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A Covid-19 Vaccine IP Waiver Won’t Kill Pharma Innovation

Sept. 24, 2021, 8:00 AM

President Biden on Sept. 22 held, virtually, a global Covid-19 summit during the U.N. General Assembly. He announced a target for 70% of the global population to be vaccinated within the next year to end the pandemic. At the same time, wealthy nations including the U.S. have already begun or plan to offer booster vaccinations to their citizens.

Biden and others have claimed that pursuing both strategies are possible. But providing third doses to just a few when most of the world has yet to receive an initial dose due to limited vaccine supply will render his global vaccination target impossible. Instead, this goal must be matched with a commitment to dramatically scale global vaccine manufacturing.

Only a few manufacturers control the current vaccine supply and have prioritized wealthier nations who have accumulated a massive surplus. Though necessary, promised donations of vaccine doses by these same countries are not sufficient.

To increase vaccine manufacturing, advocates and governments in the Global South have repeatedly called for sharing of production know-how, investing in local manufacturing capacity, and temporarily waiving intellectual property (IP) protections for Covid-19 health technologies. However, almost no technology has been shared with established technology-sharing pools despite local manufacturer and country interest. Instead, Covid-19 vaccine manufacturers have negotiated bilateral deals with wealthier countries, eschewing multilateral mechanisms like Covax to equitably distribute doses.

In May, Biden announced unprecedented support for temporarily waiving IP rights for Covid-19 vaccines, which would allow additional manufacturers to bypass these barriers and produce the vaccine. But no progress has been made, with World Trade Organization discussions suspended over the summer.

This progress has been stymied in part by the argument that waiving IP rights will diminish profits, thereby disincentivizing future innovation necessary to address the next public health crisis or other diseases of unmet need.

The issue of temporarily relinquishing such rights holds particular salience for intellectual property law partly because this limited Covid-19 IP waiver exposes a system in dire need of repair even before the current pandemic. Pharmaceutical companies earn a tremendous profit from IP-protected monopoly periods and thus guard and extend them through legal and artificial strategies.

A False Choice Between Access and IP Waivers and Innovation

But the trade-off between ensuring global access to Covid-19 vaccines through IP waivers and innovation is a false choice for several reasons, especially amidst a devastating pandemic.

First, in the case of Covid-19 vaccines, such monopoly rights are duplicative and unnecessary. Through Operation Warp Speed, the U.S. government underwrote Covid-19 vaccine development, spending an unprecedented $18 billion. This included advance purchasing agreements for the vaccines before they were shown to be effective, essentially eliminating companies’ risk of failure.

Moreover, key technology that led to the currently available mRNA vaccines was developed by the U.S. government. For Moderna, continued development of booster vaccines has been in collaboration with and through the support of the National Institutes of Health.

Second, companies have already profited handsomely from Covid-19 vaccines. Pfizer will earn $33 billion and Moderna $18 billion in sales in 2021 alone. Because this pandemic will likely not end anytime soon, companies will continue to make profits from Covid-19 vaccines, including from more expensive booster shots. The White House recently purchased an additional 200 million doses of the Pfizer/BioNTech vaccine at a higher price than last year, and prices were also set higher in recent EU orders. Such trends will likely continue.

Third, manufacturers’ prioritization of higher-revenue markets in wealthier countries has meant that vaccines, particularly for infections with pandemic potential, have historically been neglected. An Ebola vaccine, for instance, languished since the early 2000s. Promising vaccine candidates for SARS-CoV-1, the coronavirus that led to the SARS outbreak in 2003, quickly lost funding once the outbreak ended. If this research had continued, we may have had earlier vaccine and treatment options for the related Covid-19.

While long-term reform is needed to address this innovation void, democratizing Covid-19 vaccine manufacturing through an IP waiver would have minimal, if any, negative effect.

Fourth, a Covid-19 IP waiver is unlikely to harm drug development for non-pandemic diseases. As currently constructed, the waiver is limited in time and scope to only Covid-19. But to the extent that an IP waiver would diminish Covid-19 vaccine profits, the non-partisan Congressional Budget Office recently found that limiting pharmaceutical profits would lead to a relatively small reduction in new drug launches.

Moreover, these few drugs may not reflect truly transformative innovation that meets the needs of our patients to begin with. Companies frequently invest in new drugs that treat diseases with existing treatments (“me-too” drugs) and focus more on stock buybacks than on research and development. There is thus little reason to believe that reducing further profit margins from Covid-19 vaccines through an IP waiver would harm innovation for non-pandemic diseases.

Fifth, Covid-19 has quickly validated novel vaccine platforms, particularly mRNA, which holds the tantalizing potential of treating other serious infections and cancers. This ability to repurpose largely publicly funded vaccine platforms for other diseases means that companies will continue to benefit beyond the current pandemic. Concerns that an IP waiver could affect future uses of mRNA are tempered by the reality that ownership rights such as patents will still exist.

Unquestionably, the remarkable organizational capacity of pharmaceutical companies helped bring Covid-19 vaccines to fruition and they have been rewarded. But enacting an IP waiver to allow additional manufacturers to overcome the ongoing supply shortfall is essential in curbing the threat of new variants, ending this pandemic, and saving millions of lives around the world. There are admittedly real challenges even after an IP waiver, but these are addressable difficulties and many manufacturers stand ready to collaborate.

Continued, long-term inequity that further fuels what is now a preventable disease ought to be an unacceptable outcome to this plague. During the UN General Assembly, our world leaders would do well to fight for equitable vaccine access to end this pandemic and to stand on the side of people over profits.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Dr. Ravi Gupta is a physician, associate fellow at the Leonard Davis Institute of Health Economics, and a fellow in the National Clinician Scholars Program at the University of Pennsylvania.

Dr. Reshma Ramachandran is a family medicine physician and a fellow in the National Clinician Scholars Program at Yale University.

Gupta and Ramachandran are both members of the Doctors for America Drug Affordability Action Team.

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