Dan Banik speaks with Rory Horner on the role and impact of the pharmaceutical industry in global development and the ability of India's huge and thriving pharmaceutical industry to supply affordable drugs and vaccines to low-income countries.
One of the many ways in which India has expanded its influence in global affairs relates to pharmaceutical products. The Indian pharmaceutical sector has enthusiastically highlighted its ability to develop Triple A technology (affordable, available, adaptable). By encouraging research hubs and offering a steady supply of affordable drugs to many countries, including the United States, India has rapidly moved from being a pharmacy for low-income countries to becoming the “pharmacy of the world”.
The country’s rapidly growing economy has been a major beneficiary of the astonishing rise of the domestic pharmaceutical industry. In becoming a powerhouse on low-cost generic drugs, India contributes actively to meeting global demands for vaccines, Over the Counter (OTC) medicines and patented drugs.
An important factor that has contributed to enhancing the reputation and profitability of Indian pharmaceutical companies abroad has been the government’s tough policy on patents, which has enabled Indian firms to manufacture generic versions of drugs that are much more expensive in countries where they were originally developed.
But Indian companies also face numerous challenges in the export market. There is a growing demand to reduce costs even further. And several countries in Latin America, Sub-Saharan Africa and Southeast Asia are trying to protect and promote their domestic industries by introducing new regulations that make Indian imports more expensive. There are also concerns that India has become increasingly dependent on imports from China for so-called “active pharmaceutical ingredients” required for making both advanced and essential medicines.
To discuss India’s huge and thriving pharmaceutical industry and the country’s ability to supply affordable vaccines and generic drugs to low-income countries, I am joined by Rory Horner. He is a Senior Lecturer in Globalisation and Political Economy in the Global Development Institute at the University of Manchester. We began by discussing the role and impact of the pharmaceutical industry in global development.
Transcript (prepared by Ingrid Ågren Høegh)
Horner The most prominent statement that is cited is when Yusuf Hamied, the head of Cipla at that time ... he says he’ll supply a year’s supply of antiretroviral drugs for $300 a year. And at the time, they’d been about $10,000 a year in cost ... antiretroviral drugs had been available to people in higher-income countries, but not in lower and middle-income countries.
Theme music You are listening to In Pursuit of Development with Dan Banik.
Banik One of the many ways in which India has expanded its influence in global affairs relates to pharmaceutical products. The Indian pharmaceutical sector has enthusiastically highlighted its ability to develop Triple A technology (affordable, available, adaptable). By encouraging research hubs and offering a steady supply of affordable drugs to many countries, including the United States, India has rapidly moved from being a pharmacy for low-income countries to becoming the “pharmacy of the world”. The country’s rapidly growing economy has been a major beneficiary of the astonishing rise of the domestic pharmaceutical industry. In becoming a powerhouse on low-cost generic drugs, India contributes actively to meeting global demands for vaccines, Over the Counter (OTC) medicines and patented drugs.
An important factor that has contributed to enhancing the reputation and profitability of Indian pharmaceutical companies abroad has been the government’s tough policy on patents, which has enabled Indian firms to manufacture generic versions of drugs that are much more expensive in countries where they were originally developed.
But Indian companies also face numerous challenges in the export market. There is a growing demand to reduce costs even further. And several countries in Latin America, Sub-Saharan Africa and Southeast Asia are trying to protect and promote their domestic industries by introducing new regulations that make Indian imports more expensive. There are also concerns that India has become increasingly dependent on imports from China for so-called “active pharmaceutical ingredients” required for making both advanced and essential medicines.
To discuss India’s huge and thriving pharmaceutical industry and the country’s ability to supply affordable vaccines and generic drugs to low-income countries, I am joined by Rory Horner. He is a Senior Lecturer in Globalisation and Political Economy in the Global Development Institute at the University of Manchester. We began by discussing the role and impact of the pharmaceutical industry in global development.
I hope you enjoy our conversation.
Banik Great to have you on the show, Rory. Welcome.
Horner Thanks Dan, good to be here. Thanks for the invitation.
Banik Well, I’ve been following your work for many years and I’m really glad to have this chance to speak with you Rory. You and others have over the years been observing that the pharmaceutical industry of course does not necessarily feature as prominently in the academic and policy discourse as say many other industries; could be extractive industries, or textiles, as you written about. The argument has been, by you and others, that pharmaceuticals are actually important in the global South. They do create lots of jobs. They are important for export revenues for countries such as India and China and many others. And of late, of course, there’s been a lot of focus on the ability of countries like India to produce affordable medicines that are not just crucial for consumption within India and other countries, but also important in terms of making them available for export to countries where people can’t afford the more expensive Western alternatives. So, my question is: do you think Covid has changed things now? Do you see more interest in better understanding the really crucial role that pharmaceuticals in low- and medium-income countries play in global development?
Horner I think that’s 100% yes to that question. I think Covid has really generated increased awareness of what the relevance of pharmaceuticals are, whether it’s medicines or vaccines, including having production capabilities to produce key medicines and vaccines. The amount of conversations I’ve had with colleagues or other people in recent months, that are suddenly interested in vaccines, which countries are producing them, which regulators are going to approve them, which countries have agreements to buy which vaccines, which drugs in the early stages of the pandemic, there was a lot of interest in drugs – so there is in a sense unprecedented interest in pharmaceuticals and realising how unbelievably important the pharmaceutical industry is, in this case for global public health and by consequence the global economy. But as you said the pharmaceutical industry in development studies or in broader work on the political economy of development has never really attracted anywhere near as much attention as many other industries. The textile industry attracts a lot of attention as a potential sort of springboard to industrialization. Auto industry is a more advanced industry and some lower middle-income countries, and also of course many agricultural industries and resource-based industries, given their prominence in in many countries. It’s been remarkable to me how few people in a sense are researching the pharmaceutical industry pre the pandemic, at least in what we typically think of as a development studies community. And there are people spread out across different disciplines doing really great work, but it’s in a way not been recognized as central. In policymaking, there are various agendas, which have attracted a lot of attention. So immediately once I say I do pharmaceuticals, many people will be like, okay intellectual property rights and there has been enormous interest and awareness of the hugely contentious debate over intellectual property rights, particularly in relation to the World Trade Organization, trade-related aspects of intellectual property rights agreement, which was a condition for all countries to be a member of the WTO. And the pharmaceutical industry was absolutely central to those debates and India was pretty crucial there too because India had developed a successful, very prominent pharmaceutical industry with relatively limited patent protection. So, there are areas where it has filtered in the past, especially through the IP issue, but I think the pandemic has really thrown a much greater light and much more people are now interested in the pharmaceutical industry and its relevance in multiple different ways in the global South, as well as the global North.
Banik Why is it, Rory, that there wasn’t much interest before Covid? Everything you’ve just said shows that pharmaceuticals of course are extremely important in large parts of the world. It is not just the availability. It’s also the affordability issue. And so, I find it surprising that the sector has been neglected. Why is it that it has been neglected for so long until Covid came along?
Horner I think there might be a couple of things. I mean, it’s obviously not been completely neglected. There was work on, for example, dependent development where I mean Peter Evans, an incredibly well-known economic sociologist, he worked on pharmaceuticals in Brazil in that context and Gary Gereffi, who actually wrote a book on dependency and the pharmaceutical industry in the Third World, at the very beginning of his career, before he developed all of his work on global value chains. He did a lot of his early work on the pharmaceutical industry in Mexico. So, there were some prominent development scholars who have done work on pharmaceuticals, but it was never really… My experience has been that if you submit a paper and you have to organize your own sessions for a conference on pharmaceuticals and really recruit people that you know are working this area from other disciplines to come, because there’s not anywhere near the kind of critical mass of people working on pharmaceuticals as elsewhere. I think it’s partly related to this perhaps unofficial division of labour between work on global health and work on what we would now call global development as well. There is a sort of whole separate group, well some overlaps when people come together, but there are people in global health who work on other aspects of pharmaceuticals. So, it’s hard to know. It definitely seems somewhat related to the intellectual division of labour. Maybe it’s not been seen in many countries as just not attracted the same recognition. It’s not probably the same sector with the same likely kind of job creation potential or industrial spill overs as some other industries may create as well. I think a lot of the significance of the industry does come from the fact that it’s an industry with public health implications. And that may be a factor in its not accounting for the same volume of employment or exports share as natural resource industries would. And even in countries where pharma industry is very successful, and it’s also very hard for me to answer because I’ve always been relatively convinced of the significance of pharmaceuticals and especially that’s the case when you’re going out and doing fieldwork and talking to people and pharmaceutical firms and policymakers and places where there’s huge debates over pharmaceuticals and their development implications, both on the industry and the health side.
Banik So at least in the academic discourse, if I understand this correctly, the discourse on the pharmaceutical industry in the global South, particularly say in the seventies and eighties, there was a lot of focus on trying to understand the development of this industry in relation to the debates of that time on dependency, that a lot of developing countries were highly dependent on the major developed countries, and it was all about reducing that dependency, right? And I find it quite fascinating how the pendulum has shifted, because what Covid did illustrate last year was that there was suddenly this fear in Europe and in the United States that these countries had suddenly become very dependent on the global South for all of these protective equipment from China. And there was this request by Donald Trump for India, or it was almost a threat, to send hydroxychloroquine to the US. So it appears that the dependency issue has actually changed somewhat from the global South being dependent on the global North, now it looks almost the opposite situation and there are all of these fears in the global North that one really should not be outsourcing the manufacture of a lot of these essential equipment to other countries. That one should promote local production. How do you see this pendulum shift? I mean is it from the one end to the other? Is it going to come back in terms of the production being moved to the global North?
Horner I think this is a really fascinating issue and especially linking up to the whole body of work on Dependency Theory. There are people working on reviving interest in it at the moment, but its obviously not a mainstream approach in development studies, but what’s really remarkable is, as you say, there are basically statements by political leaders in Europe and the United States through various stages of 2020 which are basically making dependency arguments, but framing themselves as the periphery dependent on the core of the pharmaceutical industry or personal protective equipment in China, and to some degree in India as well. And Europe issued a plan in late November for what is now framed as promoting ‘greater strategic autonomy’ in the pharmaceutical industry. And Donald Trump in May announced a more than 300-million-dollar investment in Phlow Corp., a company in Virginia to try and produce some active pharmaceutical ingredients more in America. Similarly, there was a big investment announcement for Kodak in Rochester, New York state. So, there’s been this whole idea of now promoting greater local pharmaceutical production in Europe and North America has attracted attention. It’s not just pharmaceuticals or medicines, it also relates to aspects of other medical industries too. Part of the context behind this is, in pharmaceuticals, a huge portion of the active pharmaceutical ingredients which is the key incipient in a drug which has the key functioning to try and make you better when you take it as a medicine, most of that production in the world is concentrated in China. It’s a very chemical intensive process. It’s also quite pollution intensive and there’s been a globalization of the API stage of the pharmaceutical value chain over the last almost three decades. Now, there’s been awareness about this dependence before the pandemic, including government investigations in America and framing this as a potential national security or health security issue. The pandemic of course played up and had a massive influence in amplifying these fears. I think it’s noticeable that at least in pharmaceuticals, China, which would have been to some degree affected by the lockdowns in China in the early part of 2020, but there was never any official ban that I am aware of on actually preventing the exports of pharmaceuticals from China. India, very temporarily, put a ban on some APIs and formulations made in those APIs, but, as you said, faced immediate diplomatic pressure from Donald Trump, most prominently, as well as other countries and very quickly promised, and especially in cases of humanitarian need, and in lower-income countries and places where it was already promised to supply the drugs that they would continue. But these sort of media reports which then emerged about India preventing pharmaceutical exports, there were media reports last week very temporarily about India’s preventing the exports of its newly approved Covid-19 vaccine. In a sense, that was based on confusion about some of the announcements taking place. There are still largely the regulatory approvals for those exports of Covid-19 vaccines are still waiting for. But there is a sort of, in the context of current global tension and America-China tension, is a whole much greater awareness of this pharmaceutical dependency. And local production is now an agenda. It’s not new in the world as a policy agenda because many countries in sub-Saharan Africa, over the last 15 years, the African Union has had a policy goal of promoting greater local pharmaceutical production because that continent is the most dependent on imports of pharmaceuticals anywhere in the world. India has its own agenda around its becoming increasingly reliant on China for the active pharmaceutical ingredient. So even though India is known as the ‘pharmacy of the world’ and a huge exporter of generic medicines, it’s more specialized in the formulation stage of the industry, and APIs then turned into a liquid, a tablet, or capsule, the common forms in which we would consume drugs. So even though India exports a huge amount of drugs, it relies itself on a lot of ingredients coming from China. So in the last couple of years, even before the pandemic, India itself also had a government investigation about how to try and reduce its dependence on China for APIs and made some announcements around industrial parks in March this year to try and promote that agenda. I think it’s a huge question to what extent efforts to reduce dependency on China or to some extent India will succeed. I mean that’s been actually a question that goes back to dependency and issues of overcoming dependency in the political economy of development for many decades. It’s easier to identify situations of dependency than to actually in practice overcome them. It’s, of course, a popular issue at the moment in Europe and America to say we will try and overcome dependency, but this will need long-term support in order to do so and there may also be trade-offs. It may potentially increase the cost of medicines and therefore potentially have negative public health consequences, even if there is somewhat of a greater health security. So, there are various pros and cons that would need to be weighted up. And a lot of questions about will politicians and policymakers continue to try and support this industry or will they just make short-term announcements in the context of the current global emergency.
Banik That’s fascinating, because the pharmaceutical industry is a great example of not just being the China-US rivalry, but it’s also the India-China tensions that have created certain challenges. So, perhaps this is the time we should move on to discussing more explicitly the Indian case. As you mentioned, India is often referred to as the ‘world’s pharmacy.’ It’s considered by many to be a pharmaceutical superpower, if I can say so, and the interesting question I have for you, at least I think it’s an interesting question, is how on earth did India achieve this status of becoming the world’s pharmacy and what really are the main factors that have contributed to this impressive development? All these big major pharmaceutical companies in India that are now almost household names in many African countries and large part of the world? Many African governments are partnering with Indian companies. There are all these generic drugs being sold. There is a lot of focus on medical tourism to India. So, before we talk about India’s role in the world, my first question has to do with how did India become this superpower in the pharmaceutical sector?
Horner You’re absolutely right. India is known as the pharmacy of, some say the developing world, but increasingly people say ‘pharmacy of the world’ for its huge generic pharmaceutical industry. And this is something that has been built up over decades. It’s not something that has come in the last 20 years. It’s not even something that has come post-India’s liberalization in 1991. There’s a key initial policy development that many point to, is India’s 1970 patent tax, which removed patents on pharmaceutical products and only put very limited patents in place in India. So, there was very limited patent protection from 1970 onwards. It’s interesting that this was actually even identified in the years leading up to planning for Indian independence. That there had been a strong patent protection in place in India from the colonial period from 1911. The various committees, pharmaceutical inquiry committees in 1950s identified the need to limit the amount of patent protection in India in order to facilitate the development of a local pharmaceutical industry. But many other countries had limited patent protection and actually moved to have limited patent protection the 1960s and 1970s, but did not develop anywhere near as significant a pharmaceutical industry as India. So, we have to look at other factors in conjunction with the limited patent protection in order to explain the rise of India’s pharmaceutical industry. I think what’s really key is there were strong domestic capabilities developed in the 1950s and 1960s to state-owned companies. Hindustan Antibiotics and Indian Drugs & Pharmaceuticals Ltd. The latter, IDPL, set up in Hyderabad, which eventually became a really big centre for pharmaceuticals. These state-owned companies, their significance is not really what they achieved in their own identities, but they acted as a development of skills and capabilities and many people got initial training and experience in these companies who then went on to set up their own private companies. Government companies in Indian government terminology were declared financially unviable, but the most prominent example would be Dr Reddy of Dr Reddy’s Laboratories. Dr Anji Reddy had worked for IDPL in Hyderabad at an earlier stage before he eventually set up Dr Reddy’s Laboratories, which is one of the top three Indian pharmaceutical firms in the world. There were also heavy restrictions on foreign investment in the 1970s and a compulsion for multinationals that if they wanted to sell in the Indian domestic market that they needed to have some extent of local production present. So, some multinationals exited the domestic market and then that gave greater space for domestically owned companies to sell within their own country. Other multinationals partnered with local firms too. So, I think we really have to think not just of the patent law, which is incredibly significant in the pharmaceutical industry because once a drug has… It’s the industry of all industries where IP is the most significant because once a drug is invented in one part of the world, it can be relatively easily reverse-engineered. So, examples of certain drugs in India: ibuprofen, for example in the 1970s, within a few months some of these drugs would be made available in India. Reverse-engineered and off-patent versions. And that was perfectly legal in India at the time. So, patents are crucial, but we also need to pay attention to the development of domestic capabilities, the scientific skills, and the restrictions on foreign investment, which really curbed the multinationals from the heavy control they had of this industry in India and many other countries in the 1970s and 1980s, or prior, in the 1950s and 1960s, the multinationals are dislodged and India actually moves from a dependent situation to actually overcoming dependency and starting to play a much more of a lead role in the generic side of this industry in the world.
Banik You make a very important point that there were actually many countries that removed these product patents and they’ve done so in the past few decades, but they haven’t been able to develop the kind of domestic pharmaceutical industry to the same degree as India. And the role of the state and domestic institutions, as you rightly point out, have been crucial. I want to return to this issue of the patents. It is an ethical problem, isn’t it, that you have some companies investing billions to develop something, a drug, and then it is produced at a very cheap price and distributed and potentially depriving these major pharmaceuticals of their revenue. I’m talking about those that do the research and development in Europe and the United States. But the point here is also related to the fact that there are lots of people who can afford these expensive alternatives. So, is that something the Indian actors, both politicians but also the pharmaceutical sector, have they been highlighting that kind of ethical dilemma appealing to the conscience of the world? And I know that the civil society organizations in India have played a critical role, have they not, in this whole debate, highlighting the fact that without the ability to produce these generic drugs, a lot of people would really be in in deep trouble?
Horner That’s right. To me, India is absolutely essential to the whole global contestation over intellectual property, which one person I interviewed once in India, an activist who worked on this issue, basically very simply said to me that – many people in the 1980s and early 1990s, IP sounded like a technical issue. And for those of us who work and as researchers on development issues, I mean there are whole other areas where, labour rights issues, democratic freedoms, other issues are going to attract naturally a lot more attention and students get interested in them and researchers do. There are these huge protests and mobilization around them and this person I interviewed in India, really well-regarded activist in that area, basically just said – well people elsewhere just thought IP was just a kind of boring issue, it was kind of technical, but in India there was really the realization of how crucial IP can be for its societal implications. And partly, India had started to develop this thriving domestic pharmaceutical industry through the 1970s and 1980s. And some actually identified the lobbying movement from the United States through the pharmaceutical lobby and to some extent from Europe to put a global agreement in place. Intellectual property was actually motivated by trying to counter what was happening in India, in the pharmaceutical industry, amongst other places too. India led the counter to try and maintain as much flexibility for developing countries in relation to intellectual property rights. It’s of course faced huge pressure in that regard and we still do have the TRIPS agreement, various timings that can be identified in terms of financial crisis in India, and at the turn of the beginning of the 1990s, where despite the strong resistance in India, the TRIPS agreement did come into place. But India is ready central, and the resistance in India and awareness from civil society, domestically, as well as working with international organizations, especially such as MSF, who sort of externally to the rest of the world helped highlight India’s role as the ‘pharmacy of the developing world.’ But I think we really have to mention the example and the issue of access to antiretroviral drugs for people living with HIV AIDS here, because this issue is one where India has been central to revolutionising the global supply. The most prominent statement that is cited is when Yusuf Hamied, the head of one of the major Indian pharmaceutical companies, in 2001 says he’ll supply a year’s supply of antiretroviral drugs for $300 a year. And at the time, they’d been about $10,000 a year cost. And in a sense, antiretroviral drugs have been available to people in higher-income countries, but not in lower and middle-income countries. And if you look, the country with the highest incidence of HIV AIDS in the world, South Africa, life expectancy actually falls from the mid-1990s to the mid-2000s, South Africa’s life expectancy actually falls from the mid-sixties to mid-50s. Very much related to the influence of HIV AIDS. And now India is the biggest supplier of antiretroviral drugs to South Africa. South Africa’s life expectancy is now higher again. I think then it was at the time of the end of Apartheid and India has become a major supplier to the global fund for HIV AIDS, TB and malaria. And that’s just within the scope of HIV AIDS and it was because there was no patent protection. So I think that sort of helped accelerate the awareness of IP and of India’s pharma industry.
Banik That’s fascinating, Rory, and we return to the international perspectives in relation to India’s impact abroad, but I want to continue with this focus on the domestic scene for the time being, and I’ve often wondered how important the pharmaceutical industry is considered within India, and I grew up in India, my childhood. And when I do return, and I remember my when my wife first visited India, she was fascinated with the sheer number of pharmacies that dotted the street and you would have one street and there would be like five pharmacies. And in certain parts of India, an important part of daily life, and its pretty easy to get hold of all kinds of medicines with or without a prescription, and some people wonder if perhaps the controls are a bit lax and that you can get away with just calling yourself doctor and then making a case that you know what kind of medicine you’re taking. So, while India is this superpower outside India, how is the pharmaceutical industry considered within India? Is it considered safe? Is it considered to be doing good things in promoting health security? Is it considered to simply be looking for profits? What is the kind of reputation of pharmaceutical companies within the country?
Horner So I’m speaking as a foreigner. I’m from Ireland, but I have spent quite a bit of time over the last 10 years in India researching the pharmaceutical industry. So, the reputation of the industry is actually quite complicated within India, at least according to my observations. One of the first examples I’d point to, and actually my understanding as I got into this research area, was reading through Economic and Political Weekly, incredibly well-known and widely read within India, but also very well reputed outside India, which provides really great social science commentary on current social issues. One of the early stages of my PhD research more than a decade ago was basically downloading any article that had been in Economic and Political Weekly, and other social scientists in other Indian publications to see what work had been done on the pharmaceutical industry. I noticed that in the 1970s and 1980s, long before the patent issue becomes one of global contention. There’s a lot of health groups within India that are really raising a lot of questions around the domestic pharmaceutical industry. These are related to pricing issues. There has long been contention around the extent of price control and also around companies’ ways and mechanisms to get around the price controls that are in place or there’s much less drugs under price control in India now. In the 1970s there was a huge amount of drugs under a drug price control order. There was a lot of question marks around some of the marketing practices of some of these companies and there was also question marks domestically around the quality of some of the drugs available within the Indian market. And it’s not just India, but in other places too, where people say they want the drug from the multinational, not from the domestically owned company. That would have been more an issue in the past, rather than a reflection now. The other issue is the environmental aspect to the industry too, which is not so positive. There is the greater Hyderabad area has had a restriction or a ban on any further active pharmaceutical ingredient production for almost 20 years now. And very high levels of pollution were found in that area and there are some darker sides to this industry. I think it’s a very politically sensitive issue because at the same time India had a very important role to be held up as a kind of positive example of what can happen when you don’t have strong intellectual property rights in place. And so, it has enormous health benefits in other ways, in terms of antiretroviral drugs and in other countries as we will talk about. Domestically, I think the situation is more complicated. Of course, there’s a lot of benefits domestically to having a much greater pharma industry in India. The price of most drugs and India is significantly lower, certainly significantly lower than it had been before, when this industry was controlled by foreign multinationals in India. There was a US Senate committee report in 1961, which said the price of drugs in India was amongst the highest in the world. That’ll be hard to believe for anybody who spends any time in India today, where drugs are very widely available and, for the most part, relatively affordable. Although there are some drugs that are very high priced now because of the new introduction of patent protection as a consequence of the WTO for some cancer medications and one or two other areas. The leading researcher in the world on India’s pharmaceutical industry. He’s recently retired from IIM Calcutta. He worked on India’s pharmaceutical industry in the early 1980s and continued working on it for almost four decades. And so, he was there from the beginning long before it attracted global attention. He’s really talked about this quite extensively and it’s a very complicated issue. Because of some of these potential downsides, in a sense, India is the pharmacy to the world, but not to India. But we’re likely to see India at least compared to some other lower middle-income countries having greater initial rates of access to Covid vaccines because of Serum Institute in India, and the development of capabilities in the sector. So, it’s a mixed bag, but it’s probably a mixed bag in many other places too. But it’s not to try and undermine the Indian pharmaceutical industry just to point out that there are sort of different kind of reactions within India as well.
Banik I was mentioning to you before we started the recording that we have a new research project that I’m heading here in Oslo and we’re collaborating with partners in Africa and also with the University of Mumbai. We’re studying India’s soft power and this growing reputation that it has achieved in terms of medical tourism and access to medicines, and this partnership that a lot of NGOs on the African continent and governments that are partnering with Indian actors. And India’s pharma exports are just expanding to Africa. And you mentioned the antiretroviral drugs and the important role that Indian ARVs have played on the African continent. I want to get back to this vaccine diplomacy that you mention, or medical diplomacy. I find it fascinating, last year with Covid, this mask diplomacy from China and you also mentioned India exporting hydroxychloroquine to many parts the word, paracetamol. All of this is positive, isn’t it? I mean, this is not just important now for Indian companies in relation to making profits but also for the Indian government to protect itself and to position itself, of course in relation to China, India can’t match Chinas infrastructure capacity on the African continent and many other parts of the world. But what India can and does very well is of course what they call frugal innovation in terms of IT, but also in relation to health. So, how do you see this playing out? This medical or vaccine diplomacy? And there are all kinds of challenges and you may want to reflect on this application by India and South Africa to the WTO. Could you reflect a bit on the capacity that India has, to distribute vaccines at an affordable rate to parts of the developing world?
Horner Yeah, I mean, India is the biggest supplier of vaccines in the world and primarily, many vaccines are administered to children, so a lot of that is supplied through UNICEF. Serum Institute of India is the leader in that and has developed that role over more than 20 years. It’s not the only one and there’s other big vaccine producers in India as well. This in a sense is I think one of the most prominent and most influential examples of South-South relations in the world. The enormous influence of India in supplying medicines and vaccines. For the Indian government, this definitely fits with the idea of win-win South-South Cooperation. India has always been a leader and trying to promote the interests of the South and there are clear industrial benefits for India from this industry. But there’s also clear benefits for public health in other parts of the world. I think it’s important to emphasize though that a lot of the exports from this industry aren’t necessarily a direct product of, kind of, government to government cooperation agreements. We’re seeing those government to government agreements in the pandemic, but there’s a lot of people I’ve interviewed in Indian pharmaceutical firms who have talked about, basically, they made business connections in different parts of Africa. Of course, there are long-standing people of Indian descent in East Africa, especially, and in South Africa. So, essentially Gujarati business networks across the Indian Ocean which helped facilitate the private-sector exports of drugs from India to sub-Saharan Africa. So, there are ways for different government policies, of course India and the support from the government initially in developing the industry through the state-owned companies, but many people involved in this export would really see it as private-sector trade. But of course, from a diplomatic point of view, this makes sense as a really positive aspect of South-South cooperation to highlight and we’re seeing enormous – the kind of vaccine diplomacy – in a big way. There’s a lot of talk about vaccine nationalism, of providing vaccines to your own population before elsewhere, but I think we’re also seeing vaccine diplomacy, especially from both China and India, but also in an intriguing way, Russia too. This is partly in a context where some of the initial vaccines that have been approved in Europe and North America for Covid-19, especially from Pfizer and Moderna, have restrictions in terms of the temperatures they need to be stored at, but also a lot of the doses have already been bought up in Europe and North America. And very little manufacturing of them.
Banik I wanted to ask you about that, Rory, because one thing is to manufacture and produce the vaccines. The other thing would be the logistical problems of distribution and storage. One could argue that China is much better equipped to do that, right, in terms of the logistical capacity. But India, how do you see India actually distributing these vaccines?
Horner That sort of varies depending on what the vaccine is, so that’s where the Oxford-AstraZeneca vaccine, for example, has been held up as a much more likely candidate for the world than the Pfizer or the Moderna vaccines. The Oxford-AstraZeneca vaccine can be stored in a regular refrigerator. Essentially what’s important is that it can be distributed in the same way that other vaccines would be distributed. And there are long-standing mechanisms of regulatory approval and logistics distribution from India to other parts of the world, including low and middle-income countries, where there’s been enormous progress in vaccinations over the last couple of decades. So, I think that’s where there are differences. But depending on what the vaccine is. But, yeah, China and India as well. And we’re basically seeing a very difficult choice for many low and middle-income countries, or lack of choice, in that some of the vaccines that are now being rolled out as we speak, in Europe and North America, either have already been bought up, the initial supply, or are also very unsuitable for the conditions of logistical infrastructure that is available. So, we’re seeing increasingly turning to India, China and even Russia for Covid-19 vaccines. Because these countries are willing to make them, at least to some degree, available. India signed a prominent deal last week with South Africa to supply a million Covid-19 vaccines of the Oxford AstraZeneca vaccine by the end of January. Another half-million by February. There are deals with Bangladesh, with Nepal as well, and likely to be others too. I think the first Covid-19 vaccines supplied to Argentina were the Sputnik 5 vaccine. The first country in Africa where they’re available, I think, was Guinea, also the Sputnik 5 vaccine. The Chinese one had to undergo clinical trials in Brazil and other countries because of China’s success in curbing the vaccine domestically. So, there are really fascinating aspects of South-South relations, which are emerging in the context of Covid vaccines at the moment.
Banik Final set of issues has to do with this competition and the rivalry between India and China that we were discussing earlier. On the one hand, of course, I noticed that India’s very dependent on China for access to active pharmaceutical ingredients, APIs, and any shortage of supply from China for that would impact India’s production capacity, you know, correct me if I’m wrong. So that’s one kind of dependency that India has on China. There’s also this other aspect of who to trust. So, let’s say in Africa or Asia or Latin America. There may be less trust in the Russian vaccine, and perhaps more on India because of its reputation. But I also noticed that the Chinese are using the vaccines as an important tool to cultivate closer relations. Just earlier today, I noticed on Twitter there were these pictures of the Indonesian president receiving the first jab of the Chinese vaccine. How do you see this kind of rivalry, the south-south rivalry between India and China, but also with the other BRICS-country, Russia, playing out in the world, in relation to vaccines? So on the one hand, you have all these Western vaccines and, on the other, you have these cheaper variants that are most likely going to play an extremely important role in many parts of the world in the next few years.
Horner It’s a really interesting question. I think we are still at the early stages of seeing exactly how it’s going to play out. There are a lot of deals that both China and India have done recently. And even within South Asia and Southeast Asia, I mean, in some places there is sort of a division of labour between China and India, depending on which countries are more friendly already. So, I mean, I think the Chinese vaccines are likely to be available in Pakistan and there are deals in Indonesia and elsewhere in Southeast Asia too. Some countries seem, in their desperate search for vaccines, are going to look for vaccines from India, from China, and from Russia: all three. I think that’s the case in some parts of Latin America. And many countries, if they have the resources, are trying to look for Covid vaccines from wherever they come from. The nature of these deals, I mean, there’s some broader discussions in relation to China’s involvement elsewhere about the nature of the relationships. Long-standing, important questions about the nature of relationships that come from assistance from China. It’s not something that’s really been the focus of my research, but I think it will be interesting to see how that plays out in in this vaccine context too. But it’s still early days, but there’s no doubt that these South-South relations are going to be incredibly key for any kind of meaningful Covid-19 vaccine access in low and middle-income countries.
Banik It was great fun to chat with you today, Rory. Thank you so much for coming on my show.
Horner Thanks, Dan. Good to talk about pharmaceuticals and a lot of really important issues. Let’s hope we can see a lot of progress and access especially in the immediate future and for Covid-19 vaccines.
Banik If you enjoyed this podcast, please spread the news among your friends and share it on social media. The Twitter handle for this podcast is @GlobalDevPod.
Thank you for listening to In Pursuit of Development with Professor Dan Banik from the University of Oslo’s Centre for Development and the Environment. Please email your questions, comments and suggestions to inpursuitofdevelopment@gmail.com.