The Necropolitics of Intellectual Property

By Gordon Hull

Update (4/30).  Essential piece by Amy Kapczynski (who is one of my sources below).  Also see this Twitter thread by Dennis Crouch of PatentlyO, characterizing the issue as one of technology transfer more generally than patents specifically.  Trade secrets are an important issue - like patents, they allow companies to control access to innovation.  Companies also will use a strategy of combining patents and trade secrets in order to maximize their revenue (so if they think something can't be patented, they might claim it as a trade secret).  The theory behind trade secrets is based more in contracts than property, which means that they are arguably even worse if you're worried about neoliberalism, since they are an even further privatization of law and policy.

Update (4/29).  Here's more on IP and other barriers to vaccine distribution in India (and elsewhere):

• The Modi government is incompetent at every level, and India's base capacity was lower than it estimated.
• Most of the world wants IP waivers.  The U.S. and Europe and a few other countries do not. 
• This WaPo piece argues that waivers are bad but licensing (preferably voluntary, but with compulsory as a stick) is good.  Note that licensing is not what Bill Gates is talking about, as far as I can tell, which is buying vaccines and donating.

In my Biopolitics of Intellectual Property, I argue that IP policy has shifted from what I call a “public biopolitics” model to a neoliberal version.  In its briefest form: the public version treats IP as a necessary but limited monopoly to promote public goods, and the neoliberal version focuses on private wealth gain through proprietization (I summarize the argument here).

Something that I don’t particularly talk about in the book, but that one knows from Foucault, is that biopolitics comes with its inverse, necropolitics: if biopolitics is about promoting life and health for the “population,” it is also about who is allowed to die.  As Foucault puts it, “the ancient right to take life or let live was replaced by a power to foster life or disallow it to the point of death [au vieux droit de faire mourir ou de laisser vivre s'est substitué un pouvoir de faire vivre ou de rejeter dans la mort]” (History of Sexuality I, 138).  Governmental power goes from the right to kill to the power to cause people to live; death becomes something into which one is literally “thrown back.”  The leading examples of necropolitics are political, as for example Foucault’s discussion of state racism (of which Nazism is the apotheosis) in Society must be Defended.  Achille Mbembe’s “Necropolitics” article spends time on how post-colonial African states have dismantled populations, which are “disaggregated into rebels, child soldiers, victims or refugees, or civilians incapacitated by mutilation or simply massacred on the model of ancient sacrifices” (34).  Building on these, Ege Selin Islekel’s brilliant treatment of the disappeared in Turkey notes that in necropolitical spaces, “the entire content and the fact of living, constituted by the ethical, political, and epistemological conditions of life, are subsumed under death.”

However, as Ute Tellman has recently demonstrated, the political treatment of biopolitics needs to take seriously how it is co-configured with the economy.  On Tellman’s account, the notion of economic scarcity first appears in Malthus (it was missing in Smith!) as a way to police the behavior of the poor (and “savages” in the colonies) by training them to think in terms of futurity.  For Malthus, the poor have to be trained not to eat and procreate their way into oblivion by forcing them to think in terms of economic rationality.  This brings us to the neoliberal justification of IP, which is partly underpinned by the Schumpeterian thesis that innovation is to be pursued at all costs, because the gains of future innovation (“dynamic efficiency”) are more important than whatever short-term distribution problems (“static inefficiencies”) they entail.  Thus, more or less, is Harold Demsetz’s reply to Kenneth Arrow. 

It also subtends the argument being given for why IP rights around Covid vaccines shouldn’t be licensed to the poor in India (side note: Malthus served as professor at the East India Company College).  Developing countries have proposed a waiver of related IP rights to ensure the rapid production of generic Covid vaccines, and Pharma has responded with an army of lobbyists to explain that no, IP can’t possibly be the problem with Covid vaccine distribution, and it would be much better for philanthropies to purchase lots of drugs and then distribute them.  Other unrelated IP industries have followed with their own lobbyists.  Whatever other difficulties exist in getting vaccinations to people in developing countries, it seems hard to deny that insisting on IP rights and thereby limiting production of the drugs isn’t one of them.  Allowing generics – especially in India and Brazil – increases capacity.

Western countries have a long history of taking advantage of developing countries with IP laws and their singular focus on economic growth and “innovation” as its own end, especially during public health emergencies, and this is no exception (it is worth noting that the current focus on IP developed out of a group of pharma executives who decided to maximize their IP profits by convincing Congress that IP is good for trade policy).  The basic move behind the theoretical neoliberlization of IP is accomplished by making any sense of public good invisible, or (more precisely) declaring that it should be available for private internalization.  If the neighbors are going to enjoy the music you’re playing in your backyard, that ought to be monetizable in the form of a public performance license!

In the case of Covid vaccines, this is not only immoral, it is bad economics.  First, public health is a classic public good, which means that it’s non-rivalrous (we can all share it) and non-excludable (we can’t stop others from benefiting).  Every person who is waiting for vaccination rates to drive down Covid transmission understands this point intuitively: when fewer people get sick from Covid, the benefits spillover to all of us.

Public goods are poorly served by markets, because there is no obvious way to capture the value of someone not getting sick.  Even if you can sell me a vaccine, if my vaccination stops what otherwise would have been a chain of Covid transmission (because I didn’t get sick when exposed, and so didn’t transmit it to my family or friends), there is no way to monetize that benefit.  This point is even clearer if the vaccination rate causes new variants not to develop, since the damage those would cause is unknown (and yes, virologists are deeply concerned that Covid’s running amok in India and elsewhere is breeding new variants that could be more contagious or more virulent or even evade vaccines).  Avoiding those is of incalculable benefit, but that benefit doesn’t translate into the profits of a vaccine maker.

This situation is part of why the world doesn’t have more vaccines in the first place – they are cheap treatments that prevent bad things from happening.  As I argue in the book, numerous scholars have shown that strong IP rights tend to push drug development in the direction of diseases that primarily affect citizens of rich countries, towards treatments for expensive chronic conditions rather than less remunerative drugs like antibiotics and vaccines, and towards “me too” drugs that offer different treatments for conditions whose treatment generates lots of revenue (so think the multiple drugs to treat erectile dysfunction) rather than to genuinely novel drug development.  Even worse, excessive proprietization of everything tends to divert public policy and other resources away from proven-successes like water sanitation systems and into sexy, expensive drugs like genomics.

All of these are “static inefficiencies” generated by being willing to absorb near-term harm for long-term gain in the form of innovation; they reflect the Malthusian bargain.  But what about the more basic question of present consumption versus the future?  An especially serious problem in this context is what economists call “deadweight loss.”  Basically, in a free market, the price of something would be driven down by competition to marginal cost.  Patents create an artificial monopoly, which means that the patent owner will charge above-market prices for their product if they can.  Public image has helped here for some vaccines: why is the AstraZeneca/Oxford vaccine so important to developing countries?  It’s not just that it’s cheap to make and stores in an ordinary fridge; it’s also that the company has promised to sell it at cost in perpetuity.  J&J is also committed to not-for-profit distribution of its vaccine, at least for the duration of the pandemic.  But Pfizer and Moderna are making money, including from future booster shots.

Those of us in the U.S. are getting our Pfizer and Moderna shots for free, but that’s because the government is paying.  The IP advocates want philanthropy to pay to distribute the vaccines elsewhere.  We can debate whether all this paying this is good policy in general.  On the one hand, like literally all other drugs, these vaccines were made on the back of considerable public investment.  One the other hand, the outcome was definitely serious innovation: the mRNA vaccines do appear to be proof of concept for a platform generating new drugs that could defeat not only Covid but potentially a load of other diseases, including many cancers.  And companies like Moderna started their work into mRNA with venture capital long before Covid; that’s part of why the platform could turn around the vaccines so quickly.  Moreover, the empirical questions about pharma incentives are deeply murky, and there are also other ways to fund what is now IP, and good economic reasons why they might be better.  All of that is a subject for another day.

For now, notice that places that don’t have that luxury of a rich government that can deficit spend at will, i.e., whose governments can’t afford the price, are suffering from deadweight loss.  This measures the gap between what demand for a product would be, if it were priced at marginal cost, and what it actually is, given the monopoly price.  To understand this, go in your wayback machine to before streaming took over the music industry, and imagine that I own the rights to a song.  Some folks are willing and able to pay the $2 I’m charging to license its use to your MP3 player.  Other folks don’t have that money, or sort of enjoy the song but would rather spend the money on something else. Maybe they’d be willing to pay $1, or $.01 instead.  That set of folks represents deadweight loss – unmet social demand.  In the case of MP3s, maybe not such a big deal.  But when those folks need a vaccine that they cannot afford, then they risk dying: they are thrown back into death.

This is the necropolitics of IP.  It is really important to recognize that there is nothing in nature or even economic laws that requires this!  It is not just that the complaint that economic scarcity needs to determine our political decisions was an invention of Malthus, or that the bioeconomy has been built, as Melinda Cooper argued, on a promise of an endlessly bountiful future and a permanent solution to the problem of scarcity (paid for, she adds, by an unsustainable debt load in the present, with environmental and other bills that will likely come due before the bountiful future actually arrives).

It is that the decision to treat public health as a private good for the purposes of vaccine distribution, and the unwillingness of the state to compel companies to allow production of vaccines at cost, are both political decisions.  IP theory was not always this way. The idea that the present should always be sacrificed at the altar of future innovation, and that this should guide IP, dates roughly to the 1960s.  These decisions can be made differently, and in this case there is really no downside.  Deadweight loss, recall, measures unmet social demand: the people who are going to die because they can’t buy the vaccine (or because there isn’t enough manufacturing capacity to get it to them).  That describes the status quo, which means that getting these folks vaccine faster than they would in the status quo is not only a net social gain; it’s not a loss to Pharma, because they weren’t going to buy the vaccine in the status quo.  In this case, the need for present consumption outweighs speculation about the future.  This is not a hard call, and that Pharma is dispatching armies of Malthusian lobbyists to deflect from it says everything you need to know.