The announcement by the Biden administration about waiving IP rights to the coronavirus vaccines obviously calls for some comment. Keep in mind that I have been doing research in the pharma industry for over 30 years now, so my viewpoint is obviously going to be affected by that, for better and for worse.
With that said, what you think about this move will depend on what you hope to accomplish by it. Let’s go to the immediate practical concern: will it open up the near-term supply of vaccines to the world? It will probably come as no surprise, but no, I don’t think it will do that. One big reason is that I don’t think that patent rights are the main reason for supply constraints – they’re not the bottleneck or the “rate-limiting step”, to use the language of chemistry. IP could be, if several other bottlenecks would get out of the way, but for now I don’t think that it is. Update: Alex Tabarrok on this issue here.
Non-IP Constraints on Vaccine Supply
I’ve gone over these other problems before, but here’s a brief summary of those – not in any order, because it’s difficult to rank them and those ranks change. An obvious first problem is hardware: you need specific sorts of cell culture tanks for the adenovirus vaccines, and the right kind of filtration apparatus for both the mRNA and adenovirus ones. You also need specialized mixing equipment for the formation of the mRNA lipid nanoparticles. A good proportion of the world’s supply of such hardware is already producing the vaccines, to the best of my knowledge. Second, you need some key consumable equipment to go along with the hardware. Cell culture bags have been a limiting step for the Novavax subunit vaccine, as have the actual filtration membranes needed for it and others. These are not in short supply because of patents, and waiving vaccine patents will not make them appear. Third, you need some key reagents. Among others, there’s an “end-capping” enzyme that has been a supply constraint, and there are the lipids needed for the mRNA nanoparticles, for those two vaccines. Those lipids are indeed proprietary, but their synthesis is also subject to physical constraints that have nothing to do with patent rights, such as the availability of the ultimate starting materials. Supplies have been increasing via the tried and true method of offering people money to make more, but switching over equipment and getting the synthesis to work within acceptable QC is not as fast a process as you might imagine. Fourth, for all these processes, there is a shortage of actual people to make the tech transfer work. For most reasonably complicated processes, it helps a great deal to have experienced people come out and troubleshoot, because the number of tiny things that can go wrong is not easy to quantify. Moderna, for one, has said that a limiting factor in their tech-transfer efforts is that they simply do not have enough trained people to go around. And keep in mind that these all have to do with producing a stream of liquid vaccine solution – but you need what the industry calls “fill-and-finish” capacity to deal with it after that. Filling and capping sterile vials for injection is a specialized business and the great majority of large-scale capacity is already being used for the existing vaccines. Time and money will fix that, and has been, but waiving vaccine patents won’t.
Short Term Versus Long Term Supply
The mention of scale deserves some comment. We need to vaccinate billions of people around the world – no argument there. But that means that if you’re working under the constraints above, your time and effort are best spent on the largest capacity manufacturing efforts available. I believe that the majority of these are already enlisted in the vaccine production efforts, though, both in the production and fill-and-finish areas. I have seen people talking about how now every country will be able to produce its own vaccines, but that’s not a feasible or useful idea. Most countries do not have industrial cell culture capacity or sterile fill-and-finish lines, and trying to start them from scratch is not a good use of the time, money, and effort. It would be like deciding that Switzerland needs to be self-sufficient in sushi.
Look at a part of pharma world that (while it has its technical aspects, for sure) is much less demanding than vaccines, the production of small-molecule generic drugs. The chemical matter involved is off-patent, and nonpatented routes are available for them. But the great majority of these drugs are still made in a handful of countries, and if you trace the starting material supply chains back, the list of countries and suppliers narrow still more. As with most industries, you find yourself going back to the people with the expertise and equipment to produce things on large scale.
As mentioned several times during the above, these supply problems are all fixable. Indeed, many of them are already greatly improved compared to the situation a few months ago. But from what I can see, none of this fixing would have been aided by waiving the patent rights to the vaccines themselves at some earlier date. The supply of vaccines has been increasing, and would continue to increase without the patent waiver idea. The constraints are physical ones, supply chains and engineering ones, not legal.
We actually have some proof of this already. As others have noted, Moderna announced last October that they would not enforce any of their own patents on the production of the vaccine. But this has not led, as far as I can tell, to any non-Moderna production of it, or even the announcement that anyone is thinking about it. A more cynical person than I am – they exist – might conclude that Moderna knew this full well when they made their announcement, but in either case, this situation largely obtains because of the constraints above.
What Does the Patent Waiver Proposal Entail?
We also need to talk about what the Biden administration has proposed. Despite some headlines, the announcement was not something like “All patents are waived”. The actual text uses this language:
“The administration believes strongly in intellectual property protections, but in service of ending this pandemic supports the waiver of these protections for COVID-19 vaccines. We will actively participate in text-based negotiations with the World Trade Organization (WTO) needed to make that happen. These negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.”
That last sentence is actually a bit of a warning and a bit of cover for the amount of time that this will take. No IP has been waived yet, because the WTO and the World Intellectual Property Organization (the international framework for patent protection that most countries belong to) are going to have to weigh in on this. There are several countries involved in the existing patents, and they will all have their say as well. The WTO meets next in June, and at that point we’ll start to see how protracted a process this will be. It could indeed take a while, and what emerges at the end of it is of course not yet clear. Not every government involved is going to be thrilled.
This is why many comments on this decision have called it as much of a public relations move as anything else. I can see the point. It is indeed a big step for a US administration to call for something like this, because the US (with a large proportion of the R&D-driven industry in the world) has traditionally been very hard-line on patent protection. But calling for it is not the same as delivering it (for various definitions of “it” and various values assigned to them!) For now, the US government has agreed to start to think about how to negotiate the issue, with details to follow at an undetermined later point.
The Desirability of IP Waivers, and of Patents in General
I know that many people are ready to argue these points, and I can see why. They’re fun. They’re emotional, and lend themselves to ringing statements of righteous principle, and I feel the temptation as much as anyone. But I’m going to try to hold back, which is one reason I’m writing this post this morning instead of banging something out last night.
First off, I am simply not going to take on the “Big Pharma is evil and they deserve what’s coming to them” point of view. Boy, can you find a lot of that one on social media, and I’m trying not to respond to all of it (although I have slipped a few times). So let me just say that I have not worked the past thirty-something years of my life to poison people, to keep them sick, or to bury cures so no one can find them. I have seen good friends, colleagues, and beloved members of my own family succumb to the very diseases that I have researched treatments for, and if I could have done something for them, I would have. I know it’s fun for passionate activists and grandstanding politicians to pretend that that they’re battling hordes of Vile Inhuman Pharma Fascists, but folks, it’s actually mostly a bunch of people like me. That’s not to say that we don’t have some real bastards in this business, but guess what? So do you, in yours. We stock the buildings with people, and they’re not all gems. I hate the Martin Shkrelis of the world as much as you do.
Now, to patents themselves. It’s not that great a use of our time to have the fight right here, either, but it will come as no surprise that I think that intellectual property protections, while they can be abused, are a net good. I think that incentives are a good thing, and that IP rights provide an incentive to take the risks needed to discover things. But those are broad terms. The degree of such protection and how long it lasts are of course key things to get right, and you can get them wrong, too. For example, I think that current US copyright law is way too restrictive and should be rolled back to something less lengthy. Imagine if drug patents lasted through the lifetimes of the inventors and 70 years past that! Penicillin wouldn’t be generic yet.
Remember, a patent is not a secret. You have to disclose how your invention works and how to make it work in order to be granted one, and others can go ahead and get to work on how to make you obsolete based on that information. Also remember that for many drugs, by the time the patent issues, it often has eaten up most of its lifetime. The clock doesn’t start ticking from approval; it starts from the application priority date. I have found over the years that many people outside of R&D do not realize these two points.
I can imagine different ways of doing it, though, most of which involve some other way of rewarding inventors via prizes and the like. For these to work well, though, I believe that such prizes would need to be on the same order of magnitude as the value of a patent as we issue them now. A tricky aspect of this is that this value is not always immediately obvious – sometimes things turn out to be more valuable, and sometimes less than they appeared. That’s another detail to be worked out in a prize system, but there are several ways to do it. With such systems, you’re still recognizing that there is such a thing as valuable intellectual property – you’re just finding a different way to reward it.
What I don’t see working, though, is the “Get rid of all intellectual property, everything should be free” viewpoint. I’m not even going to debate it, because to be honest, I lost my taste back in college for endless wrangling about infuriating hypotheticals, and that’s all this proposal is. I refuse to take it seriously, and I refuse to take seriously the people who attempt to advance it.
But that means that proposals to abrogate existing IP protections need to be taken seriously, because I believe that you’re messing around with something of great importance. In its crudest form, an IP waiver is a direct taking of such property from its discoverers and owners without compensation, and I don’t like it at all. A system that allows such things to happen whenever people really feel like it will not work as well as one in which property rights are protected.
All That Money
I realize that this talk of IP waivers comes, as fate would have it, while some of the vaccine companies are reporting earnings on the vaccines themselves. Pfizer, for example, has said that they may well have $26 billion of sales of the vaccine that they developed with BioNTech. And while I don’t know what the actual profit will be, it’s going to still be a lot. Allow me to be offensive: good for them. 26 billion is a small fraction of the economic damage that’s been done during the year because of the pandemic, and these vaccines are really the only way out of it. Add to that the incalculable social and psychological damages, and it’s a damned cheap price for all of the vaccines put together. Remember, there was no guarantee that any of these things would work – several large and very competent drug companies (Merck, GSK, Sanofi) failed in their own vaccine efforts.
The vaccines that have worked have been the result of years of work by both academia and industry. Both of these groups have hoped to profit by their efforts. And as I never seem to get tired of pointing out, a lot of that work went into discovering things that didn’t work. RNA constructs that fell apart or didn’t produce much protein. Formulations that didn’t deliver, or were toxic. Viral vectors that weren’t worked-out enough, or couldn’t be produced in sufficient quantity. Genetic payloads that weren’t written in quite the right ways. So when something finally does work, I am all for being able to profit from it, and to cheer on the people who are hoping to profit from the discoveries that are working their way through the academic and industrial labs now.