Has the public got the taste for free medicine?

The COVID-19 pandemic has seen the fundamental principles of the IP system, normally a touchstone of advanced economies, called into question. Governments and manufacturers alike are under pressure to assure the public that IP will not be a barrier to accessing the tools needed to fight the disease.

The answer, so far, has been a temporary suspension of IP protocol, through measures like compulsory licensing. Early on in its COVID-19 crisis, the UK government called on manufacturers to ‘retool’ and produce ventilators to make up a feared shortage in the capacity of the National Health Service.

The government has since promised to  indemnify manufacturers against any IP-related liability as part of this effort. Countries like Brazil and Canada, meanwhile, have introduced new compulsory licensing legislation to guard against a monopoly on medical devices, drugs, or eventual vaccines.

There was initially little public resistance to the distribution of free IP, but now Big Pharma is trying to apply the brakes. Last week, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA)  criticised the  World Health Organization’s (WHO) ‘Solidarity Call to Action’.

The WHO’s solidarity appeal calls on IP owners to offer up their technology, and says that all COVID-19 research should be “published under open licenses that allow access free of charge”. It has received the backing of lower-income countries including Bangladesh, the Dominican Republic, and Zimbabwe.

But IFPMA, representing the likes of  Gilead Sciences and  Pfizer, says that we should be wary of any “one-size-fits all model”. The trade body also went on the defensive, arguing that IP will: “continue to play a crucial role long after this pandemic is over to ensure that the world is prepared with innovative solutions for the next outbreak.”

Big Pharma’s rejection of the WHO over the Solidarity Call of Action sets up a clash of values in how we organise drug development and distribution. IFPMA, like many others, champions the positive role of IP in healthcare. But IP’s underpinning principle is not solidarity, but exclusivity. Now the question has been posed, can we have both?

‘Corporate giveaway’

Heidi Chow is a veteran health campaigner who fights for broader, more equitable access to healthcare. As senior campaigns manager at the  Global Justice Now campaign, she has led the NGO’s work on issues like global trade inequalities and high drug prices.

According to Chow, there has been a “real shift” in the narrative on how to best organise our economy, including IP. This is evidenced by an editorial in the  Financial Times, which said that the pandemic had “laid bare the frailty of the social contract”.

Part of our ‘social contract’ is that we supposedly reward innovation with exclusivity. But Chow says this has gone too far: “The IP system is working in favour of big companies, and we’ve seen more and more exclusivity slapped on top of the actual patents themselves.”

In many countries, especially the US, the pharmaceutical industry is rewarded with additional exclusivity in addition to the standard patent protection. An example is for ‘orphan drugs’, used to treat diseases so rare that there isn’t a strong financial incentive to invest in treatments for them.

That’s where strong supporters of IP will say that the system can help solve this problem. Countries like the US offer extra incentives for orphan drugs, including a seven-year exclusivity term.

Gilead faced sharp criticism earlier this year for being seen to abuse the scheme to gain exclusivity for remdesivir, an antiviral approved in the UK and Japan for treating COVID-19.

Gilead applied for orphan drug designation for remdesivir early on in the COVID-19 pandemic, when recorded cases in the US were relatively low. This was seen as blatant gaming of the system and drew condemnation from the likes of Bernie Sanders.

The ex-presidential candidate demanded that Donald Trump’s administration end the “corporate giveaway” to companies like Gilead. While the orphan drug scheme is a Food and Drug Administration (FDA)—not a US Patent and Trademark Office—programme this is as much an image problem for IP as it is for Big Pharma. At the heart of the controversy is exclusivity as a supposed reward for innovation: a core principle borrowed from IP.

It seems people are increasingly suspicious of private companies looking to secure exclusivity on socially useful goods, especially during a health emergency. Governments and corporations have so far justified the concessions that compulsory licensing demands from IP owners on the grounds that it’s a temporary measure that is used only in extraordinary circumstances.

Philosophical problems

But perhaps the biggest problem for the pharmaceutical industry and IP will be guiding the debate on what circumstances warrant these supposedly extraordinary measures. Should we not also take similar steps to ensure all who need HIV medicine have access to it, even if that means suspending IP rights?

Many campaigners think so. Unfortunately for Gilead, it’s at the centre of that controversy too. The company, which dominates the US market for HIV treatment and pre-exposure prophylaxis (PrEP), has faced criticism for the rising costs of its antivirals.

Gilead sells drugs which, if taken every day, can reduce the risk of contracting HIV by 90%, says the US Centres for Disease Control and Prevention (CDC). And despite some of them having been on the market for a long time, the price has kept creeping up. Truvada’s wholesale price has spiked by more than 40%  since it was formally approved by the FDA in 2014. That has put Gilead at the centre of a political controversy in the US, and at odds with both Sanders’ wing of the Democratic Party and the Trump administration.

A campaign has developed calling on the US government to “break the patent” and end Gilead’s legal monopoly. It’s clear that COVID-19 is not the only example of the value of IP being called into question. But the difference is that now, during this pandemic, these concerns are determining policy.

It’s much easier to argue that compulsory licensing should only be reserved for very limited circumstances when it’s almost never used. Now it’s a standard policy of governments around the world. Campaigners will ask why this policy shouldn’t be applied to other diseases and problems—and IP owners will have to think more carefully about their answers.

For Niky Bagley, a patent attorney at  Cole Schotz, it’s all about balance: “Patent owners should provide their IP at a reasonable price, but I don’t think making them give it away for free is the right answer.”

The key word there, perhaps, is ‘reasonable’. As Bagley explains, what’s a fair price for this IP will be fiercely contested: “What’s reasonable compensation? A European country could afford a much higher price than many other countries.”

Bagley is a proponent of strong IP and believes in its value to society. But she recognises that this crisis has thrown up “philosophical problems” which IP will need to answer. “Underlying assumptions about why IP rights are good are now being questioned, like whether Big Pharma needs these billions of dollars from exclusivity,” she says.

Perhaps, like everything else, IP may find it difficult to go back to a pre-coronavirus world, where patent rights and exclusivity-based rewards for innovation were inviolable. Chow says that, when we come out the other side of COVID-19, “people will see the importance of compulsory licensing in a system like ours”.

This is a supposedly extraordinary mechanism now being made ordinary. Previously, Chow says, whenever countries used it, “they were told they shouldn’t be using it”.

That’s a much more difficult argument to make now.

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