Fighting Covid-19 Requires Fewer Patents And More State – Piergiuseppe Fortunato

Big Pharma has not been the real innovator in the fight against the pandemic and intellectual property rights must be reshaped to restore fairness.

Piergiuseppe Fortunato

On March 17, 2020, pharmaceutical giant Pfizer officially in partnership with New Biopharmaceutical Technologies (BioNTech), a spin off from Johannes Gutenberg University in Mainz. The partnership aimed to accelerate a potential vaccine against Covid-19 (BNT162), first in its class, using not an attenuated or deactivated virus but a strand of messenger ribonucleic acid (MRNA) to produce and engender immunity against the virus spike protein.

The vaccine was due to enter clinical trials by the end of the following month. By then it had already been almost entirely developed by the small German immunotherapy company. What Pfizer brought to the alliance was primarily funds for clinical trials and commercial capabilities.

In September, BioNTech was allowed about $ 445 million from the German Ministry of Education and Research, to advance its agenda through regulatory approvals. These funds were in addition to the $ 120 million already received by the company as a concessional loan from the European Investment Bank. Meanwhile, Pfizer secured an upfront payment of nearly $ 2 billion from the United States government for 100 million doses of the vaccine. As with other major vaccine producers, and in response to a call by pharmaceutical companies in the early stages of the pandemic, the deal aimed to share some of the risks inherent in the development and distribution of vaccines.

Secondary contribution

The BioNTech / Pfizer story is no exception. Vaccine research programs, like all research in the biopharmaceutical sector, rely heavily on public investment in basic science and, at a later stage, on public support and oversight of clinical trials and regulatory approvals. For almost all of the SARS-CoV-2 vaccine candidates that have reached advanced stages of testing, the contribution of the big pharmaceutical companies has been only secondary.

Giants such as Merck and Sanofi are still lagging behind, while AstraZeneca only came into play when the vaccine developed by the University of Oxford – almost entirely publicly funded – entered clinical trials and production, just like Pfizer. To date, the only large private company capable of developing a vaccine on its own (neither the first nor the most effective) is Johnson & Johnson, via its Belgian subsidiary Janssen Pharmaceuticals. The real innovators in the fight against Covid-19 have been universities or small businesses which are essentially spinoffs from academic research, as with BioNTech or Moderna.

Despite an essentially supporting role throughout the innovation process, Big Pharma can paradoxically enough claim almost exclusive intellectual property rights (IPR) on innovations and capture significant rents on the products they manufacture. In the first quarter of 2021, the vaccine was, by far, Pfizer’s largest source of revenue, let in over $ 3.5 billion. These revenues come from the sale of most of the doses to governments in deep pockets in North America and Europe.

Indeed, Pfizer, like the rest of the industry, has been pressure to stop a temporary IPR waiver, approved by the current US administration under Joe Biden, to allow generic Covid-19 vaccines to be distributed at low cost in the south of the world. Instead, the industry is claiming monopoly rights in all the developing economies that have ratified the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which entered into force in 1995, even in August. price of dilatory Vaccination against Covid-19 around the world.

Market power

Intellectual property rights – through patents, copyrights, and trademarks – have become one of the main ways of building market power and thereby capturing larger rents, often at the cost of rents. detriment of broader public interests. Patent filings amounted to one million in 1995. By 2011, they had more than doubled. In 2014, they reached ten million, worth about $ 15 trillion.

As research and development productivity has declined globally, however, IPRs are apparently disproportionately claimed for the benefit of incumbent firms in both primary and secondary markets. According to Organization for Economic Co-operation and Development, the average technological and economic value of inventions protected by patents has eroded, while the legal right to exclude others has become broad and susceptible to abuse.

Two specific practices are patent thickets (overlapping patents covering a wide area of ​​economic activity and potential downstream inventions) and patent closings (excessive patents with a view to delineating areas for future research). Between 1990 and 2005, Pfizer deposit around fifty patents in several different categories (substance, process, formulation / dosage, combination and use) to defend its position on the market for PDE5 inhibitors, used to treat male erectile dysfunction. Patent thickets and fences extend protection to entire areas of technology, maintaining the advantage of incumbent firms at Cost slow down the overall pace of innovation.

Public sector

The primacy given to the interests of private investors is also questionable given the role played, in several industries, by basic and applied research in the public sector. Many groundbreaking technologies emanating from the United States National Institute of Health, the National Science Foundation, and the Defense Advanced Research Projects Agency, which funded what has become the the Internet when he was trying to create a wireless network to connect the scattered cogs of the American military machine – ultimately benefited companies in the biochemical industry or in Silicon Valley. Taking advantage of the patent system enshrined in TRIPS, they obtained enormous position rents.

Patenting vaccines (and drugs) is particularly problematic, because public research irrigation is preponderant and large companies generally only intervene in the clinical trial phase, just before patenting, most often when the resources to be invested exceed the financial capacities of small inventors. The pricing of patented products, however, does not internalize the contribution of other actors, including public institutions, or public health goals (such as global immunization in the case of Covid-19), since the IPR system was not designed to do so. On the contrary, being the subject of intense lobbying and regulatory capture by large companies, the system is often abused and high prices persist, granting privileged holders benefits not justifiable by their contribution.

It is as socially inequitable as it is economically inefficient – its insufficiency is dramatically exposed by the pandemic. Vaccines developed with substantial public contributions are generator hundreds of billions of dollars in revenue for pharmaceutical companies, while the coronavirus is still ravage the poorest countries that cannot afford to be vaccinated.

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Correcting these distortions would require rethinking both the patent system and the role of the state. Large private manufacturers would then produce vaccines and generic drugs, at a corresponding price, while governments would more explicitly do so. lead research and innovation, by conducting (rather than just co-funding and supervising) clinical trials and tests. Waiver TRIPS would represent a first step.

vaccines, Pfizer, patents, Big Pharma

Piergiuseppe Fortunato is an economist at the United Nations Conference on Trade and Development, where he leads projects on global value chains and economic integration, and external professor of political economy at the University of Neuchâtel.

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