Beyond the Market Monopoly: How Patents Act

As the covid-19 pandemic highlights the fault lines between rich and poor countries, one set of debates has crystallized around the question of access to vaccines. Countries in the global North, including the U.S., U.K., and Canada have surpluses; countries in the global South do not have nearly enough. For instance, although India is home to the Serum Institute, the world’s largest vaccine manufacturer, less than three percent of the Indian population is fully vaccinated. In Pakistan, this percentage is even lower: less than one percent of the country’s over 200 million people are vaccinated.

This illustration, created at the Centers for Disease Control and Prevention (CDC), reveals ultrastructural morphology exhibited by coronaviruses.

The most prominent and polarizing thread in the vaccine access conversation centers on Big Pharma’s patents on covid-19 vaccines. In October 2020, the Indian and South African governments requested the WTO to waive these patents for the duration of the pandemic. Numerous advocacy organizations and media sources have also demanded or supported a patent waiver. Most recently, the Biden administration’s support of the waiver has sent shockwaves through the pharmaceutical industrial complex, which has tendrils extending deep into Capitol Hill (Wouters 2020). While drug patents are a poignant and concrete anchor for these polarizing debates, the problem runs far deeper than patents blocking vaccine access. This means that the solution to global inequity is more elusive than a waiver of these patents. “Free the vaccine,” the rallying cry of anti-patent advocates, needs to encompass much more than a patent waiver.

Drug patent debates typically follow a by-now-familiar playbook (see, e.g., Ecks 2008, Halliburton 2017). These debates raise fraught questions of postcolonial sovereignty (Rajan 2017). They also foreground the desire of powerful pharmaceutical MNCs based in the global North to assert hegemony over the global South by “harmonizing” intellectual property regimes worldwide through the WTO TRIPS (Trade Related Aspects of Intellectual Property) Agreement (see, e.g., Kapczynski 2009, Hayden 2010). Their bulwark is scientific innovation. Patent holders—Western multinational pharma companies and their spokespersons such as the Pharmaceutical Research and Manufacturers of America (PhRMA)—cite the astronomical costs of drug discovery and development and hold up patents as a pre-requisite to lifesaving scientific innovation. Those opposed cite the loss of lives caused by Big Pharma’s patent-based monopolies, which allow them to set high prices and exclude other companies, especially those in the global South, from making cheaper versions. The technology underlying covid-19 vaccines, however, has complicated the contours of this familiar debate.

For anti-patent constituencies, a covid-19 vaccine patent waiver is entirely insufficient, and for some, even meaningless. This counterintuitive stance stems from their belief that a patent waiver will, on its own, not enable generics manufacture. (I discuss this further below.) Pro-patent constituencies also claim that a patent waiver will not improve vaccine access. But this strange uniformity of positions conceals deep rifts and oppositional structures of commitment and resistance to the ideals of intellectual property.

I want first to reflect on what explains this superficial conflation of positions. Pfizer and Moderna’s covid-19 vaccines are based on mRNA technology, which is fundamentally different from standard vaccine technologies. Given the complexities of mRNA technology, it is not easy to reverse-engineer these covid-19 vaccines, as most generics manufacturers have historically done. What these manufacturers need is for companies such as Pfizer and Moderna to instruct them in how to actually use the mRNA technology disclosed in their patents. This is known as “tech transfer.” Those who say the patent waiver won’t be enough point out that without Big Pharma’s active assistance, it will not be possible for generics manufacturers in the global South to make the vaccine.

When it announced that it would not sue anyone for manufacturing covid-19 vaccines for infringement of its patents, Moderna won a public relations victory, but Moderna knows well that it is highly unlikely for anyone to successfully copy its vaccines without tech transfer, which only Moderna can provide. But even the possibility of copying does not exercise Moderna much. As the company points out, it is already selling the vaccine at low “pandemic prices” and also supplying to Covax, the covid vaccine equitability initiative co-led by Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO. In other words, says Moderna, a patent waiver is not needed because we are not going to enforce our patents—so just let our patents be.

Another key reason that patent waivers may not mean much is insufficient information disclosure in the patents themselves. The US Patent Act requires that a patent holder disclose sufficient information in the patent for someone “skilled in the art” to manufacture the invention. This public disclosure requirement, however, has been whittled away over the years, enabling patent holders to withhold information essential to producing the invention. This is particularly damning to aspiring generics manufacturers in the case of complex technologies such as mRNA. Patents today often contain obfuscatory instead of enabling language, as anyone who has attempted to read one can confirm. This was certainly borne out in the time I spent practicing patent litigation. As the leading U.S. patent blog Patently-O puts it, lawyers often walk “the tight-line between the patentability disclosure requirement and client-interest in keeping certain trade secrets.”  

Another reason for inadequate patent disclosures is that types of intellectual property other than the patent help companies withhold information: trade secrets, part of a broad category also known as “undisclosed information,” are key. Trade secrets are robustly protected both under national U.S. law and TRIPS. Without delving into their intricacies, the point I want to underscore is that the covid-19 vaccine patents alone do not contain enough information for copies to be made. For adequate disclosure, other, non-patent IP protection such as trade secrets would have to be suspended, an extremely unlikely prospect.

In addition to this staunch legal edifice protecting pharma companies, there are logistical roadblocks to increased vaccine manufacture. For example, even India’s Serum Institute, the world’s largest vaccine manufacturer, has been facing raw material shortages. Its CEO, Adar Poonawalla, tweeted the US President in April 2021 to open up raw material exports for vaccine manufacture, citing scarcity in India. It is therefore unrealistic to assume that there are factories in the global South sitting by, raw materials and technical know-how at the ready, waiting for the patent waiver to materialize before launching into frenzied vaccine production.

How then to increase global vaccine production, if a patent waiver won’t suffice? One way would be for generics manufacturers to work with Western MNCs, as the latter have been at pains to emphasize. The expansive protective legal structure enables pharma companies to argue, perfectly logically, that far more conducive to increased vaccine production than a patent waiver would be for them to voluntarily license their patents to generics manufacturers. These licenses would go beyond simply permitting the latter to make copies; they would contain tech-transfer provisions, thus enabling the generics companies to actually make the vaccines. Co-operation, not the antagonism that a forced patent waiver will engender, is the way to go, they argue. The specter of low-quality knock offs is also raised: without adequate tech transfer, who knows what the generics companies will make? Inefficacious vaccines, or, horror of horrors, fake ones.

Pharma MNCs are not the only ones to argue for a cooperative stance. Some national governments have eschewed an antagonistic stance as well. The Indian example illustrates this. Advocates of greater vaccine access in India have pointed out that the Indian government need not wait for a patent waiver, which may or may not come, since a legal provision allowing them to override the patents—compulsory licensing—already exists in the Indian Patent Act. The Indian government, however, has refused to go this route.

A deep history underlies this hesitation. Past attempts by Indian state entities to override MNCs’ pharma patents have led to diplomatic pressure, including then-president Obama’s famous visit in 2015, after which the Indian Patent Office reversed its rejection of Gilead’s patent on the breakthrough hepatitis-C drug Sovaldi.

Given this framework of expansive legal protections and diplomatic clout, it does seem that the only solution to vaccine shortages is a co-operative one. But of course, Big Pharma won’t cooperate if it is simultaneously confronting a challenge to its IP. “If you want us to co-operate with you, don’t cross us by threatening our IP,” is their message. “But when you leave our IP alone, we are willing to help you.” 

So if vaccine patent holders aren’t planning to enforce their patents anyway, why is their resistance to a patent waiver so unanimous and dogged? The explanation transcends the exigencies of the covid-19 pandemic, or indeed, any pandemic. It has to do with pharma’s fundamental attachment to the power patents imbue them with, and ultimately to a capitalist framework that categorically upholds that most emblematic of intellectual property rights, the patent. The economic value of pharmaceutical patents transcends their monetary worth: they are valuable also because they allow the patent holder control: over space, knowledge, markets. 

While the specificities of the covid-19 case are unique, pharma MNCs’ militant defense of their patents despite the lack of direct financial benefit has precedent. In the case of leukemia drug Gleevec, Novartis fought to uphold its Indian patents even as it gave away Gleevec for free to Indian patients (Rajan 2017). Despite no prospect of profit in the Indian market, Novartis fought to retain its monopoly over Gleevec. The explanation of this superficially illogical stance lies in the inextricable connectedness of global pharmaceutical markets: in the face of mounting opposition to high prices from its Western consumers, it was more defensible for Novartis to relegate the Indian example of free Gleevec to charity, rather than allow a market scenario of lower prices in India (Ecks 2008).

In the covid-19 case, too, the pharma lobby’s defense of vaccine patents isn’t driven by immediate profit motives. Big Pharma companies are not, for example, interested in charging the high prices patents typically enable. Instead, patents give them extraordinary control. The patents necessitate that any generics manufacture occur via a voluntary licensing agreement with the patent holder. This gives the patent holder control over who gets to make generics, how they make them, and who they can sell them to. This enables the patent holder to retain its monopoly in select markets, where profits can be made. Pharma companies are willing to countenance copies of the vaccine, but on terms they set. And of course, having the patents also allows them to make claims to benevolence by voluntarily pledging not to enforce them, as Moderna did; a waiver would preclude such public relations victories.

Pandemic and post-pandemic temporalities also matter. While they will not enforce their patents during the pandemic—if for no reason other than the PR disaster this would be—they may well wish to do so after the pandemic; when, for example, we transition to a world where a covid-19 vaccine becomes as routine as an annual flu shot. There are potential decades of immense profits for covid-19 vaccine manufacturers, which they are not willing to sign away by allowing a patent waiver. In fact, company executives have already hinted at raising prices post-pandemic. The point of property rights then, isn’t always or merely their enforcement. Their very existence provides a scaffolding, a structural milieu fundamentally anchored to the norm of categorical private property protection. As long as that scaffolding remains untouched, the property holder is willing to relent in various ways, but always on her own terms. These acts, touted as benevolent, may produce effects similar to those that would flow from the absence of property rights: allowing competitors to enter the market, or selling the patented product at very low prices. In such scenarios, property retreats backstage, but it remains ever vigilant, poised to re-emerge at the slightest whiff of an existential challenge.

Zahra Hayat is a Ph.D. Candidate in Anthropology at UC Berkeley, and a lawyer. Her research focuses on pharmaceutical access in the global South, specifically Pakistan, and the regimes of price and intellectual property such access is contingent on. She is currently completing her dissertation as an American Association of University Women (AAUW) fellow.


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