Global Citizen is a community of people like you

People who want to learn about and take action on the world’s biggest challenges. Extreme poverty ends with you.

Mufid Majnun/Unsplash
Global Citizen AsksDefeat Poverty

How Can Fair Vaccine Pricing Help the World Recover From COVID-19?


Why Global Citizens Should Care
Billions of people worldwide have been affected by the COVID-19 pandemic, and hundreds of millions are facing the toughest challenges yet in their daily lives. Global Goal 3 promotes healthy lives and well-being for all, and Global Citizen's Recovery Plan for the World campaign calls on world leaders, corporations, philanthropists, and everyday Global Citizens to take action so we can end the pandemic and get back to our lives. You can find out more about the campaign and join us in taking action here

As COVID-19 vaccines continue to roll out around the world, they've offered us some hope in tackling the pandemic and getting back to normalcy — but unless they can reach everyone on the planet, that’s unlikely to happen.

Most pharmaceutical companies have reserved the right to set their own vaccine prices, often at exceedingly high levels. This limits the ability of low- and middle-income countries to access life-saving tools that could help the world achieve herd immunity and end the pandemic once and for all.

Scientists and medical experts alike have called on the global pharmaceutical industry to offer the vaccine at an affordable cost and to start putting people’s lives over profit, but Big Pharma has yet to step up, which poses a significant challenge to our recovery efforts. 

Global Citizen spoke with Dr. Samira Guennif — a French economist specializing in health, intellectual property, pharmaceutical patents, and access to medicines and health care in developing countries — about the importance of setting fair vaccine prices to help the world overcome the pandemic.

Global Citizen: How are vaccine prices determined?

Samira Guennif: There are a few elements that determine the price of a product before it’s marketed to the public. The price is a complicated trade-off between research and development (R&D) expenditures, [product] efficacy, and sales volume. It is a negotiation between public agencies, drug agencies, and firms — but usually, these negotiations take place within a context where information-sharing is asymmetrical. The agency is completely reliant on the data [provided by pharmaceutical companies] to come to a set price; so although the product is regulated by a public agency, the negotiations take place within a particular context where firms hold huge negotiation power. And this kind of situation can give rise to higher prices on the market. 

So in order to solve the issue [of high vaccine prices], we need to have access to that data.

Some have called on Big Pharma to share intellectual property rights associated with vaccines to help the developing world end the pandemic as fast as possible. Can you explain how the ownership of a patent ties in with the cost of the vaccine? 

Once the firm gets the patent, it becomes the only one able to produce and market the product for 20 years. This creates a monopoly, which means that prices will inevitably go up. 

This is quite an important issue to address in the context of this pandemic because if countries are able to avoid vaccine patents, production could be scaled up and high prices could be avoided. 

What does a fair price look like, in your opinion, as an economist? 

It's definitely not a global price, which means that a firm cannot decide that, “the price is this price and this will be set for the north and for the south.” It means that we need differential pricing. Developed countries would accept to pay a higher price compared to low- and middle-income countries.

What would be the benefit of lowering COVID-19 vaccine prices for developing countries? 

We know that health is very important for development, especially for developing countries... It's very important [for high income countries] to invest in health to ensure the development of [these countries]. [Without such commitments], we are responsible for the incapacity of [these countries] to achieve [the Global Goals] — [and especially Goal 4] for health and well-being established by the United Nations.

How can we incentivize pharmaceutical companies to make sure that they're offering the vaccine at an affordable price? 

We need some kind of collaboration and cooperation on a global scale because some countries are purchasing a lot of vaccine doses and others have a stronger production capacity. This kind of situation is socially acceptable: We paid for the development of this product, and we cannot let this happen. I'm also thinking about developing countries, which will not have any way to survive [without] this kind of product — except [with some help from developed countries].

This interview has been edited and condensed for clarity.