As governments around the globe scramble to address the COVID-19 pandemic, there is an urgent need for medicines, medical supplies, diagnostics and treatments. Shortages of available medicines and medical devices overwhelm hospitals and caregivers. However, many of these life-saving drugs, treatments and medical supplies are protected by patent rights. Patents are monopoly rights, granted by the government to patent holders, that exclude others from making, using or selling a patented invention. Under normal circumstances, their use can be authorized by the patent holder in carefully negotiated license agreements to ensure proper compensation for the costly efforts invested in developing the patented invention.
The COVID-19 outbreak raises a plethora of regulatory, public policy, and ethical questions, which can be answered by relying on our experiences from fighting previous pandemics. Here is a question that governments need to answer as soon as possible: How to deal with barriers imposed by patents for the production and provision of low-priced medicines and medical treatments? Most importantly, how does one square humanitarian concerns with incentives for research?
One way for governments to deal with this issue is to activate the rights to forcibly license a patented invention when there is a threat to public safety, such as the COVID-19 pandemic. Under certain (very limited) circumstances, prescribed by the law, compulsory licenses suspend the monopoly effect of a patent and allow others than the patent holder to produce and supply the product.
Currently, there is no vaccine to protect against the coronavirus nor there are any effective pharmaceutical treatments registered for the indication. However, scientists all over the world have been working relentlessly, funding is becoming available and regulatory agencies are offering assistance and financial assistance to speed potential treatments to the market.
It goes without saying that pricing gouging by pharmaceutical and biotech companies will be scrutinized since the demand for medical necessities will be significant. Some of the products that are currently being tested are products that have been on the market for years and are also inexpensive to produce, thus a low price might be possible. However, if a company has a monopoly on the use of COVID-19 medicines/medical treatments, its market positioning rather than the production costs will influence the price. What is more, investment banks have been urging pharmaceutical companies to raise their prices and to create a business out of products/medical treatments currently under development.
Some governments have started deploying compulsory licensing mechanisms in order to prevent price gouging of much-needed medicines and medical treatments of COVID-19.
Chile’s lower house of Congress passed unanimously a resolution that would permit the Chilean Government to issue compulsory licenses for any medicines, vaccines, or diagnostics for combating the pandemic. The resolution would also have the Chilean health ministry ask the World Health Organization to collect information on R&D costs directly associated with products used for preventing, detecting, and treating COVID19.
Israel issued a compulsory patent license related to lopinavir/ritonavir (brand name Kaletra), which is an HIV medicine currently being tested, in combination with other products, for effectiveness in the treatment of COVID-19. The license allows the importation of lopinavir/ritonavir from a generic company. The producer of Kaletra- AbbVie has not been able to provide the necessary inventory of the drug on the national market. The Israeli patents are good until 2024, but they have expired in India and elsewhere. The permit is narrowly drafted to authorize the importer the right to import Kaletra from Hetero (based in India). The compulsory license was issued without consultation with the patentee or conducting a direct judicial review. The fast track license was possible as it was issued under Section 104 of the Patent Law, which allows Israel to permit the use of an invention (e.g. the use of an imported drug) for national defense purposes in order to ensure sufficient supply and for critical services.
On 20 March, the Education, Culture, Science and Technology Commission of the National Assembly in Ecuador approved a resolution asking the Minister of Health to issue compulsory licenses over patents related to coronavirus technologies. See for details here.
In response to the compulsory license imposed by the Israeli Government, AbbVie informed the Medicines Patent Pool (MPP) that the company waives any restriction on the MPP licensees that would prevent generic companies from supplying Kaletra anywhere in the world for any purpose, effective immediately. AbbVie indicated that it will no longer be enforcing patents relating to adult or pediatric lopinavir/ritonavir anywhere in the world. Treatment activists have been battling with the company for years for better access to lopinavir/ritonavir. AbbVie has not communicated publicly about its decision but it seems that the company rather forgoes its patents than being confronted with more compulsory licenses.
Unlike AbbVie, the drug-maker Gilead has recently shut down its emergency access to its COVID-19 candidate drug, Remdesivir, except for pregnant women and children with severe symptoms. The move left families and doctors scrambling for answers. This comes as a result of “overwhelming demand” and “exponential increase” in requests.
The compulsory licensing measures are an important instrument to address immediate public health concerns caused by the COVID-19 outbreak. However, they do not address the big question of how proprietary COVID-19 technologies will go to market and how they will be made available globally. There is an urgent need for global collaboration, public-private partnerships in enabling better access and affordability of new medical technologies. Products for the prevention and treatment of COVID-19 should be readily available to the general public without cumbersome restrictions imposed by the patent system.
Given the severity and the velocity of the COVID-19 pandemic, many countries will be willing to undertake strong measures in the coming months to ensure affordable access to key medical goods, including ventilators, diagnostic tests and any COVID-19 drugs or vaccines that are brought to market.
This may well involve steps to circumvent patent rights, under well-defined circumstances of national emergency and protection of public health. Most jurisdictions around the globe have compulsory licensing laws in place, allowing them to side-step patents where there is a compelling public need. This will be especially the case if innovators are perceived to be asking for an unfair price for new COVID-19 drugs or vaccines, or the supply of such medicines is seen as inadequate.
However, many governments might encounter additional regulatory hurdles along the way, such as data exclusivity where no would-be generic competitor can make use of their clinical data to support expedited approval applications. A further two years’ market exclusivity might also be granted to the patent holder, as well as an additional year if the originator develops the drug for a new indication. Medical devices can be granted data exclusivities as well. EU and US regulation of clinical test data protection and the granting of market exclusivity interfere with the effective use of compulsory licensing by these governments, and can even prevent access to off-patent medicines because they prohibit registration of generic equivalents. Chile and Colombia have passed regulatory exclusivity waivers for cases of compulsory licensing. Other governments are likely to follow suit.
Governments need to use the right to issue compulsory licenses for importation of needed affordable medicines cautiously, and only under circumstances of national emergency. If this right is used in excess by certain countries, then this may make pharma companies balk at entering certain markets, at the price of hurting the populace in that country in need of the drug/vaccine, especially in absence of third country generics. In view of this, aid agencies, and international development organizations would need to explore other mechanisms to ensure access to drugs/vaccines in those countries. Models such as those practiced by PEPFAR would be needed.
Thus, while governments may be tempted to think that compulsory licensing could help them address the challenges of providing quality medicines cheaply in an expedited manner, the issues are far more complex and compulsory licensing though an important tool in the arsenal, needs to be used with great circumspection.