This is the second in a series of posts being produced under the auspices of the Centre for Commercial Law in response to the coronavirus crisis. The first blog post is available here.
In the grip of a world pandemic of COVID-19 when scientists are racing to develop a cure, the idea of anyone claiming intellectual property rights to the exclusive use of the cure may seem difficult to rationalise. Yet patents are intended to benefit the public by encouraging technological advancement through granting inventors a limited exclusive period to exploit their inventions. How could these two points intersect in the context of the present emergency? Some companies have heeded calls to adapt their business practices to fill an unprecedented demand for hand sanitisers to slow the spread of the coronavirus. No patent issue is at play. Some of the sanitisers are, however, branded by the companies which manufacture them (notable examples are LVMH and BrewDog) and then donate to those in need, particularly hospitals. This enables the public interest to be addressed while also raising the profile of the brand in the marketplace. These brands may be protected in doing so in law by registered trade marks and the law of passing off in the United Kingdom. There may be similar opportunities by which pharmaceutical companies can deliver a widely-accessible cure that will advance both public and corporate interests.
This is highly relevant here, as COVID-19 brings home to everyone issues which intellectual property lawyers, particularly those with an interest in developing countries, have been raising for many years. How does the standard argument (which indeed has some merit) that the exclusive right to control the results of innovation conferred by a patent, align with the need for people to be diagnosed and treated as quickly as possible? The patent owner may be unable or may choose not to meet demand, or may charge a fee which not everyone (be that patient, hospital or government) would be able to pay. This power of the patent became more prevalent from the mid-1990s when all countries who were members of the World Trade Organisation (WTO) had to protect patents, pursuant to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Patents have limits: they last 20 years and they are limited to one country (or in some cases, one region). Further, TRIPS permits WTO members to have additional exceptions to patent rights ‘provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties’; and that WTO members can require patent owners to share their innovation, in certain cases, through compulsory licensing. TRIPS does not engage with parallel importing – goods moving from one country to another.
Against this backdrop, a seismic shift in the patents discourse occurred in the late-1990s, when pursuant to the rights to life and health in its constitution. South Africa introduced the Medicines and Related Substances Control Amendment Act No. 90 of 1997 to enable greater access to medicines, including HIV/AIDS medicines. The South African Pharmaceutical Manufacturers Association and (mostly multinational) pharmaceutical manufacturers then instituted an action against the government of South Africa, on the grounds that the legislation introduced contravened TRIPS and the right to property in the South African constitution. The case sparked wide-spread emotive public debates about corporate profits causing deaths of poor peoples. The pharmaceutical manufacturers eventually withdrew the case in 2001 – but by then the case had stimulated a continuing clash of worlds between human rights and health on the one hand and profits and patents on the other.
Discussions about access to medicines at the Third and Fourth WTO Ministerial Conferences in Seattle in 1999 and Doha in 2001 immediately followed. In 1999, the United States issued an Executive Order on Access to HIV/AIDS Pharmaceutical and Medical Technologies, that supported the use of compulsory licenses to increase access to HIV/AIDS medicines in sub-Saharan Africa. More structural action came in 2001 with the adoption of the Doha Declaration on TRIPS and Public Health. The Doha Declaration confirmed the flexibilities within TRIPS. Importantly, it encouraged WTO members to make full use of them, emphasising that TRIPS should be interpreted in a manner supportive of WTO members rights to protect public health and, in particular, to promote access to medicines for all. TRIPS was eventually amended in 2005 to expand the compulsory licensing provision by allowing the production and exportation of affordable generic medicines under compulsory licences, to serve the needs of countries that cannot manufacture those medicines themselves; thereby addressing key gaps in manufacturing capacity.
The extremes of the patents and innovation debates are being seen as new legislative and regulatory activities unfold alongside business decisions and international interventions in relation to COVID-19. The Coronavirus Act 2020 in the United Kingdom does not refer to patents or limits on them. In contrast, Chile introduced legislation on 17 March 2020, which allows compulsory licences for medicines, vaccines and technologies useful for the detection, prevention, surveillance and treatment of people infected by the coronavirus. Israel introduced a specific compulsory licence on 19 March 2020 that allows the importation of generic versions of AbbVie’s patented Kaletra to treat coronavirus. Ecuador introduced legislation on 20 March 2020 that allows compulsory licences for patents related to coronavirus technologies and further allows competent authorities in the country to authorise third parties to access undisclosed information, including clinical test data. Canada introduced legislation on 25 March 2020 that accelerates the process of issuing compulsory licenses for medicinal products.
There are also increased calls for community sharing based approaches, similar to the developments in the production of software and electric cars. In their letter of 23 March 2020, Costa Rica’s President, Carlos Alvarado and Minister of Health, Daniel Salas appealed to the Director-General of the World Health Organisation (WHO), Dr Tedros Adhanom Ghebreyesus, to pool rights to technologies that are useful for the detection, prevention, control and treatment of the COVID-19 pandemic. Alvarado and Salas propose that the global pool should include relevant existing and future intellectual property rights, including patented inventions, designs, copyright and rights in regulatory test-data and provide for free access or licensing on reasonable and affordable terms, in all member countries.
The pharmaceutical and scientific communities are abuzz with debates on the conflict between sharing information and invention and promoting corporate interests. Yet, this sharing does not necessarily exclude the potential for corporate welfare. Achieving a higher brand profile or at least a brand profile that is perceived to be sympatico with public sentiments in a time of crisis could serve pharmaceutical companies in the long run, while the global community benefits from the more imminent contribution that sharing of information makes to the global community to combat COVID-19. This returns us to the start of this blog post.
As the COVID-19 pandemic spread to Europe, luxury brand LVMH, which usually manufactured perfumes for its Christian Dior, Givenchy and Guerlain brands, offered to produce and donate 12 tons of hydroalcoholic gel to 39 hospitals of the Paris system within a week of the French government calling on industry to help fill the supply gap. It is launching a similar effort in Italy. Likewise, at a time that pubs, bars, and restaurants are closed to slow the spread of the coronavirus, the brewery and pub chain BrewDog also announced it would produce ‘Brewgel’ ‘Punk’ hand sanitiser at its Aberdeen distillery in Scotland and distribute the much needed supply free of charge to key workers across the UK, including those in the National Health Service and certain charities. Through these moves, LVMH and BrewDog make a valuable public contribution while also attracting brand relevance at a time of ‘social distancing’ when perfumes and pubs are far from public minds.
The stage is now set for pharmaceutical companies or the industry as a whole to follow a similar path. There are movements afoot in this direction. The WHO launched SOLIDARITY, a multinational mega trial to test the potentials of promising coronavirus treatments. SOLIDARITY focuses on four medicines previously used to treat Malaria, HIV and Ebola. They are Remdesivir, Chloroquine and Hydroxychloroquine, Lopinavir plus Ritonavir, and Lopinavir plus Ritonavir and Interferon-beta. So far, pharmaceutical companies like Gilead Sciences, Merck, Cipla, Mylan and AbbVie have pledged to donate drugs for the trial and ten countries have committed to the trial: Argentina, Bahrain, Canada, France, Iran, Norway, South Africa, Spain, Switzerland, and Thailand.
Further, following criticisms from activists for planning to profiteer from the pandemic, Gilead, a United States based multinational pharmaceutical company, rescinded an orphan drug designation which it had obtained for its potential coronavirus medicine, Remdesivir. An orphan drug designation grants special status to drugs or biological products that treat rare diseases or conditions upon the request of a sponsor and would have enabled Gilead to benefit from a monopoly for at least seven years, under which it would enjoy control over prices and tax incentives. This status is intended for diseases that affect up to 200,000 people in the United States. But by the time of the grant of the designation, over 400,000 people had been infected with COVID-19 globally. In its statement requesting to rescind the designation, Gilead acknowledged the urgent public health needs posed by the COVID-19 pandemic and committed to work on advancing the development of Remdesivir as quickly as possible.
Patents seek to incentivise innovation to benefit society; but, this could come with consequences such as exorbitant costs and monopoly of knowledge. The South African case that exposed the inequities of pharmaceutical patents in relation to access to medicines in developing countries stimulated significant amendments to TRIPS. The COVID-19 pandemic is another watershed moment where a compelling context exists for reassessing research and development for pharmaceutical products urgently needed for a global market. An outward looking business model such as BrewDog’s can open a new approach to the relationship between public interest and corporate welfare in a time of a high profile global crisis.
