Furthering Innovation while Ensuring Access to Cures: Ensuring Balance During a Global Emergency

As COVID-19 continues to pose a global threat, governments and patients nervously wonder when treatments and vaccines will be available and if they will have access to them. Countries are acting individually to preempt affordability and access issues and WHO is engaged in a campaign to ensure global access to COVID-19 cures. But preemptive measures like issuing compulsory licenses for drugs that may treat COVID-19 could have unintended long-term consequences and fail to address the actual emerging challenges.

Many countries have been considering issuing compulsory licenses, a government-issued license that allows someone other than the patent holder to make or use the patented product without the patent holder’s permission, for existing and potential drugs that show promise of treating COVID-19. In the pharmaceutical space, compulsory licenses were designed to ensure that countries with nascent pharmaceutical markets could still access life-saving drugs in a national emergency; yet, compulsory licenses have often been abused across the board as budget-alleviation measures.

Beyond grappling with development and the intellectual property (IP) environment surrounding it, industry is actively working to prepare and bolster supply chains to ensure global access to emerging products. It should be noted in the absence of this kind of effort compulsory licenses could be appropriate, especially if patient access is hindered due to supply issues. However, at this time there are multiple business and policy levers available to meet access goals, so industry and governments should communicate regarding collaborative options and the consequences of using last-resort tools first to address the crisis.

Governments have been known to abuse compulsory licenses as a means to drive pharmaceutical costs down. For example, FTI recently reviewed how copy-and-paste policies related to inappropriately issuing compulsory licenses to drive down drug costs spread from Malaysia to Latin America. Now, the global COVID-19 response has introduced new social and political dynamics which has led more developed markets to also consider loosening IP protections as a means to tamp down on high drug costs, something that was once unthinkable in these geographies.

Governments across the globe from Israel to Canada to Brazil are toying with ways to use compulsory licenses to their advantage, but when costly drugs for COVID-19 have alternate indications, it raises questions regarding whether the compulsory license is truly necessary especially when treatments have not yet been identified. Is it instead a means to procure drugs for other diseases at lower costs, or an action born out of desperation and lack of alternative options?

Many drugs that treat diseases such as malaria, HIV, or certain cancers are now being tested for their applicability for treating COVID-19, but IP protection must remain. Otherwise, this dynamic presents a slippery slope – what are the implications of loosening IP protections for any possible cure to COVID-19, and what are the long-term consequences for the global patent system?  Now is the time for balance. Many products may exist that have a COVID-19 application so industry must continue to monitor these drugs and their government procurement to ensure they are not used inappropriately. At the same time, companies must also be prepared to partner with governments in ways that make compulsory licensing unnecessary.

This may be the tip of the iceberg. As developed countries, like Canada, pave the way to issue   compulsory licenses for COVID-19 response, others could quickly follow. Countries that have historically had strong IP protections are urging exceptions or changes, for example, U.S. legislators recently advocated against allowing a drug company to hold an exclusive license for COVID-19 vaccination or treatment.  These policies gone unchecked could have widespread impact on the pharmaceutical industry and the IP rights it is built upon.

Industry is actively engaged in fighting COVID-19 and they have risen to the challenge since it began, pouring resources into research, testing, and even the infrastructure to deliver the therapies that could prove to be useful against COVID-19. While critics have often asserted that drug manufacturers only create novel products for niche markets over those in need, COVID-19 defies this assertion and the steps that have already been taken that indicate manufactures will forego the lucrative rewards of other developments in exchange for producing a COVID-19 cure. Industry should be sure to proactively communicate how it is producing new innovative cures for both COVID-19, how it is collaborating with countries and patients to help them access these treatments, and why robust IP protections help support both this work and future innovation.

Considerations for industry partners:

  1. Understanding what is important to patients and governments is key. For example, a recent FTI survey found that the public is watching the pharmaceutical industry more closely than other industries.  In Latin America, respondents are paying more attention to the pharmaceutical industry than they are to grocery stores or testing labs.
  2. It is essential that innovators communicate the steps they have taken and resources deployed into finding a cure. The messages should convey how robust IP environments have fostered innovation.
  3. Industry should also communicate the access challenges that will emerge as treatments and vaccines are discovered, most of which will not be associated with IP, but rather with ensuring global production, distribution and logistics capabilities at scales never seen before. Industry should collaborate with policymakers and the public around policies that ease supply chains and access into their countries.

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