Analysis: U.S. move to loosen vaccine patents will draw drug companies to bargain -lawyers

OWC Pharmaceutical Research

07/05/2021 06:00

By Michael Erman and Blake Brittain
    May 7 (Reuters) - U.S. support for waiving intellectual
property rights on COVID-19 vaccines could be a tactic to
convince drugmakers to back less drastic steps like sharing
technology and expanding joint ventures to quickly boost global
production, lawyers said on Thursday.
    "I think the end result that most players are looking for
here is not IP waiver in particular, it’s expanded global access
to the vaccines," said Professor Lisa Ouellette of Stanford Law
School. 
    President Joe Biden on Wednesday supported a proposal to
waive World Trade Organization intellectual property (IP) rules,
which would allow poorer countries to produce vaccine for
themselves. So far COVID-19 vaccines have been distributed
primarily to the wealthy countries that developed them, while
the pandemic sweeps through poorer ones, like India.
    The real goal, though, is expanded vaccine distribution.
    "If it is possible to increase the rate of scaling up
production, this potentially would give the manufacturers a
greater incentive to come to an agreement to make that happen,”
Ouellette said.
    Vaccine makers like Moderna  MRNA.O , Pfizer  PFE.N  and 
BioNTEch  BNTX.O  have argued that patents have not been a
limiting factor in supply. New technology and global limits on
supplies are frequently cited as challenges, and both Moderna
and Pfizer nevertheless have steadily boosted supply forecasts.
    "There is no mRNA in manufacturing capacity in the world,"
Moderna Chief Executive Stephane Bancel said on a conference
call with investors on Thursday, referring to the messenger RNA
technology behind both the Moderna and Pfizer vaccine. 
    "This is a new technology. You cannot go hire people who
know how to make the mRNA. Those people don't exist. And then
even if all those things were available, whoever wants to do
mRNA vaccines will have to buy the machine, invent the
manufacturing process, invent verification processes and
analytical processes."
    To increase vaccine production capacity significantly within
two years, the Biden administration would need to do much more
than waive patents, including providing funding to find and
build new manufacturing sites, and backing technology and
expertise transfer to the new manufacturers, said drug supply
chain expert Prashant Yadav.
    Moreover, the U.S. government must guard against allowing
foreign companies to use COVID-19 vaccine makers’ technology to
compete in areas outside of COVID-19, which are likely to be
more lucrative in the long term, said Thomas Kowalski, an
attorney at Duane Morris who specializes in intellectual
property. Once a competitor has the technology, restrictions on
use are difficult to enforce, he said.
    Professor Sarah Rajec of William & Mary Law School said she
did not think a waiver itself would do as much as the signal
from the United States, a stronger supporter of corporate
intellectual property, that patent rights take a backseat to the
urgent needs of the world population during the pandemic.
    Rajec said Biden’s support for a waiver "pushes the drug
companies to be more open to partnerships, and other licensing
on favorable terms, in a way that perhaps they otherwise
wouldn’t be."
    Drugmakers argue that they have already struck significant
partnerships, sharing technology with competitors who they might
not have linked up with if not for the pandemic.
    “Our position is very clear: this decision will further
complicate our efforts to get vaccines to people around the
world, address emerging variants and save lives," Brian Newell,
spokesman for pharmaceutical industry group Pharmaceutical
Research and Manufacturers of America said in a statement.
    European patent attorney Micaela Modiano said that even if
the waiver is adopted, vaccine makers are likely to negotiate
for some payment, if less than what is generally paid in
licensing arrangements. Her firm Modiano & Parners represents
Pfizer but has not worked on any COVID-19 related matters. 
    "I would imagine that the pharmaceutical companies are
already and will continue to lobby significantly to make sure
that if this waiver proposal passes, that it just doesn't pass
as such, but that they receive some sort of financial
compensation," she said.

 (Reporting by Michael Erman in Maplewood, N.J. and Blake
Brittain in Washington, D.C.; additional reporting by Carl
O'Donnell in New York; editing by Caroline Humer, Peter
Henderson and David Gregorio)
 ((michael.erman@thomsonreuters.com;))