JI

Patently absurd: IP in the age of COVID

by loljapes

Around a year ago, Western countries started coming to the icy realization that the COVID-19 outbreak would not be contained in Asia and had in fact likely already gone pandemic within their own borders. In response, governments around the world began the age-old practice of throwing money at the problem. One of the more productive exercises in money-flinging has been the creation of several vaccines against COVID-19*.

There is a lot that is admirable in how governments supported vaccine production. No-one knew a year ago what vaccines would be most effective against COVID, so it made sense to fund multiple candidates. Similarly, it would have been tragic to have had a viable vaccine but not have the manufacturing base necessary to create the vaccine in the amounts needed, so ramping up production capacity before clinical trials were concluded also made sense, although it was expensive. The whole exercise shows that a degree of planning in an economy can serve human needs better than relying on raw profit motive.

Less admirable was the decision to allow pharmaceutical companies to retain the intellectual property rights to the vaccines that have been produced. The usual story told about pharmaceutical patent rights is that companies take on large risks during drug research and unless the government grants them a time-limited monopoly in the form of a patent they will have no incentive to continue their work. Even before the pandemic this argument had certain flaws, but the support provided to vaccine companies during the pandemic completely destroys it. Several vaccine companies were given billions of dollars, completely risk-free, in order to let them create their COVID-19 vaccines (see below). Often this was done in the form of vaccine preorders, where governments agreed to pay money for shots irrespective of whether they were ultimately found to work or not. The support for vaccine companies didn’t end at the financial help that was given, governments around the world undertook other activities such as speeding up regulatory processes. This was likely especially helpful for the vaccines made by Moderna and Pfizer-BioNTech as they use novel mRNA technology that would likely have faced extra scrutiny in normal times. You literally can’t buy the sort of support given by governments in order to speed up vaccine production, and yet, at the end of the pandemic, it will be the companies who walk away with full control of the products of all that public spending.

There are some signs that vaccine companies know they’re in a delicate situation. Moderna has made a pledge to not enforce intellectual property restrictions on its vaccine until the pandemic is over (other companies have been more tight lipped, and even Moderna’s pledge gives them a big loophole to start charging once the pandemic is over). However, the problem is that these companies retain any rights at all to technology that wouldn’t have been developed without huge influxes of public cash. Western countries have put themselves in the position of paying once to build up manufacturing and research capacity for private companies, then paying again to take delivery of the product of that investment.

Canada could use this moment to reappraise patent law (which even pre-pandemic was looking incredibly rickety as a way to incentivize biomedical research). Unfortunately, Canada is instead doubling down on the current intellectual property regime. In October 2020, India and South Africa submitted a request to the World Trade Organization for a time-limited waiver of intellectual property restrictions on healthcare technologies related to the COVID pandemic**. The proposal is supported by around 70 countries, but Canada in not one of them, and has released a statement saying that they see no problems with the current international IP regime. This is setting the stage for an ugly battle where the US, UK and Canada (all countries that have secured enough vaccine doses to protect their entire population, four times over in the case of Canada) will be fighting to deny poorer countries access to COVID-related medical technology. For whatever reason, it’s a fight that Canada’s leaders are eager to pick.

Public Support received by COVID vaccine makers

AstraZeneca - University of Oxford

• $1.2 billion USD (Operation Warp Speed)
• 20 million doses preordered by government of Canada

Pfizer BioNTech

• €375 million (government of Germany)
• $2 billion USD (Operation Warp Speed)
• 76 million doses preordered by government of Canada
• 200 million doses preordered by the EU

Johnson & Johnson

• $1 billion USD (Operation Warp Speed)
• $456 million USD (U.S. Health and Human Services Office)
• 38 million doses preordered by government of Canada

Moderna

• $1.53 billion USD (Operation Warp Speed)
• 44 million doses preordered by government of Canada
• 80 millions doses preordered by the EU

Novavax

• $1.6 billion USD (Operation Warp Speed)
• 76 million doses preordered by government of Canada

Sanofi and GlaxoSmithKline

• $2.1 billion USD (Operation Warp Speed)
• $456 million USD (U.S. Health and Human Services Office)
• 72 million doses preordered by government of Canada

* According to the WHO there are currently 182 vaccines in preclinical testing and 74 in clinical trials

** The move isn’t completely disinterested, India in particular has a huge generics industry which would love to be able to produce vaccines and medical technology license-free.