We have the usual outbreak of that virulent collectivism over at Oxfam. People are making money out of creating a better world – quick, stop them!
“This is a public health emergency, not a private profit opportunity,” said Anna Marriott, a health policy adviser at Oxfam, which is part of the alliance. “We should not be letting corporations decide who lives and who dies while boosting their profits.
“It is appalling that big pharma is making huge payouts to wealthy shareholders in the face of this global health emergency.”
Asinine stupidity on show here.
The People’s Vaccine Alliance argues that the profits made by the companies are inappropriate when most of the world cannot get the vaccines they need, which are expensive and in short supply. Campaigners want to see the companies waive their patents and help set up factories to make affordable versions of their vaccines around the world.
The alliance estimates that Pfizer has paid out $8.44bn in dividends, Johnson & Johnson $10.5bn in dividends and $3.2bn in share buybacks, and AstraZeneca $3.6bn in dividends.
Those payments out are not, of course, anything at all to do with covid or vaccines for it. They relate to the activities of previous years.
But let us examine the underlying claim. Folks shouldn’t make money out of pharma research. That is, after all, the real claim.
The demand for vaccines, at a time when the global economy is at a standstill, is responsible for a new wave of billionaires, it says. Uğur Şahin, the founder of BioNTech, which partnered with Pfizer to produce the vaccine he and his wife invented, now has shares worth $5.9bn. Stéphane Bancel, the CEO of Moderna, which produced a vaccine with similar mRNA technology, is worth $5.2bn.
Those two German Turks for example. Should they make lots of money out of a disaster? Hell yes. Two highly talented people have spent their entire working lives on mRNA vaccines. They’ve swallowed a few hundred millions of capital along the way – hey, maybe it’s only a few tens of millions. The end result has been a technology available to us just when we wanted to have said technology available to us. Ain’t that nice?
The thing being, well, how valuable is that technology to us? To a reasonable guess the global economy is about $100 trillion a year. That’s around $300 billion a day at this level of accuracy. Covid sliced what, 20% off that? So, we’ve a daily – daily – cost of $60 billion.
mRNA vaccines speeded up vaccine development by what? 60 days as compared to earlier technologies? OK, you have some different number but that just changes the calculation, not the point. We gain, as a species, some $3.6 trillion from the invention of mRNA vaccines.
So, what are we, pikers or something? Unwilling to shower a few single billions on those who have given us $3.6 trillion?
Except even that’s not the correct calculation. We don’t make people rich, we don’t allow people to become rich, as a result of their delivering value to us, not in the sense of this is why we set the system up this way. Sure, only people who do deliver value to us get to become rich but that’s not the pragmatic point of the system at all.
That point is that if this generation of people who have delivered $4 trillion to us all gain a $billion here and there then the next generation of people who might deliver $trillions are tempted to try it out. It is not a reward for having made vaccines. It is a temptation to the people who might solve our next problem.
At which point Oxfam can – and should – go boil their heads. Not that the extract of the head cheese will be worth anything which is why we’ll not reward them for producing it.