Bypassing TRIPS doesn’t reward those that took the risks

A popular argument, littering the comments section of any newspaper article about this asks: in putting in money to R&D when there was no guarantee that the treatment would prove effective, private companies took a risk. By forcing them to share IP we are today asking them to forego their profits; profits that tomorrow will drive further innovations if a different affliction were to face humanity. How is that useful? Why would private companies risk money on innovations?

Truth: A lot of public funding went into bringing the Covid vaccines to the market

Historically only about 6% of vaccines make it from concept board to the market. The cost of developing one through the the long testing process can run into 100s of millions of dollars. Thus the argument seems reasonable at first. This is big money we are talking about

With Covid however, the facts are this: the key scientific breakthroughs that allowed the development of the mRNA vaccine were developed by two researchers at the Univ. Of Pennsylvania, using grants from the National Institute of Health (NIH) a publicly funded federal government entity. Subsequently Moderna, Pfizer did spend a substantial amount of money developing it, but the US Government spent 955 million USD to fund a part of the research. This included the cost of clinical trials which was coordinated often through government participation

In addition, the US Government, as did many other governmental authorities around the world pre-purchased much of the vaccine production commitments, eliminating a key risk – would there be market for the product. This is not to mention the cost of marketing which is often one of the most expensive cost components in really creating a profit on a drug product.

All in all research by keNUP indicates that the European governments spent upward of Euro 93 billion in just 11 months to help create, manufacture and distribute the vaccines.

While the work of private firms is undoubtedly key to bringing the vaccine to market is, the fact is that the risk was shared. And public funding is (not always) meant for the public good, which in this case can only be achieved even in the narrow confines of a national polity through a global response.

How do we know that a quality product will be produced by far off production facilities not monitored by FDA?

In a recently aired interviewed, one of the global champions and indeed sponsors of the vaccine development program Bill Gates, made a similar point. So it’s got to stand to reason right?

Truth: With all due respect to Mr. Gates, this is what the WHO is there for

Covax is one of the largest global health initiatives aimed at equitable access to COVID-19 vaccines led by Gavi, the Vaccine Alliance (formerly the Global Alliance for Vaccines and Immunization, or GAVI). This program is acquiring vaccines for the poorer regions of the world, but competing with the rich countries and often losing out because demand far outstrips supply. More interestingly Covax has its own stringent qualification criteria which includes a pre-qualification by the WHO. If production were to be initiated in facilities that can share IP, they will still have to go through the same strict quality protocols before a needle with that vaccine ever touches skin. And there is a precedence for this. 60% of the worlds vaccine production (non-Covid)and whopping 80% of the demand in developing nations is supplied by India. The same facilities supply to the western world as well. The FDA sends inspectors to certify these manufacturing facilities. Why would this be different for Covid vaccines? The truth is this is not a IP issue at all, it is a process issue that already has a solution for it. IP licensed and therefore “priced” has nothing to do with using capacity in a manner where quality is ensured.

There is no idle capacity and even if there were, the technology required to jumpstart production is missing with these manufacturers

mRNA vaccine production is new and the technology required to “grow” the strains and use capacity cannot be mitigated by a TRIPS waiver alone

Truth: As the Merck and J&J deal brokered by US President Biden’s administration shows, where there is a will there is a way

There is truth in this argument that just providing a temporary waiver of IP is not adequate. There needs to be sharing of technology and some resources too. But the heart of the argument is whether ALL available capacity and willingness should be used or only those that are lie in the west and are guaranteed or cajoled by the government? As the Merck deal indicates there is a way. The US government is a force across the world, able to enforce its will across the globe despite any news-reports to the contrary. It has carrots and big sticks in terms of trading bans, embargoes, enforcing monetary freezes with which it can enforce a disciplined approach towards technology use, if private institutions in the US agree to share such technology with manufacturing facilities across the world. There are reported instance of the Israeli pharma major Teva, that have requested IP licensing and finally dropped the search after it did not find any willing partners. This forced the Israeli government to enforce a WTO clause under TRIPS for Compulsory License Sharing. Not a small move by a tiny nation where R&D is big business and a reputation of compliance with IP Laws is a pre-requisite for the continued investments in this area. So, if friendly nations with available capacity and willing partners are not able to find sharing agreements, the argument that there is no capacity rings hollow. Truth: IP Waivers will not by themselves miraculously grow capacity, but it is a first and mandatory step along with other actions that will enable for this to be resolved.