Drive for COVID-19 Therapies Raises Patent and Pricing Issues

Jill Wechsler

Fears that biopharmaceutical companies will set too high prices on new therapies and vaccines to protect against the pandemic has spurred proposals to limit patents or set controls on prices of critical medicines. While some members of Congress urge more attention to prices and potential profits on anticipated therapies, international health organizations and national authorities are seeking to ensure access to any promising 

treatment. 

In the US, extensive support for COVID-19 research by the National Institutes of Health, the Department of Defense, and other federal agencies and academic research centers has increased calls for ensuring that future prices consider that significant taxpayer support. Some analysts are highlighting a provision under the Bayh-Dole Act that would enable the federal government to “march in” and seize the patent of a product developed with public research funding if it fails to be made available under “reasonable” terms financially. Similar policies apply to US universities that hold patents on biomedical discoveries from their own labs that advanced due to federal support. 

Pharma companies are announcing plans for producing hundreds of millions of doses of any therapy or vaccine found effective against the pandemic, as multiple research programs move from early testing stages to clinical trials. One incentive may be to avoid being unable to supply sufficient quantities of an effective new drug, which could open the door for the federal government to authorize other biopharmaceutical entities to also produce the product. 

Meanwhile, international authorities are promoting strategies that support access to new treatments. The World Health Organization (WHO) is considering establishing a voluntary pool to collect patent rights and product testing information that could be shared to develop such products. This mechanism for pooling technologies and information, which was outlined recently by Costa Rican President Carlos Alvarado Quesada, would calculate the cost of clinical trials and other tests, along with public subsidies supporting such efforts, to determine “reasonable and affordable” terms for product pricing to help poorer nations gain access to needed medicines and vaccines.

The existing Medicines Patent Pool (MPP) responded by expanding its mandate to include health technology related to COVID-19.¹ Supported by UNITAID, which funds more than $1 billion in projects to advance global health and biomedical innovation, the MPP has expertise with licensing and IP policies that could advance efforts for ensuring equitable and timely access to drugs and diagnostics for vulnerable populations hit by the pandemic.

These initiatives may gain some industry support as preferable to compulsory licensing actions that have emerged in multiple regions. Canada’s COVID-19 Emergency Response Act contains a clause that permits compulsory licensing to address drug shortages during the pandemic. Brazilian lawmakers also have proposed permitting the government to temporarily suspend patents on drugs needed to combat COVID-19 or other similar public health emergency. And a broader “no patent” policy for medicines, diagnostics or vaccines developed to thwart the pandemic was advocated by Doctors Without Borders.²

Reform and trade

It remains to be seen if efforts to limit pharma intellectual protections during the pandemic will lead to more targeted patent reform in the US and abroad. Complex IP policies and long exclusivity periods often are blamed for boosting drug prices at home and for delaying access to new biosimilars. Congress has considered legislation challenging brand strategies to limit generic drug competition, but most changes remain on hold. 

Meanwhile, patent issues have figured visibly in recent trade negotiations. The U.S.-China trade deal finalized in January includes provisions for the Chinese government to inform pharma firms when a competitor’s plan to introduce a generic drug or biosimilar that might infringe on the brand’s patent rights. China also says it will extend patent terms in cases where these issues delay marketing approvals.

However, companies lost an important protection in the U.S.-Mexico-Canada Agreement negotiated last year when the Trump administration agreed to drop a provision providing 10-year market exclusivity for biologics. Despite strong protests from industry, House Democrats insisted on the change as important for controlling drug prices, and the negotiators did not want to jeopardize the much broader trade deal, with important provisions for famers and labor, over a narrow patent issue.   

Congress could similarly move to limit biotech exclusivity in future drug pricing legislation. Innovators insist that IP protections of 10 or 12 years are critical to supporting life-saving R&D, while reformers promote tighter terms as key to promoting competition and broader access to therapies.  

Jill Wechsler is Pharmaceutical Executive’s Washington Correspondent. She can be reached at jillwechsler7@gmail.com

1. https://unitaid.org/news-blog/medicines-patent-pool-and-unitaid-respond-to-access-efforts-for-covid-19-treatments-and-technologies/#en

2. https://www.doctorswithoutborders.org/what-we-do/news-stories/news/msf-pharma-no-profiteering-coronavirus-pandemic