Coronavirus Puts Big Pharma’s IP Regime to the Test
The race is on to find treatments — but who will own the resulting knowhow?
Open plan: the blueprints for the UCL-Ventura breathing aid, developed by UCL and Mercedes, are freely available online © JAMES TYE
Maija Palmer and Donato Paolo Mancini
Financial Times
“Chaotic” is how Jorge Contreras, a law professor at the University of Utah, describes a struggle by companies and governments to navigate intellectual property law in the urgent search for Covid-19 treatments.
When AbbVie, the US drug company, dropped its patent rights for its Kaletra antiviral drug — identified as a potential treatment for Covid-19 — it was clear that the pandemic had upended the normal rules of the pharmaceuticals sector.
AbbVie’s move came after the Israeli government issued a compulsory licence — overriding normal patent protection — to allow the sale of copycat versions of the drug. For Israel to do this, say industry executives, shows that these are not normal times: the country is the home of Teva Pharmaceuticals and has an economy that is heavily dependent on R&D.
Yet a growing number of higher-income countries — from China to Chile — have indicated that they too are prepared to issue compulsory licences to secure adequate drug supplies.
The industry views such moves with alarm. Severin Schwan, chief executive of Roche Holdings, says waiving IP “would be a disaster”. “If we don’t have IP, no one will take care of developing anything . . . Who would ever invest if there was no incentive?”
Beware of the backlash
Pharmaceutical companies have responded rapidly to the need for treatments and a vaccine for the novel coronavirus. The Biotechnology Innovation Organization (BIO) says more than a third of its 1000 members are now working on coronavirus. The trade organisation adds that surprising new collaborations are springing up — not least a vaccine development partnership between old rivals GlaxoSmithKline of the UK and Sanofi of France.
IP is not the limiting factor at this stage, says David Loew, executive vice-president at Sanofi Pasteur. “Most vaccines don’t even have IP. In the end it’s a lot down to knowhow: how you produce them, workers, quality systems.”
Changing IP rules could therefore end up doing more harm than good. “As an industry, having IP is always important,” Mr Loew said in an interview. “We are already doing tiered pricing and providing equitable access around the world. It would be very ill oriented to start breaking patents.”
Companies have quickly learned, however, that they will face a furious public backlash if they are seen to be aggressively asserting patents during a global health crisis.
Labrador Diagnostics, owned by technology investment company SoftBank, faced a media storm for launching a patent lawsuit against US start-up BioFire, which was developing diagnostic tests to detect Covid-19. Labrador backtracked after a few days and announced it would offer royalty-free licences for its patent-protected technology.
Similarly, Gilead Sciences, the biopharmaceuticals company, made a U-turn on its attempt to secure a financially advantageous “orphan drug” status for remdesivir, another potential treatment for Covid-19.
Pools and platforms
A few options are emerging to manage IP during the crisis. The University of Utah’s Prof Contreras and a group of US-based lawyers, professors and scientists have set up the Open Covid Pledge, a website where companies can quickly set up a basic licensing agreement for any coronavirus-related technologies. The project has the backing of the technology industry, including companies such as Intel.
University College London’s business school has also set up a rapid licensing website, initially to help distribute the blueprints for the UCL-Ventura breathing aid developed by UCL and carmaker Mercedes. It is now also open for any other inventors of Covid-19 treatments.
The Costa Rican government has also proposed the creation of a patent pool for Covid-19 treatments, similar to the Medicines Patent Pool, a UN-backed health organisation to help provide treatments for HIV/Aids, Hepatitis C and tuberculosis in lower-income countries.
A patent pool is a mechanism that allows companies to collaborate on research for treatments and often sets the prices at which they can be sold. Though it is not necessarily a quick fix, observers have said that the speed of reaction during the present pandemic has been unlike anything they have seen previously. While the MPP initially took nearly a decade to set up for other diseases, it announced earlier this month that it would temporarily expand its mandate to cover Covid-19 interventions.
Tahir Amin, of the Initiative for Medicines, Access & Knowledge, a campaign group, says an optimal solution would be “an open-collaborative platform and partnerships where all data and technologies are made available for use by anyone in the world without the constraints of intellectual property and negotiating terms of access.”
“That will scare some people because it may reveal the many flaws of the current proprietary models that are holding up progress,” he says.
Another option might be to use public development partnerships, such as the model followed by the Medicines for Malaria Venture (MMV). The Swiss not-for-profit foundation, backed by governments and charitable foundations, funds private companies to develop treatments for malaria on the condition that they make those drugs accessible to users in developing countries at affordable prices.
“We tend to use IP as a positive — companies retain their IP and can benefit from it, but there is a responsibility that goes along with that,” says David Reddy, chief executive of MMV.
A question of cost
Meanwhile, pressure on the pharmaceuticals industry is only growing. A recent study by Liverpool University’s Andrew Hill and others found that Covid-19 drugs made from repurposed molecules could be produced at a profit for $1 per day. Gilead’s remdesivir could cost as little as $9 per treatment course. The company, which has distributed its drug at no cost so far as it awaits trial results, has disagreed with that costing.
Ellen ‘t Hoen, of research group Medicines Law & Policy, says those findings could rebalance negotiations between drugmakers and national health systems.
“Knowing the cost of production for Covid-19 drugs, which are largely public-sector funded, shows the level of discount possible,” she says. “When a drug costs $1 a day to make, it is easier to push back on a list price of $100 a day, enabling negotiations to be more aggressive.”
This article has been amended to reflect the fact that the Medicines Patent Pool has undertaken to include coronavirus treatments within its remit
Open plan: the blueprints for the UCL-Ventura breathing aid, developed by UCL and Mercedes, are freely available online © JAMES TYE
Maija Palmer and Donato Paolo Mancini
Financial Times
“Chaotic” is how Jorge Contreras, a law professor at the University of Utah, describes a struggle by companies and governments to navigate intellectual property law in the urgent search for Covid-19 treatments.
When AbbVie, the US drug company, dropped its patent rights for its Kaletra antiviral drug — identified as a potential treatment for Covid-19 — it was clear that the pandemic had upended the normal rules of the pharmaceuticals sector.
AbbVie’s move came after the Israeli government issued a compulsory licence — overriding normal patent protection — to allow the sale of copycat versions of the drug. For Israel to do this, say industry executives, shows that these are not normal times: the country is the home of Teva Pharmaceuticals and has an economy that is heavily dependent on R&D.
Yet a growing number of higher-income countries — from China to Chile — have indicated that they too are prepared to issue compulsory licences to secure adequate drug supplies.
The industry views such moves with alarm. Severin Schwan, chief executive of Roche Holdings, says waiving IP “would be a disaster”. “If we don’t have IP, no one will take care of developing anything . . . Who would ever invest if there was no incentive?”
Beware of the backlash
Pharmaceutical companies have responded rapidly to the need for treatments and a vaccine for the novel coronavirus. The Biotechnology Innovation Organization (BIO) says more than a third of its 1000 members are now working on coronavirus. The trade organisation adds that surprising new collaborations are springing up — not least a vaccine development partnership between old rivals GlaxoSmithKline of the UK and Sanofi of France.
IP is not the limiting factor at this stage, says David Loew, executive vice-president at Sanofi Pasteur. “Most vaccines don’t even have IP. In the end it’s a lot down to knowhow: how you produce them, workers, quality systems.”
Changing IP rules could therefore end up doing more harm than good. “As an industry, having IP is always important,” Mr Loew said in an interview. “We are already doing tiered pricing and providing equitable access around the world. It would be very ill oriented to start breaking patents.”
Companies have quickly learned, however, that they will face a furious public backlash if they are seen to be aggressively asserting patents during a global health crisis.
Labrador Diagnostics, owned by technology investment company SoftBank, faced a media storm for launching a patent lawsuit against US start-up BioFire, which was developing diagnostic tests to detect Covid-19. Labrador backtracked after a few days and announced it would offer royalty-free licences for its patent-protected technology.
Similarly, Gilead Sciences, the biopharmaceuticals company, made a U-turn on its attempt to secure a financially advantageous “orphan drug” status for remdesivir, another potential treatment for Covid-19.
Pools and platforms
A few options are emerging to manage IP during the crisis. The University of Utah’s Prof Contreras and a group of US-based lawyers, professors and scientists have set up the Open Covid Pledge, a website where companies can quickly set up a basic licensing agreement for any coronavirus-related technologies. The project has the backing of the technology industry, including companies such as Intel.
University College London’s business school has also set up a rapid licensing website, initially to help distribute the blueprints for the UCL-Ventura breathing aid developed by UCL and carmaker Mercedes. It is now also open for any other inventors of Covid-19 treatments.
The Costa Rican government has also proposed the creation of a patent pool for Covid-19 treatments, similar to the Medicines Patent Pool, a UN-backed health organisation to help provide treatments for HIV/Aids, Hepatitis C and tuberculosis in lower-income countries.
A patent pool is a mechanism that allows companies to collaborate on research for treatments and often sets the prices at which they can be sold. Though it is not necessarily a quick fix, observers have said that the speed of reaction during the present pandemic has been unlike anything they have seen previously. While the MPP initially took nearly a decade to set up for other diseases, it announced earlier this month that it would temporarily expand its mandate to cover Covid-19 interventions.
Tahir Amin, of the Initiative for Medicines, Access & Knowledge, a campaign group, says an optimal solution would be “an open-collaborative platform and partnerships where all data and technologies are made available for use by anyone in the world without the constraints of intellectual property and negotiating terms of access.”
“That will scare some people because it may reveal the many flaws of the current proprietary models that are holding up progress,” he says.
Another option might be to use public development partnerships, such as the model followed by the Medicines for Malaria Venture (MMV). The Swiss not-for-profit foundation, backed by governments and charitable foundations, funds private companies to develop treatments for malaria on the condition that they make those drugs accessible to users in developing countries at affordable prices.
“We tend to use IP as a positive — companies retain their IP and can benefit from it, but there is a responsibility that goes along with that,” says David Reddy, chief executive of MMV.
A question of cost
Meanwhile, pressure on the pharmaceuticals industry is only growing. A recent study by Liverpool University’s Andrew Hill and others found that Covid-19 drugs made from repurposed molecules could be produced at a profit for $1 per day. Gilead’s remdesivir could cost as little as $9 per treatment course. The company, which has distributed its drug at no cost so far as it awaits trial results, has disagreed with that costing.
Ellen ‘t Hoen, of research group Medicines Law & Policy, says those findings could rebalance negotiations between drugmakers and national health systems.
“Knowing the cost of production for Covid-19 drugs, which are largely public-sector funded, shows the level of discount possible,” she says. “When a drug costs $1 a day to make, it is easier to push back on a list price of $100 a day, enabling negotiations to be more aggressive.”
This article has been amended to reflect the fact that the Medicines Patent Pool has undertaken to include coronavirus treatments within its remit
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