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September 27, 2021

Patent buyouts can ensure equitable access to vaccines – leading macroeconomic influencers

The monopolistic pricing policies of private pharmaceutical companies have hindered the ability of low-income countries in gaining access to effective coronavirus vaccines.

Experts opine that patent buyouts are the most effective way in which equitable access to vaccines can be ensured without impacting the profits of private companies.

Linda Yueh

Linda Yueh, economist at the University of Oxford, shared an article on how public policy interventions to control the spread of the coronavirus pandemic have been impacted due to the monopolistic pricing policies adopted by pharmaceutical companies regarding vaccines. The article detailed that economies of scale in the manufacturing of coronavirus vaccines much be achieved to ensure equitable access to vaccines.

The Covid-19 Vaccines Global Access initiative (COVAX) is an important step in this direction but the initiative needs to be redesigned instead of depending on external funding and obtaining surplus vaccine supply from rich countries. COVAX should initiate patent buyouts for the most effective vaccines to ensure that production licenses are freely available to qualified vaccine and generic manufacturers globally.

The article highlighted that unlike patent waivers, patent buyouts do not impact the incentive for private companies to invest in innovation. Buyouts can be designed in such a way that they encourage voluntary transfer of vaccine knowledge while breaking the price monopolies that private companies hold and encourage global competition in vaccine production. Patent buyouts can also help in ensuring equitable access to effective vaccines globally, while achieving high levels of immunity, fight against mutations and bring the pandemic to an end, according to the article.

 

Christophe Barraud

Christophe Barraud, chief economist at financial services firm Market Securities, shared an article on how retailers have raised concerns on rising inflation amid supply chain disruptions and shipping costs. Companies such as Nike, Costco, and FedEx have warned of rising prices due to high shipping costs. The cost to getting a 40ft shipping container from Shanghai to New York was $2,000 last year but now it has increased to $16,000, according to Bank of America.

Costco noted that freight costs, high labour costs, shortage of items such as computer chips and oils along with high commodity prices are placing inflationary pressures on the company, which it will have to pass on to its customers. Retailers are trying to improve their supply chain but eventually expect these costs to impact their operating profit. Customers are currently willing to accept the higher prices with the holiday season approaching and also due to the increase in personal wealth thanks to government stimulus checks. Personal wealth is estimated to have increased by 4.3% in Q2 2021.

The inflationary pressures are expected to continue through the year and until early next year with the Federal Reserve admitting that inflation is projected to be higher in 2021. Officials from the Federal Reserve stated that they are planning to cut some of the monetary stimulus provided during the pandemic. Experts opine that the policies adopted by the Federal Reserve will need to be adjusted to control the rising inflation.

John Ashcroft

John Ashcroft, founder of The Saturday Economist, a website providing the latest news and updates on the global economy, shared an article on how world trade is rebounding and creating supply chain issues. Companies have indulged in an buying spree to keep up with the rising domestic demand in the US, which is leading to overloaded railroad terminals and shipping docks.

World trade is estimated to have increased by 10% in July with exports from China increasing by 20% in Q2. Majority of these exports are to the west cost of the US where shipping lanes are congested and freight rates are on the rise. The US government is trying to ease the congestion in the freight system, which has doubled in size in August and was a unknown phenomenon before the pandemic. The problem is being compounded due to shortage of workers to move the freight, the article highlighted.

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