Our conception of IP and related rights has room – and a need – to evolve

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By Viveka Roychowdhury On Jan 13, 2021

Patrick Kilbride, Senior VP, Global Innovation Policy Center, US Chamber of Commerce explains why he believes that if the global commitment to intellectual property rights is seriously eroded it is difficult to imagine that the world will be as well prepared for the next crisis. But he also mentions the need to broaden the view of intellectual property, so that forms of ownership and exclusive rights will be part of the formula but not the whole story, in an email interaction with Viveka Roychowdhury

What role has intellectual property played in the fight against the ongoing global pandemic at different levels of vaccine research, manufacturing and distribution know-how?

The role and importance of intellectual property standards have never been more apparent than during this global pandemic. The ecosystem for innovation spans basic scientific research, applied science, product development and testing, and commercialisation. That ecosystem also connects stakeholders from governments to academia, to start-ups, to equity markets, to multi-national corporations. When you look at the innovation ecosystem through the lens of COVID-19 you see that the technologies being applied are not necessarily new, although in some cases, such as with mRNA, we may be seeing their first successful real-world applications.

Rather, these technologies have for the most part been under development for many years and form a small part of a much larger research and development pipeline that is underwritten both by investments by governments in basic research and by investments by the private sector in product development, testing, and commercialisation.

The role of intellectual property laws in this ecosystem is to enable those investments by transparently and predictably assigning rights to the breakthroughs that result at each respective phase of the innovation ecosystem.

Those legal rights allow stakeholders to come to terms on contractual arrangements that enable collaboration by ensuring each party agrees on the value the others are bringing to the project. By doing so, intellectual property rights provide a vehicle to transform new technologies from useful knowledge into finished products that can serve an end-user, such as a treatment or vaccine for COVID-19. Without those legal rights to the results of their work, the innovator has no ability to earn a return on investment, there is no re-investment in research and development, and the pipeline that has given us anti-viral therapies, monoclonal antibodies, and mRNA vaccines to fight this pandemic simply dries up.

How can a strong IP regime strengthen a country’s fight against the coronavirus?

Eradicating COVID-19 will depend on the development, production and distribution of biopharma solutions on a massive scale. Governments play a critical role in the innovation ecosystem by funding wide-ranging scientific research that contributes to our collective knowledge base.

Importantly, intellectual property rights provide a temporary exclusive right, not to new knowledge, but to a specific application of that knowledge not previously accomplished. Private sector innovators specialise in applied science: mobilising the resources to make the focused investments that turn technologies that show potential into usable end products, which in the case of the biopharma sector means medicines or vaccines that are safe, effective, and able to be reproduced at scale. The ability to commercialise – produce, test, manufacture, and distribute – a new medicine depends on high-risk, long-term, capital-intensive investments many times larger than public sector research budgets.

The strength of a country’s intellectual property standards determines whether it has a role to play in the innovation ecosystem. Many nations invest in basic scientific research; few support the intellectual property and financing infrastructure that enables private sector commercialisation.

What are the biggest intellectual property challenges in the healthcare sector? Has theft of intellectual property been a challenge for these industries?

The single biggest challenge to biopharma investment is uncertainty. Innovators face three levels of risk: First, the usual risk that all companies face of poor performance or unfavourable business or economic conditions; second, the risk of doing something new and untested that nine out of ten times will fail; third, and most importantly, biopharma innovators face the political risk that governments will change the rules arbitrarily or retrospectively, such as by invalidating or forcing the compulsory licensing of legitimate patent rights.

In a sector that requires decades of research and testing and billion-dollar investments to produce a product, political risk has a chilling effect on innovation. The goal of every country’s intellectual property system should be to provide sufficient legal certainty to innovators – measured by the transparency, predictability, and reliability of intellectual property rights – that they are willing to make those investments and take those risks in that country’s market.

Through that lens, it’s easy to see why a political step such as suggesting the waiver of all rights associated with the WTO TRIPS Agreement, for instance, would make that country a dangerous place to do business, whether through research, manufacturing, or simply making a product available in the marketplace.

The COVID-19 crisis is being looked at as an opportunity for the global pharma industry to redeem itself in the eyes of the public. For instance, Albert Bourla, CEO, Pfizer has been quoted, during a virtual panel discussion organised by Fortune, as saying that the vaccine effort is improving the reputation of his industry, which was in the dumps before the pandemic “not only because of bad players, but also because of us. For years, for example, the CEOs of Pfizer were speaking of how much money we made from Lipitor instead of pointing out how many hundreds of millions of lives were saved by Lipitor. We did it to ourselves.” So, will/should pharma companies suspend their intellectual property rights (IPRs) on essential tools to fight the pandemic, like vaccines, repurposed medicines, diagnostic kits, ventilators etc, as is being petitioned by countries like South Africa, India, etc and organisations like MSF?

Companies in the biopharma sector, like all businesses, want to get their products in the hands of customers – or in the present instance their shots in their arms. It’s been my experience that these companies are willing to be extraordinarily flexible in order to accomplish the goal of serving patients in need. In return, they want to know what their rights are and that those rights will be respected and afforded all due process of law.

There has simply been no evidence during this pandemic, or at any other time, that intellectual property rights are a barrier to access to medicines. On the contrary, intellectual property rights are the reason new, breakthrough therapies and vaccines exist in the first place.

Without that global system of rights, represented by the WTO TRIPS Agreement, we can have little confidence that the pipeline will be there to support an effective response to the next crisis, whatever it may be.

Before the pandemic, R&D budgets for infectious diseases were not at pace as NCDs, oncology, etc. Hence most of the fundamental research into today’s COVID-19 tool kit started out in public-funded labs, universities, smaller companies. Pharma companies have accelerated this in the past 10 odd months. Are the IPRs being shared between the partners, collaborators?

What you describe is typical of the innovation ecosystem: the investment begins with basic scientific research, often funded by governments and carried out at universities or government laboratories. In a viable ecosystem, where there is some transparent and reliable assignment of rights, those rights can be licensed out for further work toward commercialisation, whether by a start-up or – if showing more immediate promise – by a larger firm.

Ultimately, the business and operational capabilities of a larger player may become indispensable to scale up product development, clinical trials, manufacturing and distribution networks to reach a global patient population. At each stage of this ecosystem stakeholders with specific strengths play important roles.

Clear assignment of rights, supported by political leaders and enforceable in courts, enables these diverse stakeholders to work together and advance a product to the point where it can reach a patient. Transparent, reliable intellectual property rights mean that partners can make informed decisions about the relative resources they are committing, and the relative risk they are assuming, when they enter into a collaboration, or a licensing deal, or an acquisition with another party.

Governments have tremendous influence, both positive and negative, in determining where private sector resources are invested. By funding scientific research targeted at specific societal needs, governments can drive new private sector workstreams, especially when they further support investments through strong intellectual property standards. Conversely, governments can drive investment away from critical unmet health needs by creating an onerous political and legal environment for innovators by stigmatising a legitimate return on investment.

What role will IPR play in preparing for future pandemics? From being a bone of contention today, will stronger IPR systems encourage research in such systems and foster competition which will force royalty-free manufacturing collaborations, at least during times of medical crises?

In a pandemic that continues to take far too many lives, we can be thankful that public and private sector investment, underwritten by intellectual property norms such as those in the WTO TRIPS Agreement had prepared a pipeline of tools that were ready to be applied to the fight.

This is true not just of the vaccines and therapies that are just now coming to fruition, it applies equally to the myriad technological tools and creative works that are keeping many people around the world connected, informed, and educated, and our economies productive. If the global commitment to intellectual property rights is seriously eroded it is difficult to imagine that the world will be as well prepared for the next crisis.

Still, our conception of intellectual property and related rights has room – and a need – to evolve. In a future economy whose productivity will be even more driven than today’s by intangible assets – education, workforce training, business processes, relationships, etc. – we need to broaden our view of intellectual property to allow individuals, businesses, and governments to better invest in and leverage those assets. Forms of ownership and exclusive rights will be part of the formula but not the whole story. That is the key to enabling broader participation in the fourth industrial revolution and sustaining the emerging global middle class that is so threatened by the pandemic.

Is there a middle path, a balance between IP, profits and affordable, accessible, safe public health? Any suggestions, examples that the Global Innovation Policy Center (GPIC) advocates?

Oftentimes these conversations on intellectual property are posited as an if-then, either-or dilemma, and especially the people versus the corporations. These are false dichotomies.

People everywhere need access to therapies to address a wide range of healthcare needs. Massive financial resources are required to support advanced R&D, clinical trials, and other breakthroughs emerging from a robust pipeline.

The question we need to ask is how do we create the legal, economic, and political conditions to maximise both innovative output and access to innovation? In addition to millions of lives and untold suffering, the COVID-19 pandemic will cost the world trillions of dollars in lost economic output.

Whatever the price tag associated with a vaccine, it will cost far less to develop, manufacture, and distribute to everyone in the world, than has already been lost. Isn’t it worth the investment in intellectual property to sustain innovation and have the capability to end this pandemic and the next crisis, too?

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