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Introduction
Today, as the global scientific and research community doubles
down on finding a potential drug or vaccine against the novel
Coronavirus, the obvious question that arises is of access to
affordable drugs and medical equipment. With the high investment
required in drug discovery and pharmaceutical research generally,
the debate naturally turns to the returns on such investment in
times of a public health crisis as the one being faced today. This
note seeks to understand if intellectual property (IP) protection
will be a barrier to affordable drugs.
IP as a barrier to affordable drugs
The emergency situation around Covid-19 has led to innovations
in – especially – medical equipment. Some existing
drugs have also been shown to have positive reactions to the virus.
These ‘discoveries’ have often tended to be by accident,
and purely by way of a response to the emergency situation. As it
turns out, many of these equipment innovations or secondary uses of
existing drugs are protected by some form of IP in one or more
jurisdictions. In some cases, IP owners have also threatened to
pursue legal action against those they identify as infringers. In
the normal course of things, such innovations or discoveries would
have followed patent procedure and obtained independent protection.
The nature of the present emergency situation has led to the
innovations and drugs being put on the market sooner than they
would otherwise have, and without due diligence on the IP
protections surrounding them. The threat of legal action, and the
existing web of IP protection around these, leads to the question
of whether access to affordable medicine and equipment is possible
at all in times of public health crises.
In Italy, a 3D printing start-up Isinnova developed a
replacement ventilator valve after an Italian hospital ran out of
supplies and was struggling to run its ventilators amidst a surge
in patients needing intensive care. The original spare part from
the ventilator maker reportedly costing US$11,000, was not
available, while the cost of the copy was just US$1. This helped
save the lives of 10 Covid-19 patients. However, the original
manufacturer later threatened to sue the start-up for patent
infringement. (See)
Cepheid, a US company has recently launched rapid molecular
diagnostic machines to test Covid-19. The test delivers results in
just 45 minutes, using existing testing machines that have been
routinely used for tuberculosis (TB), HIV and other diseases. The
company declared they will charge US$19.80 per test in developing
countries, including in the world’s poorest countries where
people live on less than two dollars per day. Research on
Cepheid’s TB test (which uses a similar test cartridge for TB
for which the corporation charges US$10 in developing countries)
shows that the cost of goods, including manufacturing, overhead,
and other expenses, for each cartridge, is as low as US$3, and
therefore each test could be sold at a profit for US$5. (See)
Remdesivir, a novel antiviral drug, developed by Gilead Sciences
Inc., is considered to be one of the most promising drugs which can
be used for treatment against Covid-19. The drug works by
inhibiting the virus’s ability to copy itself inside cells.
Previously, lab and animal studies have demonstrated the drug’s
effectiveness against SARS and MERS, two other respiratory
illnesses brought on by coronavirus infections. Another potential
drug against Covid-19 is Favipiravir, which is used to treat RNA
viruses, like SARS-CoV-2. The drug has been used by China for
treating patients in Shenzhen who had tested positive for Covid-19
and found that patients given this drug tested negative four days
later. During a trial in Wuhan, the drug has been reported to
shorten the duration of patients’ fever from an average of 4.2
days to 2.5 days.
Both these drugs are presently patent protected in India. The
patent granted to Remdesivir is bound to expire only in 2035.
Favipiravir is a part of five patents in India, only one of whose
term has expired. Under Sections 92(3), 100, and 102 of the Patents
Act, the Indian government can issue compulsory licenses against
these patents and allow for the manufacture of the patented
molecule. However, such a move would be against the oral assurance
given to the United States regarding not granting any compulsory
licenses on medicines during US-India Business Council, 2016. (See)
Even as innovations seem to be barricaded by IP in some form of
other, there are older drugs like hydroxychloroquine, with an
expired patent that have large generic manufacturing and
export.
Ensuring access to Covid-19
drugs
There is a global recognition of the importance to ensure
affordable access to drugs and medical equipment in the fight
against Covid-19. Some companies are either not enforcing patents,
or not seeking patent protection at all. Many governments across
the world are issuing compulsory licenses to ensure the drugs are
not IP protected. Some international organizations are tapping into
their global networks and obtaining assurances from partners for
ensuring affordance access, and not abusing IP as a tool to prevent
such access.
On April 16, the vaccine major Serum Institute of India
announced that it was expected to release a vaccine for Covid-19
latest by 2021. The company said it was not going to patent the
vaccine or commercialize it beyond a sustainable level in a public
health epidemic. (See)
In March 2020, the US firm AbbVie declared that it would stop
enforcing its patent on Kaletra, which is an HIV medicine which is
currently being tested for effectiveness in the treatment of
COVID-19, anywhere in the world. (See)
Gilead, the developer of Remdesivir, initially applied to US
regulators for “orphan status” for the drug. Under US IP
law, pharmaceutical companies that develop treatments for diseases
that affect fewer than 200,000 people enjoy market exclusivity for
seven years. But, seeing the public backlash, Gilead revoked the
application for orphan status. (See)
Elsewhere, Roche, world’s leading diagnostic kit maker,
initially came under fire from political leaders from Netherlands
and UK for not releasing the chemical formulae for a reagent,
buffer used in its polymerase chain reaction-based test for
COVID-19. Later, however, Roche agreed to release the recipe for a
liquid solution that Dutch laboratories need to run a coronavirus
test. (See)
On March 15, Canada passed a COVID-19 bill that allows the
government to make and use patented inventions as needed in
fighting the pandemic. Governments in Chile, Ecuador, Germany, and
Israel have taken similar steps. Seeing the response of these
countries, the Geneva-based Doctors Without Borders announced
“no patents or profiteering on drugs, tests or vaccines”
for Covid-19. (See)
Carlos Correa, Executive Director of South Centre, in an open
letter to the heads of World Health Organization (WHO), World Trade
Organization (WTO) and World Intellectual Property Organization
(WIPO) said “support developing and other countries, as they
may need, to make use of Article 73(b) of the TRIPS Agreement to
suspend the enforcement of any intellectual property right
(including patents, designs and trade secrets) that may pose an
obstacle to the procurement or local manufacturing of the products
and devices necessary to protect their populations”. (See)
Encouraging research for vaccines and drugs
Governments around the world are taking steps to ensure that
private companies do not use Covid-19 for pandemic profiteering.
They are doing that by overriding patents and issuing compulsory
licenses for COVID-19 related treatments, vaccines, and tools.
However, such measures may discourage pharmaceutical businesses
from investing in research and development. To overcome this,
governments across the world may take the following steps:
Governments can offer strong incentives such as patent buyouts
to drug makers. In a buyout, the government purchases the patents
on a new drug typically at a price that matches or exceeds what the
patent holder otherwise would have earned. Thereafter, the
government allows makers of generics to produce and sell low-cost
versions. If, for example, clinical trials establish the efficacy
of Remdesivir in treating Covid-19, then the federal government
should buy the US rights to the drug from Gilead and give generic
manufacturers free rein to ramp up production. (See)
Another way for rewarding innovation while ensuring widespread
access to new technologies may be through a competition. The
government and international organizations may propose a hefty
prize for an effective coronavirus vaccine per vaccinated person.
That would potentially make a Covid-19 vaccine profitable,
therefore encouraging private corporations and researchers to work
harder. (See)
Such investments may lead to a temporary financial deficit but
to contain Covid-19 now and other pandemics in the future, such
long-term investments need to be made. Of all the costs that
society will bear because of this virus, the payout to
pharmaceutical companies will be miniscule.
Conclusion
In times of crises like this, we desperately need to find
answers to the problems that are arising now to be better prepared
for the future. For example, should countries use compulsory
licensing only as a stop gap measure for this pandemic, as Canada
and some other countries are doing, or should they mainstream
legislatively for all public health crises in general? What is the
nature of incentives needed for companies to get them to develop
vaccines or medical equipment for public health problems without
compromising on quality or affordability? And so on. These are all
open-ended questions, with multiple possible workable solutions.
Context will matter, as will resource availability, and leadership.
This is a very special opportunity for all stakeholders in the
public health sector to make a real difference to the lives of
people. We can only hope that they work together in the best
interests of humankind.
Originally published 01 May 2020
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