7 May 2021

Waiving patents for vaccines is a virtue-signalling stunt, not a meaningful solution

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The expropriation of Covid-19 vaccine patents will not lead to a single additional jab. This simple fact, sadly, has not prevented the Biden Administration from throwing their weight behind a proposal to waive intellectual property protections for Covid-19 vaccines at the World Trade Organisation.

Patents are not the bottleneck to producing more vaccines. There are no factories capable of producing Covid-19 vaccines sitting idle because they don’t have a patent.

We know this because Moderna announced that they would not be enforcing their own patents last October — yet there is no generic non-Moderna production. There are also existing WTO rules that allow low-income countries to force pharmaceutical companies to negotiate on licensing patents during an emergency. Indeed, European and US companies have already entered dozens of licensing agreements with local manufacturers in developing countries without being forced to do so. The Serum Institute of India is the world’s largest manufacturer of Covid vaccines. It’s quite clear that vaccine producers have no interest in limiting access.

Vaccine manufacturing is an extremely difficult, time-consuming high-technology task that few companies are capable of mastering. The current issues with supply are to do with access to skilled individuals, raw materials, and machinery like cell culture tanks and bags, mixing equipment and filtration apparatus. These are highly specialised goods with complex quality assurance and relatively few manufacturers. It’s all fixable, but it will take time and resources.

It’s hard to exaggerate how bad an idea waiving patents is in the longer term. Vaccines are costly and complex to develop: they take extensive research and development, pre-clinical animal trials followed by three stages of human trials and gigantic regulatory hurdles. Intellectual property, the exclusive right to produce a product for a set period of time, is the reward for all this effort.

It’s true that Pfizer and Moderna have made billions from their vaccines, but there’s nothing wrong with that. Yes, there has been state funding to accelerate manufacturing, but it’s the pharmaceutical companies that innovated to bring the products to market. Their vaccines have already saved thousands of lives and reduced economic hardship for billions.

Nor should we forget the substantial risk involved in developing vaccines. The likes of Merck, GSK and Sanofi all failed with their vaccine candidates and took a big financial hit as a result. Then there’s the reputational risk for a brand should anything go wrong: just look at the way AstraZeneca has been treated by the EU.

In fact, far from being some kind of gold mine for Big Pharma, most vaccines fail and are barely profitable. Until the Covid-19 pandemic, there was more money spent on “alternative medicine” (quack remedies like homeopathy) than on vaccines, despite the huge benefits to humanity that come with eradicating infectious diseases.

The pandemic, however, turned that dynamic on its head. Various global efforts to develop innovative “vaccine platforms,” pre-existing technologies adaptable to new viral threats, came to fruition just in time.  Against most expectations, this resulted in several highly efficacious and safe vaccines being produced in record time.

That was not just the result of scientists’ heroic work in 2020 – it took substantial investment over many years. Pfizer spent over $1.5bn developing its vaccine with BioNTech. Had it failed, Pfizer would have lost all of that money, having rejected Operation Warp Speed cash for anything but purchases. Likewise, Moderna invested hundreds of millions and took the best part of a decade developing mRNA technology in the hope it would someday prove effective. For all the bleating in some quarters about corporate greed, AstraZeneca has so far lost money on its Oxford vaccine, after committing to not take a profit for the duration of the pandemic.

The huge investments that it took to develop these miraculous vaccines would simply not happen if there was never a prospect of profit that comes from intellectual rights ownership.

That would be nothing short of a tragedy for humanity. We are on the cusp of technologies that could end pestilence. But doing so will take efforts to understand viral threats, prepare vaccines, undertake early-stage testing and develop manufacturing and logistics in advance. This investment simply won’t happen unless vaccines are also profitable.

One thing we can and perhaps should do is reduce the length of time that intellectual property applies. That’s not as simple as it sounds, though, given the enormous costs and high failure rate involved in producing medical treatments. Clearly, there needs to be some time for exclusive profit in order to encourage much-needed innovation.

What we certainly don’t need is a pointless IP waiver which would take many months to negotiate, in a situation where time is of the essence. A much more sensible step would be for wealthy countries to offer significantly more funding to ramp up production. This would save lives and be in our own interest, delivering a faster global economic recovery while reducing the threat of vaccine-resistant strains arising.

That goal is so important that we should be willing to pay whatever it takes, including making sure all the companies involved make a healthy profit, to speed up the process. Western countries also need to get rid of restrictions on vaccine exports, especially the United States, who have found themselves with more doses than its people need.

The focus on patents while people are dying is little more than a sickening distraction. It betrays a lazy, virtue signalling stunt rather than a meaningful solution – humanity can do so much better.

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Matthew Lesh is Research Director at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.