Our New Future
Our New Future

Countries worldwide look to acquire the intellectual property rights of Covid-19 vaccine makers

Nasos Koukakis, special to CNBC.com
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Key Points
  • Soaring demand for the Covid-19 vaccine and limited supply have countries worldwide looking for ways to fast track vaccinating their citizens.
  • Many countries have gone to the World Health Organization requesting compulsory licensing of Covid-19 vaccine patents from drug makers.
  • A compulsory license suspends the monopoly effect of a patent holder to produce and supply the product.
Lawrence General Hospital RN Delana Asaro pre-draws doses, of the Moderna vaccine in a separate room, to save time at the pods in Lawrence, MA on Jan. 11, 2021.
Pat Greenhouse | Boston Globe | Getty Images

As the death toll from the coronavirus reaches nearly 2.1 million, countries around the world are racing to vaccinate their populations. But soaring demand and limited supply have them looking for ways to fast track this urgent call to action. As a result, many countries have gone to the World Health Organization requesting compulsory licensing of Covid-19 vaccine patents.

The severity of the coronavirus crisis has led many to argue that products for the prevention and treatment of Covid-19 should be global public goods. This "compulsory licensing" approach has gained many followers and has been supported by countries such as South Africa and India. A compulsory license suspends the monopoly effect of a patent holder to produce and supply the product. Many countries, from Israel to Chile, have used this practice as a defense during pandemics or against serious illnesses.

Last October, Moderna, a pioneer in the development of messenger RNA (mRNA) vaccines and therapeutics, announced that it would not enforce patent rights related to its coronavirus vaccine during the pandemic. The commitment earned praise from intellectual property activist Jamie Love of Knowledge Ecology International, who said Moderna's pledge "should be matched by every manufacturer." Moderna has also announced that it will allow open access to patents for the "pandemic period," and is willing to out-license the same intellectual property once the pandemic is over.

This exemplifies an effort among public and private actors to launch collaborative global efforts to develop and manufacture therapeutics, vaccines, and diagnostics with the aim of guaranteeing equitable access. Actions include committing to non-exclusive and royalty-free licensing or issuing non-enforcement declarations of patent rights in some or all jurisdictions, publishing scientific data on a free-to-use basis, publishing technical specifications of vital equipment (e.g. ventilators) and sharing knowledge.

In May, the World Health Organization formally launched a voluntary pool to collect patent rights, regulatory test data, and other information that could be shared for developing drugs, vaccines, and diagnostics to combat Covid-19. The voluntary pool concept was initially proposed by Costa Rican government officials amid mounting concerns that some Covid-19 medical products may not be accessible for poorer populations. 

Α similar proposal was submitted by Greece last spring, which suggested the member states of the European Union jointly buy patent rights for vaccines against Covid-19 to help ensure that if they are effective, they are quickly distributed to those in need across the bloc. A key figure behind this proposal is Elias Mossialos, a health policy professor at the London School of Economics and Greece 's representative to international organizations dealing with the coronavirus pandemic.

CNBC reached out to Pfizer and AstraZeneca for comments on this issue but did not hear back by presstime.

A nurse prepares a syringe of Covid-19 vaccine during a vaccination campaign in a nursing house in Athens.
LOUISA GOULIAMAKI | AFP | Getty Images

According to Mossialos, the speed of exit of a country from the pandemic will depend on its preparation for the distribution of anti-virus technologies. "Successful strategies will depend on the effective and equitable distribution of these technologies. To ensure that this is done in a way that does not discourage private investment into R&D, countries could collaboratively buy patent rights to these technologies. This will enable innovators to be rewarded fairly for their efforts and to encourage further widespread engagement from companies while also translating Covid-19 technologies into global public goods that can be distributed rapidly and equitably to those in need," he said.

According to Mossialos, this outside-the-box approach should be reserved for crisis situations, such as this one. "We've witnessed huge cash stimulus injections in economies and other investments into Covid-19 response, which are far more costly than payments for IP rights would be. The health and economic benefits from these IP rights purchases would certainly outweigh the costs," he added.

Compulsory licensing of Covid vaccine

Last March, the parliament of Chile unanimously adopted a resolution declaring that the global coronavirus outbreak justifies the use of compulsory licensing to facilitate access to vaccines, drugs, diagnostics, devices, supplies, and other technologies useful for the surveillance, prevention, detection, diagnosis and treatment of people infected by the coronavirus in Chile. The same month Israel issued compulsory patent licenses related to an HIV medicine called Kaletra currently being tested, including in combination with other products, for effectiveness in the treatment of Covid-19. The license allows the importation of the medicine from a generic company.

Some believe that this path should be followed in a coordinated manner on a global scale. However, those who disagree with this approach also have strong arguments. "Compulsory licensing is a useful mechanism to enhance access to Covid-19 health technologies, however it should not become the default strategy that countries take as it may lead to disincentives for private investment into R&D," Mossialos noted.

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In his view, the Covid-19 crisis necessitates exceptional responses, but instead of using compulsory licensing which may not be sustainable for encouraging long-term innovation, it is better to reward Covid-19 health technology developers with value-based purchases IP rights for their products.

"If companies like Pfizer, Moderna and AstraZeneca can produce all the necessary vaccines on their own and can meet the demand, then there is no problem. But if they cannot produce the billions of vaccines needed in time, then they could be paid extra, to grant the IP rights and share the vaccine production with other companies," he said.

Indicatively, the European Union has agreed to pay 15.50 euros ($18.90) per dose for the Covid-19 vaccine developed by Pfizer and BioNTech. If there was an agreement between the producers and EU for the IP rights, as described above, then this price could increase.

The EU has signed vaccine purchase contracts with BioNTech-Pfizer (600 million doses), AstraZeneca (400 million doses), Moderna (160 million doses), but deliveries of these vaccines are slow. And there are already reactions. Lithuania, Latvia, Estonia, Finland, Denmark and Sweden wrote to the European Commission last Friday to say local representatives from the BioNTech/Pfizer vaccine collaboration had told them deliveries would be "substantially reduced." The countries did not disclose the degree of the cuts but said some had been told normal service would resume from Feb. 8 while others had been given no end date.

Last week, the European Union announced that deliveries of the Pfizer-BioNTech vaccine would be reduced in the weeks ahead but that increases in doses would be available in late February and March.

On this basis, the proposal to increase vaccine production through value-based purchases IP rights is gaining ground. "These could be used to enable large-scale manufacturing and effective and equitable distribution of these products," Mossialos said.

"The compulsory licensing approach assumes that countries have the legal and regulatory capacity necessary to issue these. While there is a moral imperative to make Covid-19 technologies widely available, any approach to achieve this goal should also consider both long-term sustainability of innovation and equity in healthcare systems," he added.

By Nasos Koukakis, special to CNBC.com