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A Reason for Celebration and Renewed Commitment – IMPRI Impact and Policy Research Institute

A Reason for Celebration and Renewed Commitment - IMPRI Impact and Policy Research Institute

Nilanjan Banik and Philip Stevens

Recent data from Our World in Data calls for celebration as Covid-19 related infection around the world and India is waning. Hospitalizations and deaths are very low. Vaccines must take great credit for keeping Covid largely out of the headlines after two years. There are now 10 COVID-19 vaccines recommended by the World Health Organization, for a disease that was unknown in December 2019 – and over 60 vaccine candidates in late-stage clinical trials or pending regulatory review.

This innovation triumph has been matched in manufacturing too: by December 2021 there were around 12 billion doses manufactured, enough to vaccinate the world’s population. Currently, vaccine supply far exceeds the global distribution capacity – Africa’s first Covid vaccine manufacturing plant in South Africa recently announced it may close due to lack of demand.

It’s a story of how new vaccines made Covid far less dangerous. Central to it are the intellectual property (IP) rights which have given companies ownership and rights over their inventions.

As the unsung hero of the pandemic, IP has enabled dozens of research collaborations and manufacturing partnerships all over the world, often between competitors. Rivals have shared proprietary compounds, platforms and technologies to develop new vaccines and flood the market in record times.

Since June 2021, the number of vaccine manufacturing partnerships has risen from 93 to 357, from end-to-end production to sourcing drug components, spurred on by the legal certainties IP rights provide.

Yet health NGOs and some governments argue that developing countries will get speedier access to new vaccines if IP rights are suspended so that manufacturers everywhere can produce them. Others argue patented drugs and vaccines by increasing price create a deadweight loss for the consumers, negating the idea of the neoclassical growth approach (endogenous growth models) that innovation leads to economic growth and prosperity.

That argument drives a World Trade Organisation proposal to dismantle IP rights for Covid vaccines, now in the final stages of negotiation. Meanwhile, an equal push to weaken IP rights in a new treaty on Pandemic Preparedness is in its early stages at the World Health Organization, which gathers for the World Health Assembly on 22 May.

Removing or weakening IP rights for pandemic vaccines and therapeutics would be highly counterproductive, undermining the incentive to invest in new technologies and treatments. IP rights allow for risk-taking that brings rewards – such as the first mRNA vaccines that underpin global Covid vaccination.

The highly speculative efforts into mRNA vaccines only paid off after decades of trying and now offer the potential for rapid solutions for future pandemics and other diseases, including malaria and cancers.

Removing IP rights in pandemic situations would also destroy the international manufacturing collaborations and partnerships essential to saving millions of lives in the current pandemic.

If IP rights are weakened either now at the WTO or in any future treaty, few private sector companies would be willing to commit resources to pandemic vaccines and therapeutics. This would leave the world reliant on alternative open-source or IP-free models of drug and vaccine development.

There are worrying signs already. One IP-free vaccine from the University of Helsinki was unable to secure funding for clinical trials, while Corbevax, another patent-free vaccine developed by Texas Children’s Hospital has been authorised for use in India, but there is no public data on its efficacy or clinical trials.

If successful, IP-free vaccines could prove useful additions to the pandemic preparedness arsenal. But these patent-free models face difficulties in marshalling the capital and expertise to rapidly scale-up global production. In other words, they would be unreliable if needed quickly in another

By contrast, vaccines that have leveraged IP rights have moved quickly through clinical development, regulatory authorization, and into mass manufacture and distribution.

Rather than limiting IP rights in pandemic situations, governments should more sensibly focus on concrete measures that will genuinely speed up access to vaccines and therapeutics. The TRIPS Agreement already gives flexibility to the individual country to minimize the deadweight loss that may arise from higher drug and vaccine prices. For example, any individual country may
decide not grant patents to diagnostic, therapeutic and surgical methods for treating patients. Many other governments are already subsidizing patented drugs to lessen the impact of drug price rise. Jan Aushadhi outlets in India are a step in that direction.

Ergo, innovation should continue. One is the need for greater global harmonisation of regulation. If every country were to carry out its own review of a vaccine, it would force the manufacturer to go through 190 different regulatory processes, according to Richard Hatchett, chief executive officer of the Coalition for Epidemic Preparedness Innovations.

Meanwhile, various trade barriers have disrupted vaccine availability globally. Governments should agree a legally-binding way to ensure this can’t happen again, preferably at the World Trade Organisation.

Covid has shown what works and what doesn’t in pandemics. IP is clearly fundamental. It would be a mistake to remove it either for Covid or for future pandemics.

Read another piece by Nilanjan Banik on digital rupee- Digital Rupee: An Alternative to Quantitative Tightening in IMPRI insights.

Read another piece by Nilanjan Banik on China- The China Effect – Sounding the Death Knell of Many Domestic Industries in IMPRI insights.

Read another piece by Nilanjan Banik on the Gig economy- The Challenge with India’s Gig Economy in IMPRI insights.

About Author(s)

Nilanjan Banik, Professor, Mahindra University, India.

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Philip Stevens, Executive Director of Geneva Network, a UK-based think tank.

Youtube: Watch Nilanjan Banik in Three Narratives on China’s Economic Miracle

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