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The Omicron Variant and Patent Waivers for COVID-19 Vaccines

The Omicron Variant and Patent Waivers for COVID-19 Vaccines

A vial of the Pfizer-BioNTech COVID-19 vaccine concentrate is prepared for use at a hospital. Photo: Victoria Jones/Pool via Reuters/File Photo

Will the discovery of the omicron variant result in a patent waiver for COVID-19 vaccine? That seems to be a much debated question in the global health and economic policy circles last fortnight but from the looks of it, a patent waiver seems unlikely.

To test this question, I did a small sample survey the other day on Twitter with N = 20 responses. Admittedly a lazy endeavor with very high selection bias, I found 75% being sceptical in expecting a patent waiver. A remaining 25% wanted to stay hopeful. On LinkedIn when I posted the same question, bio-entrepreneurs responded: what will happen to innovation then? Some others picked the choice “are you kidding me?”.

And that in its essence captures the crux of the debate. If in the coming days robust evidence shows to Pfizer or Moderna that omicron is escaping double dose vaccination, the odds of the innovator lobby in Big Pharma being soft about a patent waiver may increase. It may after all offer them new incentives for new vaccines, variant specific, supported by more easier to comply new drug delivery systems like nasal sprays or patches, all protected by a thicket of products and process patents. That’s the spirit of incremental innovation after all or as the pharma world sometimes calls it evergreening or salami slicing.

If, instead, evidence arises in the next few weeks that the mRNA vaccines and boosters do indeed offer protection against the omicron variant, it will be difficult to see global innovator firms in the biopharmaceutical industry accepting a patent waiver for COVID-19 vaccines.

This more so, given that mRNA platforms, technologically, are now increasingly showing traits of being a broader General Purpose Technology (GPT) in bio-pharmaceutical innovation with ability to provide innovative medicines in other disease contexts like cancer. Incentives are thus not at all aligned then for patents on such GPTs to be relaxed any time soon. And especially when if that is done, reverse engineering firms from contexts like China and India can likely commoditize drug innovation at a faster clip than what they can do in a world where such patents are protected.

All that said, this is also a crucial juncture for social planners and policy makers globally including governments from advanced nations like OECD countries, particularly the US and Germany. The Biden administration here has shown more portability to the idea of relaxing patents perhaps displaying foresight that this pandemic can be only mitigated with a One World approach to the virus and not just for its OMicron but other future potential variants. Germany in contrast has shown a preference towards towards stronger patents arguing that the vaccine patent waiver will need to be also complemented with transfer of complex manufacturing technology where they argue the secret sauce lies, hence in some sense patent waivers maybe likely just a dog and pony show in posturing benevolence of rich nations to poor.

Of course the availability of pills like Merck’s Molnupiravir and Pfizer’s Paxlovid, some with voluntary licenses and others available to the poorer world at a fraction of the Western price, creates additional nuances to the global patenting equilibrium in COVID-19 biotherapeutics. Studies are also going on in other vaccine platforms; also mRNA vaccine subsequent innovators like Gennova Pharmaceuticals in India are still to publish their clinical trial evidence. Should they also show not just stated but revealed large sample efficacy in their products, then the likelihood of global patent vaccine waiver for COVID-19 is going to diminish even more so over time. This is mainly because the outside option’s viability will increase and innovator firms like Moderna or Pfizer would then likely try to exert even more market power trying to protect their first mover advantages in an even more sharper manner.

Meanwhile, the WHO, perhaps increasingly feebly, continues to implore rich nations to pay attention to this issue saying that omicron hopefully should be a wakeup call to the world on global patent waivers for COVID-19 vaccines. The WTO which was supposed to convene on these issues got cancelled couple of days after emergence of omicron was reported but there surely would be intense back stage political jockeying going on there too between rich and poor nations for patent waivers on COVID-19 vaccines.

Meanwhile few watch (like the 25% in my lazy Twitter poll suggested) in sad bewilderment how this pandemic is getting dragged, even in the rich world truth be told, due to an incentive lens to what is essentially a morality question for the human race and its sustenance. Some voices have indeed pointed out that the implications are broader. How the world deals with the patent waiver debate has a message for how it will deal with market failure in other global public goods, like climate change and fossil fuel emission norms for example.

To be blunt however, the signals emerging dont seem great. It doesn’t look like a dominant population, especially the rich and powerful in this world, live with a One World consciousness. That unfortunately is a great long run revealed adverse outcome and realization coming out of 21 months and more of this ongoing COVID-19 pandemic. Vaccines during pandemics maybe global public goods but private interests in perpetuating market power towards long run incentives for innovation may result in selfish short run moves than those that demonstrate altruism.

Chirantan Chatterjee is a health economist, a reader in economics of innovation at SPRU-Sussex, University of Sussex, a visiting fellow at Hoover Institution, Stanford University, and a visiting adjunct professor in economics at IIM Ahmedabad, India.

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