April 2021
Written by Dr Andrew Bailey, Senior Manager: Innovation, University of Cape Town; SARIMA President-Elect
The Covid pandemic has certainly stirred up intellectual property (IP) and access issues as countries vie to secure access to vaccines for their citizens. The issues and thinking have proved interesting and this article is designed to bring the different viewpoints to the fore, without necessarily taking a particular stance.
The space is also changing as time progresses. We are now dealing with multiple approved vaccines, rather than a single one, virus variants render some less effective than others and we are now realising that this will be a longer-term haul; not a quick, one-shot vaccine to eliminate the disease, but with the lifespan of antibodies raised in immune response being fairly short-lived, it is likely that annual vaccination, akin to the flu vaccine will be necessary, which also keeps up with different strains.
Affordable access to vaccines is really at the core, but the oft-targeted IP right, a patent, is emerging as a less important gate keeper than trade secrets and know-how. Whilst there are provisions for compulsory licensing of patents in many countries, compelling companies to release their trade secrets and know-how is another matter. Countries in which patents have not been applied for, or are not in force, are already able to produce the patented product, but is the knowledge provided in the patent specification enough?
There is an emerging trend that favours maintaining trade secrets over patenting driven by changes in IP laws that have made it difficult to achieve IP protection, especially in the biotechnology[1] and IT space, e.g. around computer implemented inventions[2]. In the US in 2016, President Obama signed the Defend Trade Secrets Act into federal law aligning legislation that had already been widely adopted at a state level and many developed countries have been bolstering their trade secret legislation of the past few years1.
Something that Shultz and Stevens[3] highlight is that IP rights actually facilitate normal rivals and competitors to work together against the pandemic, with their proprietary knowledge, which may extend beyond application for just Covid vaccine manufacture, protected. The partnership between Pfizer and BioNtech relied on this IP basis and we are now seeing players such as Merck, who abandoned their own vaccine development, now looking to manufacture competitor vaccines in its facilities to help with supply[4].
Historically, in the case of South African access to antiretroviral (ARV) therapies, the issue revolved around access to generic supplies of ARV’s that could reduce the annual patient treatment cost from $10,000 to $0.21[5]. The argument in the Covid space, expressed by Emily Field, head of European pharmaceutical research at Barclays is that multiple vaccines are / will be available and that this competition will naturally prevent a premium price being charged2. Here the assumption is that there will be multiple sources of an effective vaccine; as evidenced with the South African Covid variant 501Y.V2 effective vaccines that a country may be needing access to may be quite specific.
In terms of the South African Patent Act 56(2)(d) provision is made for compulsory licensing and “rights in a patent shall be deemed to be abused” if the patent is not being worked in SA to an adequate extent, the demand for a patented article in the Republic is not being met to an adequate extent and on reasonable terms, or the demand is met by importation and the price is excessive compared to the countries in which the patented article is being manufactured and sold. This proved insufficient to provide access to generic ARVs whilst patents were still in force.
In May 2020 over 80 academics in South Africa signed a letter to President Cyril Ramaphosa calling on him to expedite the implementation of phase 1 of the national IP Policy that was approved by the cabinet in 2018.
The letter included a call for the Companies and IP Commission (CIPC) to temporarily suspend the issuance of patents on Covid-19 related health products for the duration of the pandemic. Duration generally appears to be the period until a sufficient number of people have been vaccinated so as to create “herd” immunity[6].
Ultimately this has been taken up at World Trade Organisation (WTO) level by the Counsellor at the South African Permanent Mission in Geneva, Mustaqeem De Gama. He has called for a vote to waive IP rights on all Covid-19-related products for the duration of the pandemic at the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council. The WTO can also achieve this through consensus, which is more usual. Typically developing countries have sided with South Africa, India, Kenya and Eswatini’s formal call, but the countries that dominate the pharmaceuticals industry have opted for voluntary arrangements[7].
Ms Ngozi Okonjo-Iwela, former Nigerian finance minister, has been appointed as the head of the World Trade Organisation (WTO) and will start her four-year term on 1 March 2021[8]. She will be walking into the pandemic supply storm and mentioned that she will be trying to find a middle road where vaccines are manufactured in many countries, but in a balanced fashion so as not to discourage research and innovation that links to IP rights.
Whilst the current emphasis is on access, another important piece of the puzzle is the ability to produce to supply local demand and the important need for this capacity to be built in the developing world. In South Africa, Biovac has recently started to manufacture human vaccines in partnership with Sanofi and Department of Science and Innovation Minister Blade Nzimande stated in January 2021, that “the demand for an effective national COVID-19 vaccination plan, and the threat of future pandemics, has thrust the country’s ability to develop and manufacture vaccines locally into the spotlight”[9]. Biovac is a public-private-partnership that is 47.5% owned by government.
Local “genomic surveillance” has also proven to be a useful contributor to global knowledge about the pandemic. The DSI funded the KwaZulu-Natal Research Innovation and Sequencing Platform (KRISP)[10] to conduct spatial and genomic monitoring to identify hotspots of transmission. The platform identified the “South African” variant 501.V2 in December 2020[11].
An essay on Justifying the Patenting of Life Saving Drugs[12] provides a useful perspective on this topic, especially the balancing of patent rights against the protection of public health. The pharmaceutical industry has argued that WHO “essential medicines” were off-patent and affordable, however, in the latest lists[13], around 10% are under patent somewhere in the world[14]. Strategies to ensure access include: the Medicines Patent Pool (MPP) which seeks to make patented drugs broadly available in low-income countries; patent owners voluntarily limiting their pricing the territories; patent owners agreeing not to enforce their IP in the countries; and bilateral licenses. The largest percentage of essential medicines that are patented are for the treatment of cancer.
To drive shareholder value pharmaceutical companies target widely prevalent diseases and look to maximise profit – this is evidenced by the un(der)-served “orphan diseases”. To attract production of drugs in this space Mahdavi[15] mentions that in the USA the Orphan Drug Act provides companies with seven years of market exclusivity, but a company can effectively charge what they want to during this period.
In her article, she goes on to say that during the 2016 US presidential race that drug pricing came up frequently and polls indicated that respondents supported a cap on drug prices. This was most likely triggered by the practices at the time of infamous Martin Shkreli who as CEO of Turing Pharmaceutics dramatically hiked the price of Darprim, a treatment of toxoplasmosis, especially in HIV positive populations. An article by Picchi[16] provides evidence that Shkreli’s strategy was not unique, with “20 brand-name prescription drugs [having] at least quadrupled [in the just under two-year period] since December 2014”.
Medicines for Malaria Venture (MMV) oversee the research and development of affordable, antimalarials. They were established in 1999 using seed funding from the Government of Switzerland, UK Department for International Development, the Government of the Netherlands, The World Bank and Rockefeller Foundation[17]. The motivation to fill the void in this drug development pipeline was the high death rate versus a return on investment that was unattractive for the pharmaceutical industry.
Pharmaceutical companies have since a decade ago moved away from conducting high-risk, early-stage drug discovery in-house, leaving this to the domain of universities and small biotech companies working on “public money” – government grants and funding from philanthropists or charities. The research has become too costly for them to fund internally compared to new drug success rate that is being achieved.
Herein possibly lies the key to unlocking affordable drug access, i.e. that funder conditions prescribe a particular approach to commercialisation. Perhaps it could include triggers should a drug be included on the WHO essential medicine list? There is also clearly a need for governments to seek to build capacity to manufacture vaccines to meet local demand to assist with the response.
The pandemic has seen incredible collaboration across institutional, company and country borders where we sought to collectively deal with an urgent health crisis. As we are told, this is merely the first of future pandemics, but hopefully this experience will shape global thinking about how we collaborate and how we ensure that access to all is equitable, whilst the infrastructural investments and trade secrets or know-how of manufacturers are reasonably acknowledged.
[1] Philanthropy Alone Will Not Ensure Global Access To COVID-19 Vaccines – South Africa’s Take – Health Policy Watch (healthpolicy-watch.news)
[2] The changing trade secret and patent equilibrium | TechCrunch
[3] Why intellectual property rights are a key, not a curse, for Covid-19 vaccines (businesslive.co.za)
[4] Merck canned its own COVID-19 vaccines. Now, it’s in talks to manufacture other companies’ shots | FiercePharma
[5] More than 80 academics, researchers and teachers call on President Ramaphosa to Fix the Patent Laws – Fix The Patent Laws
[6] Justify the Patenting of Life Saving Drugs (lawteacher.net)
[7] ‘Pretoria boykie’ is leading global drive on WTO to m… (dailymaverick.co.za)
[8] Ngozi Okonjo-Iweala: Meet the World Trade Organisation’s new boss (msn.com)
[9] Minister Blade Nzimande: Plans for reopening of Post School Education and Training Institutions amid Coronavirus Covid-19 | South African Government (www.gov.za)
[10] Minister Blade Nzimande on the funding of the KwaZulu-Natal Research Innovation and Sequencing Platform and the Network for Genomic Surveillance in South Africa to complete the sequencing of Coronavirus COVID-19 genomes | South African Government (www.gov.za)
[11] SA identifies COVID-19 variant | SAnews
[12] www.lawteacher.net/free-law-essays/commercial-law/justify-the-patenting-of-life-saving-drugs-commercial-law-essay.php?vref=1
[13] WHO Model Lists of Essential Medicines
[14] Essential-Medicines-and-Patents_02-Dec-2020.pdf (geneva-network.com)
[15] Patents and the Pharmaceutical Industry | California Management Review (berkeley.edu)
[16] Martin Shkreli-style drug price hikes are everywhere – CBS News
