries in need. Although the issues involved in the waiver debate differed from those implicated by the TRIPS complaints filed by the United States and the European Union against China – with the former focusing on a public health emergency that has claimed millions of human lives and caused worldwide devastation and disruption – both the waiver and the WTO complaints concerned efforts to transfer technology without the authorization of IP rights holders.⁴²

Finally, China might have engaged in the practice of strategic deference, considering that article 4 of the TRIPS Agreement will extend “any advantage, favour, privilege or immunity … immediately and unconditionally” to China regardless of its position. Such strategic deference also resembles China’s past engagements in the international arena. For example, during the RCEP negotiations, the country did not advance any proposal for the negotiating text. The four texts that provided the basis of the early rounds of the negotiations originated from the Association of Southeast Asian Nations (ASEAN), India, Japan, and South Korea.⁴³ To be sure, China was interested in including an obligation to disclose in patent applications the origin of the biological resources and traditional knowledge used in inventions, similar to article 26 of the Chinese Patent Law.⁴⁴ Nevertheless, it strategically deferred to other RCEP negotiating parties that were pushing for a similar position. Notably, India, which was active in the negotiations before its eventual withdrawal in November 2019, advanced a ten-paragraph proposal to cover the area of genetic resources, traditional knowledge, and folklore.⁴⁵

Even before the RCEP negotiations, China repeatedly engaged in the practice of strategic deference. When the United States proposed to “issue a joint statement in support of the Doha agenda,” China declined.⁴⁶ Likewise, when Argentina and Brazil made their now famous proposal for the establishment of the WIPO Development Agenda, China did not join them, even though it was one of the major leaders in the developing world.⁴⁷ The deferential position China took in the waiver debate was actually not that different from its previous policy positions, especially those taken in the first few years of its WTO membership. The waiver-related position only stood out because it differed significantly from the more assertive positions that China has taken in the international arena in recent years. That many observers remain fixated on the old narrative on China’s piracy and counterfeiting problems has also led them to mistakenly assume that the country’s IP positions would align more closely with those of the Global South.

3 Choices for Pandemic Diplomacy

A third contributing factor that accounted for China’s position in the debate on the COVID-19 TRIPS waiver was the availability of a wide array of choices for the country’s pandemic diplomacy. Following the outbreak of COVID-19, countries across the world actively engaged in such diplomacy – whether the country was developed (such as the United States or members of the European Union) or emerging (such as China or India). A key goal of pandemic diplomacy is to gain soft power and goodwill through the donation or delivery of health products and technologies to other countries or through the support of policy positions taken by these countries,⁴⁸ such as those relating to the proposed COVID-19 TRIPS waiver.

In the early days of the pandemic, China was very eager to send face masks, other personal protective equipment, and ventilators abroad, especially to developing and least-developed countries. A recent study conducted by the Center for Strategic and International Studies on China’s pandemic diplomacy also reported that the country had “dispatched teams of medical professionals and advisors to assist at least 63 countries in handling the pandemic.”⁴⁹ At the opening of the 73rd World Health Assembly in May 2020, President Xi Jinping pledged “$2 billion over two years to help other countries respond to the impact of the coronavirus pandemic.”⁵⁰ As locally developed vaccines became available through Sinopharm and Sinovac, the country also sent hundreds of millions of doses abroad. Meanwhile, more than twenty countries hosted trials of Chinese vaccines.⁵¹ By October 2021, China had already delivered more than a billion doses of COVID-19 vaccines to over 100 countries, out of which at least tens of millions were donations.⁵²

Although China did not immediately join the COVID-19 Vaccines Global Access (COVAX) Initiative – much to the disappointment of its developing country allies and the supportive nongovernmental organizations – it became more active on the vaccine front after joining the initiative in October 2020.⁵³ (By comparison, the United States did not join COVAX until a few months later.) In August 2021, at an international forum on vaccine cooperation in China, President Xi pledged the supply of 2 billion doses of COVID-19 vaccines to other countries by the end of the year.⁵⁴ He also promised to contribute $100 million to the Gavi COVAX Advance Market Commitment, enabling the provision of donor-funded doses of COVID-19 vaccines to low- and middle-income countries.⁵⁵

Considering that China had already made a conscious and deliberate choice to provide vaccines to other parts of the world, the country might not have felt compelled to push aggressively for the adoption of the COVID-19 TRIPS waiver as part of its pandemic diplomacy. Indeed, the export of Chinese vaccines to countries in need, especially those in the developing world, would have allowed China to score more diplomatic points and attain greater soft power than the mere endorsement of a proposal that was advanced by India and South Africa and that had already earned the support of over sixty WTO members.

There are other reasons. First, there were many different policy and diplomatic options that would help China achieve the end goal of promoting global solidarity and enhancing access to vaccines, treatments, and other health products and technologies.⁵⁶ These options included vaccine donation and distribution, transfer of health and medical technology, support for the creation of regional or local production capacity, and active participation in international IP reforms (including the negotiation of the COVID-19 TRIPS waiver at the WTO). Because these options were not mutually exclusive, China could easily have supported multiple options simultaneously. The more options there were, the less urgent it would be for China to push aggressively for the adoption of the waiver at the WTO.

Second, the waiver remained controversial in the international arena, especially in the developed world. Even the United States, which made a high-profile announcement of its support for text-based negotiations at the WTO, declined to extend support beyond the narrow area of patents in vaccines. In such a polarized environment, it is understandable why China found it worthwhile to take a step back and hedge the risks of supporting the waiver. Had the proposed instrument been adopted, China would have shown its support. The WTO’s most-favored-nation treatment would also have enabled the country to benefit from this new arrangement. Given that the waiver was rejected – or at least adopted in a substantially different form – China successfully preserved its hard-earned political capital by maintaining a healthy distance from the proposal.

Finally, Sinopharm and Sinovac derived substantial financial benefits from the international sale of COVID-19 vaccines. In July 2021, the COVAX Initiative entered into an agreement to purchase 550 million doses from China, earning the ire of US politicians, commentators, and the mass media.⁵⁷ Likewise, studies have shown that a significantly large portion of the COVID-19 vaccines produced in China were sold rather than donated.⁵⁸ Thus, the proposed waiver would have undermined these commercial activities.

In short, it is not difficult to understand why China took a middle-of-the-road position in the debate on the COVID-19 TRIPS waiver at the WTO. There was simply no urgent need for the country to move to the forefront of that debate to maximize its global pandemic diplomacy. All it needed to do was refrain from taking actions that would undermine the waiver’s support.

4 The WTO Ministerial Decision

As the previous sections have shown, China was rather deferential in the first year and a half of the waiver negotiations at the TRIPS Council. Nevertheless, it became significantly more assertive toward the end of the debate – specifically during the deliberations on the proposal that provided the basis of the Ministerial Decision adopted at MC12.⁵⁹ This section explores why China changed its position in the run-up to this decision.

A month after the United States changed its negotiating position on the waiver in May 2021, the WTO membership agreed to begin text-based negotiations. Nevertheless, these negotiations were stalled by such contentious issues as the scope of the waiver (in relation to both the products and IP rights covered), the waiver’s duration, implementation issues, and the protection of undisclosed information (including regulatory data).⁶⁰ In December 2021, the European Union, India, South Africa, and the United States, with the support of the WTO Secretariat, began their own consultations to find a compromise. While China initially welcomed the use of small-group negotiations to break the impasse,⁶¹ it found those negotiations highly problematic when they produced an outcome document that sought to single out China for exclusion.

Although the WTO did not immediately release this document despite announcing a major negotiation breakthrough in March 2022, Stat News published a leaked version of the document online.⁶² Footnote 1 of that document limited the eligibility of the proposed arrangement to “any developing country Member that [had] exported less than 10 percent of world exports of COVID-19 vaccine doses in 2021.” Because China had slightly over a third of these exports in December 2021, according to the WTO–IMF COVID-19 Vaccine Trade Tracker, the country was de facto the only developing economy that would have been disqualified for the proposed arrangement. By the time the WTO officially released the outcome document on May 3, footnote 1 added new bracketed language stating that “[d]eveloping country Members with capacity to export vaccines are encouraged to opt out from this Decision.”

At the outset, it is not difficult to understand why some WTO members believed that the proposed arrangement should not be available to a country that had the world’s largest or second largest economy⁶³ and that accounted for a third of the world’s COVID-19 vaccine exports. After all, the arrangement was negotiated primarily to help countries in need – in particular, those with no or insufficient capacity to manufacture vaccines.⁶⁴ It is also no secret that the United States – and likely also the European Union – firmly believed that any negotiated concession in the COVID-19 context should not benefit a major trade power like China, whether due to domestic politics, global rivalry, or the developed countries’ growing effort to limit the special and differential treatment of developing countries.⁶⁵

On China’s side, there were also good reasons why the country had limited interest in using the proposed arrangement. As noted earlier, China-based Sinopharm and Sinovac derived substantial financial benefits from the international sale of COVID-19 vaccines during the pandemic. Waiving IP rights, even temporarily, would undermine these commercial endeavors. It was quite telling that a month before the adoption of the Ministerial Decision, China announced in the General Council’s meeting its intention not to use the proposed arrangement provided that the WTO membership agreed to drop the exclusionary language in footnote 1.

Such language was particularly problematic for China. It is one thing to opt out of the proposed arrangement but quite another to be disqualified by other trade powers without ever being consulted. To a large extent, the proposed language had created a major diplomatic blunder by overlooking the border closure to Chinese visitors in the early days of the pandemic, the importance of “face” (mianzi) in Chinese culture,⁶⁶ and the country’s historical struggle with what historians have referred to as the “century of humiliation” – an extended period in the nineteenth and early twentieth centuries during which China was reduced to a semi-colony.⁶⁷ The exclusion looked even worse when the consultations that generated the new proposal involved only 4 out of more than 160 WTO members – or less than a fifth of the WTO membership if all EU member states were counted (notwithstanding the fact that only some EU members opposed the waiver).

As a result of this proposed exclusion, China quickly moved from a deferential position to a more assertive one, similar to those policy positions it took when it perceived a threat to its state sovereignty. The resistance from China, along with the usual complications regarding eligibility, eventually caused footnote 1 to become the last issue to be resolved by WTO delegates.⁶⁸ When the Ministerial Decision was finally adopted in the wee hours of the last day of MC12, that footnote was changed to the following:

For the purpose of this Decision, all developing country Members are eligible Members. Developing country Members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision. Such binding commitments include statements made by eligible Members to the General Council, such as those made at the General Council meeting on 10 May 2022, and will be recorded by the Council for TRIPS and will be compiled and published publicly on the WTO website.

Even though the outcome is the same – that China would not use the new arrangement facilitated by the Ministerial Decision – China likely found the adopted language more palatable because it was not an imposition by other trade powers but a recognition of the country’s sovereign decision to opt out of the proposed arrangement.

As many commentators rightly recognize, the adopted language still posed a serious problem from a public health standpoint. Excluding a country like China would greatly reduce both the global demand and global supply of the COVID-19-related health products and technologies.⁶⁹ A very high volume of these products and technologies were produced or consumed in China. Nevertheless, the danger of introducing eligibility restrictions is outside the scope of this chapter.⁷⁰ Such restrictions would affect not only China, but all developed countries as well as those developing countries that opted out of the arrangement. To a large extent, the public health problem posed by these restrictions was the same as the one confronting the opt-out mechanism in article 31bis of the TRIPS Agreement. It is therefore no surprise that, in the early days of the COVID-19 pandemic, a consortium of nongovernmental organizations and individual experts sought to address the latter problem by calling on WTO members that had previously opted out of the article 31bis system to reconsider their earlier position.⁷¹

5 Lessons and Observations

This chapter identifies three distinct reasons why China took a middle-of-the-road position in the debate on the COVID-19 TRIPS waiver at the WTO. The previous section also recounted the country’s more assertive position in the run-up to the adoption of the Ministerial Decision. Drawing eight lessons from the international debate on the waiver and the subsequent Ministerial Decision, this section offers insights into the roles China can or will play in future international policy debates at the intersection of IP and public health, including during the next pandemic.

First, the position China took in the waiver debate is indicative of the country’s changing pharmaceutical landscape and its growing ambition to become an IP power. Because of these developments, China now takes policy positions that align more closely with those of developed countries than those of developing countries.⁷² While some policymakers and commentators have been surprised that China did not take the developing countries’ position in what they considered a traditional North–South debate, China has moved gradually away from the developing countries’ policy position since its innovative turn in the mid-2000s. The waiver debate is just one of the latest iterations of this changing policy position. This policy shift also explains why China supported the consultations between the European Union, India, South Africa, and the United States until the outcome document included a footnote that would have excluded the country. As China declared in the TRIPS Council’s meeting in December 2021, shortly after the launch of these consultations:

We appreciate the updates made by South Africa, the European Union, and others. We have also followed some media coverage on this important issue. It is good to know that recently there have been some small group discussions at ministerial level and between experts, and the momentum is building for an urgent resolution on the TRIPS waiver.⁷³

Second, although China’s ambition to become an IP power has caused the country to move away from the developing countries’ traditional policy positions, it remains reluctant to give up leadership in the developing world and continues to value support for other developing countries, due in large part to the soft power generated from such support.⁷⁴ Given this policy dilemma, China will likely push for policies that strengthen IP protection while at the same time promoting the transfer of technology to countries that are less economically and technologically developed. The existence of these seemingly conflicting policy positions is not new. Even though China pushed for stronger IP protection to build national champions in the pharmaceutical sector, it has made strong commitments to promoting universal healthcare.⁷⁵ Likewise, although the Fourth Amendment to the Chinese Patent Law adopted during the pandemic strengthens the protection for pharmaceuticals by providing the Hatch–Waxman extension of the patent term and introducing a new patent linkage system, the revised statute provides a six-month grace period for filing patents that has been disclosed during a national emergency to promote the public interest. Articles 50–52 usher in further support for open patent licensing.

Third, China is in a good position to facilitate large-scale transfer of health and medical technology. Commentators have widely noted the importance and urgency of the development of regional supply centers and domestic production capacity.⁷⁶ China’s Belt and Road Initiative – in particular, its “Health Silk Road” – will provide an ideal platform for facilitating such development.⁷⁷ As noted in a joint statement released in June 2020, China will work with other countries to

support mutual efforts in combating the COVID-19, and [to] cooperate to address, control and overcome the pandemic through the sharing of timely and necessary information, experiences and best practices for diagnosis and treatment of the COVID-19, strengthening and upgrading the capacity of public health system[s], promoting joint scientific research and international dialogues among health professionals, and providing assistance to countries in need.⁷⁸

Thus far, the Health Silk Road has remained largely a concept, and the Belt and Road Initiative has focused primarily on connectivity and infrastructure development – which is likely to translate to hospitals, treatment centers, and other facilities in the health context. Nevertheless, researchers have found that “countries that have signaled their endorsement of [this] concept scored much higher” in terms of the scope and impact of China’s activities during the COVID-19 pandemic.⁷⁹ They also note that “China’s Covid-19 diplomacy was most significant in countries where China already had strong diplomatic relations and sizable influence before the start of the pandemic.”⁸⁰

Fourth, unlike those countries that have actively donated vaccines to multilateral initiatives such as COVAX, China has taken a predominantly bilateral – and often decentralized – approach to vaccine diplomacy.⁸¹ It reportedly has donated only a small portion of the COVID-19 vaccines produced in China,⁸² although it is unclear whether and how much the sales price of those vaccines has exceeded their production costs. At the time of writing, comparative research on pandemic diplomacy remains scant. When more research in this area becomes available, it will be useful to compare the diplomatic efforts across the major players in the global health regime, including China, India, the European Union, and the United States. A deeper understanding of their differing approaches will help anticipate how these players will behave during the next pandemic. It will also provide insight into the competitive dynamics involving these players.⁸³

Fifth, China’s predominantly bilateral approach during the COVID-19 pandemic recalls the country’s historical “reluctance to collaborate with surveillance systems or engage in other information-sharing activities that are at the heart of contemporary global health governance.”⁸⁴ Although there is a tendency to treat developments during the COVID-19 pandemic as unprecedented, extraordinary, or sui generis, China’s pandemic diplomacy resembles its earlier engagements in public health diplomacy during the SARS, H1N1, and H5N1 outbreaks.⁸⁵ As Jeremy Youde explained:

China’s preference for bilateral channels likely reflects its relative newness to the development assistance for health realm, the unsettled foreign aid bureaucracy within the country, its interests in increasing the sovereign capacities of its recipient states, and its concerns about the role of civil social organisations and nongovernmental organisations in service delivery.⁸⁶

Outside the public health arena, one could further link China’s current engagements in this arena with those in other areas, such as bilateral and regional trade agreements or the Belt and Road Initiative.⁸⁷ Given these similarities, it is no surprise that many China critics remain concerned that China would conduct pandemic diplomacy in the same way it has undertaken diplomatic engagements in trade, development assistance, and other contexts. As the Center for Strategic and International Studies’ research on China’s pandemic diplomacy reminded us, “China predominantly engages countries bilaterally to augment its bilateral influence.”⁸⁸

Sixth, China will assume influential positions in future debates at the intersection of IP and public health. These debates range from the ongoing discussions on the international treaty on pandemics under the WHO⁸⁹ to those concerning the greater deployment of artificial intelligence in public health. Yet it remains difficult to predict where China will stand in those debates in the near future. Thus far, we have rarely seen China take policy positions that differ significantly from those of either developed or developing countries. Instead, its positions often fall somewhere between these two traditionally polarized positions.⁹⁰

Seventh, China can bring important benefits to the international community even if it does not move to the forefront of the IP debates at the TRIPS Council. Consider, for instance, the debate on the COVID-19 TRIPS waiver. Regardless of its support for this proposed instrument, China’s donation of face masks, ventilators, vaccines, and other supplies had already helped alleviate the public health challenges in many developing countries. In addition, there was no clear-cut divide, especially at the WTO, between issues at the intersection of IP and public health and those in other trade or trade-related areas, such as agriculture, fisheries, steel, and textiles. Even if China did not take an active position in the former debate, its important role in the latter debates could ultimately influence discussions in the former. In the run-up to MC12, some commentators expressed concern that the proposed waiver might be linked to other trade items in a “take it or leave it” manner.⁹¹ These concerns were understandable in view of the past practice of “linkage bargaining” in negotiations at the WTO and the General Agreement on Tariffs and Trade.⁹² Indeed, the TRIPS negotiations provide a textbook example of such bargaining, which resulted in an agreement to introduce high IP standards in developing countries in exchange for developed countries’ concessions in textiles and agriculture.⁹³ While China did not play an active role in pushing for the adoption of the COVID-19 TRIPS waiver, its positions in other trade or trade-related areas, and its ability to strike side deals at the WTO and in other international fora, could have had a significant impact on the waiver negotiations had they continued.

Finally, although policymakers and commentators considered it self-serving when the pharmaceutical industry and its supportive politicians used China and Russia to explain their opposition to the waiver,⁹⁴ the competition between IP rights holders in China and those in Europe, the United States, and other developed and emerging countries cannot be overlooked. China has now reached the stage of development where it can compete effectively against other countries both at the technological level and in the pharmaceutical arena. To be sure, the country still does not have internationally recognized pharmaceutical brands that are comparable to those found in Europe or the United States, such as Johnson & Johnson, Merck, Novartis, Pfizer, Roche, and Sanofi.⁹⁵ Nevertheless, it is only a matter of time before the generous investment and substantial policy support in China provide the much-needed boost to create globally competitive national champions in the pharmaceutical sector.⁹⁶ The concerns in the European and US pharmaceutical industries are therefore not far-fetched. To some extent, such concerns remind us of their earlier unpopular comments about generic competition in HIV/AIDS medicines in Sub-Saharan Africa.⁹⁷ Around the time of the highly controversial lawsuit that the global pharmaceutical industry filed against President Nelson Madela’s government in South Africa, an industry representative “suggested that South Africa was a pawn used by India and Argentina to undermine TRIPS.”⁹⁸ The industry’s present concerns about the growing rivalry with Chinese companies in the COVID-19 context largely resemble its earlier concerns about generic competition.

6 Conclusion

The COVID-19 pandemic has forced countries in both the developed and developing worlds to make difficult policy choices at the intersection of IP and public health.⁹⁹ It has also made salient the fast-changing developments that are already underway in China and other emerging countries. Although many policymakers and commentators still have tendencies to link China’s IP developments to either the age-old debate on piracy and counterfeiting or the traditional North–South divide, a comprehensive reassessment of the country’s role in the international policy debates at the intersection of IP and public health is in order. Such reassessment will better recognize the country’s innovative turn in the mid-2000s, its ambition to become an IP power, and its changing pharmaceutical landscape. In the near future, China will likely subscribe to policy positions that lie somewhere between those adopted by developed countries and their less developed counterparts. Its middle-of-the-road position in the debate on the COVID-19 TRIPS waiver has provided a timely and instructive illustration.

14 COVID-19 Exclusion, Policy Contagion, and Colonial Hangover in Africa

Olufunmilayo B. Arewa

1 Travel Bans, Vaccine Exclusion, and Political Theater

As has been the case outside of Africa, African countries have experienced multiple consequences from the COVID-19 pandemic that extend beyond its immediate impact on human health. In Africa, much like elsewhere in the world, the pandemic has had a significant economic impact, leading to profound global economic distress. African countries have also experienced consequences that are unlike those of much of the rest of the world. For example, the pandemic has contributed to a sovereign debt crisis that led to sovereign defaults by Zambia in late 2020, Mali in early 2022, and Ghana in late 2022, and that might lead to additional defaults.¹ Travel bans and COVID-19 vaccine exclusion are key COVID-19 policies that have also had a particular impact in Africa. These and other COVID-19 policies in African contexts reflect patterns of exclusion that are at least in part a consequence of continuing colonial hangover.

In late November 2021, scientists in South Africa and Botswana discovered a new variant of the COVID-19 virus.² This new variant was subsequently designated Omicron.³ Just a year earlier, in late December 2020, amid concern about an earlier COVID-19 surge, the United Kingdom had announced an immediate travel ban on flights to South Africa; this ban was lifted in October 2021.⁴ Shortly after the lifting of the 2020 travel ban, a new travel ban was imposed within two days of the identification of the Omicron variant. In a December 2021 comment in the medical journal The Lancet, a group of South African scientists labeled the UK travel ban a form of “political theater.”⁵ UN Secretary General António Guterres referred to the travel bans as a form of “travel apartheid.”⁶

Patterns of COVID-19-era exclusion also extended beyond travel bans to access to COVID-19 vaccines. In the earliest days of the distribution of COVID-19 vaccines, many African countries did not receive adequate access to them. As Gavi, the Vaccine Alliance, noted,⁷ “early access was inadequate; by the end of 2021, a number of low-income countries, particularly in Africa, had barely been able to vaccinate 10% of their populations … In contrast, many high-income countries had already achieved vaccination rates of 75–80% by this time.”

Vaccine exclusion was due in part to hoarding by wealthier countries,⁸ as well as the policies of some vaccine manufacturers that sought to wring maximum profit from their vaccines: “Moderna, whose coronavirus vaccine appears to be the world’s best defense against Covid-19, has been supplying its shots almost exclusively to wealthy nations, keeping poorer countries waiting and earning billions in profit.”⁹ Vaccine exclusion was also likely exacerbated because poorer countries were in some instances charged more for vaccines than wealthier ones.¹⁰

The experiences of African countries during the COVID-19 pandemic highlight key consequences of colonial hangover and fundamental structural impediments and inequalities evident in global and local contexts. As Oumar Seydi, the Gates Foundation Africa Director, noted in December 2021:

To many here [in southern Africa], the travel bans feel like punishment. Why is it, people here want to know, that when it comes to vaccines, Africans are last in the queue, but when it comes to travel sanctions, we’re first? Why do travel bans target the countries that can least afford it, while people in higher-income countries can travel freely?¹¹

2 Policy Contagion and the Costs of COVID-19 Exclusion

African countries were not the only countries to have experienced COVID-19 travel bans. However, the manner in which bans were imposed on countries in Africa reflects such countries’ disparate and likely discriminatory treatment.¹² The travel bans imposed against African countries after the South African announcement of the detection of the Omicron variant reflect a pattern of policy contagion.¹³ The spread of COVID-19 policies highlights uncertainties about the nature of policy diffusion during times of crisis,¹⁴ as well as ways that public health and other policies and institutions reflect continuing patterns of colonial overhang.

COVID-19 policy contagion, which has been particularly evident in travel bans, may not be grounded in science or even public health best practices:

Rapidly imposed travel restrictions make sense in the early stages of an outbreak, when infections of a variant are few and test-and-trace systems are still able to follow the paths of contagion. When imported cases account for more than 10% of infections, bans can have a big impact on the growth of the epidemic. They can thus buy time to find out about a new variant, prepare hospitals or roll out vaccinations … But travel bans have a habit of sticking around even though, once a virus or variant is circulating freely in a country, they are largely pointless.¹⁵

Travel bans may be counterproductive in a number of ways. The South Africa Omicron travel ban potentially limited access to important sequencing reagents for South Africa’s critically important COVID-19 genomic surveillance activities.¹⁶

After its initial South Africa travel ban, the United Kingdom soon extended the ban to other countries in Africa, including Angola, Malawi, Mozambique, Nigeria, and Zambia. Notably, Nigeria, which is more than 2,000 miles away from South Africa, is not even in the Southern African region where Omicron was first identified. This travel ban would be akin to imposing a ban on travelers from the United Kingdom as a result of cases in Cyprus. Further, at the time the United Kingdom travel ban was imposed on Nigeria, the percentage of travelers from Nigeria testing positive for COVID-19 after arriving in England between October 14 and November 3 was “similar to the proportion among those arriving from several European countries” and was less than percentages of travelers testing positive from both Spain and Italy, neither of which became subject to a travel ban.¹⁷ This reflects a broader pattern of imposition of Omicron travel bans against countries in Africa when bans were not imposed against countries outside of Africa with much higher levels of COVID-19 cases:

Nearly two weeks after South Africa raised the flag over the new omicron variant, African leaders have called the newly imposed travel bans on African countries discriminatory and unjust … Despite the omicron variant being detected in over 40 countries, including the US and across Europe, similar travel bans are yet to be imposed against non-African countries … Yet covid-19 numbers remain far higher in Europe than across southern Africa. On 7 Dec., the UK registered over 50,000 new cases, whereas South Africa registered 6,400 and Malawi 16. This has led to several African leaders calling the bans discriminatory.¹⁸

The Omicron travel bans targeted at African countries soon spread across the globe: “Though scientists have little information about the new variant and aren’t certain where it originated, several countries, including the United States, Canada, the United Kingdom and the European Union announced immediate travel bans from South Africa and other southern African nations.”¹⁹ In late November 2021, Canada banned nationals of several African countries, including those such as Egypt and Nigeria that are far away from the Southern Africa region where Omicron was first detected.²⁰ Notably, Cairo, the capital of Egypt, is farther away from Pretoria, the executive capital of South Africa, than Canada’s capital Ottawa is from London, United Kingdom.²¹ Canada also created an innovative policy of imposing a third-party testing requirement on Canadian citizens traveling from the African countries on the banned list, requiring such travelers to stop in a third country and take a COVID-19 test in the third country “before continuing their journey to Canada.”²²

Inequity in access to COVID-19 vaccines and travel bans, particularly the Omicron travel bans, mirror and likely intensify existing patterns of global inequality. Lack of access to vaccines led to a widening poverty gap for countries excluded.²³

Whereas many wealthier countries were able to not only leverage domestic production capacity (and repurpose existing capacity to manufacture COVID-19 vaccines) but also take huge gambles on the advance purchase of a spread of vaccines, most African nations were not and were left behind in the race to protect their populations. The impact was increased mortality, greater fragility of health systems and weaker economies.²⁴

Lack of vaccine equity can also contribute to the emergence of new variants and increase stress for countries that may already be fragile, which could exacerbate political unrest.²⁵ Vaccine exclusion might also contribute to precarity, evident in increased poverty, food insecurity, and unemployment.²⁶

Exclusion from access to vaccines may boost the likelihood of migration, which is an increasingly contested issue in relationships between countries in Africa and Europe.²⁷ The economic impact of travel bans for countries in Africa has been significant. An estimate in early 2022 suggested that South Africa had lost more than 2 billion Rand (more than US$123 million) in tourism spending because of the Omicron travel ban.²⁸

3 COVID-19, Exclusion, and International Institutions

Travel bans and vaccine exclusion are a continuation of patterns of exclusion of African countries from international institutions. This exclusion reflects a pervasive colonial hangover that has had a continuing impact locally within Africa, as well as globally. As UN Secretary General António Guterres noted in July 2020:

The legacy of colonialism still reverberates … We see this in the global trade system. Economies that were colonized are at greater risk of getting locked into the production of raw materials and low-tech goods – a new form of colonialism. And we see this in global power relations. Africa has been a double victim. First, as a target of the colonial project. Second, African countries are under-represented in the international institutions that were created after the Second World War, before most of them had won independence. The nations that came out on top more than seven decades ago have refused to contemplate the reforms needed to change power relations in international institutions.²⁹

Colonial hangover is evident in African representation in varied global policymaking contexts. Dominant legal, regulatory, and policy frameworks, within many countries in Africa and globally, can be traced directly back to colonial-era lawmaking and postcolonial legal and policy approaches that have replicated colonial-era patterns.³⁰ This means that many today operate under assumptions and use of policies and laws that were created and deployed during and even prior to the colonial era.

International institutions exemplify continuing consequences of colonial hangover and African exclusion. Institutions created in 1944 as part of the Bretton Woods system continue to play a key role in global economic and financial matters today. The International Monetary Fund (IMF) and International Bank for Reconstruction and Development (World Bank) were created at Bretton Woods, New Hampshire at a meeting of forty-four nations.³¹

The IMF and World Bank have had notable successes, including facilitation of the rapid post-World War II reconstruction of Western Europe and Japan, “which led to the period of the fastest economic growth and, particularly, the fastest growth of international trade in world history.”³² The collapse of the original Bretton Woods arrangements in the 1970s led to what economist José Antonio Ocampo describes as “the de facto rise of the current ‘non-system’.”³³

Organizations created at Bretton Woods remain a strong institutional force, particularly in African contexts. In the 1990s, during a debt crisis, the IMF and World Bank were described as “institutions, founded half a century ago at the Bretton Woods Conference to serve the needs of the industrialized world, [that] have become the overlords of Africa in the 1990’s.”³⁴ The governance structure of the system established at Bretton Woods continues to embody colonial-era power dynamics:³⁵

[T]he rules embedded in the Bretton Woods institutions are protectionist, asymmetrical and impede balanced economic development … The governance structure of the Bretton Woods system constitutes mostly industrialised countries which make vital decisions and form policies that are implemented by all as they represent the largest donors. Sometimes these decisions are made without adequate consultation with the developing countries.

The ad hoc framework that followed the collapse of the original Bretton Woods system has contributed to significant asymmetries between developed and developing countries. Ocampo has noted that such asymmetries have led emerging and developing countries to have a limited share in the creation of international liquidity and greater economic vulnerability.³⁶ Ocampo also points out that such countries have an “inadequate voice and representation in international economic decision-making and in the International Monetary Fund (IMF) in particular.”³⁷

International public health institutions were created during the same era as international financial institutions, and the United Nations’ “key global health agencies, such as the UNICEF [United Nations Children’s Fund] and the World Health Organization were born in the post-World War II era of 1946–48, in the waning years of colonialism.”³⁸

Colonial hangover in COVID-19 contexts mirrors key elements of colonial hangover in the financial and economic sphere and exemplifies specific aspects of such hangover in the intellectual property (IP) and public health arenas: “exclusionary colonialist patterns that centre Euro-Western knowledge systems have also shaped the language and response to the pandemic – which, in turn, can have adverse health outcomes.”³⁹

As COVID-19 exclusion thus highlights, colonial hangover has long been evident in the public health arena and is apparent in patterns of knowledge production, as well as policy and funding approaches. External public health donor funding in Africa may be driven by external needs and often external funding institutions. On April 15, 2021, an open letter to the editor in Nature Medicine noted continuing patterns of external donor funding for malaria largely being used to fund institutions outside of Africa:

In 2017, the USA, UK and Canada collectively spent US$1.1 billion on malaria development aid, which includes research funding … 81% of funding was used to support institutions in the funding country and 18% went to non-governmental organizations (probably based in high-income countries) – that leaves just 1% of malaria funding available to local in-country research institutions. We recognize that the current funding structures create an imbalance of power and a monopoly that favors Western institutions and is derived in part from the perpetuation of inequities in access to funding with policies that lock out African institutions. These structural inequities must be examined, and they must end.⁴⁰

Public health reflects an “epidemic of illusions … propagated by the coloniality of knowledge production,” which involves questions about the “mechanisms in public health science,” particularly epidemiology, “that enable groups to sanction one account of disease causation over another.”⁴¹ COVID-19 vaccine exclusion has been facilitated by structures of global knowledge production that continue to exclude African countries. Few African countries have local capacity to produce COVID-19 vaccines, which both reflects and exacerbates colonial hangover. Less than 1 percent of all vaccines used in Africa are locally produced, which “reveals the region’s intense vulnerability and overdependence on foreign supplies.”⁴²

Colonial hangover is evident in a broad range of knowledge production infrastructures, including in relation to research and development (R&D). The lack of local vaccine production capacity mirrors gaps in research capacity more generally and African countries’ tremendous deficit in scientific and technological infrastructure: “[Sub-Saharan Africa] accounts for less than 1 percent of the world’s research output while being home to 13.5 percent of the global population … In 2008, [countries in Africa] produced the same number [of research papers] as the Netherlands,”⁴³ which in 2021 had a population of 17.53 million as compared to a population of some 1.391 billion in Africa and some 1.181 billion in Sub-Saharan Africa.⁴⁴

Research activities within Africa reflect externalized networks, evident in international collaborations.⁴⁵ Current internal research capacity within Africa reflects low levels of local R&D investment, which has led to research being “highly dependent on external funding support, often through intermediary institutions, and thus not optimal for effectively addressing research problems in the region.”⁴⁶ Not surprisingly given past patterns, Sub-Saharan Africa significantly lags most of the world in key knowledge production metrics, including R&D expenditures as a percentage of gross domestic product (GDP) and the number of R&D scientists per million people.⁴⁷

The exclusion of African countries evident in varied settings reflects both external and internal constraints. External constraints largely emanate from hangovers from colonial-era power arrangements, while internal decisions have too often not sufficiently disrupted such hangovers and may have even exacerbated the negative impact of external constraints:

Globalization has brought many opportunities to African countries, but African economies have not transformed enough away from dependence on raw materials, and thus many remain on the bottom rungs of global supply chains. This is not only the fault of the global superstructure; it also has to do with the policy choices that many African countries have made, especially in the last thirty years. But attempts over the last two decades to regulate some of the worst excesses of globalization have paid scant attention to the needs and constraints of developing countries. The rise of new challenges, such as climate change and the digital economy, and of frameworks to regulate them sharpens further the difficulties faced by African states.⁴⁸

Colonial hangover is particularly visible in the IP realm: “The international rules governing intellectual property have been framed to protect companies’ investment in research and development. However, intellectual property rights as they are currently designed place developing countries at a constant disadvantage, especially in areas such as public health.”⁴⁹ African countries have long criticized current IP arrangements in relation to a number of things, including the World Trade Organization (WTO) Dispute Settlement Mechanism.⁵⁰ In the digital era more generally, notwithstanding the potential promise of new technologies, African countries have increasingly been left behind or disadvantaged by various infrastructures, including in relation to digital economy governance, digital economy infrastructure, and the international tax regime.⁵¹

Patent protection and access to medicines have long been contested in global IP discussions and became a critical and continuing point of dispute during the HIV/AIDS pandemic. The importance of access to medicines became apparent with the HIV/AIDS pandemic, which has had its greatest impact in Africa.⁵² Patents for antiretroviral therapies (ART)⁵³ have long been a contested issue.⁵⁴ ART helps people with HIV live longer and healthier lives and profoundly reduces risk of HIV transmission.⁵⁵ Debates surrounding access to medicines, particularly ART, underscore the interaction of law, policy, and issues related to human well-being that continue to reflect the impact of colonial hangover.⁵⁶ The COVID-19 pandemic, which also raises critical patent-related issues for African and other developing countries,⁵⁷ may intersect with and worsen HIV/AIDS outcomes.⁵⁸

4 Colonial Hangover and Double Marginalization

Vaccine exclusion and travel bans reflect patterns of exclusion of African countries that are not new. Although formal colonialism ended more than half a century ago in much of the world, a pervasive colonial hangover continues to shape relationships within and among countries. Colonial hangovers evident during the COVID-19 pandemic represent one of many colonial hangovers evident in economic relations, global business and finance, international relations, and public health.

External economic relations of African countries have too often been based on a model of plunder and extraction of raw materials that today increasingly extends to data and information. These extractive models have contributed to the economic and political exclusion of African countries in varied global contexts. Extractive models have also reflected significant external determination through which decisions about internal needs are too often based on the needs and interests of external actors. These externally oriented and often extractive models reflect top-down approaches that have contributed to double marginalization in African and other contexts. At the first level of marginalization, African countries are marginalized and to a significant degree excluded from global power relations.

In many African contexts, a second level of marginalization has long been apparent in the exclusion of a significant portion of the population from access to opportunities and resources, including healthcare. Many in Africa are poor, and global poverty is increasingly a Sub-Saharan African phenomenon: “Extreme poverty will become a predominantly Sub-Saharan African phenomenon in the coming decade and the continent will be home to the lion’s share of the global poor by 2030.”⁵⁹

High levels of poverty within Africa are a testament to high levels of internal exclusion. In 2018, the World Bank estimated a 40 percent regional poverty rate for Sub-Saharan Africa, which contained 13 percent of the world’s population in 2017,⁶⁰ with countries in Sub-Saharan Africa accounting for close to two-thirds of the global population of extremely poor people. While the poverty rate in Sub-Saharan Africa decreased from 56 percent in 1990 to 40 percent in 2018, the number of poor people continues to rise. This means that the poverty rate in Sub-Saharan Africa has not fallen fast enough to keep up with population growth in the region. In 2018, 433 million Africans were estimated to live in extreme poverty, an increase from 284 million in 1990.⁶¹ This second level of internal marginalization, which is a key element of the significant double marginalization confronting many countries in Africa, requires targeted locally facing policy interventions.

The impact of internal marginalization soon became apparent during the COVID-19 pandemic. In COVID-19 contexts, vaccines eventually became more widely available in Africa despite continuing external supply limitations. In early 2022, as the supply of COVID-19 vaccines increased in many African countries, the need for policies to promote vaccine uptake became apparent: “Although COVID-19 vaccine supplies to Africa have risen significantly, the continent is struggling to expand rollout, with only 11% of the population fully vaccinated. The vaccination rate needs to increase six times if the continent is to meet the 70% target set for the middle of [2022].”⁶²

The 70 percent target was not met in 2022. As of December 31, 2022, the Africa Centres for Disease Control and Prevention (Africa CDC) estimated a 25.6 percent rate of fully vaccinated people in Africa, with utilization of 77.4 percent or 801 million of the 1.0345 billion vaccine doses received.⁶³ Despite greater availability of vaccines, existing policies in many countries may not have sufficiently facilitated widespread vaccination efforts or effectively countered vaccine hesitancy. Existing policies have also in some instances contributed to expiration of unused doses of vaccines: “In African countries, public confusion over whether to get inoculated, and if so when and where to do so, has contributed to the expiration of doses. Like Malawi[, which threw away 16,000 expired vaccine doses in early 2021], South Sudan saw 59,000 unused doses expire this month.”⁶⁴

Poverty in Africa underscores patterns of exclusion and marginalization that may exist internally within many countries in Africa. Internal exclusion and marginalization draw attention to the continuing internal impact of colonialism and colonial governance, particularly in relation to elite intermediaries. During colonialism, elite intermediaries in former British colonies, for example, were selected, validated, and kept in power by British colonial policies that primarily attended to the needs of external actors and interests.⁶⁵

Elite intermediaries were an important aspect of governance structures in varied colonial contexts. The incentives that shaped the behaviors of internal intermediaries during colonialism continue to play an important role in the policy arena that has not fundamentally disrupted the most deleterious aspects of colonial governance. Rather, colonial and postcolonial governance may offer such internal elites opportunities to profit from differences between internal and external legal and governance arrangements through practices such as jurisdictional arbitrage and other forms of elite extraction that may have exacerbated internal contestation.⁶⁶

Anthropologist Elizabeth Colson noted how internal contestation played out in the development of customary land law. Contestation was particularly evident in contexts of scarcity when people became aware of “the conflict between the old political obligation to maintain general access to adequate resources for all citizens, and the possibility of extracting an individual profit from areas preempted under the rule that a man might enjoy the fruits of his labor.”⁶⁷

The contestation noted by Colson remains fundamentally unresolved, largely because institutional structures were for the most part not put in place during or after colonialism to check internal patterns of extraction. This has led to questionable incentives that may be baked in institutionally and that may continue to the present day in too many African contexts. The combination of internal and external factors and constraints have led to widespread poverty and pervasive scarcity of opportunity, particularly for many young people. This combination has also contributed to a policy environment that would benefit from a focus on the development of sustained strategies and policies for the benefit of the majority of the population in contexts shaped by colonial hangover.

Critically, existing governance approaches have left many governments with insufficient tools to address crises such as COVID-19. Internal and external constraints and governance structures make navigation of difficult external and internal challenges potentially perilous for many within African contexts. This became particularly evident during COVID-19, when many countries in Africa lacked the internal capacity to produce vaccines, were too often last in line to gain access to critically needed vaccines but became first in line for travel bans and other products of policy contagion that had a significantly negative impact across the African continent.

5 Learning from COVID-19 Exclusion: Strategies and Policies to Disrupt Colonial Hangover

Policy approaches to COVID-19 should not be limited to dealing with COVID alone but should be the start of robust processes that disrupt knowledge production structural impediments and inequalities. Lack of local vaccine production capacity in Africa highlights continuing patterns of external dependence that are a hallmark of colonial hangover. This lack of capacity underscores the need for knowledge production and innovation infrastructures that disrupt colonial hangover. External actors and sources of authority continue to be given primacy in too many African contexts with insufficient scrutiny of whether such primacy is merited and ways in which modification of external policies might lead to better outcomes.

Colonial hangover is evident in models of governance, policies and laws, and institutions developed during colonialism. These models, laws, policies, and institutions were created to a large extent by external powers with an external orientation. During colonialism, verbatim copying of laws and policies was a norm. Patterns of external determination underscore potential problems that come from indiscriminate borrowing from external sources. Borrowing from other contexts comes with histories, contexts, assumptions, disputes, and accommodations. External determination reflects persistent patterns of policymaking and lawmaking that fail to sufficiently consider the local. A clear need exists today for strategies that better incorporate the local. As a 2021 Policy Brief from the African Policy Research Institute notes, in crafting a digital economy agenda, African countries must “ensure that policies and strategies are not indiscriminately copied from other contexts. National and regional policymakers should exercise creativity and judgement that reflect the specificities of African contexts in formulating their digital policies.”⁶⁸ This suggested approach should extend beyond just digital economy policies.

Intellectual property laws are key mechanisms that govern knowledge production and innovation. In African contexts, IP frameworks have been implemented with insufficient consideration of the local. Colonial hangover has led to fractured and highly fragmented IP frameworks in Africa “comprising an array of partially overlapping and sometimes conflicting agreements, laws, policies and sub-regional organisations.”⁶⁹ As many commentators have noted, the COVID-19 pandemic underscores the need for local patent reform within African countries and globally to give greater attention to the critical need for local vaccine manufacturing and other types of capacity in Africa and other developing countries.

The COVID-19 pandemic draws attention to a persistent lack of consideration of the local impact of knowledge production frameworks. This inattention has hampered policy, planning, and local vaccine production. As a result, much of the population in Africa remained unvaccinated well after widespread dissemination of vaccines in developed countries. Even if vaccines were to have flowed in greater quantities to countries in Africa at an earlier point in time, other potential limitations might have impeded vaccination efforts. In late October 2021, UNICEF projections suggested that “to reach the new COVID-19 vaccination targets, and assuming an unhindered vaccine supply next year, there could be a shortfall of up to 2.2 billion auto-disable syringes.”⁷⁰

The ability to accurately measure infections and death rates remains a persistent problem in many countries in Africa.⁷¹ The COVID-19 pandemic illustrates the high costs of insufficient measurement because reported numbers of infections and deaths may not be accurate. This is certainly not an exclusively African problem. The COVID-19 pandemic has highlighted pervasive underestimates of COVID-19 deaths within and outside of Africa. For example, according to official South African data, by mid-2021, 90,000 people had died from COVID-19.⁷² An analysis in South Africa found excess deaths during the pandemic of more than 190,000 between May 2020 and July 2021.⁷³

Healthcare inequities in African contexts highlight the increasing number of poor people in Africa. The COVID-19 pandemic also exposes patterns of double marginalization that combine pervasive external marginalization of African countries with significant levels of internal marginalization within such countries. Responses by external actors to COVID-19 in African countries reflect the inability of such actors to overcome their tendency to recreate persistent patterns of exclusion.

South Africa has experienced significant external marginalization evident in vaccine exclusion and travel bans. The country has the largest and most integrated local vaccine production capacity in Africa.⁷⁴ However, it also faces continuing challenges in internal marginalization. For example, it has excellent private healthcare in a highly unequal health system, particularly for the 70 percent of the population that relies on the public healthcare system.⁷⁵

South Africa is not alone in having unequal internal access to healthcare. Many countries both inside and outside of Africa have significant internal exclusion and marginalization. In African contexts, double marginalization must be considered in crafting innovative and hybrid policies that take sufficient account of local contexts and needs. Increasing local R&D funding and local science, technology, engineering, and math (STEM) capacity are of critical importance in establishing the groundwork for greater local ability to manage digital economy strategies and address COVID-19, healthcare more generally, and other local needs in African contexts.

COVID-19 highlights consequences of ineffective strategies for dealing with the internal and external. The pandemic also draws attention to the need for greater targeted internal funding and strategies to promote development of sustainable innovation ecosystems. Public and private funding, including from venture capitalists, have been important sources for financing STEM innovation globally.⁷⁶ Internal STEM funding in African contexts is far too often insufficient and may continue to be shaped by colonial hangover. Inadequate internal funding of R&D and other elements of scientific and technological capacity have made external funding even more important.

However, as malaria funding patterns discussed in the Nature Medicine letter to the editor suggest, funding by external donors can be governed by external needs and priorities that may leave little funding for or room for input from local organizations. External private funding in African contexts can be driven by biases imported with investors that may replicate racial patterns and funding biases evident in Silicon Valley and other contexts that some have described as a form of neocolonialism. These funding patterns were highlighted in a July 2020 article in The Guardian, with the title “Silicon Valley has Deep Pockets for African Startups – If You’re Not African.”⁷⁷ This article noted that of seventeen companies that raised $1 million or more from venture capital in Kenya in 2019, only one was founded by locals, four by a mix of expatriates and locals, and eleven by expatriates only.

COVID-19 has revealed critical shortcomings in local enabling environments and capacity in African countries, including in relation to public health. Policy approaches to the COVID-19 pandemic should disrupt structural impediments and inequalities that reflect colonial hangover. These approaches can also be a part of broader strategies intended to facilitate local capacity and diminish continuing patterns of exclusion for many countries in Africa.

Disrupting colonial hangover and double marginalization will require attention to the external and internal. Approaches to COVID-19 vaccine exclusion may be crucial in the emerging recognition of the critical importance of attention to both the internal and external. For example, in April 2021, the Africa CDC and the African Union (AU) Commission held the virtual summit “Expanding Africa’s Vaccine Manufacturing for Health Security.”⁷⁸ This summit and the New Health Policy announced by the Africa CDC and AU Commission in September 2022 reflect approaches that combine scrutiny of the internal and external.

The New Health Policy calls on governments, multilateral organizations, nongovernmental organizations, the private sector, and civil society organizations to support implementation of Africa’s New Public Health Order, which is seen as a “roadmap to sustainable health outcomes and health security.”⁷⁹ Critically, in addition to calling for new partnerships to advance vaccine manufacturing within Africa, the New Public Health Order emphasizes the importance of internal investments in capacity building, including domestic health infrastructure, manufacturing capacity, institutional and governance structures, and public health workforce and leadership development.⁸⁰

The New Public Health Order presents a potential model that could be applied in other contexts to address internal and external conditions that have exacerbated colonial hangover and double marginalization. Alternative and hybrid models have the potential to provide a basis for greater inclusion of African countries within global policy frameworks and institutions. Such models may also play an important role in ameliorating internal conditions that reflect colonial hangover and in fostering internal inclusion. Reducing internal and external exclusion will be a key element in truly disrupting the shadows of colonial hangover in Africa.

15 Technology Transfer for Production of COVID-19 Vaccines in Latin America^*

Kenneth C. Shadlen

Latin American and Caribbean (LAC) countries were severely hit by the COVID-19 pandemic.¹ As of April 2021, the region was reported to have experienced nearly 30 percent of the world’s COVID-19 deaths, despite accounting for less than 10 percent of the population.² The devastation continued through 2021, a period when vaccines had been approved, but access to these essential products remained limited. National vaccination campaigns in many LAC countries were slow to take off, allowing illness and death rates to soar. While LAC countries’ estimated number of cumulative excess deaths per million people was 100 at the end of 2020, this increased to over 300 by October 2021 as Figure 15.1 shows.

Figure 15.1 Cumulative excess mortality in Latin America and the Caribbean (per million people).

Excess deaths are calculated as the number of all-cause deaths minus the number of deaths expected for the same period based on previous data, per million people. The data in the figure are cumulative, relative to the baseline of January 2020. Although Our World in Data includes Mexico as part of “North America,” the data used for the figure are based on a recalculation with Mexico included as part of LAC. Note that I report LAC alone, and not inter-regional comparisons, because high levels of missing data from other regions make such comparisons unreliable.

Source: Our World in Data (https://ourworldindata.org/excess-mortality-covid)

Although restricted access to vaccines in 2021 was due to multiple factors (and, of course, death rates are attributable to more than access to vaccines), many observers came to link the dire effects of COVID-19 to the region’s dependence on imported vaccines that were in scarce supply. Vaccination in LAC countries relied mostly on purchases from the World Health Organization’s (WHO) joint procurement facility, COVAX,³ and directly from vaccine manufacturers. A common diagnosis that emerged is that more local or regional production of vaccines could have ameliorated the impact of the pandemic – and local production has subsequently come to be regarded as a way to assure that what transpired in the COVID-19 pandemic is not repeated during future health emergencies. To that end, regional organizations and many national governments embarked on strategies to increase local production.⁴ As the authors of a report by the United Nation’s Economic Commission for Latin America and the Caribbean on “self-sufficiency” put it, “while the pandemic has laid bare the health vulnerabilities of the region, it has also been an opportunity to re-evaluate its productive and technological capacities, and to reformulate strategies and policies for strengthening local manufacturing and innovation systems for components of goods and services linked to the health complex.”⁵

The reckoning that occurred throughout Latin America and the Caribbean is hardly specific to this region.⁶ Dependence on – and lack of access to – imported vaccines was acute in Africa as well, and similar diagnoses and proposals have followed.⁷ Indeed, the WHO links differences in health outcomes and access to vaccines globally to uneven production patterns,⁸ and throughout the world (including in wealthy countries⁹), vulnerabilities revealed by the pandemic are motivating actions to increase production capabilities.¹⁰

This chapter looks forward by looking back, examining the production of COVID-19 vaccines in the LAC region. The focus is on technology transfer for local production. That is, while efforts to produce original, “home-grown” vaccines are discussed, attention is primarily directed at the extent (or absence) of production in LAC countries of the leading vaccines that were most used internationally, such as those made by AstraZeneca, BioNTech/Pfizer, the Chinese firms Sinopharm and Sinovac, as well as Johnson & Johnson (J&J), Moderna, and Russia’s Sputnik-V. The research reveals a limited degree of local vaccine production during the pandemic, what can be regarded as an under-utilization of the region’s pharmaceutical production capabilities.

Through the analysis of the technology transfer initiatives, as well as the accompanying regulatory challenges, the chapter sheds light on the intense challenges involved with pandemic vaccine production in the Global South. The analysis also shows, however, that relaxing intellectual property rights to enable “independent” production would not be feasible either, and thus suggests we orient attention to factors that are likely to make partnerships and technology transfer more common.

The chapter proceeds as follows. Section 1 presents an overview of the universe of local production arrangements for which information is publicly available. Section 2 then drills down to the cases where technology transfer advanced the furthest, examining the production experiences of the AstraZeneca vaccine in Brazil and jointly in Argentina and Mexico. Both partnerships illustrate the challenges of building and sustaining supply chains during the pandemic. The Brazil case highlights key steps that enabled relative success, including rapid and proactive efforts by public sector institutions. The Argentina–Mexico case, which appeared to be both more ambitious and better positioned from the start but did not yield the same outcome, sheds light on the technological and regulatory obstacles that may confound such projects. Section 3 provides a broader view of the experience of technology transfer during the pandemic, considering the role of intellectual property rights and pointing to the collaborative dimensions of production partnerships. Section 4 synthesizes the main findings and points to avenues for future research.

To be sure, with LAC vaccination rates among the highest in the world by 2023, the issues discussed in this chapter may no longer appear to be pressing. But building local and regional production capabilities – and making more use of existing capabilities – has important implications for preparedness for future pandemics.¹¹

1 COVID-19 Vaccine Production in Latin America: Overview

COVID-19 vaccines can be distinguished among four types: viral vector, inactivated virus, mRNA, and protein-based. While inactivated virus and protein-based vaccines are traditional technologies that have long been used, viral vector and mRNA are both newer platform technologies that involve insertion of genetic code into delivery vessels.¹² Table 15.1 presents the landscape of production partnerships in Latin America and the Caribbean by type of vaccine, and also according to the different stages of the production processes that are being executed locally. Firms may manufacture the “drug substance,” which is the core of the vaccine (sometimes referred to as the “antigen”), or they may manufacture the final product that is administered to humans, a stage referred to as “fill–finish” that consists of formulating the drug substance and putting the formulated versions of the vaccine into sterile vials that can be distributed for use.¹³ The table shows partnerships for production of five different vaccines across three technological platforms, involving a mix of public and private firms. Manufacturing activities consist mainly of fill–finish, with limited drug substance production. The remainder of this section provides brief overviews, by technological platform.

Table 15.1 Production partnerships: COVID-19 vaccines in Latin America

Vaccine	Technological platform	LAC country (firm) with partner for drug substance productiona	LAC country (firm) with partner for fill–finish productiona
AstraZeneca	Viral vector	Argentina (mAbxience) Brazil (BioManguinhos)	Brazil (BioManguinhos) Mexico (Liomont)
Sputnik-V	Viral vector		Argentina (Richmond) Brazil (União Química)
CanSino	Viral vector	–	Argentina (Richmond)b Mexico (DrugMex)
Johnson & Johnson	Viral vector	–	–
Sinopharm	Inactivated virus	–	–
Sinovac	Inactivated virus	–	Brazil (Butantan)
BioNTech/Pfizer	mRNA	–	Brazil (Eurofarma)b
Moderna	mRNA	–	–
Novavax	Protein-based	–	–
Sanofi/GSK	Protein-based	–	–
Corbevax	Protein-based	–	–

^a Italics indicates the local partner is a publicly owned laboratory.

^b Late announcements, for eventual, future production.

The partnerships in the table have recorded output or, where indicated, are confirmed agreements for eventual production. Additional reported partnerships are discussed in the text.

Source: Author’s compilation from press reports; ECLAC, Plan for Self-sufficiency in Health Matters in Latin America and the Caribbean: Lines of Action and Proposals, 98 (2021), www.cepal.org/en/publications/47253-plan-self-sufficiency-health-matters-latin-america-and-caribbean-lines-action-and#:~:text=The%20Plan%20for%20self%2Dsufficiency,and%20medicines%20in%20the%20region; Veronica Vargas, Analysis of Regional Capacity for Research, Development, and Manufacturing of Vaccines in Latin America and the Caribbean, Unpublished manuscript, Inter-American Development Bank (2020).

A Viral Vector

The most important instances of technology transfer for production in the LAC region have been for the AstraZeneca viral vector vaccine, which featured a pair of regional supply chains. The first, announced in June 2020, was with BioManguinhos, a public laboratory in Rio de Janeiro, Brazil, that is linked to the Ministry of Health. BioManguinhos would start by importing the drug substance from AstraZeneca to undertake fill–finish locally, and then in a second phase move to full production with fill–finish operations based on drug substance that it produced too. To supply the rest of Latin America and the Caribbean (excluding Brazil), in August 2020 AstraZeneca partnered with a pair of private firms in Argentina and Mexico to jointly produce the full vaccine, with the drug substance to be made in Argentina and the fill–finish completed by the partner in Mexico. The two AstraZeneca partnerships are discussed in detail in Section 2.

Though limited relative to AstraZeneca, two other viral vector vaccines with local production in the region are CanSino (China) and Sputnik-V (Russia). The main CanSino agreement in the region is in Mexico, with DrugMex, a local firm that was contracted to import the drug substance and produce the final product (that is, execute fill–finish) locally.¹⁴ CanSino also reached an agreement with a private Brazilian firm, Biomm, for local distribution of the vaccine, pending its approval by the national regulator, reportedly with “potential” production in a facility in the state of Minas Gerais.¹⁵ Yet this aspect of the agreement never went beyond potential: CanSino’s application for authorization of its vaccine in Brazil listed Biomm as its local representative and distributor, not a producer.¹⁶

Production agreements for Sputnik-V were established with partners in Argentina and Brazil. In Argentina, Richmond was responding to high demand for this vaccine, aiming to help the Ministry of Health secure more doses in the context of scarce global supply. Argentina was the third country to authorize Sputnik-V, in December 2020, following Russia and Belarus, and the vaccine played an important role in the early stages of Argentina’s vaccination strategy.¹⁷ Richmond began with fill–finish, relying on drug substance imported from Russia.¹⁸ Although Richmond planned an eventual move to drug substance production too, and began construction of a new plant to be able to participate eventually in upstream activities, by the middle of 2022 the Ministry of Health was no longer purchasing and administering Sputnik-V, and local production of the vaccine ceased. At the end of 2022 Richmond announced termination of the collaboration with Sputnik-V and that its new facilities would be used instead to produce products jointly with CanSino, including, potentially, COVID-19 vaccines.¹⁹

In Brazil, União Química had capacity to produce 8 million doses per month, expecting to use its existing plants in Brasília and São Paulo to manufacture the drug substance and undertake the fill–finish operations, respectively.²⁰ Yet demand for Sputnik-V in Brazil never matched that in Argentina, as the vaccine had a complicated registration process and was only authorized for use in a limited number of states.²¹ Although some Sputnik was exported from Brazil, these were locally finished doses based on imported drug substance.²² It remains unclear how much (if any) of the drug substance was produced locally. Although a technology transfer team visited União Química’s Brasília factory, Airfinity does not record any drug substance output of this vaccine from Brazil.²³

While other agreements for Sputnik-V production were announced, the announcements tended to be accompanied with minimal information and followed by little action. In Mexico, for example, an agreement was reached in mid-2021 for fill–finish of Sputnik-V by Probiomed,²⁴ and the following year it was reported that Probiomed may produce the drug substance too,²⁵ but it does not appear that the Russian vaccine was ever produced locally in Mexico. In Peru, the government announced in September 2021 that it would build a plant for fill–finish of Sputnik-V, though without providing details, and there is little evidence that the project advanced.²⁶

A record of multiple announcements with less follow-through is a notable trait of the Russian vaccine during the pandemic. The announcements themselves led some observers to depict Sputnik as a vaccine with an expansive global manufacturing network and to laud the vaccine’s sponsor for its willingness to engage in technology transfer.²⁷ Yet drug substance production for Sputnik vaccine remained highly centralized,²⁸ and not as much of the technology transfer for fill–finish that was being celebrated actually happened either.

A notable absence from the account of LAC production of viral vector vaccines is Johnson & Johnson.²⁹ As this is the same technology as AstraZeneca, CanSino, and Sputnik, requiring the same sorts of production capabilities and infrastructure, the challenges to technology transfer and manufacturing would not appear to be greater for J&J. The absence is particularly surprising – indeed, a missed opportunity – given J&J’s large presence in the region, and therefore familiarity with local productive landscapes, regulatory processes, and procurement and distribution systems, all of which presumably would have eased the establishment of partnerships. In Brazil, officials from BioManguinhos had discussions with J&J, but opted to pursue AstraZeneca on account of that company’s greater willingness to transfer technology for full production, as well as expectations that the vaccine would be ready to produce and use sooner.³⁰ Globally, in terms of the number of partners and geographic scope, J&J’s global production approach has been limited: all of the drug substance production reported by Airfinity came from facilities in the Netherlands and the United States (the latter riddled with problems³¹); J&J partnered with producers in India and South Africa for fill–finish, but not in LAC.

B Inactivated Virus

The other vaccine type with production in LAC is the oldest and most traditional approach, based on inactivated viruses. During the pandemic, two vaccines from China were leaders in the production of vaccines of this sort: Sinovac (private) and Sinopharm (public). Together, these accounted for nearly 40 percent of all the COVID-19 vaccines produced globally. While these firms have established multiple agreements for partners throughout the world to engage in fill–finish, Airfinity reports that drug substance production remained entirely in China.

The most advanced manufacturing partnership in LAC for a vaccine of this type is between Sinovac and the Butantan Institute, a public research institute in São Paulo, Brazil.³² According to this arrangement, Butantan, which was responsible for running Sinovac’s Phase 3 clinical trial in Brazil, would commence with fill–finish based on imported drug substance, pending the trials being successful and the vaccine authorized for use in Brazil. Accordingly, Sinovac committed to technology transfer to facilitate local production.³³ The Sinovac/Butantan partnership also projected an eventual move upstream to drug substance, and thus full, integrated production. Butantan began constructing a new facility for this objective, but this stage of the partnership was not reached.

Information on additional production partnerships for inactivated virus vaccines remains scarce. Sinovac announced plans for technology transfer and local production in Chile, Colombia, and Ecuador. The Chilean project was reported as including fill–finish facilities as well as an R&D center.³⁴ The Economic Commission for Latin America and the Caribbean (ECLAC) reported a Memorandum of Understanding between Sinovac and an unspecified partner in Colombia “for production, technology transfer and vaccine development projects, starting with fill and finish processes in the second quarter of 2022,”³⁵ while announcements of the agreement in Ecuador lack details on locations or technologies to be transferred.³⁶ With regard to Sinopharm, there is no record of production in Latin America, neither drug substance nor fill–finish. Discussions for production in Argentina were reported but appear not to have advanced.³⁷

C mRNA

Both of the leading mRNA vaccines (BioNTech/Pfizer and Moderna) have relied on tight-knit production networks, using their own facilities or engaging small sets of contract manufacturers. Neither vaccine’s initial production networks included partners in Latin America.³⁸ In the case of Pfizer, this began to change in late 2021 and early 2022, as an agreement was announced with Eurofarma in Brazil, whereby the Brazilian firm would import the drug substance and undertake the fill–finish steps.³⁹ Moderna, though announcing its intention to build a facility in Africa, has not given similar signals about production in LAC. Rather, in February 2022 Moderna announced a commercialization and distribution arrangement for an Argentinean partner with affiliates throughout the region to import the finished vaccines and have responsibility for local logistics (such as registration, negotiations with purchasers, and delivery).⁴⁰

D Protein-Based

The profile of technology transfer into the region for production of protein-based COVID-19 vaccines is blank. There is no record of agreements for manufacturing the Novavax product, which based all drug substance production in the United States and India. Nor are there confirmed plans for production of the Sanofi/GSK vaccine, an early front-runner that received public funding, and for which high demand in 2021 was projected and advance purchases were made.⁴¹ The Texas Children’s Hospital vaccine is not produced in the region either, despite the inventors’ willingness to transfer technology widely.⁴²

The absence of protein-based vaccines in the landscape of LAC production is curious, as the appropriate production capabilities are present. Indeed, much regional pre-pandemic vaccine production relied on this technological approach. During the pandemic, in addition to attempting to participate in production of vaccines via technology transfer, the focus of this chapter, several countries embarked on efforts to develop their own COVID-19 vaccines. Though not exclusively protein-based, most of the “home-grown” projects advanced in the region use this technological platform, further evidencing the existence of local capabilities for this sort of production.⁴³

One instance of a protein-based COVID-19 vaccine produced in the region and authorized for use in a national vaccination program during the main period of the pandemic was from Cuba. Cuba did not participate in the COVAX program, nor did the government make purchases directly from foreign vaccine developers; its vaccination strategy relied wholly on developing and producing its own vaccines.⁴⁴ Cuba’s vaccines have also been exported to a handful of countries within LAC (Nicaragua, Venezuela) and beyond (Iran, Vietnam), but for the most part they have been produced at limited scale for local use.

An important constraint on wider use of the Cuban vaccines has been production capacity on the island. Not only is manufacturing hindered by US sanctions, which complicate access to essential inputs, but the fact that three injections are needed to complete the primary course (plus more for boosters) obviously increases the amount of output needed.⁴⁵ In January 2022, the Central American Bank for Economic Integration announced plans to loan Cuba US$53.1 million to increase production capacity and, potentially, enable exports. The government of France is reported to have provided funds for manufacturing as well.⁴⁶ Cuba applied to the WHO for Emergency Use Authorization of the Soberana vaccines, which could have increased global demand and thus been important for attracting additional producers, though this process was not completed.⁴⁷ Although Cuban authorities have announced a willingness to transfer technology, and there are reports of technology transfer in Iran and Vietnam, it did not occur on a significant scale. This can be attributed in part to resource constraints in Cuba, in that the local experts with essential production knowledge are being allocated to production rather than outward technology transfer, as well as potential technology transfer recipients’ lack of interest in producing vaccines that were not authorized by the WHO and thus not in high demand.

2 AstraZeneca in Latin America

Having provided an overview of the landscape of production partnership agreements in the region, I now examine in more detail the two most important cases: the technology transfer and manufacturing arrangements for production of the AstraZeneca vaccine in Brazil, and jointly in Argentina and Mexico. Both partnerships were supported by combinations of public and private financing to minimize the risks involved. To understand this important dimension of the COVID-19 response, we need to remember the urgency of the situation – not just the need for new vaccines, but large volumes of new vaccines that would be produced quickly. With a premium on speed, steps were taken to transfer technology and build production networks while the products were still in trials, so large-scale production could commence, and doses be available immediately upon (or soon after) receipt of marketing authorization. These expenditures were thus “at-risk,” because if clinical trials revealed the vaccine candidates to be unsuccessful, the investments would be lost.⁴⁸

A Brazil

The first partnership that AstraZeneca reached in the region was with BioManguinhos, announced in June 2020.⁴⁹ The AstraZeneca/BioManguinhos partnership stands out for its contribution to a national vaccination strategy. BioManguinhos was a principal supplier to the Brazilian Ministry of Health, particularly in 2021 when the pandemic was at the acute stage; at times AstraZeneca vaccines produced by BioManguinhos accounted for half of the vaccines used in Brazil.

The AstraZeneca/BioManguinhos partnership emerged from an intensive prospecting and evaluation exercise undertaken in Brazil. When the WHO declared COVID-19 a global pandemic in March 2020, a BioManguinhos team, working jointly with colleagues from the Ministry of Health, was already looking for vaccines that the institute could produce. From the start, technology transfer that would eventually allow for local production of the full vaccine was regarded as a key objective. Building upon – and expanding – an already-existing “prospecting” division, BioManguinhos set about evaluating candidates according to a range of criteria, including not just the state of development of the products and their appropriateness for Brazil’s vaccination campaign, but also technological and manufacturing characteristics.⁵⁰

BioManguinhos officials regarded the AstraZeneca vaccine, which emerged originally from the University of Oxford (United Kingdom), as particularly appropriate, as it was at an advanced stage of development, and the viral vector technology was complementary to its own existing competencies in working with cells in bioreactors. BioManguinhos thus expected that the manufacturing process would be fastest with the AstraZeneca vaccine, using its existing facilities and building on its capabilities in biologics. Fill–finish capacities used for Yellow Fever vaccines could be adjusted, for example, and cell culture for production of the drug substance could be accomplished in a plant with bioreactors that was equipped to produce interferon but would be redeployed. Also important was Oxford and AstraZeneca having announced their intent to build a global, distributed production network, which would feature transfer of technology to partners for manufacture of the full vaccine – not just fill–finish but drug substance too, and not just in Europe and the United States but also to partners in the Global South.⁵¹

The ensuing partnership was designed to proceed in two stages. First, BioManguinhos would import the drug substance, supplied by AstraZeneca, and complete the process of manufacturing the final drug product at its facilities in Rio de Janeiro, with an initial target of 30 million doses. Pending completion of clinical trials and regulatory approval of the vaccine, another 70 million doses would be produced under these arrangements. The completed doses would then be sold to Brazil’s Ministry of Health, which had committed funds to purchase the 100 million doses. In the second stage, BioManguinhos would produce the drug substance too, and thus be manufacturing the full vaccine. While full production was the ultimate objective, the immediate priority was to be able to provide doses to the Ministry of Health, which, given the state of capabilities and infrastructure, would be accomplished most quickly via fill–finish.

While starting downstream with fill–finish operations and moving upstream to drug substance production is a common approach to technology transfer for vaccine production,⁵² and one that previous BioManguinhos projects had followed as well, an important aspect of these arrangements in the case of the COVID-19 vaccine is that the steps were accelerated and collapsed. That is, preparation for the second stage started while the first was in process: BioManguinhos was procuring inputs, fitting the facilities for drug substance production, and getting its manufacturing plant and processes approved by the national health regulator (Anvisa), while also preparing for – and then engaging in – fill–finish production.

As an experienced vaccine manufacturer, BioManguinhos already had advanced capabilities in the core steps for fill–finish operations, including documentation, analytics, and quality control requirements, along with special-purpose “clean rooms.” BioManguinhos worked with AstraZeneca to conform with the new standards that would be required and, importantly, to master the specific steps for this particular vaccine.⁵³ BioManguinhos raced to complete these steps and ready itself for undertaking the final steps in vaccine production. As one informant put it, “we should be waiting for the IFA, the IFA shouldn’t be waiting for us.”⁵⁴

And, indeed, it was BioManguinhos that was made to wait, on account of problems within the AstraZeneca supply chain. Specifically, the drug substance that AstraZeneca was meant to supply (from a contract manufacturer in China) was delayed. Without the essential input, of course, BioManguinhos would be unable to proceed to production. Although the Ministry of Health managed to fill the gap by importing fully produced AstraZeneca vaccine doses (from the Serum Institute of India, another manufacturer in AstraZeneca's global production network), the experience demonstrates the vulnerability of fill–finish operations, specifically dependence on external suppliers. A benefit of developing upstream capabilities, to produce the drug substance too, as eventually occurred, is that it reduces vulnerability of this sort.

While both stages of the partnership involved the transfer of technology, know-how, and data, it was in the second stage that this was most critical. BioManguinhos had never produced a viral vector product before, and therefore had to learn to apply its existing capabilities and technology for cell culture in bioreactors and protein purification to the challenges of producing the drug substance for this type of vaccine, and, specifically, the AstraZeneca version.

A key stage of the collaboration involved receipt from AstraZeneca of the cell lines, virus seed, and culture medium. To achieve the same clinical results, BioManguinhos (and all the producers in AstraZeneca’s global production network) would need to use the same starting materials and proceed following the same steps.⁵⁵ To prepare, BioManguinhos’ staff received training to defrost biobanks, as the cell lines were shipped at –150°C. BioManguinhos received two capsules to train with. Just as BioManguinhos readied its equipment and processes to be “waiting for the IFA” in the first stage, it made sure to be prepared for receipt of the key starting materials from AstraZeneca for the second stage.

In June 2021, after the contract for the second stage of the technology transfer was signed, BioManguinhos received the cell lines and, continuing to work with AstraZeneca, initiated operations to produce the drug substance. In January 2022, BioManguinhos received regulatory approval of the drug substance, and the first batch of fully produced vaccine was delivered to the Ministry of Health in February 2022.

Before turning to the case of the other partnership for production of the AstraZeneca vaccine in the region, in Argentina and Mexico, three additional aspects of the AstraZeneca/BioManguinhos partnership are worth noting: the role of external support, the government’s contributions, and the formal nature of the relationship between the parties. The AstraZeneca/BioManguinhos partnership benefitted from philanthropic and public support, both to set it up and to make it work. The Lemann Foundation sponsored AstraZeneca’s clinical trials in Brazil, for example, and a consortium led by Brazil’s largest bank (Itaú) and brewing company (Ambev) provided financing to help BioManguinhos adapt its manufacturing facilities, as well as aiding with logistics to help BioManguinhos manage the procurement of equipment and inputs.

The Brazilian government also provided support for technology transfer. This was both direct, through the allocation of resources, and indirect, via the exercise of a special procurement contract that allowed BioManguinhos to dedicate public resources toward developing a product that required regulatory approval at a point when such approval was outstanding. The national government’s backing appears paradoxical, given the overall posture toward the pandemic and vaccines demonstrated by President Bolsonaro, who consistently downplayed the public health threats posed by the coronavirus, appears to have gone out of his way to demonstrate his rejection of WHO guidelines on nonpharmaceutical interventions such as masking and social distancing, and regularly made comments that discredited the value of vaccines and vaccination. Yet, notwithstanding these attributes and actions of the President, the federal government allocated resources and moved the machinery of government and bureaucracy to enable and advance BioManguinhos’ partnership with AstraZeneca.⁵⁶

With regard to its relationship with AstraZeneca, BioManguinhos was a licensee, not a contract manufacturer. Concretely, this meant that BioManguinhos was not producing for AstraZeneca, and the Ministry of Health was not purchasing the vaccine from AstraZeneca, but rather BioManguinhos was producing the vaccine and selling it directly to the government, with payment of a royalty (undisclosed amount) to AstraZeneca. Although the differences in this sort of relationship are not to be exaggerated, as what BioManguinhos could do with its output was restricted by the terms of the license set by AstraZeneca (and, as discussed, in the first stage the amount BioManguinhos could produce was constrained by how much drug substance AstraZeneca supplied), this distinction nevertheless marks an important difference with the other AstraZeneca partnership in the region.

B Argentina–Mexico

In contrast to the agreement with BioManguinhos in Brazil, where all production was to be done by the same producer in the same country, the second AstraZeneca partnership in Latin America, announced in August 2020, featured production in Argentina and Mexico. And while production in Brazil began with fill–finish steps, the Argentina–Mexico collaboration started immediately with both drug substance and fill–finish production. According to these arrangements, mAbxience, an Argentinean firm dedicated to producing “biosimilar” monoclonal antibodies, would manufacture the drug substance and ship it, frozen, to Mexico, for Liomont, one of Mexico’s largest pharmaceutical companies, to undertake the fill–finish stages. Then, the final products would be distributed by AstraZeneca throughout the LAC region (except Brazil). This partnership involved philanthropic support too, with the Mexico-based Carlos Slim Foundation providing direct financing and interest-free loans to both partners.⁵⁷

An immediate question that emerges here is why not have both steps, drug substance and fill–finish, in Argentina or in Mexico. That is, why not emulate the arrangement that AstraZeneca had established in Brazil (and elsewhere, though not everywhere⁵⁸), with technology transfer for drug substance and fill–finish in the same country? Although locating both stages in Argentina seems feasible, given the presence of multiple firms with experience producing biosimilars and sterile injectables that could have been enlisted for fill–finish, it appears that AstraZeneca sought a geographically distributed supply chain for Latin America, rather than concentrate all production in South America – and in the southern reaches of the continent.

In fact, had AstraZeneca found a partner in Mexico, it is not clear that Argentina would have been involved at all. According to actors involved, the origins of the partnership featured AstraZeneca approaching the Slim Foundation as a potential funder of at-risk investment needed for its “no profit, no loss” model, which then identified Liomont. The Mexican firm, unable to satisfy AstraZeneca’s needs on its own, and having a long-standing relationship with another firm that was part of Grupo Insud, the conglomerate that included mAbxience, brought the Argentinean lab into the partnership. According to this version, AstraZeneca did not immediately seek a partner in Argentina, but rather found mAbxience via Liomont.⁵⁹

The AstraZeneca partnership with mAbxience and Liomont did not meet expectations in terms of output. Drug substance production occurred quickly, on account of mAbxience’s existing capabilities (human and physical) and its abilities to recondition its facilities to absorb the technology from AstraZeneca, but fill–finish operations in Mexico did not advance at the expected pace. Projected to produce 150–250 million doses, the collaboration did not reach that target; as of the end of 2021, only 70 million final doses of the jointly produced vaccine had been delivered throughout the LAC region.⁶⁰

The sources of the delays in the final production of doses are different in this case than at BioManguinhos. In Brazil, the delays were due to the unavailability of the drug substance needed to take the final steps. In the case of the Argentina–Mexico collaboration, Liomont received drug substance from mAbxience in January 2021, but experienced difficulties undertaking the steps that it was contracted for, which led to frozen drug substance needing to be stored in warehouses.⁶¹ One reason for this was that Liomont faced delays in obtaining certification of its new facility for vaccine production, but even when the plant had the green light it was hamstrung by a lack of access to filters, pumps, and other production inputs on account of strained supply chains. Compounding these challenges, the use of the Defense Production Act in the United States required all US-based producers of inputs to prioritize orders placed by firms manufacturing COVID-19 countermeasures for the US government, creating difficulties for manufacturers outside the United States (like Liomont) to obtain essential inputs from US suppliers. Unable to obtain the equipment needed, Liomont initially was unable to apply the finishing stages to the drug substance produced by mAbxience according to the programmed schedule.⁶² By late May 2021 the bottlenecks at Liomont were finally overcome, and from that point production as envisioned in the agreement from the previous year was realized.

The delays in production opened the agreement to intense criticism. To be sure, the delays were not massive: when the agreement was announced in August 2020 it was projected that, pending positive clinical trial results, doses would be distributed beginning in April 2021;⁶³ and doses started arriving by the end of May. Yet context is critically important: the vaccines were missing when they were most needed. The first half of 2021, precisely the period when finished doses based on drug substance produced by mAbxience were not yet – or only just beginning to – be distributed, marked the peak of the pandemic in Latin America and the Caribbean, when excess death rates were accelerating (see Figure 15.1). While vaccination was advancing rapidly in the United States and Europe, much of the rest of the world still experienced low vaccination rates due to limited access to doses.⁶⁴ In this context, an otherwise small delay of 6–8 weeks had enormous consequences.

Not surprisingly, criticisms of the agreement were most intense in Argentina, where mAbxience was producing the drug substance, to great fanfare, but doses were unavailable for the local population. The secure supply of vaccines that production was promised to yield when the partnership was announced had not materialized, a source of great frustration – particularly given the country’s own pharmaceutical production capabilities. Analyzing the criticisms that these delays elicited, and the subsequent debate over possible responses, provides important insights into the challenges of technology transfer.

One criticism regarded the logic of the arrangements themselves, with drug substance produced in Argentina being shipped to Mexico for fill–finish, only for the final doses then to be shipped back to Argentina (and throughout LAC, other than Brazil). Some regarded this as unnecessary, as other Argentinean firms had capabilities to execute the fill–finish stage of production. Indeed, two of these firms (Sinergium and Biogénesis Bagó) are neighbors of the mAbxience plant where the drug production was occurring, located in the same industrial park (and also part of Grupo Insud). And if not these specific companies, other laboratories that make biosimilars or sterile injectables presumably could have been engaged early in the process to absorb the technology from AstraZeneca and perform the fill–finish steps locally. Considering the abundant production capabilities in Argentina’s pharmaceutical sector, this appeared to be a missed opportunity, a shortcoming in the original design of the arrangements made in August 2020.

In addition to criticisms of the technology transfer and production partnership as it was originally designed, in 2021, with the supply crisis apparent, there were also calls for the Argentinean government to intervene to alter the arrangements in course. Protesters assembled outside the mAbxience factory, demanding that the plant’s output not be shipped to Mexico but rather sent to another laboratory in Argentina for completion.⁶⁵ Protests making the same demand occurred outside the Ministry of Health offices in the capital.

Were the Argentine government to have introduced measures that overwrote an existing contract to enhance local supply of the vaccine, it would not have been unprecedented in the COVID-19 pandemic. As noted, the United States used the Defense Production Act to limit the export of inputs, notwithstanding contractual agreements that US manufacturers had with foreign producers, and India imposed an export ban that overrode the terms of the Serum Institute’s contract with AstraZeneca. Argentina had already restricted exports of key inputs early in the pandemic (March 2020), mostly personal protective equipment, but also the medicine interferon.⁶⁶ Hypothetically, the Argentinean government could have stepped in, on an emergency basis, and demanded that some mAbxience-produced drug substance, which legally belonged to AstraZeneca and was meant to be sent to Mexico, be kept in the country; that the fill–finish be undertaken by another Argentinean lab; and that the completed doses be used locally in the national vaccination campaign. Though such violations of the contract with an international firm could have had legal and geopolitical repercussions, it was regarded by some as justified given the urgency of the situation.⁶⁷

Even had these steps been attempted, however, they almost certainly would not have had the desired effect of increasing output and thus the supply of vaccines available to the government. Understanding why is essential for getting to the heart of the challenges of vaccine production in the context of a global pandemic.

The most important obstacles that would have confounded any plans to sequester drug substance to complete doses locally are found in the areas of technology transfer and pharmaceutical regulation. For such plans to succeed, there would need to be technology transfer from AstraZeneca to the local fill–finish partner enlisted to take on this task, be it Sinergium, Biogénesis, or another firm.⁶⁸ As this was not part of the original arrangements, there were no firms ready to receive mAbxience’s output and start fill–finish operations; getting one up to speed would take months. In this regard, references to the Indian government’s restrictions of exports (“they did it, so why can’t we?”) are misleading, as, at the time of that government’s intervention, the Serum Institute had already mastered fully integrated manufacturing of the vaccine.

Furthermore, unless AstraZeneca also amended its regulatory submissions to include a new Argentinean manufacturer, the version of the vaccine being produced (hypothetically) entirely within Argentina would need to undergo its own clinical trials, a lengthy process that would defeat the purpose of the emergency intervention. The mAbxience/Liomont version had been authorized by the WHO, with AstraZeneca as the license holder (the other labs involved were contract manufacturers, working on behalf of AstraZeneca), indicating that drug substance was produced in Argentina and fill–finish executed in Mexico. Revising regulatory submissions entails more than simply adding a new manufacturer to the list of producers. AstraZeneca would have to work with the local producer to achieve the desired output and the necessary standards – that is, to replicate the outcome produced by its collaboration with Liomont, and AstraZeneca would need to supply documentation to regulators that the new plant’s production processes (including records and quality control) satisfied the required levels. Even if, hypothetically, AstraZeneca were prepared to do all of this, these steps would take time, again defeating the purpose of an emergency intervention to increase supply during the pandemic.

Argentina’s health authorities were aware of these constraints. The Ministry of Health expressed concerns about the lack of supply, both to the UK’s Ambassador to Argentina and to AstraZeneca officials, regarding this as nonfulfillment of the contract.⁶⁹ Yet there was little they could do with regard to manufacturing; the drug substance produced by mAbxience belonged to AstraZeneca, and setting up local fill–finish of this material – even with AstraZeneca’s support – would not be possible within a realistic time frame. To be sure, some articles in the Argentinean press report that the government requested AstraZeneca to allow fill–finish to be done locally and threatened to impound drug substance produced by mAbxience for this end (usually one article repeating what another article reported), but informants in the Ministry of Health deny this, emphasizing that they knew it was not feasible. The Ministry was urging AstraZeneca to treat the supply crisis with urgency and take all necessary steps to fulfill its commitments to deliver the number of doses that Argentina had purchased.⁷⁰

AstraZeneca’s response did involve introducing a new supplier for the LAC supply chain and revising its regulatory dossier, but without embarking on fill–finish operations in Argentina. To overcome the bottleneck created by Liomont’s delayed production, AstraZeneca redirected some of the drug substance produced by mAbxience to a contract manufacturer in the United States, Albany Molecular Research Inc (AMRI), a firm that had originally been engaged to undertake the fill–finish step for the US supply chain.⁷¹ Thus the initial doses of the AstraZeneca vaccine that were distributed in the LAC region (outside of Brazil) were Argentina–United States rather than Argentina–Mexico products.

To understand the feasibility of this shift in light of the obstacles discussed in the previous paragraphs, it is important to note that, although AstraZeneca never obtained authorization of its COVID-19 vaccine in the United States, it had originally intended to do so, and to that end had established a US-based supply chain, with the necessary technology transfer undertaken and a set of producers indicated to the Food and Drug Administration (FDA). Thus, engaging AMRI, which already had been trained to produce the AstraZeneca vaccine, did not require additional technology transfer, as would have been the case with a new producer in Argentina. Nor did AMRI need to obtain new equipment to produce, as a new Argentinean firm would have.⁷² And because the AstraZeneca vaccine was not being used in the United States, and therefore there was no domestic demand for the final product, AMRI’s exports were not constrained by the Defense Production Act. Lastly, as regards regulation, because the US firm was already an FDA-approved producer (even if AstraZeneca’s vaccine never had the FDA’s authorization for use in the United States), the required changes to regulatory dossiers were more straightforward.

Before concluding, it is worth considering another potential producer to undertake the fill–finish steps of the drug substance produced by mAbxience: BioManguinhos. Like AMRI, BioManguinhos had already received technology transfer, so some of the obstacles discussed earlier would have been less present. At one point this was contemplated too, though several factors mitigated against this approach being explored. First, BioManguinhos did not have available capacity to simultaneously produce vaccines for Brazil, as it needed to do, and also undertake fill–finish steps to produce vaccines for the rest of the LAC region. Unlike in the case of AMRI and the United States, where fill–finish capacities were available without any demand for the final product, the AstraZeneca vaccine was authorized in Brazil and constituted a major part of the country’s COVID-19 vaccination strategy. Second, BioManguinhos’ authorization was by Anvisa, and, notwithstanding the recognition of the Brazilian regulator’s attributes,⁷³ altering the regulatory dossier to include a firm authorized by Anvisa would be a more complicated process than making an alteration to include a firm designated as an authorized producer by the FDA.

3 Technology Transfer and Production of COVID-19 Vaccines: Collaboration v. Competition

None of the arrangements reviewed in this chapter featuring technology transfer for local production constitute independent manufacturing undertaken by LAC firms. That includes the AstraZeneca arrangements discussed in the previous section, the most advanced examples of local vaccine production in Latin America. In the case of mAbxience and Liomont, these firms were contracted by AstraZeneca to produce for a regional supply chain; mAbxience had no rights to or control over the drug substance it produced, and the same is so for the final doses produced by Liomont – all of this belonged to AstraZeneca.⁷⁴ Nor would it be accurate to describe BioManguinhos as independent, despite being a licensee rather than contract manufacturer. Even in the second stage of the partnership, when making the full vaccine itself and thus no longer dependent on AstraZeneca for the supply of drug substance, what BioManguinhos could do with its output remained limited by the conditions imposed by AstraZeneca.⁷⁵ These arrangements were partnerships for production of originator products via technology transfer; they did not feature local firms involved in the independent manufacturing of their own “generic” versions of these products.

While these characteristics of the vaccine production arrangements may be regarded as limitations, in that the local actors were not making independent and autonomous decisions about production and distribution,⁷⁶ they also came with advantages: local labs benefitted from technology transfer, and the vaccines they produced were not required to go through their own clinical trials but rather were included in the originators’ dossiers and authorization processes. In normal times, such advantages might be outweighed by the disadvantages of lacking control and being in a subordinate position to the originator firms, but in the midst of a global pandemic the calculus may differ. That is, when massive amounts of output are needed as quickly as possible, it is not clear that independent production is the most fruitful path. For all of the difficulties that the joint Argentina–Mexico scheme for production of the AstraZeneca vaccine faced, for example, proceeding without the originator would have been even slower and less fruitful.

These characteristics of production during the pandemic have important implications for debates over intellectual property (IP) rights.⁷⁷ Where production depends on the active engagement of originators, to help master production processes and satisfy regulatory requirements as quickly as possible, as is essential for vaccines during a pandemic, the absence or removal of IP rights is unlikely to increase supply quickly. What is needed in such circumstances is not subtractive – that is, removing the restrictions that IP rights create – but rather additive – that is, technology transfer from the originator to partners. In contrast, then, to what was witnessed with HIV/AIDS medicines earlier in the century, where the absence of patents and the existence of simple regulatory pathways enabled generic producers (public and private) to make abundant and affordable treatments available,⁷⁸ efforts to expand global supply of vaccines during the COVID-19 pandemic needed to rely on originator firms transferring technology, know-how, and data to manufacturing partners. Where such sharing does not happen, independent production of vaccines may still occur, but is likely to proceed at a substantially slower pace, which places severe limits on its usefulness during a pandemic.⁷⁹

Importantly, the LAC partners involved in the production of vaccines did not regard the forms of collaboration as being restrictive, but rather as creating opportunities that could generate new capabilities. The fact that BioManguinhos was working under the conditions set by AstraZeneca according to the terms of the licensee was not regarded as a drawback. To the contrary, BioManguinhos officials knew that on their own they could not produce the vaccine fast enough. In fact, BioManguinhos officials expressed excitement regarding capability enhancement that the collaboration would bring. Accessing the adenovirus, viral vector technology, it was expected, would position BioManguinhos on a new research and knowledge pathway. Although its immediate objective was to contribute to the COVID-19 pandemic response in Brazil by manufacturing vaccines, the technology transfer promised by this partnership would grant BioManguinhos access to a new technological platform that could be applied to additional products going forward. Working closely with AstraZeneca not only enabled a faster route to COVID-19 vaccine production in Brazil, but, BioManguinhos officials stress, the acquisition of new competencies in a new technological area generates possibilities for collaboration with more external actors.⁸⁰

Similarly in Argentina, the collaboration with AstraZeneca was seized by mAbxience as an opportunity. Although already an accomplished firm with proficiency in biological processes, and always regarding the shift to vaccine production as a temporary deviation from its core activities, mAbxience officials expected to benefit from the transfer of skills regarding business operations (for example, product, audits, purchasing, record-keeping).⁸¹ Working with AstraZeneca to obtain approval of the vaccine from the European Medicines Agency, for example, required the introduction of new practices regarding data collection and documentation, changes that would be useful for placing its own products in the EU market. Moreover, mAbxience officials regarded this as the potential start of a new relationship as a local partner for one of the world’s largest pharmaceutical firms with a portfolio (and pipeline) of innovative products. While BioManguinhos officials referred to the acquisition of capabilities that will allow it to take on new projects, mAbxience officials stressed the new commercial opportunities that arise from working with a firm such as AstraZeneca.⁸² Officials of Liomont, in Mexico, expressed similar sentiments. And, though neither the União Química nor Richmond collaborations for the production of Sputnik-V advanced far, representatives from both of those firms explicitly regarded their relationships as opportunities.⁸³

In fact, none of the actors involved in local vaccine production that I spoke with for this project expressed concern about their activities being constrained by originator firms’ exercise of IP rights. Nor did they cite IP rights as a barrier to entry. Given my own priors, based on research of conflicts between Latin American and transnational pharmaceutical firms over IP rights,⁸⁴ this was surprising. Yet local firms repeatedly explained that originators’ IP rights were not getting in the way of their abilities to produce COVID-19 vaccines in the pandemic, emphasizing, to the contrary, that even in the absence of any IP rights they would not have been producing COVID-19 vaccines on their own.⁸⁵

These observations have broader implications for how we think about technology transfer and local production. In contrast to the prominent image of renegade pharmaceutical producers in the Global South, an image forged by the experience of the HIV/AIDS crisis that featured Indian firms launching their own products and thereby challenging the power and influence of the international pharmaceutical industry, the firms involved in local production of COVID-19 vaccines in Latin America were working closely with the originators. And they were content to be doing so; partnerships were appreciated as being beneficial more than resented as being constraining. To be sure, there are certainly rebellious firms in the region that may have wished to confront “big pharma,” as they still do with many medicines, but without the engagement of the originators they had little chance of producing COVID-19 vaccines during the pandemic.

4 Discussion and Conclusion

Technology transfer for production of COVID-19 vaccines in Latin America and the Caribbean was less extensive than might be expected from a region with many middle-income countries that have important pharmaceutical sectors.⁸⁶ Most activities observed during the pandemic consisted of LAC firms applying the final steps to prepare vaccines, using drug substance imported from outside the region. Outside of Cuba, which developed and produced its own vaccines, only two LAC manufacturers, Brazil’s BioManguinhos and Argentina’s mAbxience, advanced significantly on manufacturing drug substance; and only BioManguinhos produced the full vaccine – that is, drug substance plus fill–finish.

This final section explores some of the factors accounting for this scenario and explores the obvious question of whether there could have been more. Focus is directed at three sets of issues: the interest of vaccine developers to partner with local manufacturers; the extent of vaccine production capabilities in the region; and initiatives by governments to cultivate and develop partnerships.

Local and regional production of the type discussed in this chapter cannot advance in the absence of the originators being willing to transfer the essential technology, know-how, and data that they possess. Realizing the potential benefits derived from working with originators, discussed in the previous section, depends on originators having both the desire and means to collaborate with local partners. The inclusion of “means” is important, for, as was the case with the Cuban vaccines (and also the Texas Children’s Hospital’s vaccine), even originators that express desire to transfer technology may face resource constraints that limit their abilities to do so.⁸⁷

Among originator firms with the resources, we know little about why vaccine developers pursued different approaches to scaling up production. What we do know, however, is that AstraZeneca stands out, with a commitment to decentralized and “distributed” production based on transferring technology, know-how, and data to partners across the globe, and, importantly, dedicating resources to help this to proceed quickly. Had more companies adopted similar postures on their own or been encouraged to do so with appropriate incentives and instruments, there likely would have been more cases of technology transfer than those covered in this chapter. Ultimately, understanding originator companies’ differing approaches to technology transfer and the construction of global manufacturing networks for COVID-19 vaccines is a crucially important area that demands additional research.

As importantly, more research is also needed to understand better the appropriate set of instruments to encourage such behavior. Proposals to compel, mandate, or force the sharing of technology, know-how, and data are common, but this is easier said than done. Researchers need to think carefully about what national and international actors can effectively achieve in this regard. This could include more explicit conditions attached to research funding and strategic use of purchasing that rewards producers for meeting output targets that could only be achieved by engaging in wider technology transfer.

The existence of local partners with sufficient capabilities of course matters too. Even without fully understanding originators’ strategies, and accepting that some international firms simply did not prioritize or were not interested in producing in Latin America and the Caribbean (and were not adequately incentivized to do so), it is reasonable to expect that firms that were prepared, in principle, to transfer technology would only do so with partners possessing adequate capabilities. As it happened, partnerships tended to be located in the countries with the largest pharmaceutical sectors, with the most advanced technological and production capabilities. This is not surprising, and points to the importance of legacies of development in national pharmaceutical industries. Consider the case of Argentina, where the August 2020 announcement of the AstraZeneca production arrangement involving mAbxience was celebrated as validation of the country’s scientific community.⁸⁸ This outcome was not just made possible by the country’s strong science base, but, specifically, a strong pharmaceutical industry, as it is the existence of the manufacturing firm that allowed this to happen: firms like mAbxience not only are staffed by highly qualified scientists and technicians, but they possess the industrial and management capabilities that enable engagement with originators. Indeed, this is precisely what the then head of AstraZeneca for the Southern Cone said at the time of the announcement in August 2020: “This agreement highlights our country’s great level of professionals, quality of science, and production capabilities.”⁸⁹

Could more LAC firms have become engaged? The universe of potential partners for technology transfer and production, though not infinite, almost certainly exceeds the handful of firms that have been discussed in this chapter. Lists of firms with approved biological products, for example, a useful indicator of capacity to manufacture vaccines, includes many companies that have not been mentioned here.⁹⁰ In 2021, Argentina’s Ministry of Productive Development undertook a survey of biological production capabilities in the pharmaceutical industry, reporting seven firms producing the active ingredients for injectable biological products that could contribute to vaccine production.⁹¹

Capabilities is not a binary category, however, something that companies either have or do not have, but rather sets of attributes that exist in varying degrees. Nor are the same capabilities equally important for producing all vaccines. Even for the same vaccines, firms that participated in COVID-19 production partnerships did so with different levels of capabilities; mAbxience needed less technical assistance from AstraZeneca to make the drug substance than BioManguinhos did, for example. It is difficult to identify and measure what level and type of capabilities are needed, and which firms have those specific capabilities. Yet it is reasonable to conclude that there are plenty of LAC firms with latent capabilities that, with the engagement of originators, could be useful partners. As an illustration, consider that Richmond, which partnered to produce Sputnik-V and is now collaborating with CanSino, was not one of the firms mentioned in the Argentinean government’s survey of biological producers in Argentina – though it almost certainly would be now, were another landscaping exercise of this sort to be undertaken.

Of course, not all potential local partners are interested. That BioManguinhos would participate in the venture with AstraZeneca is unsurprising; this is what it does. BioManguinhos is a public lab that engages in technology transfer to produce vaccines and other biological products for Brazil’s Ministry of Health, and it actively prospected for technology transfer partners.⁹² The interest of private firms is more variable. mAbxience and Liomont had new facilities that were available and saw opportunities to seize; likewise União Química and Richmond regarded collaboration to manufacture Sputnik-V as a point of entry into the world of vaccine production. Not all potential partners found themselves in such a position, able and willing to use production capacities for available facilities.⁹³

This brings us to the issue of government initiatives to establish partnerships. In Brazil, BioManguinhos and the Ministry of Health worked together to advance the technology transfer arrangement with AstraZeneca, while the production of Sinovac emerged from the initiative of Butantan working with the government of the state of São Paulo. In no other LAC country are such active steps to identify partners and generate partnerships evident, and in Brazil the laboratories most involved in COVID-19 vaccine production are part of the public sector. In Argentina and Mexico, although the arrangement involving mAbxience and Liomont was celebrated by both governments, it was not driven by the governments but rather AstraZeneca and the Slim Foundation. Likewise, Richmond’s venture to produce Sputnik-V, though receiving public funding, came about through its own initiative.

It is possible that public actors, LAC governments or the Pan-American Health Organization, could have done more to increase the participation of local firms in vaccine production. This might have taken multiple forms. With regard to firms that possessed the requisite (or latent) capabilities but were not interested, with the right incentives these could potentially have been motivated to participate. More ambitiously, and analogous to what was witnessed in the United States and United Kingdom, where government officials regarded vaccine development and local manufacture to be a high priority and engaged with private firms in new ways,⁹⁴ governments of LAC countries with large pharmaceutical industries could potentially have contacted foreign originators (and the governments and international organizations sponsoring some of the originators) in efforts to broker deals. Consider again the arrangements for the AstraZeneca vaccine to be produced in Argentina and Mexico. An Argentinean partner could have been engaged originally for the fill–finish stage – not somehow mobilized on an emergency basis as an afterthought in 2021, which was proposed but infeasible for the reasons discussed in Section 2, but included in the original design of the agreement in 2020. One reason given for the binational arrangements including a Mexican partner is that this was a condition of the Slim Foundation’s financing, but that only begs the question of why philanthropic resources played such an important role, presupposing the Slim Foundation’s involvement. Could, potentially, the Argentine government have made this happen, working directly with AstraZeneca (and other originators) and national firms? More generally, and beyond Argentina per se, might governments have been able to do more to make production partnerships come to fruition, exploiting existing and latent capabilities in their pharmaceutical industries and providing the incentives to entice partners? Future research should explore how governments in countries with large pharmaceutical industries can leverage local capabilities to attract originators and foster technology transfer agreements.

Going forward, one way to make more partnerships more likely is to have more potential local partners. To that end, LAC governments and regional organizations, regarding the paucity of local manufacture of COVID-19 vaccines as a source of vulnerability that must not be allowed to repeat, appear to be investing in pharmaceutical production capabilities.⁹⁵ LAC firms are also involved in the WHO’s mRNA vaccine program.⁹⁶ Initiatives to increase local production are not just for vaccines, but the full range of essential medical countermeasures, including treatments, diagnostics, oxygen, personal protective equipment, and so on. While a full review of these efforts is beyond the scope of this chapter, what they have in common is that they are directed toward decreasing the region’s heavy dependence on imports, which has come to be regarded as an Achilles’ heel, a dangerous source of vulnerability to be addressed.