Patent waiver is a seductive slogan, but not a panacea

The issue of patent waiver is far more complex and nuanced than it appears initially. The very complicated process involved in the production of vaccines, experts say, is very difficult to replicate and takes a long time even if the patent rights are waived.

By A Sreenivasa Reddy

Published: Wed 12 May 2021, 11:31 PM

Last updated: Thu 13 May 2021, 11:47 AM

Patents and intellectual property are at the heart of the modern scientific enterprise driven by private capital in modern Western world. There is an economy that capitalises on innovation. It is premised incentivising firms and people who come with solutions to solve the intractable medical and scientific problems.

The extraordinary conditions created by the coronavirus pandemic has created a situation where people ask for a waiver of these special rights for intellectual property. India and South Africa led this chorus at the World Trade Organisation. But surprisingly, the United States, which has always been a staunch defender of intellectual property rights even on the smallest of matters, joined this chorus. It took everyone by surprise and the EU had to say it will study the issue, not sure of how to respond to the US volte face. But Angela Merkel of Germany struck a discordant note and said patent waiver is not a solution to the problem. She instead asked the US to lift curbs on export of vaccines and their raw materials. It is said the US has been sitting on a huge pile of AstraZeneca vaccines, which it had finally now agreed to distribute among India and other nations facing the ferocious second wave.

But the issue of patent waiver is far more complex and nuanced than it appears initially. The very complicated process involved in the production of vaccines, experts say, is very difficult to replicate and takes a long time even if the patent rights are waived. The limited capacity and time-consuming checks for quality are the main hindrances for ramping up production instantly. So patent waiver is not going to solve the immediate problem of scarcity.

Theoretically speaking, patent waiver can help reduce the price of vaccines since the originator-cum-innovator is not charging extra price for the technology. But actually speaking, the currently approved vaccines are not expensive by any standard. Be it Pfizer-BioNTech, Moderna or AstraZeneca. The first two are a bit costly but affordable. The two US mRNA vaccines cost the government less than $50, though retail prices may be higher whenever they are available. All over the world, governments are administering the vaccines free of costs. Nation states have the resources to buy vaccines for the entire population and administer them free of costs. The US, the EU nations and the UAE have been giving the shots to their populations without charging a penny. So patent waiver is a non-issue as far as the affordability of vaccines is concerned.

The left and socialist ideologues got a shot in the arm when the US-led by Democratic president Joe Biden agreed to back temporary waiver for coronavirus vaccine patents. They saw it as a sort of victory against Big Pharma which, according to them, has a stranglehold on the production and pricing of life-saving drugs. They raised their familiar rhetoric against pharma companies which, they think, are putting profits above people’s welfare. They used the occasion to raise larger issue of overpricing of drugs due to costs related to patents.

Research and development have been an integral part of the modern pharma industry which focuses on finding cures to all perceived problems of the mind and the body. Big teams of scientists and pharmacologists are engaged in finding new compounds and proteins/biologics that can mitigate the problems of the people suffering from various ailments. It involves elaborate trials with thousands of patients with millions, sometimes billions, of dollars splurged on the exercise. Sometimes this expensive exercise may not end up yielding a new drug, with all the money going down the drain. This is the downside of what appears to be a glitzy and profitable industry.

But when the pharma R&D teams do succeed in finding a fix for one of the medical problems, they would like to recover all the money that they had spent on this drug and all other unsuccessful efforts. This leads to exorbitant pricing of drugs, often irking many who believe in affordable healthcare. This has been the bugbear of this not-so-popular industry which is portrayed as the villain of the piece in the modern healthcare.

Patent waiver, though politically an attractive idea, may not mean much when it comes to addressing the problem at hand. Vaccines, especially mRNA vaccines, are very difficult to produce at a short notice. A cousin of mine, who is working in oncology research in a senior position at a leading pharma company in the US, says the intricate and sophisticated process involved in the production of vaccines cannot be replicated in third party and third country sites that easily. Lifting patents on technology is just a political slogan which may not mean anything in actual terms, he says. Setting up sophistical facilities with associated quality checks is a long-drawn process which may involve skill sets which are not easily available in all parts of the world, he added.

Apparently, it is a good time for the pharma industry now in the US in terms of public image. Pfizer and Moderna came up with working vaccines in a short period and helped arrest the pandemic, doing a world of good to their standing in the eyes of the public. For once they are not just profit-making machines intent on overcharging hapless public.

Patent waiver has also opened up debate on generic versus patented and branded drugs. In India, chains of shops selling generic drugs have sprouted offering medicines at less than half the price normally charged in general shops. But this cousin of mine, who has been working for more than three decades in the pharma industry tells me, most of the drugs sold in India are generic, meaning they carry no patents. But big companies tend to charge more for generic products than smaller players. So medicines manufactured by the lesser-known players are sold at a cheaper cost in what came to be known as generics shops.

Another debate erupted on Twitter on freeing insulin from excessive pricing by the predatory companies after the historic decision by Joe Biden. Producing insulin, though patent-free, is a complicated manufacturing process and requires big investments, thus making it a monopoly of a few big players who hold patents with marginal improvements in the product. They tend to overprice it because of less competition, my cousin tells me.

Patent waiver is a very beautiful and seductive idea on the face of it but is not a panacea for the problems in the healthcare sector, certainly not for the shortage of the coronavirus vaccines facing the world now.


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