Patent Protection Needs a Shot in the Arm
The fact that a debate around waiving patent protection has emerged is troubling.
By Dr. Richard D. Kocur
As the COVID-19 pandemic continues to rage around the world, a new proposal regarding how to slow the spread has emerged. This proposal, however, has nothing to do with masks, lockdowns, or social distancing but rather with the intellectual property (IP) used to develop and manufacture the vaccines.
To rapidly respond to the increasing infection rate and death toll in underdeveloped countries, the World Trade Organization (WTO), with a statement of support from the Biden administration, has proposed a waiver of all intellectual property protections related to COVID-19 vaccines. This proposal essentially strips all patent protection related to vaccines from the companies that developed them. While suspending IP protection may be with the best intentions, it misses the mark in terms of achieving the goal of getting as many vaccines to as many people as quickly as possible. In addition, such an extraordinary step also goes against our nation’s long-standing (and constitutionally grounded) support of private property, could have chilling effects on future innovation, and sets a dangerous precedent.
There is no doubt that a moral imperative exists to help the developing world battle the pandemic. One need only to look at what is now happening in India. In framing the argument for waiving IP rights related to the vaccine, Ngozi Okonjo-Iweala, the WTO director general, said, “We need to respond urgently to COVID-19 because the world is watching, and people are dying.” Katherine Tai, the U.S. trade representative to the WTO, seconded the proposal in a statement of the Biden administration’s support.
In both cases, the stated objective is to rapidly respond to the pandemic by vaccinating as many people as possible. Making safe and effective vaccines, however, is not as simple as turning over the recipe. A lack of raw materials, facilities, people, and manufacturing capabilities represent significant long-term challenges that will not be overcome by waiving historical IP protection. As an example, last October vaccine-maker Moderna voluntarily stated that it would not enforce its COVID-19 patents for as long as the pandemic lasted. Since the announcement, how many manufacturers have copied its vaccine? None.
Despite criticism of the pharmaceutical industry, sometimes well deserved, it represents a source of incredible innovation. Drug development has contributed to increasing life expectancy and quality of life for millions. Innovation in the industry is done at risk with no guarantee of success. According to the Tufts Center for the Study for Drug Development, it takes approximately $2.6 billion and from 12 to 15 years for a drug to go from development to FDA approval. Each new drug then has only five years of patent exclusivity. In addition, only five of 5,000 compounds that enter pre-clinical trials make it to human testing. From those five, only one is approved. Vegas has better odds.
Business takes risk with the idea of a greater reward. IP protection in any industry is the insurance policy for the risk. Waiving IP protection, even in the extraordinary circumstances of a global pandemic, will dampen a willingness to take risk in the pharmaceutical industry, lessening innovation, and potentially depriving future generations of medical advances.
According to the World Health Organization (WHO), since the start of the pandemic COVID-19 has killed 3.2 million people worldwide. Comparatively, WHO statistics also report that heart disease killed 8.9 million people in 2019 alone. Heart disease is the leading cause of death globally and impacts countries in low, medium, and high economic classifications. That’s a health crisis by any definition. This is not to minimize the horrific nature of the pandemic but to demonstrate the nature of what may constitute a medical crisis. Using the IP waiver argument, any new compound developed for the treatment of heart disease should immediately be available for manufacture by anyone, anywhere.
Given the amazing innovation produced in the pharmaceutical industry it is also conceivable that a cure for something as cruel as Alzheimer’s disease could be possible. Should that compound also be made “IP free”? How about cancer treatments? While the WTO and some of its member nations like the United States view the current proposal through the narrow lens of COVID, a waiver of IP rights sets a precedent for the next pandemic, disease, or medical emergency. Does anyone think the COVID IP waiver (or any IP waiver for that matter), once enacted, would ever be rescinded? An IP waiver could also have a ripple into other industries whose technology, processes, or products could be deemed essential.
The United States has long been the standard-bearer for the protection of IP. Even in the face of a global pandemic, the fact that a debate around waiving patent protection has emerged is troubling; and the fact that the United States has endorsed such a move is even more alarming. Getting as many vaccinations to as many people as fast as possible is the correct goal. Focusing on efficient global supply chains, increasing manufacturing capacity, reducing regulatory hurdles, and expanding distribution networks are the keys to realizing this goal, not stripping patent protection from those who worked to bring forward a solution.
Richard D. Kocur is an assistant professor of business at Grove City College. He specializes in marketing and business strategy and has over 25 years of experience in the healthcare industry.
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