COVID-19 Vaccines: Patent Ownership and the Barriers to Equitable Access

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The race to develop vaccines for COVID-19 has edged closer to its finishing line with at least three candidates announcing positive results from their vaccine trials. While this may appear to be the light at the end of the tunnel, the focus now shifts towards equally challenging issues of availability, accessibility, and affordability of vaccines. In this post, I discuss the vaccines developed by Moderna, Pfizer-BioNTech and AstraZeneca-Oxford, the complex ownership status of their intellectual property, the bilateral pre-purchase deals struck with higher-income countries and their implications on the Global South.

[Long Post Ahead]

The Leading Candidates

On 9th November, US Pharma giant Pfizer and German biotech firm BioNTech became the first to announce that ‘BNT162b2,’ the vaccine developed through their collaborative efforts, had shown over 90% effectiveness after the conclusion of Phase III trials. They will be supplying 50 million doses of one of the first ever messenger RNA-based vaccines by the end of 2020 and 1.3 billion doses by 2021. While no safety hazards have been noted, the vaccines will require ultra-cold storage at below -70 degree Celsius temperature and will only survive for 24 hours at refrigerator temperature (2-8 degrees Celsius). It is priced at a hefty price of $39 (nearly INR 3000). Today, UK gave an emergency approval to this vaccine.

A week later, US-based Moderna declared that its mRNA-1273, another mRNA-based vaccine, had shown 95% effectiveness. It is set to be priced at $25-37 (approx. INR 1900-2800) per dose depending on quantities purchased. Similar to Pfizer-BioNTech, this vaccine will have to be stored frozen at -20 degrees Celsius. However, it may be kept at refrigerator temperature for a month making downstream transportation relatively easier.

The highly anticipated AstraZeneca-Oxford vaccine, AZD1222, claims 70% efficacy as per interim data, a figure that is estimated to increase to 90% if the dosage is altered. Unlike the other two vaccines, this one utilizes a genetically modified common-cold virus. What makes the Oxford vaccine an attractive candidate is its price, which, following a no-profit pledge by AstraZeneca, is to be capped at $3 (approx. INR 222) per dose. It is also capable of storage at normal refrigerator temperature giving it a logistical edge over the other two.

A few other candidates are Russia’s Sputnik V and vaccines being developed by Sanofi-GlaxoSmithKlien, J&J, and Novavax.

Public Funding and the Complex Web of Patent Ownership

Previous experiences such as the HIV epidemic in Africa have shown that patent ownership can drastically influence global access to healthcare. Since the beginning of the COVID-19 pandemic, concerns have been raised regarding the implications of enforcement of patents held over potential COVID-19 treatments. This has brought the patent landscape of the vaccine-manufacturing companies under scrutiny.

Public Citizen has identified 13 patents claimed by BioNTech on its vaccine technology. However, the status of rights over the vaccine is complicated. While the development of most vaccines has been significantly funded by governments, Pfizer has claimed that they have taken no money, neither from the US government nor from anyone else (perhaps as an explanation behind why it has not made any no-profit or non-patent enforcement pledges like other developers). Although this is true on the face of it, it is not to be forgotten that their Mainz-based partner BioNTech, who supplied the mRNA technology, received EUR 375 million from the German government and another EUR 100 million in loan from the European Investment Bank. More importantly, BNT162b2 was created using ‘spike protein technology,’ reportedly developed by scientists from the US government’s National Institute of Health (NIH). US Vice President Mike Pence went so far as to call the vaccine a ‘public-private partnership.’ If this is correct, in future, the ‘March-in rights’ under the Bayh-Dole Act could technically allow the US government to stake claim on what is being called taxpayer-funded technology (see the licensing arrangements here). Aside from this, Pfizer and BioNTech have been sued for patent infringement by San Diego-based Allele Biotech for using the latter’s mNeonGreen fluorescent protein in developing the vaccine. As the companies stand poised to make $13 billion from their vaccine by next year, these multiple claims over the ownership of the technology can lead to complicated battles between the public and private players involved. (Knowledge Ecology International maintains this page containing copies of the US government’s contracts with pharmaceutical companies for COVID-19 related technologies.)

Moderna, which has received huge sums from the US government, has so far published seven US patents it claims protect its vaccine. In October, Moderna pledged to not enforce its COVID-19 vaccine patents while the pandemic lasts, and to willingly license the same afterwards. While this is a responsible step indeed, Moderna is embroiled in its own set of patent-ownership controversies. The company has been accused of failing to disclose vast amount of funds received from US Defense Advanced Research Projects Agency (DARPA) for its vaccine patent filings. Moreover, Moderna too has utilized US government’s NIH protein in its vaccine. It is also presently embroiled in patent disputes with other third parties such as Arbutus Biopharma over the sub-licensing of platform technology which has been utilized to develop the new vaccine. The company though, has emphatically declared that it is not aware of ‘any significant intellectual property impediments’, in commercializing mRNA-1273 with regard to Arbutus.

The developers of the Oxford vaccine, which has relied on the UK government’s funds and other donations, had been lauded initially for suggesting a possible open licensing framework. In April, Oxford entered into an exclusive licensing agreement with AstraZeneca. While they too have pledged to sell the vaccine at cost price till the pandemic lasts, AstraZeneca’s definition of “pandemic” has recently been called into question (see below).

Issues of Transparency

Several of the dealings relating to these vaccines have been shrouded in secrecy. The Oxford vaccine, which has received millions of dollars worth funding from the US and UK governments (see breakdown here), had originally disclosed little of its licensing agreement with AstraZeneca. It wasn’t until multiple civil society groups wrote to the developers urging them to observe greater transparency that it was revealed, among other details, that the license was exclusive. A major part of the deal still remains unknown to public. A recent Financial Times article also reveals that AstraZeneca has retained with itself the power to declare the pandemic over as early as July 2021. This means that the no-profit pledge is rather misleading as the widely celebrated price of $3 can expire long before the promised 3 billion doses are delivered by the end 2021. Further, the terms allowing the company to add up to 20% of manufacturing costs to cover additional expenses incurred had also been kept secret till October.

Oxford’s vaccine has also given rise to confusion over its clinical trial data. The study consists of two groups with the first group administered two full doses, and the second, one full and another half dose. The results show 62% and 90% effectiveness respectively, an aggregate of which clocks the figure at 70%. Oxford has clarified that the second group trial began as an error in measuring doses but they subsequently decided to continue with the two different sets. Not only is this process strange, the results themselves have raised eyebrows on multiple accounts. The fact that a lower dosage showed better results is seen as puzzling. Data has also shown that the more successful group was a much smaller one and consisted only of people below 55 years of age, leaving space for the possibility of a naturally stronger immune system response to coronavirus in younger people. Experts have also questioned the 70% figure obtained from two groups administered separate dosage.

Lack of transparency in the time of pandemic can be extremely harmful as it shakes public faith over the vaccines. Without adequate information on companies’ dealings or clinical trial data, it becomes very hard for the public, healthcare providers, and governments, especially those in the lower and middle income countries with limited resources, to make effective purchase decisions.

No Vaccines for the Global South?

The equitable distribution of vaccines depends largely on the availability of vaccines in sufficient quantities. The past few months have seen frenzied attempts at vaccine stockpiling by higher-income countries through numerous bilateral pre-purchase agreements. According to Global Justice Now, 82% of the Pfizer’s 1.35 billion vaccine stocks to be made available till the end of 2021 have been pre-booked by the UK (40 million), US (100 + 500 million), EU (200 million), Japan, and Canada, which represent only 14% of world population. Moderna is not far behind, with 78% of its vaccines sold to (largely the same) countries representing 12% of the people. AstraZeneca too has committed 100 million doses to the UK. This aggressive buyout strategy triggered by ‘vaccine nationalism’ is propelling the world towards exactly the kind of medicine trade war that experts feared when US bought up nearly all of the world’s Remdesivir supply earlier this year (discussed here). High efficacy rates and no-patent enforcement pledges would be of no benefit to countries in the Global South if they are forced to scramble over leftover supplies after rich countries have hoarded up their buffer stocks.

The logistical challenge is an even greater one. Several countries across the Global South have ill-equipped healthcare systems that lack the level of electrification needed to sustain vaccine storage at ultra-cold temperatures. Also, cross-country cold storage transportation requires timely infusions of dry ice to maintain temperature, which is all the more difficult to ensure in tropical regions with torrid climates. This risks spoilage of expensive vaccines which are already limited in number.

The Need for Technology Sharing

As the physical procurement of vaccines clearly presents a multilayered challenge, an alternative way of ensuring wider, equitable distribution is by sharing technological know-how with local manufacturers across the world to pump up total supply. Earlier, an attempt by WHO to facilitate a COVID-19 Technology Access Pool for the sharing of know-how and IP in order to allow companies to manufacture vaccines and treatments had fizzled out with only 40 countries (excluding India) joining the Solidarity Call for Action – most of which were lower income countries. In October, when India and South Africa made a proposal to the WTO to allow the suspension of patents linked to Covid-19 treatment till global immunity is achieved (explained in detail by Praharsh here), this proposal was widely supported by other lower and middle income countries, WHO, and leading UN experts. At the same time, the higher income countries, which have reportedly already pre-booked 51% of the world’s vaccine supply, refused to concede. (Interestingly, Moderna’s non-enforcement pledge came merely days after this proposal, but what good is a time-barred pledge when the company does not share its technology?).

It is worth noting that AstraZeneca has signed local manufacturing agreements with some of the worst affected countries such as Mexico and Argentina, who shall be sharing the produced vaccines to other Latin American countries. Brazil too has its independent agreement with the company. Similarly, Serum Institute India (SII) has signed a licensing agreement with AstraZeneca to manufacture 1 billion doses of the latter’s vaccine for lower and middle income countries including India.

COVAX: A Solution?

Countries in the Global South are now looking to (or are only left with?) another initiative called COVAX, which is a global collaboration spearheaded by CEPIGAVI and WHO. COVAX has developed a fair allocation mechanism that supports building of manufacturing capabilities and procurement of timely supply so that 2 billion doses can be fairly distributed across its 172 member countries by the end of 2021. This will be done by pooling participants’ buying power and investing in vaccine production at scale in order to subsidize costs for lower and middle income countries. There shall be a proportional allocation of vaccines till all countries have received enough to immunize 20% of their populations and end the acute phase of the pandemic. So far, COVAX has been successful in raising funds from UK, EU, Italy, Spain, France, India, South Korea, Canada as well as non-governmental donors such as the Gates Foundation.  Sanofi-GSK has committed 200 million doses of its vaccine to COVAX, and AstraZeneca has promised another 300 million.

Despite immense promise shown by COVAX, their plan has flaws. To begin with, its vaccine allocation scheme aims at immunizing only 20% of national populations, followed by a need-based weighted approach (read more on this here). If successful, this will not alleviate national inequities but leave a large number of helpless people in lower income countries whose healthcare systems are much weaker. On the other hand, rich countries that are infrastructurally and financially better equipped to handle the crisis have the additional option of turning to supplies from bilateral deals.

COVAX is also heavily funded and controlled by the Gates Foundation, which has been criticized for constantly siding with Big Pharma in the IP rights suspension debate. This New York Times article explains how the Foundation played a role in Oxford backtracking from its non-exclusive, royalty-free vaccine license promise to join hands with AstraZeneca. The Foundation has also faced criticism for directing resources into pharma companies allowing corporate control over vaccine supply rather than strengthening fragile healthcare systems which would help governments handle the crisis better from the grassroots. While COVAX remains, as of now, the Global South’s best hope to combat COVID-19, this corporate-oriented approach casts doubts regarding COVAX’s ability to cater to the pressing needs of these countries in later stages of the pandemic.

With these concerns persisting, more and more countries are joining the call for suspension of patent rights which have not only allowed pharma companies to make profits by free-riding on largely public-funded vaccine research, but also pose a serious impediment in achieving the goal of equitable access.

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7 thoughts on “COVID-19 Vaccines: Patent Ownership and the Barriers to Equitable Access”

  1. Excellent and well drafted article ! India and South Africa should continue to push for getting the patents rights suspended till at-least 80% of low and middle income countries are covered. It is disheartening to note that Big Pharma companies want to monetize on this vaccine when already 1.55 Million lives have already been lost globally (at the time of this writing on 08 Dec). Does that mean that Big Pharma companies do not see any other drug discovery in the near-term/long-term (or) Will it be end of road for all other developments that are already in place ? There may be public pressures in all of the developed countries to vaccinate the population at the earliest given that how each of their health-care system has been found wanting (or) the higher death rate per million of population, which was not expected in first place, when the pandemic started. But this should not be allowed to cap or block equitable access to vaccines for low and middle income countries.
    Another proposal can be to allocate 1-2% of the total vaccine cost
    Being a patent

  2. There are two important issues here:
    [1] the short term development and distribution of a novel design of vaccine (modified RNA technology) to meet a specific acute pandemic.
    [2] the long term use of modified RNA technology to make next generation medicines for serious illnesses such as inherited metabolic diseases or cancer.
    Global vaccination is in the interests of rich nations as much as poor if the world economy is to recover, and so there is a motive to deliver affordable access. Remember that to keep their economis going, and buy these medicines, the US and Europe is doing this through borrowing money that they do not have (which is the same as asking future citizens to pay for this spending with taxes). However consider the investment needed to deliver 16 billion does of biotech vaccine (2 doses per person), and 16 billion syringes and needles, as well as the ultra-cold freezers needed to keep the novel design RNA vaccines stable in transport. Consider, if you own a biotech production plant, do you stop manufacturing say a cancer drug, priced at more than $100,000 per course per patient and switch to making SARS-CoV2 vaccine at $10 a dose? Who then pays the wages of your production biotech engineers and scientists?

    In the long term, protection of IP rights for next genertion medicines is crucial if innovation is to be worthwhile. The R&D investment to bring a novel medicine to approval in the USA is more than $2 Billion USD; investors are unlikely to risk that without IP protection. Should that overall IP on the technology be “given away”?.

    Lastly, while India may want low cost medicines for its citizens, it also wants to be a leading global exprter of medicines as well as a contract-manufacturing sites for pharmaceutical companies in Europe and the USA. This brings export earnings and high-wage jobs to India. Can we demand the loss of IP protection on one side yet demand it of others when it suits us on the other?

    1. Thanks for your detailed comment, Paul! I just wanted to respond to the bit about R&D investment being $2 billion. I believe estimates range from as low as 350 million to as high as 2.8 billion. A few points on that – First – no transparency. Drug companies are businesses, not charities, at the end of the day, and it is but natural that they try to profit-maximise. However, given that health is a development concern, I think it’s also high time that governments demand significant transparency on these supposed costs.

      Second – High time more tangible movement is made on delinking cost and price. Health care should stopped being treated as a regular market good. Patients from non-rich countries (and poorer patients from rich countries) have and will continue to suffer so long it is treated as a regular market good.

      Even in situations like the current pandemic, richer countries that kept saying ‘we’re all in this together’ changed their tune the minute the vaccine was available, with richer countries hoarding a disproportionate amount. Now it is more on the lines of ‘some are more equal than others’! And if that is the case, why not push it the other way too. It is in the poorer countries interests if the global economy bounces back, so why not trust them when they say that its better not to wait for portions of their populations to die of illness, rather than waiting several years for a vaccine when it is already available!

      1. I would like to understand better, in a broader context, the underlying philosophy you are advocating. For example you say

        “Health care should stopped being treated as a regular market good. Patients from non-rich countries (and poorer patients from rich countries) have and will continue to suffer so long it is treated as a regular market good.” This philosophy clearly transcends the COVID-19 context and the current pandemic, or even IP per se.

        Suppose that private industry and government in country A invests heavily in developing technology, and in very expensive testing of safety and efficacy (aided by government subsidy, or by government pre-orders which help inspire private investment), and in scaling up expensive production facilities to new height, and as a result the citizens of country A get “disproportionate” early access to the results. Are you suggesting that after all that, country A is obligated to require it’s private companies to distribute production equally to the whole world, so that the citizens of Country A do not get disproportionate benefit from their investments?

        So for a future medication or vaccine (non-COVID) a nation should not be able to achieve eg: 10% coverage until the whole world has 10% coverage, so as not to be disproportionate? They need to pay for 100% of the creation, while receiving a far smaller portion of the benefit?

        That does indeed sound very noble and self-sacrificing, but I doubt that the electorate of any democratic country in the world would allow their government to put the world interest so far above their own interests. It may work for authoritarian regimes who may court world influence at the expense of their own populace.

        Have you taken into account the likelihood that less willingness to invest (privately or publicly) may yield less vital innovation to be shared? If such investment and innovation occurred at a constant rate as a fact of the universe, then one could make the argument, as you appear to do, that the results are the common property of all humankind and should be proportioned accordingly. But if you strangle the innovation by making it a fool’s game to invent and invest, there will not be as much good stuff to be distributed.

        There has to be some balance between the extremes, where the fruits are shared to some important degree, but we keep the engines of innovation healthy as well.

        There would seem to be major hypocrisies involved. We would not expect that if a less developed nation chose to spend heavily on buying vaccines for their citizens (raising citizen taxes or cutting benefits to do so), they should then distribute majority of the doses they bought to all other third world countries in proportion to population, and should receive only a fraction of what they paid for, to use for their own citizens. We’d say that it’s reasonable for them to prioritize their purchase for their own citizens first, and laudable if they choose to donate some to other nations.

        In other words, this philosophy of healthcare as a non-Market good is inherently going to be selectively applied, ONLY when it benefits a given argument.

        No nation, rich or poor, which chooses to invest heavily in developing or purchasing, say, ventilators or chemotherapy or MRI machines, is going to agree that their country and peoples should not benefit “disproportionately” to others from that investment. But they can argue that others should share more with them.

        I am not suggesting that we need to swing to the opposite extreme, only that there needs to be a careful balance. Suggesting that investments should never disproporttionately benefit the investors over the rest of humanity is never going to be adopted except as an extremely selective rationale by a group aiming for differential advantage. And it’s going to lead to having a lot less total goods available for redistribution.

        1. By the way, discussing the specific issue of IP is very relevant to many issues, and very worth discussing of course, but it was NOT my topic in the previous post. I was only addressing the broader philosophy (that a country is wrong to disproportionately benefit their own population in regard to health care) which is broader than IP, but was brought in as relevant to IP. I wanted to discuss the philosophy in general, before any discussion of whether it’s useful in resolving IP issues.

  3. Thanks for this well-rounded post on COVID vaccine and Public Health from the IP/ Patents viewpoint. There are broader issues though.
    India has a well developed compulsory licensing system in its Patent Act, especially in section 92 that can be triggered by “circumstances of national emergency or in circumstances of extreme urgency”. This is in line with TRIPS Art. 31(b).
    The remaining issues are (1) Technology Transfer – already in the works at Serum Institute, Pune in collaboration with the Oxford vaccine, though licensing terms are not available at either parties’ websites (2) Mass Production – given India exalts at being the ‘third world’s pharmacy’, this depends on self sufficiency and intrinsic capacity (3) Mass distribution – on the capacity and good-will of the Government (4) Government funding – depends on Government prioritisation and intention (5)
    Vaccine efficacy – those which are stable only at extreme low temperatures – like Pfizer’s minus 70 degrees, should be avoided – lack of resources and trained manpower would disturb the exacting cold chain needed – our handling of cold chain is related to Oral Polio vaccine etc. – which involves a much higher temperature – even around plus 2. The Oxford/ Moderna ones are more promising in this regard.
    For the needy LDCs, it is time we measure how good is TRIPS Art. 31 bis (Result of Doha) – for export of patented pharmaceuticals under dual compulsory licensing? Will Indians accept export of Indian manufactured vaccines to LDCs even before domestic needs are fulfilled? Will Indian government fund mass vaccinations (of vaccines produced under compulsory license) in India free of cost – so far the government is non-committal.
    All these factors are dependent on India – its people and its government, not on foreign patent regimes, since such steps would be TRIPS compliant. What the US and US based companies do with their patents will pale before our resolute decisions (if they are taken by our government). We vote for our Government, they are responsible to us. We do not vote for US government, why should they bother? And why should we beg, if Oxford-AstraZeneca can rely on our technology and knowhow for production? Also, the WHO should include COVID-19 vaccine in its list of essential medicines.

    1. Thank you, ma’am. Every government is responsible towards its own country first, but the problem of competing for limited vaccine supplies or exports wouldn’t occur at all if large-scale manufacturing could take place simultaneously in multiple parts of the world. What is stopping that from happening is IP ownership (Hence my support for the India-SA proposal. This would ensure that poorer countries do not have to wait in line for their turn when vaccines have already been developed). My argument, to put simply, is that the issue of vaccine availability should not be seen as a battle between HIC citizens v. LDC citizens, whereas it actually is between Big pharma’s profits v. Equitable access for everyone, everywhere.

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