[Ip-health] FT: Coronavirus puts Big Pharma’s IP regime to the test

Thiru Balasubramaniam thiru at keionline.org
Tue Apr 21 11:16:50 PDT 2020


Coronavirus puts Big Pharma’s IP regime to the test
The race is on to find treatments — but who will own the resulting knowhow?

Maija Palmer and Donato Paolo Mancini 15 HOURS AGO

“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

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

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

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

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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