POST 159. May 9, 2021. CORONAVIRUS. “Without deeper sharing of expertise in how to make vaccines…waiving patent obligations is unlikely to be a game-changer… Having access to the “recipe” certainly helps, but understanding how to put it together and produce it at scale is something else.”

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“The Biden administration plans to support a temporary waiver on patents and other intellectual property rules preventing developing countries from mass-producing generic COVID-19 vaccines, United States Trade Representative Katherine Tai announced on Wednesday.

A group of developing countries led by India and South Africa was pushing for the move, which comes as a relief for global public health advocates.

“The Administration believes strongly in intellectual property protections, but in the service of ending this pandemic, supports the waiver of these protections for COVID-19 vaccines,” Tai said in a statement. 

The United States does not have the power to unilaterally enact the patent waiver, nor did Tai commit to the version of the waiver currently drafted by India and South Africa. Instead, she pointed to the need for further negotiations.

But Tai’s remarks signal the end of American leadership of a bloc composed primarily of wealthy nations that has prevented the World Trade Organization from reaching the unanimous consensus needed to even begin negotiations over the terms of a waiver.

Because the U.S. — which is home to some of the world’s most lucrative pharmaceutical companies — has historically been a major obstacle to patent liberalization, American support for the waiver is widely viewed as a sign that it will eventually be adopted…

The Pharmaceutical Research and Manufacturers of America, the country’s largest pharmaceutical trade organization, issued a scathing statement claiming that the waiver would do more harm than good.

“In the midst of a deadly pandemic, the Biden Administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety,” PhRMA president and CEO Steve Ubl said. A patent waiver, Ubl argued, “flies in the face of President Biden’s stated policy of building up American infrastructure and creating jobs.”

But public health experts say that failure to prioritize vaccinations for populations around the world as fast as possible will end up hurting Americans, dragging the pandemic on and creating opportunities for new variants to arise. When the coronavirus spreads unchecked, it can mutate, leading to variants that could be more resistant to already-developed vaccines, requiring even more global resources to end the pandemic.

For-profit drug makers deployed a variety of talking points against the waiver. They argued that it could lead to faulty drug production, allow China or Russia to steal valuable intellectual property, or disincentivize further development of treatments related to COVID-19. Yet many proponents of the waiver argue that the huge sums of public money pumped into the pharmaceutical industry to develop COVID-19 treatments and vaccines weakens companies’ arguments about intellectual property.” (A)

Does the decision mean more vaccines?

Vaccine campaigners have praised the decision as “seismic” and “heroic”, a potential precedent for waiving intellectual property (IP) to address health crises in the future. But they have also made clear that, alone, it is not going to address the global shortage of Covid vaccines.

For one thing, the WTO has to actually adopt the waiver. The trade body usually operates by consensus, and key economies such as the UK, Canada and the EU continue to support upholding vaccine patents. The US turnaround may persuade these countries to compromise on the issue and strike some kind of agreement that is an improvement on the current situation, but does not entirely waive IP rights on vaccines.

Second, vaccines are extremely complex formulations. As we have seen throughout this year, even experienced companies are running into problems scaling up production. The manufacturing process is just as important as the patented “recipe”, and the WTO has no power to force companies such as Pfizer and Moderna to share the technology and knowledge that is used to produce their vaccines.

But national governments do have that power. The US could take the lead by pushing its pharmaceutical companies to share not just their patents but their technology and knowhow with manufacturers across the world. “It would not deliver more vaccines next week, but if they had done this a year ago, we would now have results,” says Ellen ‘t Hoen, a medical IP expert and campaigner.

Also, she says, sharing technology and expertise with manufacturers around the world would make it easier to produce and distribute vaccines to fight the future pandemics that scientists tell us are a near certainty. “The world was not prepared for Covid-19, that’s what we are waking up to,” she says.” (B)

“Without deeper sharing of expertise in how to make vaccines like the ones devised by Pfizer Inc. or Moderna Inc., waiving patent obligations is unlikely to be a game-changer, according to Stanford Law School’s Lisa Ouellette. Having access to the “recipe” certainly helps, but understanding how to put it together and produce it at scale is something else. This explains why, months after Moderna’s own voluntary pledge not to enforce patent rights on its vaccine, there’s been no flourishing of factories pumping out “generic” messenger-RNA vaccines.

The hope is that the more strident tone on patents from U.S. President Joe Biden, French President Emmanuel Macron and European Commission President Ursula von der Leyen is really about holding the industry’s feet to the fire by pushing them to strike more partnerships and share their secrets around the world. An international industry association says it has signed 200 technology transfer agreements to expand Covid vaccine production; judging by the current state of affairs, though, it looks like even more are needed.

Given the billions in public money plowed into researching, developing and manufacturing vaccines, governments have leverage. As Ken Shadlen, a professor at the London School of Economics, has suggested, governments can make clear that if vaccine producers don’t do the right thing now, they risk punishment later, in more normal times, on issues like affordable drug pricing.

Waiving the WTO rules, known as TRIPS, is certainly a better look than hoarding doses, curbing exports and, in the EU’s case, suing AstraZeneca. For now, though, it’s a symbolic victory. If it’s not followed up by more muscular action, WHO Director General Tedros Adhanom Ghebreyesus will be asking the same question in a year’s time.” (C)

Shortly before the announcement, Biden’s chief medical adviser Anthony Fauci said in an interview that the U.S. has a “moral obligation” to share coronavirus vaccines and supplies worldwide to end the pandemic.

Fauci, the federal government’s longtime infectious disease official told POLITICO that he backs waiving pharmaceutical giants’ vaccine patents so that other countries can produce generic versions of the shots. But he cautioned that doing so would not be a quick fix for the current crisis, including surging cases and deaths in India.

Leading Republicans warned that China would be a primary beneficiary of the move at time when both the administration and Congress are looking for ways to boost U.S. competitiveness…

The two major developing countries recently said they would revise their original request. WTO members are expected to discuss the new proposal at an informal meeting later this month in Geneva.

One European diplomat said it could take until the WTO’s Ministerial Conference, scheduled for Nov. 30-Dec. 3, for countries to agree on the terms of a waiver. But the U.S. shift in position undoubtedly puts pressure on countries opposing the waiver to support a proposal that is significantly more limited, the diplomat said…

Michelle McMurry-Heath, president and CEO of the Biotechnology Innovation Organization, said a better option would have been to turn the United States into an “arsenal of vaccines,” as Biden said last week.

It is unrealistic to think that simply turning over the patent information would enable countries without the technical know-how to quickly ramp up production, she added.

Tai said that the administration will participate in global negotiations on the language to implement the waiver. “Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved,” she added.” (D)

“Pfizer CEO Albert Bourla warned Friday that waiving patent protections for Covid vaccines — a proposal President Joe Biden just endorsed — would set off a worldwide race for raw materials that threatens the safe and efficient manufacturing of Covid shots…

But Bourla, whose company produces one of three vaccines approved for emergency use in the U.S., said that he believes “categorically” that the waiver proposal will “create more problems.”

“Currently, infrastructure is not the bottleneck for us manufacturing faster,” Bourla wrote in a dear colleague letter posted on LinkedIn. “The restriction is the scarcity of highly specialized raw materials needed to produce our vaccine.”

Pfizer’s vaccine requires 280 different materials and components that are sourced from 19 countries around the world, Bourla said. He contended that without patent protections, entities with much less experienced than Pfizer at manufacturing vaccines will start competing for the same ingredients.

“Right now, virtually every single gram of raw material produced is shipped immediately into our manufacturing facilities and is converted immediately and reliably to vaccines that are shipped immediately around the world,” Bourla wrote.

He predicted that the proposed waiver “threatens to disrupt the flow of raw materials.”

“It will unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine,” Bourla wrote.

“Entities with little or no experience in manufacturing vaccines are likely to chase the very raw materials we require to scale our production, putting the safety and security of all at risk,” the CEO wrote.”  (E)

“Now that Biden has agreed to support the waiver, it doesn’t mean U.S. pharmaceutical companies must start giving away vaccine recipes so developing countries can make their own.

The WTO is a consensus-based organization and cannot move forward unless the European Union, which is against the waiver, and everyone else agrees. Once all WTO members agree, the next steps would be for countries to implement it at the national level by removing legal risks that hinder production and supply by alternative producers. To clarify these implementation options, countries must start text-based negotiations at the WTO, going through each item of the complex and multilayered IP legal requirements — a process that could take months, or even years…

Another big opponent is Microsoft co-founder Bill Gates, whose Bill and Melinda Gates Foundation sponsored Gavi, the Vaccine Alliance — the driving force behind COVAX, the U.N. mechanism to improve low- and middle-income countries’ access to vaccines. Despite more than two decades of philanthropic work to immunize the world’s poor, Gates is a fierce defender of IP protection…

Opponents insist a waiver would not help accelerate vaccine access or address supply chain and logistical constraints. It would still take a long time for governments to set up factories, train staff and procure materials to make vaccines.

They say the faster and better way to do it is through technology transfer partnerships and licensing agreements, such as the one between AstraZeneca and the Serum Institute of India, which produced doses for COVAX. The agreement has been halted by the government of Indian Prime Minister Narendra Modi, which wants to prioritize doses for its own populations as it deals with another wave of COVID-19 cases.

Licensing agreements, including those between Britain’s AstraZeneca and Brazil’s Fiocruz, or the Chinese company Sinovac Biotech and the Indonesian firm Bio Farma, have shown that middle-income countries have the capacity to produce vaccine doses within months after technology transfer.

These licensing agreements and other means of technology transfer have been praised by Okonjo-Iweala as the “third way,” an alternative to vaccine protectionism and waiving IP rights.

However, these agreements can include restrictions — for example, geographical limitations on where, when and to whom the doses can be sold. Most bilateral agreements on COVID-19 vaccine production are contract manufacturing agreements through which the contracted entity manufactures on behalf of a licenser that maintains full control over the use of its technology, the volume of production, and where and at what prices vaccines may be supplied.

The Biden administration said it would continue to ramp up efforts, working with the private sector and all possible partners to expand vaccine manufacturing and distribution, and increase the raw materials needed to produce the vaccines.” (F)

“Mark Suzman, CEO at the Bill & Melinda Gates Foundation, announced Thursday that the foundation is supportive of temporarily lifting coronavirus vaccine patent protections.

“No barriers should stand in the way of equitable access to vaccines, including intellectual property, which is why we are supportive of a narrow waiver during the pandemic,” he wrote in a statement, which was an about-face for the world’s largest private foundation.

The announcement follows criticism that Bill Gates — the billionaire philanthropist co-founder of the foundation, which is behind much of the international response to the COVID-19 pandemic — was on the wrong side of history in this debate.

Gates opposed waiving some provisions of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS. A waiver would allow member nations to stop enforcing a set of COVID-19-related patents for the duration of the pandemic so that low- and middle-income countries can produce or import generic versions of vaccines.

Gates met with U.S. Trade Representative Katherine Tai last week to make the case for protecting these patents, but Tai on Wednesday went against his recommendation when she announced that President Joe Biden’s administration would support waiving intellectual property protections for COVID-19 vaccines.

The White House backed the TRIPS waiver despite intense opposition from the pharmaceutical industry, the Gates Foundation, and Bill Gates himself.”  (G)

“If IP protection is waived, perhaps some immediate relief in terms of production and distribution could follow if more manufacturers in emerging economies can join in and allocate resources to vaccine production immediately.

However, in addition to waiving legal protections, manufacturers in emerging economies need to be supported with the technology to actually produce the vaccines. This may be particularly true of the newer mRNA vaccines such as those from Pfizer and Moderna, which are difficult to manufacture, but may equally apply to adenovirus vaccines such as the one produced by AstraZeneca.

While opening up the possibility of production via the waiver may be a start, it is not a guarantee that enough manufacturers will be found to take up production. This type of technology transfer may be best achieved via voluntary licences – in which originators provide manufacturers with the know-how to produce their vaccines – as has already been done by AstraZenca.

Future complications

One might then ask, where is the harm in trying even if this does not work? The trouble is in maintaining incentives for the future. After all, the reason we created patent protections in the first place is to provide incentives via short-term monopoly profits so that firms and individuals can invest in innovation. The monopoly creates inefficiencies, which we tolerate in exchange for technical progress.” (H)

“A waiver of patents for #COVID19 vaccines & medicines could change the game for Africa, unlocking millions more vaccine doses & saving countless lives,” World Health Organization Africa chief Matshidiso Moeti tweeted.

Just over 20 million vaccine doses have been administered across the African continent, which has 1.3 billion people.

There is precedent: In 2003, WTO members agreed to waive patent rights and allow poorer countries to import generic treatments for the AIDS virus, malaria and tuberculosis.

“We believe that when the history of this pandemic is written, history will remember the move by the U.S. government as doing the right thing at the right time,” Africa CDC Director John Nkengasong said.” (I)

“Prashant Yadav, a supply chain expert and senior fellow at the Center for Global Development, said the biggest barrier to increasing the global vaccine supply is a lack of raw materials and facilities that manufacture the billions of doses the world needs. Temporarily suspending some intellectual property, as the U.S. proposes to do, would have little effect on those problems, he said…

That underscores the drug industry’s case that patents are just one facet of the complex process of producing vaccines.

“There are currently no generic vaccines primarily because there are hundreds of process steps involved in the manufacturing of vaccines, and thousands of check points for testing to assure the quality and consistency of manufacturing. One may transfer the IP, but the transfer of skills is not that simple,” said Norman Baylor, who formerly headed the Food and Drug Administration’s Office of Vaccines Research and Review, and who is now president of Biologics Consulting.

While there are factories around the world that can reliably produce generic Lipitor, vaccines like the ones from Pfizer and Moderna — using messenger RNA technology — require skilled expertise that even existing manufacturers are having trouble sourcing.

“In such a setting, imagining that someone will have staff who can create a new site or refurbish or reconfigure an existing site to make mRNA [vaccine] is highly, highly unlikely,” Yadav said.

There are already huge constraints on some of the raw materials and equipment used to make vaccines. Pfizer, for instance, had to appeal to the Biden administration to use the Defense Production Act to help it cut the line for in-demand materials necessary for manufacturing.

Rajeev Venkayya, head of Takeda Vaccines — which is not producing its own Covid vaccine but is helping to make vaccine for Novavax — said supply shortages are impacting not just Covid vaccine production but the manufacture of other vaccines and biological products as well.

“This is an industry-wide … looming crisis that will not at all be solved by more tech transfers,” Venkayya said.

He suggested many of the people advocating for this move are viewing the issue through the prism of drug development, where lifting intellectual property restrictions can lead to an influx of successful generic manufacturing.

“I think in this area there is an unrecognized gap in understanding of the complexities of vaccine manufacturing by many of the ‘experts’ that are discussing it,” said Venkayya, who stressed that while he believes they have good intentions, “nearly all of the people who are providing views on the value of removing patent protections have zero experience in vaccine development and manufacturing.”

As Michelle McMurry-Heath, CEO of the trade group BIO, put it in a statement, “handing needy countries a recipe book without the ingredients, safeguards, and sizable workforce needed will not help people waiting for the vaccine.”  (J)

“Lurking in the background are the massive revenues and profits that Moderna and other vaccine producers have already begun to receive from these products.

Moderna on Thursday reported its first-ever quarterly profit, of $1.2 billion on sales of $1.9 billion for the quarter ended March 31, almost entirely from the COVID vaccine.

Pfizer said its COVID vaccine had contributed $3.5 billion to its quarterly revenue of $14.6 billion, though it didn’t break out the vaccine’s share of its $5.3-billion quarterly profit. The company said the vaccine could contribute as much as $26 billion to its top line this year.

How much in profits these companies deserve from the vaccine is an open question, in part because much of the fundamental research that went into the products was government-funded.

Pfizer and Moderna claim the rights to vast amounts of intellectual property that will be useful, if not necessary, for others to develop vaccines in the future.

As I reported earlier, federally funded basic and applied research at the National Institutes of Health, the Defense Department and academic labs created the foundation for the mRNA technology used in the Pfizer and Moderna vaccines. In fact, almost no drugs reach market in the U.S. without such funding.

Federal funding of the Moderna effort has been even more generous: The company collaborated directly with the NIH in developing its vaccine and received federal grants totaling nearly $1 billion during the development and trial stage.

“We do have some particular stake in the intellectual property underlying the mRNA technology” used by Moderna and Pfizer, NIH Director Francis Collins said last May.

Government scientists, moreover, are listed as inventors on some patent applications filed by Moderna; if the patents are granted, the NIH told Axios last year, “the U.S. government will hold ownership interest in the patents.”

Indeed, government rights to one recently issued patent, known as ‘070, that is allegedly key to Moderna’s vaccine, could be worth $1.8 billion this year alone if the government enforces it, according to a study by the New York University law school.

The government hasn’t sought royalties thus far, but the NYU paper suggests that it could use its patent claims to force Moderna to make its vaccine more widely available around the world…

The best thing that may come out of the patent waiver debate could be a fresh look at how pharmaceutical research and development is funded, and how its benefits should be distributed. The industry is using the success of its COVID vaccine efforts as an object lesson in the virtues of the free market in drug R&D, but that’s wrong.

“Telling the story of the mRNA vaccines as a tale of a successful patent system is a serious rewrite of history,” says economist Dean Baker, a longterm critic of industry’s stranglehold on patent rights. “This is a story where two companies [Moderna and Pfizer] stand to make tens of billions in profits off of decades of publicly funded research, while putting relatively little of their own money at risk.”

Thus far, the debate over intellectual property in pharmaceuticals has been conducted almost entirely on the industry’s turf. The Biden White House’s new approach to vaccine patents may shift the playing field in favor of the public interest.” (K)

“Vaccine campaigners have praised the decision as “seismic” and “heroic”, a potential precedent for waiving intellectual property (IP) to address health crises in the future. But they have also made clear that, alone, it is not going to address the global shortage of Covid vaccines.

For one thing, the WTO has to actually adopt the waiver. The trade body usually operates by consensus, and key economies such as the UK, Canada and the EU continue to support upholding vaccine patents. The US turnaround may persuade these countries to compromise on the issue and strike some kind of agreement that is an improvement on the current situation, but does not entirely waive IP rights on vaccines.

Second, vaccines are extremely complex formulations. As we have seen throughout this year, even experienced companies are running into problems scaling up production. The manufacturing process is just as important as the patented “recipe”, and the WTO has no power to force companies such as Pfizer and Moderna to share the technology and knowledge that is used to produce their vaccines.

But national governments do have that power. The US could take the lead by pushing its pharmaceutical companies to share not just their patents but their technology and knowhow with manufacturers across the world. “It would not deliver more vaccines next week, but if they had done this a year ago, we would now have results,” says Ellen ‘t Hoen, a medical IP expert and campaigner.

Also, she says, sharing technology and expertise with manufacturers around the world would make it easier to produce and distribute vaccines to fight the future pandemics that scientists tell us are a near certainty. “The world was not prepared for Covid-19, that’s what we are waking up to,” she says.” (L)

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