Good news in the fight against the novel coronavirus is finally starting to build.
Now in trials, AstraZeneca believes it will be able to seek regulatory approval for its vaccine by the end of the year. Also in trials, BioNTech believes the vaccine it is producing with Pfizer could be ready for administration by December. Johnson & Johnson has begun human trials of its vaccine and anticipates phase 3 trials by the end of September.
There’s good news on treatments, too, such as remdesivir, which recent data from Gilead Sciences shows can reduce the death rate for severely ill patients by an impressive 62%. AstraZeneca recently announced that it has begun testing an antibody-based cocktail for the prevention and treatment of COVID-19, joining an approach being followed by Eli Lilly, Roche, and others.
It feels as though, just as we all hoped, medical science is coming to the rescue.
However, all this momentum rests on the genius of the protection of intellectual property, which the United States owes in part to the framers of the Constitution and our historically strong advocacy of IP protections among our trading partners. Thanks to our IP protections and market-based pricing, 70% of new medicines are launched in the U.S., and our labs account for 80% of all medicines in the global development pipeline.
Emerging threats to this IP regime, such as compulsory licensing, have the potential to derail the very biopharmaceutical research and development that we desperately need right now.
It costs approximately $2.6 billion to develop one new medicine and normally takes 10 to 15 years to bring it to market. Even after investing all of this time and money, less than 12% of potential new therapies receive approval from the Food and Drug Administration. To take on this tremendous risk, drug companies and capital markets need to feel secure in that they can recoup research and development costs. IP protections such as patent rights and exclusive licenses provide some certainty.
For example, remdesivir was initially developed to treat Ebola, but it proved ineffective in late-stage testing. Gilead retained its ownership of the underlying IP, though, and the unrealized potential of this treatment helped propel Gilead to launch into testing in March of this year. Now, it is saving lives from COVID-19.
But a compulsory license allows another company to copy and sell a patented product without the consent of the patent owner. Compulsory licensing by its nature erodes the certainty IP patent rights are intended to shore up in the first place. One can imagine a circumstance in which such an extreme step is necessary, such as refusing to produce a therapy or vaccine in a time of urgent need. It isn’t credible to claim that sort of circumstance is happening now. For example, Johnson & Johnson has recently announced a $480 million deal with Emergent BioSolutions to get vaccine doses produced as quickly as possible, and novel partnerships are popping up across the industry.
Nonetheless, several countries are taking steps toward compulsory licensing, claiming that doing so will increase access to new therapies. Israel has already granted a compulsory license for an HIV medication based on the possibility that it may be able to treat coronavirus patients. Chile and Ecuador have both passed resolutions supporting compulsory licensing.
Even in the U.S., some lawmakers, anti-IP organizations, and far-Left activists are calling for the manipulation of U.S. law to strip the exclusive licenses and patent rights from therapy creators. The law they reference, the Bayh-Dole Act, only allows the government to act under very limited and specified circumstances, such as if a firm actively refuses to mass-produce a medicine or re-license. It’s tough to envision this happening since doing this would be contrary to the financial interests of everyone involved.
Thankfully, accessing vaccines during public health emergencies has not been an issue. During the Zika outbreak, for example, the National Institutes of Health issued an exclusive license to PaxVax to produce a vaccine. In response to the ensuing criticism, our now-familiar Dr. Anthony Fauci said, “I have not seen in my experience situations in which we were involved in the development of a vaccine, particularly for low- and middle-income countries that really needed it, where the pharmaceutical companies priced it out of their reach.”
Companies working on vaccines for COVID-19 have made promises that this will remain the case for the coronavirus. Johnson & Johnson has promised 1 billion doses on a not-for-profit basis, and Gilead is donating 1.5 million doses of remdesivir for compassionate use.
It’s good to be able to count on medicine coming to the rescue, but we shouldn’t take it for granted. Granting compulsory licenses will slow drug development for the coronavirus and cripple us in the fight against the next pandemic. If we start telling companies that they’re not going to get to keep the resulting IP, they’ll stop investing in the development and production of these medicines. If we destroy this system, it won’t be here the next time we need it.
Christopher Butler is the executive director of Americans for Tax Reform.