Recent WTO Decision Another Example of Misunderstanding Patents

Mike Waring
AUTM Advocacy and Alliances Coordinator



 

Last month, the United States and numerous other member-countries of the World Trade Organization (WTO) agreed to waive the normal patent rules for vaccines created to prevent COVID-19. This so-called “TRIPS waiver” was not unexpected, but it is another example of government leaders not clearly understanding the role that patenting plays in creating new vaccines and drug treatments.

Under the waiver, the intellectual property for the various COVID-19 vaccines would be shared with all countries. The stated goal is to allow for more production of vaccines overseas to increase the supply as the world deals with the global pandemic.

But here’s the problem. There is plenty of vaccine to go around. The issue is distribution, not production. This is a dangerous precedent that could threaten the willingness of investors and others to pursue the next vaccine or drug that we will need for a subsequent pandemic. Investors need confidence that the millions spent to develop drugs will provide an opportunity to make their money back. Giving away intellectual property makes that willingness to invest even more fraught with risk.

The drug pricing debate in America is similarly tricky. Those who believe drugs are unfairly priced have urged the government to threaten to take back IP from developers if their prices are not lowered.

Universities and their health systems spend millions of dollars each year on drugs — for their hospitals and patients, and for their employees and retirees. Universities do not support price gouging for pharmaceuticals.

Yet universities are also where most of the new drug compounds are created that later become the vaccines and medicines of the future. Unfair restrictions on intellectual property can inhibit the ability of drug developers to make what our health care system will need going forward.

This same patent debate is also at the heart of recent requests for the National Institutes of Health to “march in” and take back patents from drug developers as a way to control drug pricing. But the intent of the Bayh-Dole Act in 1980 was never to allow using march-in rights as a tool for price regulations. If prices are “unreasonably high,” let lawmakers and producers come together to resolve this in a way that minimizes the incentives to create the next great drug or treatment.

Working with other pro-patent groups, AUTM will continue to provide its perspectives to government officials who must deal with these difficult health care choices. Hopefully as pro-IP groups make clear that further erosion of patent rights only makes drug development harder, we will see fewer such efforts to disincentive production of the very medicines the world needs.