Brand awareness for Pfizer, Astra-Zeneca, Moderna and BioNTech has reached astronomical levels. Thanks to the crisis, we have all become arm-chair vaccine experts.
Contrary to perceptions, vaccines are less than 5% of the world-wide pharma industry. Pre-Covid, the most widespread vaccines were for tuberculosis, whooping cough and polio.
Manufacturing vaccines is complicated and can take between 12 to 36 months from raw material inception, active ingredient production, coupling with stabilisers and filling. Quality controls account for around 70% of time. It’s an industry with high R&D, intellectual capital and state of the art manufacturing.
Once plants are built, they are not easily moved. It’s global and 4 of the top 5 exporters are in Europe.
Belgium is the undisputed leader. In 2020 it exported over $11b of human vaccines, followed by Ireland. There is no doubt Belgium’s 2021 exports will soar dramatically thanks to Pfizer’s plant in Puurs.
There are over 270 Biotech companies in Belgium. It’s a cluster that supports over 38,000 jobs, not to mention tax revenue. There are generous tax breaks on researchers’ salaries and only 20% of patent income is recognised as taxable revenue.
Across in Ireland, the world’s no 2 vaccine exporter, there are over 25,000 employed in medical technology and another 25,000 in servicing the sector. Like Belgium, Ireland has not been slow in offering generous incentives to investors. The headline corporation tax rate is 12.5%.
Last year Dublin came up with a ‘knowledge development box’ sweetener which can further reduce the rate of corporation tax to 6.25% for profits derived from certain IP assets.
No surprise then that the EU has given a more cautious response to President Biden’s proposal to temporarily waiver intellectual property rights for Covid-19 vaccines.