Should pharmaceutical companies be compelled to waive their coronavirus vaccine patents?

The campaign to compel pharmaceutical companies to temporarily lift their coronavirus vaccine patents is gathering pace – and apparently making some progress.

The countries in the World Health Organisation have, according to the BBC’s Newsnight, for the first time agreed such a waiver could be an important part of the global vaccination effort.

And the White House press secretary, Jen Psaki, suggested last week that the Biden administration is now considering the case.

If the world’s largest economy – and home to several of the largest multinational drug giants – were to change its stance on this issue it could conceivably prove a tipping point, perhaps prompting action from the World Trade Organisation to waive certain parts of the agreement which protects intellectual property (IP) at a global level.

Yet there remains staunch opposition from the notoriously hard-lobbying pharmaceutical industry, with proponents of the status quo arguing that waiving patents would undermine incentives for future research and would thus prove counterproductive.

The industry, of course, has vested financial interests in maintaining the patents.

But Bill Gates, whose own philanthropic ventures have been focused on vaccinating the developing world for decades, is a less obviously conflicted figure, and he added his voice to the opposition to patent waivers this month, telling Sky News it would not help because the supply was due to a shortage of expertise and production capacity rather than intellectual property restrictions.

So what should we make of the disagreement? Would lifting patents really do little good and potentially harm? Or is it an important part of vaccinating the world and lifting the deadly scourge of this pandemic?

Most independent experts - even those in favour of IP waivers - accept that expanding supply is not as simple as lifting patents.

Vaccines are not like so-called generic medicines, which can be manufactured based on a simple chemical formula. Their production requires expertise and deep technical know how, which is usually embedded in the employees of the pharmaceutical companies themselves.

And, as AstraZeneca’s well-publicised production difficulties at its European facilities demonstrate, things can still go wrong.

“Vaccine manufacturing is fundamentally different from other pharmaceutical products, where once you’ve discovered it you just write down the chemical compound and it’s a recipe that anybody can make,” explains Chad Bown of the Peterson Institute for International Economics in Washington.

“For vaccines it’s much more complex. It’s not just a recipe, and it requires massive regulatory oversight, and testing at multiple stages of the product”.

Mr Bown argues that these technical and regulatory barriers mean it’s not feasible to imagine that many more countries could realistically produce Covid-19 vaccines safely and in short order and sees the campaign for IP waivers as essentially a distraction.

He urges wealthier countries instead to focus time, energy and resources on committing to scale up production domestically, and on delivering the vaccines to everywhere on the planet that needs them through initiatives such as the World Health Organisation’s Covax scheme.

“Right now I fear that so much energy is being spent on the intellectual property issue that they’re missing these other factors,” he says.

However, advocates of IP waivers, such as Public Citizen, argue that a big part of the problem is that Western drugs companies have been unwilling to share their expertise, and point out that some drug manufacturers in developing countries say they could scale up production if given the necessary support.

“You can’t transfer to an area where there is absolutely no vaccine production capacity at all but there are companies that have said we’re able to do this who do not get any response [from the drug companies] ” says Ellen ‘t Hoen, the director of the Medicines Law & Policy group.

She cites examples where that has happened in Israel, Canada, South Korea and Bangladeshi.

Ms ‘t Hoen also notes that drug companies, as well as resisting IP waivers, have refused to put any resources into the World Health Organisation’s Covid-19 Technology Access Pool (C-TAP) which was established a year ago.

For Ms ‘t Hoen there is something circular about the claim that there’s no point transferring expertise because countries don’t currently have manufacturing capacity.

“If you don’t know there is a willingness to transfer the IP and technology who is going to invest in building it? It’s a chicken and egg situation,” she says.

Even if it’s unrealistic for many countries to start production from scratch, Enrico Bonadio, a reader in intellectual property law at City, University of London, argues that IP waivers should enable India, which already has considerable manufacturing capacity and expertise, to scale up even further.

“It would help in those areas where there is manufacturing capacity,” he says.

That’s what the Indian government, which is at the forefront of the patent waiver lobby, seems to believe.

Sceptics point out that India’s Serum Institute has run into production bottlenecks despite already being licensed to produce the AstraZeneca vaccine. Yet these bottlenecks are partly due to US restrictions on exports of vaccine-manufacturing components.

If these protections were also lifted alongside a waiver on IP protections, it’s not unreasonable to think that the country would be able to increase supply.

Would removing intellectual property restrictions discourage investment by pharmaceutical companies into future vaccines?

For critics the problem with this argument is that the lion’s share of the funding for the current crop of successful coronavirus vaccines came from governments in the US, the UK and the EU.

In the US, $12bn of public funding was channelled into the research and development of vaccines. And researchers have estimated that 97 per cent of the funding for the development of the Oxford-AstraZeneca vaccine came from the public sector or charitable trusts.

Furthermore, analysis by the kENUP foundation shows governments spent €86.5bn on legally-binding agreements with drug companies to purchase vaccines in development, known as advance market commitments.

“I’ve worked on this subject for almost 30 years and every time you question intellectual property or even carefully propose this should be managed slightly differently the knee jerk response of pharma will always be ‘this will harm innovation’,” says Ms ‘t Hoen.

“In this case it is certainly not a valid argument because they have been completely de-risked by the public sector.”

Another counter argument to the idea that IP waivers would crush private sector incentives is that what is being proposed is a temporary waiver of intellectual property rights during the pandemic, not a permanent one.

Though Mr Bonadio points out that, for the drug companies, much could depend on how the period of the pandemic is defined.

“The proponents say it will be a time-limited waiver, but what does time-limited mean?” he asks. “Until herd immunity is reached? For eight billion people that might take six or seven years.”

Given financial analysts expect the bulk of the profits for the pharmaceutical sector to flow from an ongoing immunisation campaign as coronavirus becomes a seasonal epidemic like flu, this probably helps to explain the industry’s hostility to the principle of any curtailment of intellectual property rights.

The economist Ricardo Hausmann has suggested that a potential solution might be for governments to buy out the intellectual property from the pharma firms through a lump sum payment, and then allow any capable firm around the world to manufacture the vaccine under a free licence.

He also suggests that pharma firms should be incentivised by governments to develop vaccines to future variants, or new diseases, through tournaments or tender offers to buy the intellectual property they generate.

In theory such mechanisms could indeed tackle financial incentive problems for pharmaceutical firms, while also helping to maximise the production and supply of public goods.

Yet, at least for the moment – and for good or ill – the campaigning momentum seems to be firmly behind a demand for compulsory intellectual property waivers.