Coronavirus: The Great Disruption

Will global IP system block access to vaccine?

No, it won't. The intellectual property system permits enough flexibility to protect the public good during health emergencies. Don't use the myth of intellectual property blocking access to tear down the global IP system.

How will the world change post-Covid-19? Already, the pandemic is upending societies and ways of life, sending countries into lockdowns and triggering recessions and massive job losses.

To make sense of its impact on economies, business, governance and international relations, leading opinion leaders share their views in Coronavirus: The Great Disruption, a special series in The Straits Times Opinion section.

Amid the widespread suffering across the world caused by the Covid-19 pandemic, there is an intense race to develop a vaccine.

Several companies are pouring huge resources into trying to be the first to develop the Covid-19 vaccine. There are about 100 candidate vaccines and a number of them have started safety trials.

The first company to win the race will gain more than just prestige. It will be able to leverage the intellectual property (IP) system to obtain exclusive protection and big profits. It can levy high prices and control distribution of the much-needed vaccine.

Already, there are mounting concerns that the distribution worldwide will not be fair and equitable, that access to the vaccine will be according to the wealth of the country, and that countries will engage in "vaccine nationalism" by jumping the queue and hoarding the vaccine for their citizens.

This spawns intriguing questions: Can the IP system be blamed? Is it a hindrance to affordable access to medicines, especially to poor countries? Should it be dismantled, at least in relation to granting patents for medicines?

FOUNDATION OF IP

The IP system is based on the foundation of providing reward for innovation. It is concerned with demarcating conduct which may not be pursued without the consent of the IP owner.

In particular, patents, which are one of its components, create legal exclusions for a period of 20 years for inventions in the form of products or processes for making them.

They provide an incentive framework within which innovation can be encouraged to metamorphose through the many, and often difficult, stages from invention to commercial product or process.

Quality public health, facilitated by unimpeded access to medicines (including drugs and vaccines), is regarded as a global public good. The United Nations Human Rights Council declared that "access to essential medicines" is a human right.

Unfortunately, the patent system has been implicated by many critics, especially those in the public health sector, for contributing to the failure to deliver the public good in many countries.

The claim is that the system enables its owners to abuse their monopoly by such actions as limiting supplies, charging prices or licence fees that are well above the marginal costs of production and distribution, preventing competition from generic drugs and restricting disclosure of key ingredients, formulations or data.

However, the reality is that there are carve-outs from the IP system as well as modifications of IP rules and regulations which do accommodate public health needs and facilitate access to medicines for all.

An experimental vaccine for Covid-19 being tested at the Sinovac Biotech facilities in Beijing last month. The writer argues that the incentive framework, which underpins the intellectual property system, is still needed for firms that undertake risky investments in the search for the vaccine. PHOTO: AGENCE FRANCE-PRESSE

As Dr Francis Gurry, the outgoing director-general of the World Intellectual Property Organisation, said recently: "The IP system recognises at both the national and the international levels that emergencies and catastrophes may call for measures that may disrupt the normal functioning of the incentive framework upon which the IP system is based during the period of the emergency or catastrophe."

The recognition is, for instance, manifest in the Declaration on the Trips (Trade-Related Aspects of Intellectual Property Rights) Agreement and Public Health, also known as the Doha Declaration under the World Trade Organisation, signed in November 2001.

  • Coronavirus: The Great Disruption

  • How will the world change postCovid-19? Already, the pandemic is upending societies and ways of life, sending countries into lockdowns and triggering recessions and massive job losses.

    To make sense of its impact on economies, business, governance and international relations, leading opinion leaders share their views in Coronavirus: The Great Disruption, a special series in The Straits Times Opinion section.

This declaration recognises the "gravity" of the public health problems afflicting many developing countries, while acknowledging the constructive role of the IP system "for the development of new medicines".

It affirms that the Trips Agreement can be interpreted and implemented in a manner supportive of the member countries' right to protect public health and, in particular, "to promote access to medicines for all". It thus declares that the countries can use, "to the full", the provisions of the Trips Agreement which provide "flexibility" for this purpose. This enables the countries to effectively overcome any IP barriers to their access to affordable medicines.

Of relevance to the present Covid-19 pandemic is that governments have the flexibility of importing and using patented medicines under compulsory licences and in "a national emergency or other circumstances of extreme urgency, including public health crises" without any prior negotiations with the patent owner.

Many countries, such as Australia, Canada, Chile, Germany and Israel, have taken steps or are considering measures to make it easier to issue compulsory licences in order to secure adequate supplies of the Covid-19 vaccine.

COMPULSORY LICENSING AND PATENTS

How does this work? A compulsory licence, as the term suggests, does not require the pharmaceutical or rights-owning company to be consulted or to agree. The company is compelled by law to grant a licence, usually in a health crisis.

Specifically, the company is compelled to grant a compulsory licence by legislation (such as the Patents Act in Singapore). Through the legislation, the country compels the pharmaceutical company to grant a licence to another company (usually a generic drug company) upon terms (including royalty) to be agreed by the pharmaceutical company and the other company; or, failing agreement, determined by the court.

In practice, due to the exigencies of the crisis, the country allows the other company to make, import or use the patented medicine first, even before the terms of the licence are settled or agreed.

Once the licence is secured, the next phase is to manufacture the drug or compound. Another pharmaceutical company or a generic drug company is usually the manufacturer under the compulsory licence. It would know the formula and other relevant information from the patent document itself.

Such information has to be deposited with the patent, as a patent owner is granted a monopoly for 20 years in exchange for him disclosing his invention. In the patent document, he must set out his invention which he claims to be "new" and "non-obvious", how it can be "industrially applied" and, importantly, the boundaries of his claims. This document is available for public inspection, so that others would know the boundaries and skirt round the invention during the 20 years. After 20 years, it is public domain. As they say, all great inventions stand on the shoulders of earlier ones.

With Trips permitting such exemptions in a health emergency and existing, robust frameworks for compulsory licensing, it would be inaccurate to blame any problems in accessing a vaccine on the global IP system.

PRIVATE SECTOR INITIATIVES

Aside from these flexibilities, there are commendable private sector initiatives to share IP on a royalty-free basis.

For instance, Intel, IBM and Hewlett Packard Enterprise, which are founding members of the Open Covid Pledge, have pledged to grant non-exclusive licences to their extensive portfolio of patents to Covid-19 researchers and scientists until one year after the World Health Organisation (WHO) declares the pandemic to have ended or Jan 1, 2023, whichever is earlier.

A similar approach has been adopted by universities and research institutions such as Cambridge, Oxford, Harvard, Stanford and Yale as well as Innovative Genomics Institute through initiatives such as the Covid-19 Technology Access Framework.

Major pharmaceutical and biotechnology companies that are currently developing candidate Covid-19 vaccines or treatments have also pledged to share or waive exclusivities relating to their inventions.

For instance, AbbVie, the United States drug company, declared that it will not enforce its patent rights for potential uses of its HIV/Aids drug ("Kaletra") in the treatment of Covid-19.

Novartis, which is conducting trials for its existing malarial drug to be repurposed for Covid-19 treatment, has committed to make any IP from the repurposing available through non-exclusive licences or waivers.

Johnson & Johnson, which is working on a candidate vaccine, has indicated a willingness to share the use of its innovations by promising to "bring an affordable vaccine to the public on a not-for-profit basis for emergency pandemic use".

As Dr Gurry expounded, there does not appear to be any evidence that IP has been a barrier to access to vaccines, treatments or cures.

Indeed, anecdotal evidence indicates that the management of the Covid-19 pandemic in many countries is currently fraught with challenges that are not related to the IP system.

These challenges are likely to persist even after the vaccine is found, which means that ready access to the vaccine is not assured. The challenges include limited manufacturing capacity, weak public procurement budget, an underdeveloped distribution system, inadequate medical facilities and staff, and low purchasing power. These are due to governmental or market failures. The IP system is not the culprit.

GLOBAL COLLABORATION EFFORTS

This is not the time to undermine the IP system. The incentive framework which underpins the system is still relevant and is particularly necessary for companies that undertake costly and risky investments involved in the search for the Covid-19 vaccine. This would not be possible if a thriving innovation ecosystem built on strong IP incentives were absent.

At the same time, it is acknowledged that there is an inherent tension between IP protection of innovation and the public interest in having the fruits of the innovation available for beneficial use.

The history of the IP system has been dominated by the long debate about how optimally to balance between these conflicting interests. International collaborative efforts in finding the proper balance that is fair to relevant stakeholders are even more critical in these Covid-19 days.

One approach that has gained traction is the voluntary patent licensing pool scheme. This scheme enables patent owners to license patents to one another and others for research and development or other commercial purposes, with the proceeds split among the pool members according to an agreed formula.

Unitaid, a global health initiative in partnership with WHO, established such a scheme in 2010 for HIV/Aids, hepatitis C and tuberculosis. Major pharmaceutical companies and universities (such as AbbVie, Bristol-Myers Squibb, Gilead Sciences and the University of Liverpool) and generic drug companies participated in that scheme. It succeeded in lowering prices and ensuring fair and equitable distribution of the medicines relating to those diseases to poor countries.

Tomorrow, the WHO will launch a similar scheme for the Covid-19 vaccine and related technologies. It has the support of the majority of the member countries during its recent World Health Assembly.

The hope is that this extraordinary approach will also succeed in these extraordinary times.

• Tan Tee Jim is a senior counsel with an active practice in intellectual property.

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A version of this article appeared in the print edition of The Straits Times on May 28, 2020, with the headline Will global IP system block access to vaccine?. Subscribe