The emergence of the new Omicron COVID-19 variant provides a stark warning of the consequences of our continuing failure to roll out vaccines equally across the globe. As of December 2021, just six percent of people in low-income countries had received at least one dose of the vaccine. While the virus continues to circulate unchecked anywhere, it will continue to develop in new and potentially devastating ways.
How can we get vaccines out to the world? Attention has focused on the need for a temporary waiver of intellectual property (IP) rights, first proposed, in 2020 by India and South Africa, to the World Trade Organisation (WTO).
But a waiver would be in no way sufficient to address the problem of supply. Vaccine manufacturing is a particularly complex process that, in the case of COVID, requires advanced technical know-how and manufacturing infrastructure. A waiver could not force pharmaceutical companies to share this. It is this lack of knowledge, both tacit and codified, and production capacity that represents one of the most significant constraints to the supply of vaccines the world urgently needs.
In an article co-authored with Peter J Buckley of Leeds University Business School and Ines Hassan of the International Science Council in France, we suggest that the best way to facilitate this transfer of technology and knowledge and ramp up production is through the creation of joint ventures between global vaccine manufacturers and local pharmaceutical companies in the Global South, organised into regional hubs.
Research has shown that joint venture partnerships with local firms are particularly effective vehicles for international technology transfer. Unlike wholly foreign owned subsidiaries, they enable local staff and partners to gain technological and managerial know-how through training and everyday work interactions. They can also tap into local knowledge in areas such as resources, markets, and supply chains; significantly reduce political risk; and, where they are public–private partnerships, integrate the private sector’s advantages in flexibility, innovation, and ability to deliver with the public sector’s strengths in mobilising resources and wide outreach.
Joint ventures also offer advantages over other proposals that have been put forward, for example compulsory licensing of patents under the WTO’s TRIPS agreement. This obliges firms to share know-how in return for a licence payment.
However, current rules governing compulsory IP licensing are very restrictive. They only favour countries that already have productive capacity, as they require strong local technological capabilities to understand and effectively use the licensed technologies. Moreover, as with an IP waiver, most of the tacit technological and managerial know-how in supply chain management cannot be codified and transferred through compulsory licensing.
Another alternative proposal, calling for the creation of a new COVID-19 Vaccine Investment and Trade Agreement (CVITA) could be useful in countering ‘vaccine nationalism’, but again it only favours developed countries with existing vaccine and pharmaceutical production capacity, and makes only marginal reference to developing countries. Hence our focus on joint venture partnerships.
COVID is a global problem requiring an ‘all hands on deck’ approach and we believe financing for joint ventures should be provided by Global North governments, international organisations and host governments, as well as the pharmaceutical MNEs themselves. Governments could support these partnerships in other ways too: by providing information and infrastructure and offering preferential policies.
The final location of regional hubs in different continents could be approved and supported by a special taskforce co-ordinated by the World Health Organization (WHO) and UN agencies for technology transfer and industrial development, taking into account local absorptive capacity.
The joint venture solution would not replace or weaken the role of COVAX – the COVID-19 Vaccines Global Access Facility established by WHO to accelerate the development and distribution of vaccines. In fact, it would effectively unblock the major bottlenecks that constrain COVAX, namely the lack of funding and tacit knowledge for production. COVAX would have a continuing role, providing seed funding, helping with joint venture matchmaking, setting and monitoring product quality standards, and overseeing equitable distribution.
We believe that this joint venture model will not only help protect the global community from COVID, it also represents a rare opportunity to support the upgrading of technological capabilities and sustainable economic development across the Global South.
It could even pioneer an approach to global knowledge-sharing and global public goods provision that could be used to tackle other urgent global challenges, such as climate change. We should not waste this opportunity.
By Professors Xiaolan Fu and Diego Sánchez-Ancochea of the Oxford Department of International Development.
