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Economic and IP Considerations in Developing and Distributing a COVID 19 Vaccine

| Radhika K. Raman

In the realm of software development, the Open-Source movement emphasizes a decentralized development model predicated on making source code freely available for peer-to-peer collaboration and academic study. When copyright holders of open source software grant such broad licenses to the public, one purported advantage is that increased collaboration results in increased knowledge and discovery.

In the realm of public health, some have theorized that developing a vaccine effective against a global virus might benefit from an analogous “open-source” model. For decades, influenza vaccines were developed in a similar fashion. The World Health Organization (“WHO”) characterizes its Global Influenza Surveillance and Response System (“GISRS”) as a platform for enabling experts to share and analyze emergent data on the latest flu strains. According to the WHO, GISRS serves as a global mechanism and platform for surveillance, preparedness, and response for “seasonal, pandemic, and zoonotic influenza.” Legal scholar and Yale professor Amy Kapczynski calls this process “open science.” However, policymakers, academics, economists, and pharmaceutical companies all have varying opinions on how open science can and should interplay with various intellectual property regimes. While GISRS enables the creation of an annual, cost-effective (almost entirely government funded) and thus widely available flu vaccine, flu vaccines are an exception to the norm.

Tackling vaccine creation for COVID 19 presents unique challenges not present in developing a flu vaccine. Even after the outbreak of SARS and MERS, a successful coronavirus vaccine eluded the medical community. Complexity aside, developing a coronavirus vaccine raises the familiar issue of cost. “According to Michael Osterholm, director of the Centre for Infectious Disease Research and Policy at the University of Minnesota, it can cost as much as US$1 billion to develop, license and manufacture a vaccine from scratch – including building a facility to produce it in.” Normally, the patent system provides the financial means to recoup those development costs. However, a global public health crisis requiring mass vaccination is said by some to be incongruent with exclusivity and monopoly pricing.

Economics Nobel laureate Joseph Stiglitz notes “Because GISRS is focused solely on protecting human lives, rather than turning a profit, it is uniquely capable of gathering, interpreting, and distributing actionable knowledge for the development of vaccines.” However, many vaccines on the market today are patented. Patents understandably provide the economic incentive of exclusivity or monopolies. Conventional economic wisdom holds that the patent system fosters innovation by rewarding large research and development (along with production) budgets with even larger profits. In the face of a global pandemic, some have questioned how global IP regimes can best exist in harmony with public health initiatives.

Some governments are already making proposals for the path forward once a vaccine is widely available. For example, Costa Rica’s government recently called on the WHO to establish an even broader initiative to “pool rights to technologies that are useful for the detection, prevention, control and treatment of the COVID-19 pandemic”. In its letter, the country urged the WHO to create an IP rights pool which would “provide for free access or licensing on reasonable and affordable terms, in every member country.” Additionally, compulsory patent licensing for COVID 19 treatments is a topic of discussion and subject of new legal amendments in countries like Israel, Canada, Germany and Chile. According to a recent CRS white paper, “the term ‘compulsory license’ refers to the grant of permission for an enterprise seeking to use another’s intellectual property without the consent of its proprietor. The grant of a compulsory patent license typically requires the sanction of a governmental entity and provides for compensation to the patent owner. Compulsory licenses in the patent system most often relate to pharmaceuticals and other inventions pertaining to public health, but they potentially apply to any patented invention.”

As academic researchers across the world engage in promising collaboration and data sharing towards developing a COVID 19 vaccine, global governments require equal collaboration towards developing a plan of action once a viable vaccine exists. That distribution plan will inevitably involve elements that touch on not only global economics and IP rights for a variety of stakeholders, but human lives. Depending on its success, such a plan has the capacity to set a precedent for global cooperation during public health crises moving forward.