Capital Matters

Waiving IP Protection for COVID Vaccines Is Anti-innovation and Anti–Public Health

A healthcare worker prepares a syringe with the Moderna COVID-19 vaccine at a pop-up vaccination site in New York City, January 29, 2021. (Mike Segar/Reuters)
Patent rights were key to the unprecedentedly rapid development and rollout of COVID-19 vaccines.

Waiving intellectual property protections (including patents) for COVID-19 vaccines, which, as U.S. trade representative Katherine Tai announced Wednesday, the Biden administration supports, will if implemented prove disastrous for American innovation — and detrimental to public health as well.

Patents are property rights that allow inventors to exclude third parties from copying and using novel patented technologies for 20 years from the time a petition for a patent is filed. Patents are particularly important in the medical field, underpinning the “miracle drugs” and vaccines that save and better countless lives.

In October 2020, India and South Africa petitioned the World Trade Organization (WTO) to bypass granting or enforcement of all forms of intellectual property (IP) rights (patents, trade secrets, industrial designs) on COVID-19-related drugs, vaccines, diagnostics, and other medical technologies for the duration of the COVID-19 pandemic.

IP rights are protected under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement overseen by the World Trade Organization. U.S. support for the petition, announced by Tai, strengthens the prospect for its adoption in upcoming WTO negotiations.

Patent rights were key to the unprecedentedly rapid development and rollout of COVID-19 vaccines in 2020. A number of highly successful COVID-19 vaccines (including the Moderna and Pfizer vaccines) came about due to earlier innovative mRNA research that was spurred by patents. Indeed, patent experts recently indicated that patent-inspired “mRNA vaccines could open the door for the approval of other mRNA-based medicines, creating a wide range of new markets.”

Significantly, patents have not affected the mass production of important COVID-19 vaccines. As former U.S. Patent and Trademark Office chief Andrei Iancu explains, vaccine makers already have entered into a web of agreements with countries around the world, and “almost every factory on the planet that can make these vaccines is already doing so.”

Indeed, as Iancu points out, “there’s robust collaboration and cooperation within the industry to ensure that vaccines are made quickly and safely. And patents actually facilitate such cooperation, because each entity can rest assured that its proprietary technology is protected in the long run.”

Patents are needed to provide the future financing that is critical to incentivize the huge amount of R&D needed to bring forth new medical treatments that improve the lives of millions. Developing new drugs and vaccines is very risky and costly. The cost of developing a new prescription medicine with marketing approval has risen to an average $2.6 billion, and the rate of success in clinical trials has dropped to 12 percent, according to a Tufts Center for Drug Development study.

Also, because of the length of regulatory delays and drug trials, the actual period of patent protection for the few highly profitable pharmaceutical products is often relatively short. That places a premium on obtaining significant financial returns during the quite limited patent term.

In sum, a waiver of COVID-19 patent rights would send a signal that pharma-related patents are undependable, potentially starting a ripple effect of reduced investment in drugs and vaccines throughout the health-care system. The long-term effect would be a reduction of future health-care quality and outcomes.

A waiver could also generate near-term health-care harms for millions of individuals affected by the COVID-19 pandemic. It could do this by reducing quality-control efforts of new COVID-19 vaccine producers not subject to the oversight of patent holders.

Norman Baylor, the former head of the Food and Drug Administration’s Office of Vaccine Research and Review, recently pointed out: “There are hundreds of process steps involved in the manufacturing of vaccines, and thousands of check points for testing to assure the quality and consistency of manufacturing. One may transfer the IP, but the transfer of skills is not that simple.” Absent quality assurance, the incidence of ineffective or harmful vaccine administrations could rise significantly, directly harming individuals and potentially disincentivizing many individuals from obtaining vaccine shots.

There still is, however, a ray of hope. Tai noted in her May 5 waiver announcement that WTO “negotiations [related to the proposed waiver] will take time, given the consensus-based nature of the institution and the complexity of the issues involved.” As such, the Biden administration has time to reconsider and withdraw its support for the COVID-19 waiver, if it so chooses. Doing so would promote continued rapid innovation in health-care treatments, to the benefit of Americans and people around the world.

Alden Abbott is a senior research fellow with the Mercatus Center at George Mason University and formerly served as the Federal Trade Commission’s General Counsel.


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