Alyshea discusses the initiatives in support of patent pooling for a COVID-19 vaccine and its pros and cons
The year 2020 has been a challenging one, not just for us as Malaysians, but for mankind across the world. The first outbreak of the coronavirus disease (COVID-19) was reported in Wuhan City, Hubei Province in China in December 20191, and spread to 213 Countries and Territories around the world. The pandemic declared by the World Health Organisation (WHO) has affected over nine million people and has claimed the lives of over 484,0002 regardless of race, religion, and status, and wreaked havoc to the global economy, causing massive layoffs and pay-cuts in many countries. As a result of strict lockdowns requiring people to stay indoors in many countries, demand for oil has dried up leading to the price of oil at an all-time low and has practically obliterated the tourism and travel industry.
THE RACE IS ON
Drug manufacturers are racing to develop a vaccine to slow the pandemic and lessen the damage caused by this infectious disease. It has been reported that more than 100 vaccines for the virus are being developed globally, with several companies working on antiviral drugs, some of which are already in use against other illnesses, to treat people who already have COVID-19, while others are working on vaccines that could be used as a preventive measure against the disease3. However, only a handful have made it to the crucial and final human clinical trial stage.
Unless and until a vaccine is found, social distancing measures that have been put in place by each government will have to be strictly adhered to and have become the "new norm".
The organisation that "wins the race" to develop the COVID-19 vaccine is looking at profiting immensely. The COVID-19 vaccine will likely be granted patent protection for its novelty, inventiveness, and industrial application. With a registered patent in hand, the patent owner will have the exclusive rights and monopoly over the vaccine's production, distribution, price and arguably, its recipient. The patent owner can also choose to license the patent to others to manufacture and sell to the public in exchange for royalties or licence fees, or both. Such licences would usually include a specified time limit and geographical area to exploit the patent.
With patent law being territorial in nature, the patent owner will have to promptly file registrations for protection in each country it intends to exploit as the COVID-19 patent, when granted, will not be protected worldwide. When private organisations and government institutions partner on developing a vaccine, their efforts may result in a joint ownership of the patent. This essentially gives rights to each owner to manufacture the vaccine, but only together can they license the manufacturing to third parties.
Some countries have specific laws to facilitate arrangements where the state has the right to use the patent for its own purposes or in the case of emergencies, even if that patent is owned by a private company. Such countries include the United States, the United Kingdom, Australia, New Zealand, and Japan. Section 84(1) of the Malaysian Patents Act 1983 also provides that where there is a national emergency or where the public interest, including health sectors, so require, the Minister may determine that a Government agency or a designated third person be permitted to exploit a patented invention without the agreement of the patent owner.
LET ME IN! - MALAYSIA'S OPEN CALL FOR GENERIC TREATMENT
On 13 May 2020, Gilead Inc announced that they had signed non-exclusive voluntary licence agreements (VLs) with five generic pharmaceutical manufacturers to expand the supply of Remdesivir, an experimental COVID-19 treatment, to 127 countries. According to Gilead, the 127 nations that will receive generic Remdesivir mainly consist of low-income and lower-middle income countries, but also includes several upper-middle and high-income countries that face significant obstacles to access4. The only three Asean countries excluded were Malaysia, Singapore and Brunei.
On 19 May 2020, the Malaysian Health Coalition (MHC) and the Drugs for Neglected Diseases Initiative (DNDi) published an open letter calling for global access to COVID-19 vaccines, diagnostic tests, and treatments. The open letter cites the financial and economic impact of the COVID-19 pandemic on national resources, the World Bank's projection that the poverty rate in Malaysia may increase up to 16% as a direct result of the COVID-19 pandemic and that based on data from the Malaysian Department of Statistics, 3.1 million residents (9.5% of the total population) are non-citizens such as migrants, refugees and stateless persons with relatively lower healthcare access as reasons why Malaysia should be included in the list of countries to receive Remdesivir5.
Concurrently on 19 May 2020, the 73rd World Health Assembly adopted a resolution on the global COVD-19 response, calling for "the universal, timely and equitable access to and fair distribution of all quality, safe, efficacious and affordable essential health technologies and products including their components and precursors required in the response to the Covid-19 pandemic as a global priority, and the urgent removal of unjustified obstacles thereto; consistent with the provisions of relevant international treaties including the provisions of the TRIPS agreement and the flexibilities as confirmed by the Doha Declaration on the TRIPS Agreement and Public Health."
C-TAP & THE OPEN COVID PLEDGE
With the world population estimated at 7.8 billion, finding the balance of intellectual property rights and serving the public good has emerged as a unique challenge. The WHO has launched an initiative called the COVID-19 Technology Access Pool (C-TAP) with the aim to lower production costs and increase access to medical supplies worldwide. The WHO explains in a press release that "the platform will pool data, knowledge and intellectual property for existing or new Covid-19 health products to deliver 'global public goods' for all peoples in all countries. Through the open sharing of science and data, numerous companies will be able to access information they need to bridge the technologies, thereby scaling up availability worldwide, lowering costs and increasing access".
The Medicines Patent Pool (MPP), a United Nations backed, public health organisation founded in 2010, has shown its support for the C-TAP initiative and announced an extension of their mandate to include any health technology that could contribute to the global response to COVID-196. The MPP has established licensing agreements for 18 patented medicines that allow sub-licensees to develop, produce, and sell generic versions of the medication in the countries which are agreed upon. Currently, the MPP has sub-licence contracts with 24 generic manufacturers and product developers7.
Questions of patent protection and access to such patents have also prompted an international group of scientists and lawyers to establish the Open COVID Pledge8 (The Pledge), a movement that calls on organisations to freely make available existing patents and copyrights associated with vaccine research to create an open patent pool to solve a global problem. Whilst the EU is leading the charge to create such a pool by drafting a resolution at the WHO, it has been reported that the United States, the United Kingdom and a few other nations have opposed this idea9.
As of 29 May 2020, thirty-seven countries and the WHO appealed for common ownership of vaccines, medicines, and diagnostic tools to tackle COVID-19, taking aim at patent laws they fear could become a barrier to sharing crucial supplies.
"Vaccines, tests, diagnostics, treatments and other key tools in the coronavirus response must be made universally available as global public goods," said Costa Rica President Carlos Alvarado.
"WHO recognises the important role that patents play in fuelling innovation but this is a time when people must take priority", said WHO Director General Tedros Adhanom Ghebreyesus in an online news briefing.
WHAT ARE PATENT POOLS?
The World Intellectual Property Organization (WIPO) defines 'patent pools' as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties. Patent rights are made available to member and non-member licensees and typically the pool allocates a portion of the licensing fees it collects to each member in proportion to each patent's value. Often, patent pools are associated with complex technologies requiring complementary patents in order to provide efficient technical solutions.
Healthcare patent pools involve setting up an administrative system to facilitate sharing of IP and data of multiple IP owners. The pool may deal with proprietary rights in regulatory test data, know-how, cell lines and copyrights for diagnostic tests, devices, drugs, or vaccines. The pools are, in effect, a one-stop-shop for licences to the patented technology.
A POSITIVE IN THE POOL?
Patent pooling structures were actively discussed and considered in response to the SARS outbreak of 2002-2003, the H5N1 influenza outbreak of 2005, and the H1N1 influenza pandemic of 2009.
Similar to the HIV and proposed SARS patent pools, a COVID-19 patent pool could serve to improve access to essential medication and future vaccines, improve standardisation of diagnostic testing and encourage further innovation. A major advantage to patent pooling is that doing so would lower transaction costs. This not only reduces litigation but reduces the expense of negotiating with a myriad of patent holders.
Critics of patent pools contend that such arrangements would have the effect of stifling innovation and creating yet another market barrier for non-incumbents. While patent pools can lower the costs associated with introducing new products, they can take years to form and may require an independent expert to evaluate the members' patents. Time is therefore not a luxury with COVID-19 spreading like wildfire throughout the globe. There is also a need for a patent administrator who maintains the pool, finds licensees and ensures there is no infringement. Further, if all the major players disagree to joining the pool, or if members do not agree on governance matters, it will not work effectively. This may serve as a roadblock as a large number of organisations and nations will be involved.
Although there is a general consensus on the positive and efficiency-enhancing effects of patent pooling, there is a possibility that the creation of patent pools may lead to competition law violations if:
(a)the creation of patent pools distort competition if pro-competitive aspects do not outweigh the (potential) limitations on competition;
(b)the licensing clauses limit the rights of the patent holders and therefore infringe applicable antitrust statutes; or
(c)the patent pool leads to anti-competitive collusion among competitors.
FIGHTING THE GOOD FIGHT
Finding the right balance between protecting the sanctity of patent rights and intellectual property without it being undermined, and tackling a global pandemic, the global fight against COVID-19 can only be won if all stakeholders play their part. Would patent pools play a positive or negative role in the quest to find this balance?
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.