The editors of the Wall Street Journal express the reaction to President Biden’s remarks about waiving patent protections on COVID-19 vaccines that I would have expected from them:
President Biden genuflected again to progressives on Wednesday by endorsing an intellectual property waiver at the World Trade Organization for Covid vaccines and therapies. This patent heist won’t end well for the U.S. or the world.
South Africa and India have been pushing a resolution at the WTO that would force pharmaceutical companies to hand over their Covid vaccine and therapy IP to manufacturers in low-income countries. The waiver is backed by some 100 other low-income countries, progressive groups and more than 100 Democratic Congress Members.
Waiver proponents say breaking patent protections is necessary to expand global access to vaccines. This is false. WTO rules already allow low-income countries to force drug makers to license their patents during emergencies, though they must negotiate some agreements with developers. Liberals says this is slowing vaccine production.
Yet U.S. and European drug companies have already voluntarily entered into dozens of licensing agreements with other manufacturers, many in low-income countries, as they work to scale up production. Merck last week announced licensing agreements with several Indian manufacturers to produce its investigational antiviral drug.
concluding:
The Administration’s WTO waiver will break patents and legal protections for vaccine makers. Investors will be less likely to fund new drug research if they think their own government will betray them under political pressure. Chalk up another damaging victory for the Congressional left.
I have mixed feelings. Unmentioned in the editorial is that U. S. companies don’t trust many companies in other countries with their intellectual property for good reason. Rampant intellectual property piracy. These things bear risks.
But then again I think that U. S. intellectual property protections are too robust. Patents are not part of the natural order of things. They are government-granted monopolies. There’s a reason that so many developments are patented in the U. S. and it’s not just that we do so much R&D.
However, the editors are right—it will have consequences.
I have questions. Doesn’t a waivure of Pfizer and Moderna’s IP rights by executive order constitute a taking under U. S. law? Does President Biden even have the authority to do it?
It is a surprisingly nuanced topic. Lets list vaccines are either approved or are about to be approved.
Pfizer/Biontech — This is a collaboration between Biontech (a German company) and Pfizer. Biontech contributed most of the IP while Pfizer is more of a manufacturer/distributor. Pfizer CEO’s made remarks recently that he’s trying to reduce dependence on Biontech.
Moderna — Much of their foundational IP was funded or is from the NIH. Facing criticism last fall they were profiting from Government research, Moderna stated they would not enforce their IP during the pandemic.
Johnson & Johnson — Developed in partnership with Beth Israel Hospital in Boston. The value of the IP took a tumble due to the blood clot issue.
Oxford/AstraZeneca — IP owned by Oxford University, manufactured by a UK/Swedish company, IP also took a tumble due to risks of blood clots.
Sputnik — IP owned by Russian government.
CanSino, Sinopharm — IP owned by Chinese companies.
Covaxin — IP owned by India’s Bharat Biotech.
Novavax — American company. Their vaccine looks promising, and the technology is interesting since it isn’t mRNA. But they been around for 20 years without a single approved product and seem to have trouble scaling manufacturing.
I look at that list; and the main beneficiary would probably be Pfizer at the expense of its partner Biontech. American companies don’t look to be losing much from this.
So in the end, I think its untenable to restrict know how on technologies that can end a pandemic. But I can see why Bill Gates isn’t a big fan of total abrogation of IP on vaccines. He’s the biggest funder of vaccine research for years and he won’t be around forever, relying on the kindness of billionaires and the foresight of governments isn’t that great.
My understanding is that there is a federal statute that allows the federal government to use patents so long as reasonable compensation is provided. Its in the statutory provisions governing patents, its not really a Constitutional taking clause issue, so much as a condition or limitation on the patent. Its been used in defense procurement and back in the 60s to produce generic drugs, sometimes the threat to use this provision resulted in a deal with the pharmaceutical company. Using the patent seems different from giving the patent though.
OK, this appears to be the law: 28 U.S.C. 1498. It looks like a limited waiver of sovereign immunity. If you receive a patent, its importance is in your ability to sue to stop or seek compensation for its breach. If the feds have “used or manufactured” your patent, then this provision allows an action in the court of claims. However, it does not apply “to any claim arising in a foreign country.” So I’m not sure this provision has any relevance, which would be bad for the patent holder.
https://www.law.cornell.edu/uscode/text/28/1498
PD:
I think that my claim would be that the federal government’s use of the patent consisted in giving it away and that act originated in this country. Just compensation could then include all future prospective earnings for the patent.
Looks like the market agrees with me.
Article 1, Section 8: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
The clause sets out exactly why patents and copyrights are issued. People complain about Chinese theft of intellectual property, but the proposal to cancel the drug patents are exactly that. This is really an anticapitalist, communist proposal, which will shut down a lot of research in the US.
As a side note, China is already tied with the US for refereed journal articles (ahead if you count the work of Chinese students in our graduate schools), and close to if not tied in patents. Cancelling existing patents is bound to shift investment moneys to China and further enhance their economy and its growth.
In this particular case patents are not the problem. Shortages of materials and know how are the real limiting steps. The US would benefit if the rest of the world was vaccinated, but it would cost a lot of money. Given that half our country think Covid is a hoax or just the flu I think it would be a hard political sell, especially with employment not back to normal yet.
Steve
What do you know about the big Indian pharmaceutical companies, steve? IMO they have plenty of knowledge and experience.
Yes, it empowers Congress to enact laws granting authors and inventors monopolies. The Founders were fully familiar with the notion of natural rights. They just didn’t consider intellectual property one of them but rather a means to an end (“To promote the Progress of Science and useful Arts”). They’re instrumental rather than inalienable rights.
What I know about the big Indian companies is that they do not have the capacity we need and while they have experience and know how they are short on materials.
Steve
That contradicts what you said in your previous comment or, at least, abbreviates it.
Here are some posts on producing vaccines I found interesting:
Science Translational Medicine
Chemistry World
STAT
Nature
To my eye it appears the problem is less “raw materials” than intermediate materials and the bottleneck there is trade secret.
I said shortage of materials and lack of know how and I thought it was clear that those were the two broad limiting steps, not really indicating which might be more important for any given country or company. In the context of a broad discussion of patents I didnt think I needed to refine that any more.
I know that we need a lot more vaccines and they are coming on line too slowly to get the rest of the world vaccinated very quickly. If we can solve materials issues we can get more out of existing factories but it looks like we need more real capacity.
Steve
The German government are signaling opposition to the US position.
https://www.dw.com/en/germany-rejects-us-push-to-waive-covid-vaccine-patents/a-57453453
I surmise some in Berlin are analyzing the proposal like my comment (that the proposed IP waiver’s only real world consequence is to let Pfizer devalue its partner BioNTech).
As far as additional capacity — ask what types of vaccines and which countries. India, China were supposed to produce most of the supply for the developing world; but due to India’s current wave, India is consuming all its production.
AFAIK, there are few developing countries which have the industrial base needed to produce high quality / high tech vaccines if they had the know how (South Africa, Brazil)? In the developed world — the only spare capacity would be in Japan / South Korea.
Given that the issue of absolute vs relative risk reduction from the vaccines is finally (finally! good god) getting some traction in public discourse, what’s all the hoopla about more vaccine capacity?
For those less experiment design or statistically oriented, the “outcome reporting bias” concept is this: If your absolute risk of infection went from 10% to 9% you would have a 1% absolute reduction in risk of infection by taking the vaccine. That’s tiny; you mean to tell me that my odds with or without taking the vaccine are 10% or 9%, respectively?? So what? Why all the hoopla?
But suppose you compared a placebo group to a vaccine group and the ratio of the difference in infection rate of vaccinated to placebo shows a 95% reduction (pretty close to the Pfizer/Moderna combined data) then you report a 95ish percent difference. That leaves one with quite different perceptions, right? Get me vaccinated now!!! And yet, my odds only improved, in reality, by a miniscule amount.
Or said another way: I have investment advice that can double your net worth. Wow! Tell me more!! Right? Of course, since your net worth is $10, my advice only increases it to $20, but hey, it may only be $10 bucks better but its double. That’s a fact. Oh, and the advice is to not buy a case of beer this Friday. BFD.
It leaves one with the notion of out and out fraud by pols, media and the public health community on their mind. And after all, the FDA requires reporting both numbers. Not happening.
So, as an analysis blog, what are the cases to be made for the vaccine? The disparity in effects if the data is stratified? (old people, diabetics, COPD etc Which has been my point from day 1: a focused strategy, not one size fits all) Herd immunity implications?
Inquiring minds want to know.
I think it’s largely about India. India’s nationwide lockdown was sufficiently tight that it prevented the spread of the disease while it was in place. Presumably, the hope was that the vaccine would come along in time.
My view has always been that herd immunity was unlikely and that the more likely scenario has been that the disease become endemic, an ongoing risk.
Brazil and Mexico are reportedly going to produce the Sputnik V
vaccine.
https://www.bbc.com/news/world-europe-57016265
And we want to what? Sell them our vaccines?
This is a different situation than selling copyrighted material such as music.
Pfizer and Moderna need to consider the market share they might lose down the road if they aren’t generous today.
They’ll have no market share at all if Sun Pharma starts manufacturing their vaccines.
“So, as an analysis blog, what are the cases to be made for the vaccine?”
Seriously? It is a new virus so hard to know for sure. Best case scenario it works like polio. We reach herd immunity and we really dont see the disease in any but there tiniest numbers again. Second best we just need a booster to keep with mutations but we still little disease. In either of those scenarios life goes on as normal AND we dont have people getting sick and dying.
Neither of those are likely as a lot of people think Covid is a hoax and the vaccine has microchips in it so Bill Gates can track you. Then the rest of the world isn’t getting vaccinated very soon. Much more likely the virus does become endemic but we can hope boosters will help and we wont see large outbreaks.
I dont see any way to predict the likelihood of contracting Covid. (Ok, if you work at home and live alone and never visit anyone you have some control and can make risk very low.) If you are vaccinated AND we had herd immunity likelihood is one in hundreds of thousands or millions. Then there are other effects of the vaccine. If you do contract Covid while vaccinated the likelihood of it being severe is greatly reduced.
Steve
There are too many variables. In addition to those you mention I also think the preponderance of the evidence suggests that different people have different levels of susceptibility. It will probably be years, decades before there’s any real understanding of all of the factors involved.
“My view has always been that herd immunity was unlikely and that the more likely scenario has been that the disease become endemic, an ongoing risk.”
Me too, with one (big) exception. If those with minimal risk mortality risk spread it far and wide you may approach herd immunity. But the high risk community is what it is. Look out.
No one chooses to really address my inquiry, including steve. The vaccine should effect everyone’s chances of infection, except for your last point. How big is that issue? I dont know.
But the vaccine is not the panacea. “Absolute risk reduction.” If you are a high risk of death person you may well decide to take all precautions. But I’ll bet big money right now that people think, because of the fraudulent characterization, that if vaccinated you are home free. No. You are not.
Which brings me back to focus, my point since early days. The vast majority of people could have gone about their daily lives. They may have had a severe flu, but not die. And spare me the crap about two weeks to flatten the curve. Complete horseshit. They are all but peddling 2 years now. The entire country did not need to be brought to its knees. And now most of the population is only helped by the vaccine by a tiny margin. The real issue is that the high risk population needed to alter behavior. (And remember, we have a certain NY governor who people slobbered over who did the exact opposite and polluted a high risk group. Criminal. ) That’s it; that was the winning strategy.
This is the way the world works everyday. Don’t be out driving at 3 AM and you wont be exposed to the risk of the profound drunks. Almost makes you think this was a manufactured crisis…….