Joe Biden backed a temporary suspension (waiver) of Intellectual Property Rights for Covid-19 vaccines.
This move seems plenty of good intentions, as purely based on humanitarian grounds: we will not allow pharmaceutical industry to make money on the so-much needed vaccines. Let us see the motivations, what can really be done, the consequences and a possible solution.
Although all attention was brought to the first paragraph of the declaration of the Biden Administration, related to the waiver of the IP rights, we will explain below why we consider this goal unrealistic, whilst we fully support the second paragraph of the same declaration, related to cooperation of all parts for increasing production of vaccines.
HOW WILL THE WAIVER BE PUT IN PLACE?
Nobody knows who holds, which patents. There are no Covid-19 patents for the moment, they cannot exist. The virus was first detected in January 2020, research for a vaccine started some months afterwards, patent applications were filed a bit later, let us say in June 2020. These applications will be published 18 months later, that is end 2021.
Up to that moment, nobody has an idea of the filings.
As an application becomes a patent only after examination, and this lasts at least 4 months, no patent can be expected before early 2022.
President Biden can only introduce the waiver in his country. Meanwhile, many millions of vaccines have been sold in USA.
We are not close to a decision. The first paragraph of the Biden declaration mentions “Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.” This is a diplomatic formulation of the difficulty of the operation. A decision may never take place, as several EU countries oppose the waiver.
Will this waiver not come a bit late?
We could understand Monti to waive patent protection in India, a very poor country strongly hit by the pandemic. Monti would have the moral basis for doing that and nobody could accuse him for populism. Monti does not waive protection because even if he has the patents, he still cannot produce the vaccines.
ROW MATERIALS, KNOW-HOW AND TRADE SECRETS
Every complicated process necessitates not only patent rights. It also necessitates row materials, which in the case of vaccines seem to be extremely difficult to supply. The Pfizer vaccine needs 260 ingredients coming from 11 different countries. One of them is produced only by a tree in Chile!
It also necessitates several trade secrets and the cumulated knowledge of the researchers and production engineers of the big labs, which are not for sale or for share, without the agreement of the pharmaceutical industry.
India CANNOT fabricate the vaccines alone and they know this.
These two are the main obstacles for which India, South Africa or Brazil did not introduce the waiver in their countries, whilst it is foreseen in their patent law (it is called compulsory licensing).
When there is no abuse of a market position or an excessive monopoly with very high prices, there can be softer measures, such as negotiated licensing or even, in extreme cases “compulsory licensing”: the state obliges the company to sell the IP rights in a fixed price. If there is disagreement on the price, the case goes to court.
A waiver of IP rights is equivalent to confiscation of property (in this case, intellectual property). This confiscation, besides being incompatible with a liberal economy, weakens the trust of the citizen or the industry to the state and will hamper innovation:
– As soon as I invent something useful, the state will come and confiscate my rights. Why should I then invest further in R&D?
We consider this being the biggest danger of the decision: Covid produces mutations, which necessitate new R&D for new vaccines. Other diseases and pandemics will appear. If the industry is not sure about their patent rights, they will not invest further. Alfred Burla mentioned this diplomatically in a last interview.
The states cannot take this role, as they have neither knowledge, nor infrastructure, nor scientist to do the research. At least not for the next five years.
There will be no new vaccines.
PROPOSAL FOR SOLUTION
As people are dying every day, the matter is extremely urgent. It is also extremely complicated to fabricate vaccines, as it necessitates knowhow, row materials which are hard to find and patents. In this complex landscape patents is the least critical component.
The only solution we see is mentioned in the 2nd paragraph of the Biden declaration and comprises the following elements:
a. the COOPERATION amongst all players: governments, pharmaceuticals, row material providers, the commitment to working together towards a common goal,
b. the clear DEFINITION OF ROLES and FAIR PRICE of vaccines and
C. the SUBSIDISING of the vaccines to poor countries.