The administration of US President Joe Biden is calling for the removal of patent protection for COVID-19 vaccines so that the poorer countries of the world are able to receive more doses of the remedy. The initiative was supported by several countries and health organizations. It was opposed by the pharmaceutical industry and those who are convinced that such actions will not necessarily help restrain the outbreak of the disease in the near future, but will certainly harm innovation development. Radio Svoboda and the Associated Press have figured out what exactly the patents protect and why they are so important.
How do medical product patents work?
Thanks to innovation patents, competitors cannot simply copy a company’s invention and launch their own product based on it. In the United States, medical product patents generally last 20 years from the date of issue. As a rule, they are issued as a result of a request from the manufacturer, if he is convinced that his innovative tool is important and can become profitable.
A group representing the interests of the American pharmaceutical industry criticized Biden’s intentions, pointing out that such a step could “undermine the global response to the pandemic and jeopardize the safety of medical products.”
It often takes more than 10 years for a medical product to be approved. Therefore, pharmaceutical companies usually have the opportunity to market their new product without any competition from other manufacturers during this time. However, medical product manufacturers often find ways to improve their product or expand its scope, so they receive additional patents to extend their monopoly for many more years.
Is patent protection important for medical product manufacturers?
Developing a new medical product is incredibly expensive. Most of the experimental means appear to be unsuitable at one of the testing stages: in the laboratory, in animals, and, finally, while testing on humans. Given these failed experiments, a medical product manufacturer spends on average US $ 1 billion from invention to product adoption by the regulating body. Without a sales perspective with no competition, pharmaceutical companies have much less incentive to take this risk.
Why is the US calling for the removal of patent protection for COVID-19 vaccines?
Joe Biden’s administration is now under significant pressure from many Democrats in Congress as well, with lawmakers demanding more COVID-19 vaccines to the rest of the world. The idea to reject the patents came from India and South Africa back in October last year. Now it is gaining popularity in other countries, as outbreaks of the disease are increasing in some regions, especially in India. More than 230,000 people have died from COVID-19 in the country, according to the Indian Ministry of Health.
Why have the US and others been opposed to the removal of patent protection in the past?
The United States and other wealthy countries are world leaders in many areas of research and innovation, including medicine. In addition, pharmaceutical companies create millions of high-paying jobs, generate large profits for the government through taxes, and provide medical products that can save or improve lives. Medical product manufacturers and their trading groups spend millions annually to lobby governments to maintain the status quo concerning their patents.
Why is the pharmaceutical industry against it?
In the nutshell, because of the money. In the United States, pharmaceutical companies have the right to set any price for their drugs. They usually raise them twice a year. Within the term the patent protects their invention, the price can double or triple. As a result, large pharmaceutical companies that have been represented on the market for a long time are among the most profitable companies in the world. However, a lot of innovation comes from startups too, and they are very dependent on investors who fund in the early stages of their research. Without the prospect of big earnings, such investments will be difficult to attract.
Pharmaceutical company Pfizer predicts $ 26 million in profit in 2021 from the sale of the coronavirus vaccine. Vaccine revenue now amounts to more than a third of the company’s revenue. Les Funtlader, portfolio manager for health projects at E Squared Asset Management, believes the industry is less worried about protecting patents for their COVID-19 vaccines as it is going through the shaking ground that could set such a precedent.
What is the procedure for removal of the patent protection?
The decision will be made by the World Trade Organization (WTO), which has 164 member states. This organization administers comprehensive trade rules between countries. Each of them must agree to remove patent protection for that to take this praxis as a rule. If the removal of patents is accepted, vaccine developers will be forced to share the methodologies of a very complex production of medical products with others.
Has something like this happened before?
There is no such precedent for vaccines. However, two years ago, WTO members agreed to temporarily allow poor countries to import generic remedies for HIV, tuberculosis, and malaria because of a medical crisis. This temporary measure was eventually become permanent.
If patent protection is removed, what can they achieve?
While it is not clear, medical product manufacturers and analysts say that lifting patent protection will not help much to quickly provide developing countries with vaccines against COVID-19. They explain that making these remedies is much more difficult than just following a recipe step-by-step. This requires factories with special equipment, highly qualified personnel, and strict quality control.
In addition, now there is not enough capacity at the existing factories. In addition, many of the raw materials for making vaccines, as well as vials, stoppers, and other components, are not produced in sufficient quantity. The situation won’t change soon.