The coronavirus vaccine rollout in the United States is quickly ramping up: The Biden administration now promises enough supply for every American adult by the end of May. Yet as we look forward to family reunions, summer barbecues and rescheduled weddings, the world’s poorest countries still face a dire situation. Only in recent weeks did such nations as Ghana, Cambodia and Nigeria welcome their first vaccine shipments — and only enough to cover about 2 percent of their populations. One grim projection suggests that most poor countries will have to wait years — until at least 2023 — to achieve mass vaccination.
According to some activists, the solution to this inequity is relatively simple: By suspending protections on covid-19 vaccine patents, the international community “could help break Big Pharma monopolies and increase supplies so there are enough doses for everyone, everywhere,” claims the People’s Vaccine Alliance. Indeed, 58 low- and middle-income countries have mobilized in support of a proposed World Trade Organization waiver that would temporarily exempt coronavirus-related intellectual property from normal international rules and protections. And while the effort to waive IP protections has been a global health hot topic for months, it gained a high-profile endorsement in the United States recently from Sen. Bernie Sanders (I-Vt.). In a March 10 video statement, Sanders called upon President Biden to support the IP suspension while slamming “huge, multibillion-dollar pharmaceutical companies [that] continue to prioritize profits by protecting their monopolies.”
The logic of the argument seems clear and intuitive — at first. Without patents, which serve narrow commercial interests, companies all over the world could freely produce the vaccine. Sure, Big Pharma would lose money — but this is a pandemic, and human life comes before private profit, especially when vaccines receive substantial public financing to support research and development. As with HIV drugs in years past, widespread generic production would dramatically increase supply and drive down prices to levels affordable even in the developing world.
Reality is more complicated, however. Because of the technical complexity of manufacturing coronavirus vaccines, waiving intellectual-property rights, by itself, would have little effect. It could even backfire, with companies using the move as an excuse to disengage from global access efforts. There are more effective ways to entice — and to pressure — companies to license and share their intellectual property and the associated know-how, without broadly nullifying patents.
The Moderna vaccine illustrates the limits of freeing up intellectual property. Moderna announced in October that it would not enforce IP rights on its coronavirus vaccine — and yet it has taken no steps to share information about the vaccine’s design or manufacture, citing commercial interests in the underlying technology. Five months later, production of the Moderna vaccine remains entirely under the company’s direct control within its owned and contracted facilities. Notably, Moderna is also the only manufacturer of a U.S.- or British-approved vaccine not yet participating in Covax, a global-aid-funded effort (including a pledged $4 billion from the United States) to purchase vaccines for use in low- and middle-income countries.
It is true, however, that activist pressure — including threats to infringe upon IP rights — can encourage originators to enter into voluntary licensing arrangements. So the global movement to liberate the vaccine patents may be useful, even if some advocates make exaggerated claims about the effects of waivers on their own.
One reason patent waivers are unlikely to help much in this case is that vaccines are harder to make than ordinary drugs. Because most drugs are simple chemical compounds, and because the composition of the compounds is easily analyzable, competent chemists can usually reverse-engineer a production process with relative ease. When a drug patent expires, therefore — or is waived — generic companies can readily enter the market and produce competitive products, lowering prices dramatically.
Vaccines, in contrast, are complex biological products. Observing their contents is insufficient to allow for imitation. Instead, to produce the vaccine, manufacturers need access to the developer’s “soft” IP — the proprietary recipe, cell lines, manufacturing processes and so forth. While some of this information is confidentially submitted to regulators and might theoretically be released in an extraordinary situation (though not without legal challenge), manufacturers are at an enormous disadvantage without the originator’s cooperation to help them set up their process and kick-start production. Even with the nonconsensual release of the soft IP held by the regulator, the process of trial and error would cause long delays in a best-case scenario. Most likely, the effort would end in expensive failure. Manufacturers also need certain raw ingredients and other materials, like glass vials and filtration equipment; overwhelming demand, paired with disruptive export restrictions, has constricted the global availability of some of these items.
There are better options than broadly waiving IP rules — notably, encouraging (and pressuring) vaccine manufacturers to cooperate and share knowledge with partners across the globe. Voluntary licensing is one route: It’s a common arrangement in which developers enter into binding contractual agreements with generic producers. Generic manufacturers get permission, know-how and assistance from the patent-holder to produce the vaccine for sales in specified markets; in exchange, the patent-holder can ensure quality of the generic product and may receive royalties on its sales, usually representing less than 10 percent of sales value.
These royalties may be lower than the profit margin on direct sales; for example, Pfizer expects a 25 to 30 percent profit on its vaccine sales, or roughly $5 for every $19.50 dose. (The U.S. government has agreed to buy 300 million doses at that price.) But voluntary licensing deals offer a new revenue stream that would otherwise be captured by competitors — not to mention good publicity. Already, voluntary licensing deals from AstraZeneca and Novavax are facilitating large-scale production in India, Japan and South Korea; many of the resulting vaccines are destined for lower-income countries through Covax.
The best route to vaccine equity involves creating the conditions to facilitate more of these voluntary deals.
How can governments and activists help push things in the right direction? By lifting the export curbs on materials such as filters and bioreactor bags intended to protect domestic supply, countries can help lubricate supply chains, creating a better environment for cross-national collaboration. Governments and development-finance institutions can invest to build up the capabilities of potential vaccine manufacturing plants, making it easier for originators to say yes. Domestically, the Biden administration did something like this when it invested $269 million under the Defense Production Act to prepare Merck’s manufacturing facilities to produce the Johnson & Johnson vaccine — a crucial plank of the joint production deal announced this month. Similar efforts are underway abroad. On March 12, for example, the “Quad” — the United States, India, Japan and Australia — announced a joint pledge to produce and disseminate 1 billion vaccine doses; as part of this effort, the Biden administration announced that it would help finance an Indian generic manufacturer to make coronavirus vaccines, including the Johnson & Johnson product. The contractual language of licensing deals can explicitly protect IP from broader dissemination, helping originators feel more comfortable sharing commercially valuable information.
Sticks as well as carrots can facilitate partnerships. Under existing World Trade Organization rules, countries already have the right to issue “compulsory licenses” in certain cases pertaining to public health, allowing them to produce or import generic health products without permission from the patent-holder. Advocates correctly point out that countries face potential retaliation from industry and wealthy governments when they try to use these tools — a strong disincentive. (In 2006-2007, Thailand’s use of compulsory licenses to access more affordable AIDS drugs led the United States to revoke preferential trade status for some Thai exports.) This should change. The Biden administration and other global leaders should make clear that they will support legitimate compulsory licensees of coronavirus vaccines in cases where a valid voluntary license request has been rejected or ignored.
But compulsory licensing is vastly inferior to voluntary deals in the case of vaccines, because with the former the generic producer would still need to figure out how to make the vaccines without the originator’s assistance — again, an extraordinarily difficult task. It is useful mainly as a threat held in reserve, paired with the “carrots” of subsidies to local plants and so on. Firms may choose to play ball on voluntary licensing deals rather than face a mess of legal challenges and bad publicity. This month, for example, Canadian biotech firm Biolyse Pharma publicly requested a voluntary license to manufacture the Johnson & Johnson vaccine for global distribution. If Johnson & Johnson is unwilling, Biolyse made clear in its announcement, the company will appeal to the Canadian government for a compulsory license. The ball is now in Johnson & Johnson’s court — but this seems like the type of offer it should choose to accept, both for the global good and its self-interest.
Scaling up vaccine production is an imperative for equitable global access and an end to the pandemic. But it is smart incentives for sharing knowledge, not the wholesale elimination of intellectual-property rights, that will get us to the finish line.