Compulsory (patent) licensing for vaccines and its limits


Compulsory (patent) licensing for vaccines and its limits

The COVID-19 pandemic is showing how vaccines like from Moderna Biotech or AstraZeneca are unevenly distributed around the world. In this regard, whether and how much the use of compulsory (patent) licensing can improve global distribution of vaccines is discussed.

The use of compulsory licenses is theoretically possible: The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which is administered by the World Trade Organization (WTO) and is binding for its members, was adopted to strengthen the protection of intellectual property rights at the international level. Among other provisions, it states that patent protection shall be made available for any invention in all fields of technology (thus, even for drugs and vaccines, which were previously unpatentable in some countries). At the same time, in case of (inter alia) national emergencies, the TRIPS Agreement provides for certain limitations to patent rights, including compulsory licenses.

 

With specific reference to health emergencies, under a compulsory license, the government of a country can authorize the production of a generic version of a patented drug by a third company parallel to the production and selling of the original drug, but only for a period of time limited to the duration of the emergency. The patent holder is entitled to receive the payment of an adequate remuneration in exchange. The purpose of compulsory licensing is to increase the quantity of the drug placed on the market and distribute it as a generic version at a lower price than the original one.

 

In relation to COVID-19, however, there are arguments that compulsory licensing will prove ineffective to improve access to vaccines. Current vaccines are very complex, as they are based on new technologies. It has to be differentiated between a patent (and its protected claims) and the vaccine. These do not have to coincide, hence, the admissibility to use a patent does not necessarily mean that the vaccine connected to the patent can also be produced.

 

Thus, it is possible that their production process, the ingredients used and the instrumentation required are subject not to patents but instead to trade secrets which are generally protected separately. Furthermore, at present, not all countries would have the manufacturing capacity and know-how to replicate the protected process in order to produce their own generics. Therefore, since compulsory licenses only cover patents and not also other intellectual property rights (like trade secrets and know-how), their impact on increasing access to vaccines globally would be limited.

 

Furthermore, as compulsory licenses are only granted for the (limited) duration of the state of emergency, the time and financial assets needed to (re-)convert the production facilities to adapt them to the production of the new vaccines may make the whole operation unattractive for companies that would consider to produce the generic version of the drug, as there is a risk of not having the time to recoup the investments made. It also has to be considered that even in the case of such compulsory licences, the vaccine manufacturer must go through its own admission procedure before the competent authorities for the newly generated vaccine and, if necessary, may also need to obtain official permits with regard to the production facilities.

 

In general, compulsory licenses could therefore be, from a theoretical point of view, a useful tool to allow better access to medicines like COVID vaccines. In practice, however, the use of compulsory licenses has to be assessed on a case-by-case basis, as their effectiveness depends on several variables, including the obtaining of additional intellectual property involved in the development the drug or adequate local manufacturing capacities.


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