Vaccinating Billions Means Finding Ways Around a Patent Impasse

(Bloomberg) -- Covid-19 vaccines look set to protect millions of citizens of the world’s richest countries in the coming months. But inoculating the rest of the planet’s population may mean finding a way around an impasse over intellectual property.

Representatives from all 164 member states of the World Trade Organization met last week in Geneva to discuss a proposal from India and South Africa to waive broad sections of the WTO’s intellectual property rules and to try to forge an agreement on how patents developed in the race against Covid-19 should be recognized.

The meeting ended without consensus, leaving poorer countries who sponsored the proposal frustrated and legal protections for vaccines intact. That may be a victory for patent protection advocates, but pressure for change will only grow if billions of people in poorer countries go unvaccinated while the rich world starts getting a steady flow of doses from Pfizer Inc. and BioNTech SE, Moderna Inc. and AstraZeneca Plc.

“With the biggest health crisis we’ve experienced, we’re still not able to find alternative ways of dealing with the IP issues when everyone’s lives are at stake,” said Tahir Amin, executive director of the Initiative for Medicines, Access & Knowledge, an organization promoting better access to drugs. “You’ve got the advocates saying ‘Let’s knock the wall down,’ and then you’ve got the investors who say ‘If we open the door it’s like the floodgates.’ We have to be smarter than that.”

A patent gives a drugmaker exclusive rights to manufacture a vaccine it developed, also providing it the power to charge a price that covers the costs of research and development. Their profit margin per dose, however, depends on the urgency of the situation, and amid a pandemic, charging anything more than development costs is bound to be controversial. India's proposal would require that the waiver remain in place until there’s been widespread vaccination and the majority of the world's population has developed immunity.

Whether it’s possible to reconcile will only be clear as the pandemic plays out. The European Union and U.S., home to leading drugmakers, are vehemently opposed to the proposition, though pricing may offer some room for negotiation.

Pfizer and its partner BioNTech have said their vaccine will cost $19.50 a dose in the U.S. That’s likely to be too much for many poorer countries, even if discounted, especially given the cost of the vaccine’s deep-freeze storage requirements. But AstraZeneca’s vaccine costs $4 to $5 a dose and is the big hope for the developing world right now.

The Covax alliance, an effort backed by more than 90 rich countries that seeks to boost access to vaccines in about 90 poor ones, has struck a deal with AstraZeneca to buy and distribute vaccines.

While Covax helps to broaden the global vaccine supply, it competes with high-income countries to get doses from the same group of suppliers, said Leena Menghaney, South Asia head of the access campaign at humanitarian organization Médecins Sans Frontières. ``Global efforts should prioritize increasing the number of suppliers and the waiver is just one aspect of doing that,’’ she said. 

Last month, Covax said it had raised $2 billion but that may not be enough as it needs another $5 billion next year to procure 2 billion doses. On Tuesday, the EU and European Investment Bank announced 500 million euros ($608 million) in financing to help vaccinate 1 billion people as part of that effort.

“We’re an integrated world,” said Fred Abbott, a professor at Florida State University College of Law. “Everyone understands you can vaccinate everyone in the United States, but if you don’t vaccinate everyone around the world you’re still going to have a problem.”

Pressure from developing countries however is only going to increase next year if they are left in the lurch. UNAIDS, the U.N. agency combating the immunodeficiency virus, calls it a choice between “a peoples’ vaccine or a profit vaccine.”

While the first vaccines have been distributed in recent days in the U.K., nine out of 10 people in poor countries will miss out on a vaccine in 2021, according to Oxfam. That echoes the early days of the AIDS response, said UNAIDS Executive Director Winnie Byanyima, when “treatment was only available to the rich while poorer countries had to wait years.”

The International Federation of Pharmaceutical Manufacturers and Associations argues that suspending patents is fraught with danger. If you waive patents this time round, you risk harming the whole medical infrastructure that allowed Covid vaccines to be developed in record time, said Director General Thomas Cueni.

“Eroding patent protections has far-reaching consequences,” he wrote in a recent New York Times opinion piece, citing the development of messenger RNA, the underlying innovation common to the Pfizer and Moderna vaccines. “Scientists eager to explore future uses of mRNA will struggle to find investment if intellectual property protections are snatched away when others deem it necessary.”

Drugmakers like AstraZeneca have pledged not to profit from their vaccine for the length of the pandemic, while Moderna has said it won’t enforce its patents during the pandemic. Even frequent critics of the drugmakers have praised some of these efforts.

There are precedents for countries unilaterally suspending patents but they have been used rarely since 1945. Enforcement would be tough—most patent applications haven’t even been issued yet, and it’s hard to force companies to reveal trade secrets such as manufacturing processes that can have broad uses beyond vaccines.

Back at the WTO, delegates have agreed to keep discussions open and were due to submit a report to the WTO’s General Council meeting on Dec. 16, highlighting the “current lack of consensus” on the issue, according to a statement from the organization.

James Pooley, former deputy director general of the World Intellectual Property Organization, reckons that even though the proposal is “unlikely to go anywhere,” it may have an impact down the line.

“It’s the battering ram at the door,” he said. “If they keep bashing at it, a hinge may break.”

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