Don’t Let Life Sciences Innovation Become Another Coronavirus Casualty

“Traditional rivals within the life sciences industry have pledged to cooperate by sharing data, patent libraries, and, if necessary, manufacturing capacity. This unprecedented pooling of resources can only happen where IP rights are protected.”

https://depositphotos.com/6496641/stock-photo-looking-at-the-opinion-section.htmlWith two-thirds of the world in lockdown and no clear way out of the novel coronavirus crisis, it’s increasingly obvious that biopharmaceutical innovation will play a pivotal role. A new treatment that can mitigate the worst effects of COVID-19, and ultimately a preventative vaccine, could, literally, save the world.

Such life-saving technology is less likely to be forthcoming if, in their panic, governments sacrifice intellectual property (IP) rights for new COVID-19 therapeutics and vaccines.

The signs are not promising. IP-skeptic governments in Chile and Ecuador have taken preemptive measures by permitting compulsory licensing of any new COVID-19-related technology. Otherwise innovation-friendly Canada and Germany have passed legislation to issue compulsory licenses more easily.

Even in the United States—the center of modern biopharmaceutical innovation and a major player in ongoing COVID-19 research and development (R&D) efforts—there is pressure to break patents. In February, 46 members of Congress wrote to President Trump asking him to “use every tool of the federal government to ensure a coronavirus vaccine is affordable and accessible.” They also asserted that, “providing exclusive monopoly rights could result in an expensive medicine that is inaccessible, wasting public resources and putting public health at risk.”

The System is Working

But, in reality, the patent system is working very well. More than 140 experimental coronavirus treatments and vaccines are under development worldwide, including 11 in clinical trials. Another 254 clinical trials are underway for coronavirus treatments or vaccines derived from drugs already approved to treat other diseases. Life sciences companies everywhere are searching their patent and molecular reference libraries for promising compounds. The patent system has made all of this possible.

The global innovative life sciences sector has marshalled an enormous, immediate response to the coronavirus threat. That has only been possible thanks to an effective life sciences innovation ecosystem, built over several decades, that includes robust public and private biomedical R&D investment, strong IP rights and mechanisms like the U.S. Bayh-Dole Act to incentivize IP development and technology transfer.

Nor is it likely that the winners of the race to create new COVID-19 treatments and vaccines will price them at inaccessible levels. Johnson & Johnson, which is investing $1 billion in COVID-19 research, has said its vaccine would be available on a not-for-profit basis. Similarly, Gilead Sciences says it will provide its entire 1.5 million dose supply of remdesivir, in clinical trials as a possible coronavirus vaccine, at no cost to patients with the most severe symptoms. Claims that IP will make COVID-19 drugs so expensive as to be inaccessible are completely speculative.

Nevertheless, as the crisis continues, the calls to dilute IP rights will likely become louder. In the United States, pressure is focused around the use of Bayh-Dole “march-in-rights.” These provisions, introduced in 1980, give the federal government a tool to control drug prices by reclaiming and potentially compelling non-exclusive licensing of IP in certain instances.

Be Skeptical of ‘Marching In’

The government should be skeptical. The Bayh-Dole Act is instrumental to current COVID-19 research efforts. Take Moderna, the company that has come the farthest toward developing a vaccine, with Phase 1 clinical trials underway in Seattle. It credits the pivotal role of patents in the field of messenger RNA (mRNA) and associated mRNA delivery technologies, licensed from Harvard and the University of Pennsylvania. Elsewhere, Cepheid, the first company to receive emergency use authorization for a point-of-care COVID-19 diagnostic, says IP it licensed from the Lawrence Livermore National Laboratory has been instrumental.

Bayh-Dole clears the path to commercial production and provides a powerful incentive to private investors and venture capitalists to stand behind risky research confident they will see a fair return. Research companies are comfortable using their own funding for Covid-19 R&D as the act allows them to transfer the IP rights needed to commercialize or market their inventions. This has allowed even small biotech firms, largely funded by private capital, to join the coronavirus vaccine race.

Given that on average 80% of the overall cost of drug development comes from the private sector, biomedical innovation would be dramatically undermined if the government acquiesces to Congress and uses march-in rights to seize IP supported by federal funding. A reticence to license IP coming out of U.S. universities or national laboratories would mean fewer life sciences innovation startups spinning out of university research. Companies would prioritize their own R&D and IP, focusing on “safer” or less risky drug targets/therapeutics. It would jeopardize many current COVID-19 projects and darken the skies for future U.S. life sciences innovation.

The threat of march-in rights leads us to question the impact of broader use of compulsory licensing, or related practices. For instance, under 28 USC section 1498(a) (also called the “eminent domain” provision), the U.S. government has the authority to use or manufacture any patented invention (whether derived from federal funding or not) without a license or permission, so long as reasonable compensation is provided.

Patents Aren’t the Problem

But, in whatever form, compulsory licenses will do little to increase access to the treatments currently being researched. First, the fundamental challenge is that we currently don’t have a coronavirus treatment or cure, showing that IP itself isn’t the problem, it’s that we don’t have enough IP: issuing compulsory licenses against IP that doesn’t exist will accomplish little. Moreover, securing patents on new IP that will be created will likely take several years; enterprises will rush coronavirus treatments out long before patents are secured. At the same time, several possible coronavirus therapeutics (such as hydroxychloroquine) are off-patent and therefore available for generic manufacture.

When it comes to vaccines, patents typically cover modes of delivery or other constituent parts of the overall product. IP rights other than patents are often more important for vaccines, including manufacturing know-how (protected by trade secrets) and proprietary clinical test data. The same is true for biologic drugs, several of which show promise for COVID-19. Even under compulsory license or in a national emergency, there is no explicit waiver to clinical test data exclusivity in U.S. law.

For vaccines, confiscating IP rights is especially misguided given the need to mobilize sufficient resources to manufacture billions of doses and distribute them globally in a short space of time. Few governments have the capacity to manufacture novel, complex vaccines at vast scale, and therefore cooperation with rights holders, rather than coercion, is far more sensible.

Fortunately, those in the innovation value-chain are rising to the challenge. The Gates Foundation recently committed billions to vaccine manufacturing capacity to speed up delivery. Traditional rivals within the life sciences industry have pledged to cooperate by sharing data, patent libraries, and, if necessary, manufacturing capacity. This unprecedented pooling of resources can only happen where IP rights are protected.

Don’t Extend the Damage

Calls to suspend IP rights in this crisis ignore the important issue of incentives. If governments choose to compulsorily seize IP, they destroy companies’ incentives to develop precisely the technologies we need in emergencies. The dozens of companies working right now on COVID-19 diagnostics, medical devices and therapeutics will halt rapidly if they perceive that there will be no opportunity to recoup their investment and make a return in the future. The coronavirus has already destroyed enough. Calls to cast off foundational IP would extend the damage and harm a bedrock pillar of the successful life sciences innovation system, responsible for 153 new drugs over the past three years in the United States (25% more than in any three-year period since 1938).

We’re all counting on the tremendous promise of novel biomedical innovation to get the world through this crisis; now would be the worst time to undermine the IP rights that underpin life sciences innovation.

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Copyright: stuartmiles 

The Author

Stephen Ezell

Stephen Ezell is Vice President, Global Innovation Policy at the Information Technology and Innovation Foundation.

Stephen Ezell

Philip Stevens is Executive Director of the Geneva Network.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments. Join the discussion.

  1. jacek April 19, 2020 10:31 am

    Here is the U.S., and in many other countries, we do not have particularly bright lawmakers. When reading their statements and propositions, one can sometimes wonder if this or another party should change their name to “Caveman’s.” But from my experience dealing with people, I can tell human behavior is universally foolish. Whatever industry you are dealing with, you can quickly find out that popular assumptions, their perceived reality in 90% of the cases go in a direction opposite to the truth. 180 degree exact. The fact that by removing incentives, they expect to spoor development—old Tale of U.S. patent system with visible results where China fills over 60% of new 5G patents is one example of that.
    The only solution is education, and this is what this blog attempts to do. Of course, it is not enough since I do not think even one of these lawmakers have any real interest in the particulars of the industries they regulate.
    My propositions for present here and caring about the future of this country is to join Independent inventors organizations working to change the status quo. They need your real support. Also, I would send letters educating about the mechanism of incentivizing invention each time members of congress come out with the next bright idea.
    If you can publish some of the correct info here and there for the benefit of the public, there is no excuse for you to be idle.

  2. Pro Say April 19, 2020 2:40 pm

    Ideally, each and every member of Congress should read your excellent expose’ and exposition Stephen and Philip. Thank you.

    From an earlier post:

    How many millions worldwide will suffer and die needlessly in the years to come . . . because there were no quick tests — including those needing computers, software, AI, machine learning . . . and yes, the Internet — to determine exactly what they had / have; and therefore how to treat and cure them?

    How many more tears will be shed, graves dug, and earns filled?

    Why are some in Congress more concerned with imaginary, comic-book “trolls” than they are with American lives?

    Why are they more concerned with what Big Tech thinks and wants . . . than with what their fellow Americans want and need?

    Blood for money, money for blood?

    While Congress dawdles, people are dying.

    COVID-19 will not be the last pathogen to ravage America and the World.

    Will we be better prepared next time around?

    Not if Congress doesn’t restore patent protection to all fields of innovation, we won’t.

  3. Patent Princess April 28, 2020 8:54 pm

    Law makers and interpreters should all take a standardized psychological-scientific test.

    I say this as an extension and/or spinoff of Mr. Gene Quinn’s idea to similarly calibrate PTO Examiners as heard in PLI.

    Still, per my 2015 Patent Law class notes, the premise of the US patent system is:

    Dynamic Efficiency vs. Static Inefficiency.

    Even so, China’s IP systematic agility should Energize us/U.S.!

    We cannot maintain hegemony by dinosauric dominance.

    How can We Advance?! I am ready to help!!

  4. jacek April 29, 2020 1:20 pm

    The source of all devils is the “Citizens United” Supreme Court antidemocratic doing.
    If money is “Speech,” then the action of my FIST should also be recognized as an expression of free speech.
    Logically It means violence should be allowed. It Shouldn’t?
    Money is a poison bringing an end to any democratic system. Only unvarnished shortsightedness of apparently not so wise man from Supreme Olympus or maybe influence of the same poison can sway otherwise educated and intelligent people to make decisions like that.
    Without removing money from politics, no progressive, not even common sense agenda has a chance to succeed. But looking at what is happening in the US during the last decade, it may be too late. Disappearing respect to institutions is the very same sign on the wall I had the opportunity to watch during the collapse of the Soviet block. The destruction of the standard of living due to the virus may accelerate the process. The younger generation sees both Democratic and Republican parties as one representing the only interest of corporations.

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