As you may have read, the Biden administration announced last week that it will support a proposal to temporarily waive certain intellectual property (IP) protections for COVID-19 vaccines and therapies – a dramatic reversal of the United States’ previous position, following weeks of pressure from over 100 countries and Democrats in Congress. However, this policy proposal is far from becoming reality in the immediate future, and there are significant legal and industry concerns that are going to dominate the discussion on this topic.
Domestic political pressure was a driving factor. The move by the administration was in part driven by significant pressure from Democrats in Congress. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez had been lobbying the administration to back waiving IP protections for the vaccines and immediately lauded the move. During his campaign, President Biden had also alluded to taking this step. As expected, Republicans criticized the move, but their messaging was tepid and mostly unaligned – some say that this will give China an advantage, and others point out that future innovation will suffer. All in all, the administration will likely not pay a political price for taking this step.
The immediate practical impact will likely be minimal. There are several impediments that may get in the way of this waiver’s successful implementation.
- The United States cannot unilaterally lift these IP protections. World Trade Organization (WTO) decisions require a consensus of all 164 members, including other big countries and groups such as Canada, Japan and the European Union. They’ll all have to agree to waive the WTO rules for this proposal to move forward.
- Emerging markets aren’t equipped to manufacture mRNA technology and will not immediately benefit. Pfizer, for example, says its treatment uses 280 components from 86 suppliers and highly specialized manufacturing equipment, which means waiving these IP protections is not going to immediately result in a higher global supply and will not tame the massive COVID-19 wave that is currently underway in places like India.
- The legal precedent is concerning. In taking this step, the Biden administration will have to answer: going forward, what constitutes a public health crisis large enough to suspend IP protections, and what IP rights should fall under the purview of such waivers? Will the government invoke the Bayh-Dole Act and utilize the “march-in” rights to overturn patents for any technology that has been developed using federal funds? What does this mean for future collaborations between the industry and the government?
IMPLICATIONS FOR LIFE SCIENCES COMPANIES
Industry response has been sharply critical, with concerns about future innovation. The drug industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) expressed strong opposition, arguing that the move represents a break from longstanding U.S. policy over medical patents amid global inequities. "In the midst of a deadly pandemic, the Biden Administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety," a statement from PhRMA reads.
"This decision will sow confusion between public and private partners, further weaken already strained supply chains and foster the proliferation of counterfeit vaccines." The trade group added that the decision will compromise U.S. job creation and the country's place as a leader in biomedical innovation. Experts are also worried that weakening patent protections, in addition to being a potentially inefficient solution, would carry some significant long-term risks, especially in future pandemics.
The industry needs to be proactive and vocal about both short and long-term impacts of this policy change. In addition to highlighting how ineffectual this policy will be in curbing the COVID-19 pandemic, the industry needs to:
- Build a public case for why any changes to IP protections should be narrow and not precedent-setting. The progressive wing of the Democratic party is already aiming for patent reform that will broaden efforts to waive protections for therapeutics in other disease areas such as insulin to treat diabetes.
- Proactively highlight the impact this will have on future innovation. Innovation is often used as a buzzword, but the industry needs to vividly portray what this policy will do when it comes to preparing for future challenges and pandemics.
Overall, this action reminds us that despite the incredible progress made on COVID-19 vaccines, the pharmaceutical industry's reputation remains fragile and can be one stroke away from significant risk. If you have questions about the impact to your company's communications and business, the Syneos Health Reputation & Risk Management group is available to help.