INTRODUCTION
The bargain implicit in a patent – the Faustian pact, as Bently and Sherman put it – is classic: a limited monopoly granted by the State in exchange for public disclosure of an invention. Over the years, perhaps nowhere has this pact fuelled as much academic and policy debate as in the pharmaceutical industry. The basis for the debate is understandable: medicines can save lives, and therefore monopolies that potentially restrict access to medicines are a matter of public concern, but on the other hand, for the private sector, drug development and manufacture is a business, and an expensive business at that.
When the Covid-19 pandemic first hit, it was clear that global commitment to research collaborations and technology licensing would be crucial to scale up not just research and development, but also manufacturing and supply of vaccines and therapies. For, even after a vaccine or vaccines had been developed, no pharmaceutical company would in itself have the manufacturing capacity to meet global demand for vaccines. One would need to manufacture around 5 billion doses to vaccinate the world, for a single-dose vaccine, and 10 billion for a two-dose vaccine.[i] To contextualise the enormity of this challenge, consider that all the vaccine companies in the world together produce less than 6 billion doses a year (including flu shots, routine childhood immunisations, etc.).
This means that in order to meet global demand for Covid-19 vaccines without cutting back on any others, global vaccine manufacturing capacity would need to double at the very least, and more likely nearly triple.[ii] This would require cross-border licensing, technology transfer and contract manufacturing deals to be struck by vaccine developers at a scale and pace hitherto unheard of.
Furthermore, hundreds of patents associated with the treatment of viral infections such as Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS), influenza and Ebola had the potential to be repurposed for treating Covid (as remdesivir, favipiravir and lopinavir, among others, eventually were)[iii].
Could this be achieved if patent-holders clung to monopoly-based rent-seeking ideologies? Could innovators be trusted to grant licences fairly, quickly and on reasonable terms? Would vaccine nationalism and corporate self-interest impede the global effort to combat Covid, and limit access to vaccines and therapies? These were the questions being asked by concerned citizens and organisations early in 2020[iv], much as they had in the context of other public health crises[v].
Now, less than a year later, several vaccines have been approved for public use, supply deals worth billions of dollars have been struck and governments around the world have begun massive vaccination drives for their citizens. Were the naysayers wrong? Has the world managed to rise above petty national and corporate interests and come together, as the Beatles had hoped?
As is often the case when ideals collide with realpolitik, the situation is rather more intricate than that.
Through these series of articles, we aim to explore the legal and commercial issues at the heart of the biggest global vaccination effort the world has ever seen.
PART 1: IDEALS v. DEALS
A. Buying up Capacity
As Covid-19 burned through the world in early 2020, and companies raced to develop therapies and vaccines, supported by billions of dollars in government aid, concerns grew regarding access.
In March 2020, it was reported that the Trump administration was trying to secure a vaccine being developed by CureVac, a privately held German biotechnology group, exclusively for the United States (US), by persuading the group to move its development efforts to the US, in exchange for a large financial donation.[vi] CureVac’s investors denied the story and German officials conveyed their disapproval of any such exclusive access deal in no uncertain terms. A few months later, the German government bought a 23% stake in CureVac, effectively ensuring it can keep an eye on – and likely a veto over – similar overtures.[vii]
On 13 May 2020, Sanofi’s CEO, Paul Hudson, said in an interview that the US would likely get Sanofi’s Covid-19 vaccine (if approved) before the rest of the world, because the US was first to fund Sanofi’s vaccine research and expected that “if we’ve helped you manufacture the doses at risk, we get the doses first”.[viii]
This, understandably, did not go down well in Europe. The French Prime Minister delicately reminded Sanofi that it was a “deeply French company” and emphasised that “equal access to a vaccine for all is non-negotiable”.[ix] Hours after Hudson’s interview appeared, Sanofi clarified that while vaccines from US production sites would be mainly reserved for Americans, production capacity elsewhere would supply Europe and the rest of the globe.[x]
This echoes a more recent controversy, arising out of an interview given by AstraZeneca’s CEO.[xi] In the interview, while seeking to explain the company’s recent inability to meet its vaccine supply commitments (which he characterised as being on a “best efforts” basis), the CEO gave the impression that vaccine production from AstraZeneca’s British plants were being reserved for the United Kingdom (UK), while the European Union (EU) was being supplied by a plant in Belgium (which was facing production issues, hence the supply disruption).
The CureVac and Sanofi incidents underscored a larger trend. As the US, UK and other wealthy nations rushed to enter into Advance Purchase Agreements with vaccine manufacturers such as Moderna, Pfizer and AstraZeneca for the purchase of under-development vaccines, an overwhelming majority of the world’s (already limited) vaccine manufacturing capacity was being blocked for them, effectively denying access to poorer countries that could not afford to enter into these at-risk vaccine pre-purchase deals.
The effort to develop and distribute a vaccine was beginning to look less like a collaborative global endeavour and more like an undignified Black Friday stampede, or a brawl for the last action figure in a store the night before Christmas.
B. In Pursuit of Equity
Pressure mounted from the open access lobby for a more equitable approach. On 14th May 2020, 140 political leaders and economists released a letter[xii], drafted by United Nations Programme on HIV/AIDS (UNAIDS) and Oxfam, calling for a World Health Organisation (WHO) administered global agreement that (i) ensures mandatory global sharing of all Covid-19 related knowledge with a pool of licences freely available to all countries; (ii) establishes a global manufacturing and distribution plan “fully funded by rich nations”; and (iii) guarantees that Covid-19 vaccines, diagnostics, tests and treatments were provided “free of charge to everyone, everywhere”. On the same day, members of European Parliament expressed support for compulsory licensing as a means of ensuring Europeans access to approved Covid-19 vaccines.[xiii]
Meanwhile several health advocacy groups, including Doctors Without Borders, Third World Network and India’s Cancer Patients Aid Association, asked the Indian government to invalidate three Gilead patents protecting Remdesivir (at that time, the only drug approved in the US for emergency treatment of Covid-19).[xiv] This was despite the fact that Gilead had issued voluntary licences to manufacturers in India and Pakistan allowing them to make and sell Remdesivir in 127 countries.[xv]
At the same time, other global initiatives such as the Medicines Patent Pool (MPP)[xvi], the World Health Organisation (WHO) Covid-19 Technology Access Pool (C-TAP)[xvii] and the Open Covid Pledge[xviii] were trying to put in place voluntary pooling mechanisms to share the intellectual property (IP) and technology necessary to fight Covid, but these failed to gather critical mass and take off. Industry leaders appeared generally dismissive[xix] of these initiatives, and they failed to attract any pledges or licences from drug companies developing Covid therapies or vaccines. Although 18 generic drug manufacturers did offer their capacity to develop and supply Covid-19 treatments to those in need via the MPP, no patent licences for such treatments have been placed in the MPP pool to date.
It was reported[xx] that apart from lacking industry support, these initiatives had been edged out by the WHO’s more popular program, the Access to Covid-19 Tools (ACT) Accelerator.[xxi] The ACT Accelerator was preferred, the article theorised, because it respected and preserved the intellectual property status quo, while the C-TAP sought to challenge it.[xxii]
However, with even the European Commission now admitting the unanticipated challenges in scaling up production of vaccines and mulling voluntary licensing mechanisms[xxiii], the dynamics of the conversation around voluntary sharing approaches may shift.
C. Patent Waivers and the WTO
On 2 October 2020, India and South Africa tabled a joint proposal before the World Trade Organisation (WTO) requesting that a temporary waiver be granted to WTO members permitting them to choose not to implement, apply or enforce certain obligations related to Covid-19 products and technologies under Sections 1 (copyrights and related rights), 4 (industrial design), 5 (patents) and 7 (protection of undisclosed information) of Part II of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, for the duration of the Covid crisis.[xxiv] The proposal argues that it offers a way to ramp up global production of vaccines and calls on members to ensure that IP rights do not impede timely access to affordable vaccines and medicines.[xxv]
The proposal was opposed by several other countries on the basis of the argument that existing TRIPS allowances for compulsory licensing and parallel importing were sufficient to address the relevant concerns. In turn, proponents of the waiver proposal countered that such TRIPS allowances are illusory, as compulsory licences, when granted in the past by countries such as India, Malaysia and Colombia, have faced backlash from other member States and pharmaceutical companies, including threats of trade sanctions.[xxvi] Interestingly, the draft of the waiver proposal requires that WTO members do not challenge any measures taken in conformity with the waiver, including through the WTO’s Dispute Settlement Mechanism.
Recent news reports indicate that more than 400 US civil society groups and lawmakers are calling on the US President to support the TRIPS waiver.[xxvii] On 3 February 2021, 14 members of the European Parliament, in a letter to the EU leadership, asked the EU to support the waiver and issue compulsory licences to facilitate the scaling up of Covid-19 vaccine production.[xxviii] The WTO General Council (GC) will receive an update from the TRIPS Council on this matter during the GC meeting on 1-2 March 2021.
Increasing inability by vaccine manufacturers to meet their supply commitments, resulting contractual and diplomatic tensions and allegations of vaccine nationalism will likely cause the conversation to return to the TRIPS waiver proposal periodically, although the proposal itself is unlikely to pass (ultimately). Some believe that the political push for a TRIPS waiver may well lead voluntary pooling initiatives such as C-TAP to finally take off, in that, faced with the prospect of a TRIPS waiver or compulsory licensing, the industry may move to adopt voluntary approaches.
Further, while the TRIPS waiver proposal can, in theory, expedite response to the pandemic by suspending intellectual property protection to trade secrets, it may not eventually be able to actually force technology transfer[xxix]. If potential vaccine manufacturers cannot get access to the complex technological know-how necessary to manufacture the vaccines or therapies (where such know-how has not been disclosed in the patent filings and is protected as confidential knowhow or trade secrets), the TRIPS waiver would do little good[xxx]. Under those circumstances, a voluntary mechanism for facilitating technology transfer such as the C-TAP could come into its own.
CONCLUSION TO PART 1
The biopharma industry’s lukewarm response to sweeping initiatives like the Open Covid Pledge, the WHO/MPP patent pools and the TRIPS waiver proposal, when contrasted with the range of voluntary measures (such as voluntary licensing and IP waivers) taken by the industry over the past year suggest that patent-holders would much rather adopt a case-by-case approach to waiving or licensing their IP than sign up to a blanket, global commitment in respect of such IP. While drug companies can probably live without making large profits[xxxi] from the ongoing vaccine development frenzy (given the substantial government funding they’ve received towards development and commercialisation), they can’t simply give away the IP they develop without retaining any say in the manner of its exploitation, either. From the perspective of a pharma CEO who is, ultimately, a salaried professional answerable to shareholders that demand a return on their investment, this would likely amount to throwing the baby out with the bathwater.
The second part of this series (“Part 2: Follow the money”) will examine how compulsory licensing failed to move beyond the statute books other than in Israel but did, arguably, trigger a few voluntary IP non-enforcement pledges by vaccine manufacturers, and how access to vaccines today is a function not of the sweeping global “open access” schemes argued for by so many, but on a patchwork of bilateral advance purchase agreements between governments and vaccine developers, and public-private initiatives such as COVAX[xxxii].
A version of this article appeared in https://www.scconline.com/blog/post/2021/03/05/how-the-vax-was-won-intellectual-property-and-access-to-medicines-in-a-public-health-crisis/#_ftn9 .
[i] https://www.gatesnotes.com/About-Bill-Gates/Year-in-Review-2020?WT.mc_id=20201222100000_YIR2020_BG-TW_&WT.tsrc=BGTW.
[iii] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7474498/.
[iv] https://www.iam-media.com/coronavirus/the-danger-coronavirus-presents-biopharma-patent-owners. See also https://www.iam-media.com/coronavirus/global-calls-compulsory-covid-19-patent-licensing-build. See also the Médecins Sans Frontières Technical Briefing Document “Voluntary Licenses and Access to Medicines” available here.
[v] See, among others, Hoen, Ellen, Private Patents and Public Health, Changing Intellectual Property Rules for Access to Medicines, available here.
[vi] https://www.nytimes.com/2020/03/15/world/europe/cornonavirus-vaccine-us-germany.html.
[vii] https://www.fiercebiotech.com/biotech/after-a-turbulent-few-months-germany-takes-a-stake-covid-vaccine-drugmaker-curevac.
[viii] https://www.bloomberg.com/news/articles/2020-05-13/u-s-to-get-sanofi-covid-vaccine-first-if-it-succeeds-ceo-says .
[ix] https://sciencebusiness.net/covid-19/news/transatlantic-tensions-over-access-covid-19-vaccines-mount-after-sanofi-ceo-says-us?_sm_au_=iVVTQQcQ7tvsNHsQvMFckK0232C0F.
[x] https://endpts.com/sanofi-walks-back-paul-hudsons-promise-of-early-vaccine-access-for-the-us-sort-of/.
[xi] In an exclusive interview to an Italian newspaper, available here.
[xii] Full text available here.
[xiii] Global Calls for Compulsory Covid-19 Patent Licensing Build, available here .
[xiv] See here. See also here.
[xv] https://generics.pharmaintelligence.informa.com/GB149889/Gilead-Licenses-Remdesivir-To-Five-Firms. Generic versions of Remdesivir are now available in India. See here.
[xvi] On 31-3-2020, the Medicines Patent Pool (MPP) – which has hitherto focused on increasing access to HIV, tuberculosis and hepatitis C drugs in developing nations through patent pooling arrangements – decided to temporarily expand its mandate to include any Covid-related health technology where licensing could improve access.
[xvii] C-TAP was launched in May 2020, to act as a platform to voluntarily share Covid-related knowledge, intellectual property and data and accelerate the scale up of manufacturing. See here.
[xviii] he Open Covid Pledge (OCP) website lists patent-holders who are making their intellectual property available free of charge for use in alleviating the Covid-19 pandemic. The OCP attracted significant participation from technology giants (its founding partners included Facebook, Amazon, and Microsoft) but none from companies developing Covid vaccines or therapies.
[xix] Pharma Leaders Shoot down WHO Voluntary Pool for Patent Rights on Covid-19 Products, available here.
[xx] Constraints Facing the Covid-19 Technology Access Pool (C-TAP) available here.
[xxi] The Accelerator is a global collaboration to accelerate the development, production, and equitable access to Covid-19 tests, treatments, and vaccines. It was set up by the WHO, European Commission, France and the Bill & Melinda Gates Foundation in April 2020.
[xxii] https://genevahealthfiles.substack.com/p/constraints-facing-the-covid-19-technology.
[xxiii] “The Commission will foster the creation, if need be, of a voluntary dedicated licensing mechanism, which would allow technology owners to retain a continued control over their rights whilst guaranteeing that technology, knowhow and data are effectively shared with a wider group of manufacturers.” Communication from the Commission to the European Parliament, the European Council and the Council dated 17-2-2021, available here .
[xxiv] Text of proposal available here.
[xxv] See generally, Médecins Sans Frontières Briefing Document dated 8-10-2020 available here.
[xxvi] https://www.openaccessgovernment.org/trips-covid-19-waiver/103738/.
[xxvii] https://timesofindia.indiatimes.com/world/us/us-civil-society-groups-lawmakers-press-biden-to-support-indias-trips-waiver-proposal-on-covid-19-vaccines/articleshow/81244149.cms.
[xxviii] https://www.aninews.in/news/world/europe/eu-parliamentarians-strongly-back-india-south-africa-proposal-for-covid-vaccine-patent-waiver20210205044636/.
[xxix] https://genevahealthfiles.substack.com/p/constraints-facing-the-covid-19-technology.
[xxx] https://medicineslawandpolicy.org/2020/12/what-is-the-know-how-gap-problem-and-how-might-it-impact-scaling-up-production-of-covid-19-related-diagnostics-therapies-and-vaccines/.
[xxxi] Where do Covid-19 Vaccine Players Stand on Pricing? So Far, It’s No Profit, Slight Profit or Undecided available here.
[xxxii] COVAX, the vaccines pillar of the Access to Covid-19 Tools (ACT) Accelerator, is co-led by Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, The Vaccine Alliance and WHO. It is a global initiative that works with Governments, vaccine manufacturers, UNICEF, the World Bank, and others to ensure rapid and equitable access to Covid-19 vaccines for all countries.
