Trickle Down Vaccines – The Coronavirus Patent Crisis

By Lukas Goettke, J.D. Candidate, 2020

The pandemic known as the coronavirus continues to spread throughout the United States at an alarming rate. Exact numbers of infections are hard to come by and the talk of a vaccine is still likely months away—if not more than a year away. However, assuming that a vaccine does become available in time to be useful against this virus, the United States has a patent protection hurdle that will likely hamper production efforts for that vaccine. This blog addresses the dire need to create an emergency mechanism that both relaxes patent exclusivity and maintains economic incentives in order to facilitate the widespread distribution of an effective vaccine.

In 2009, the spread of H1N1 across the United States exposed the weaknesses in the federal government’s response to public health crises—particularly viral pandemics.[i] One of the weakness exposed during this time was the inherent conflict between the patent holder’s exclusive right to manufacture a vaccine and the public’s need for quick, widespread access to the vaccine.[ii] Under 35 U.S.C. § 154(a)(1), an inventor has “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.” These exclusive rights allow a patent holder to restrict access to a critical vaccine. In fact, we have seen patent exclusivity wreak havoc in past public health crises in the past. Aside from the H1N1 spread in 2009, one of the other most illustrative examples of this problem can see in the 2001 Anthrax scare. At the time, there was only one FDA-approved drug to treat anthrax.[iii] In that instance, the United States and Canada were forced to rely heavily on negotiations with the patent holder in order to secure enough medicine to treat the public.[iv] The 2001 Anthrax scare and the 2009 H1N1 pandemic are also not isolated incidents; even today, prices for the human papillomavirus (HPV) vaccine remain too high for many global markets as a result of patent exclusivity.[v]

With over 32,000 confirmed cases, the need for a widely available vaccine will likely be paramount to the economic and public health security of the United States.[vi] At the same time, while there is a public health need for access to such life-saving vaccines, there remains a systemic need for the patent protection of those vaccines. If companies do not believe a vaccine will be profitable, they may not invest resources to develop the vaccine in the first place. Ultimately, the government must decide how best to balance these two opposing goals.  

An existing approach is to proceed under 28 U.S.C. § 1498(a), which allows the United States to break the patent holder’s protection while also allowing the patent holder to sue the government in order to recover their losses.[vii] Although using 28 U.S.C. § 1498(a) to break the patent is permissible under the law, it is nevertheless an inefficient mechanism because the patent holder has no guarantee of winning the case or recovering attorney’s fees. Another often proposed solution to this issue is the creation of compulsory licenses for specific drugs during public health emergencies.[viii] Under this approach, patent holders would have to grant compulsory licenses when the government declares a public health emergency. To keep licensing costs reasonable, the government would then set a dollar amount that other companies would be required to pay the patent holder for the license to produce the vaccines before the vaccine becomes available, and the patent holder would be barred from refusing a license to a manufacturer.[ix] This approach would permit any company to produce patented-vaccines during declared public health crises. Ideally, Congress would set the compulsory price in a way that licensees must sell above the market rate. This would allow patent-holders to maintain their price advantage while maximizing the vaccine output nationally. The critical difference between this approach and the existing approach is that patent-holders are guaranteed to profit without the uncertainty and cost of court processes, while also achieving the same availability goals as breaking the patent.

The idea of having a compulsory license waiting to be activated in a time of emergency is not new, but the dire need to create such law did not previously exist.[x] The world has not seen a deadly pandemic of this same magnitude in decades, and a vast majority of the most recent (and smaller) pandemics were largely over before the vaccine was fully developed.[xi] As a result, this issue has remained unresolved—but now is the time to resolve it. As medical professionals are fighting the virus in hospitals and clinics, lawyers and law students must take up the fight as well—by advocating for Congress to enact emergency licensing laws.  The legal profession is a demographic uniquely positioned to plan for the next steps. Right now, medical personnel are reacting to the situation at hand, but lawyers have the ability to act proactively by acting in such a way that would enable medical professionals to do their jobs in both this pandemic and contagions yet to come.

Whether the best solution is to enact emergency licensing laws, or something else, remains to be seen. But the legal community should start working on the problem now—not once this is over. The cogs of the legislative system are already slow moving. By the time the solution is found and passed, the vaccine would likely be right on the doorstep. Ideally, the solution would solve the problem for the present and the future, avoiding as many negative consequences, and lost lives, as possible.

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[i] Michelle Kaplan, The 2009 H1N1 Swine Flu Pandemic: Reconciling Goals of Patents and Public Health Initiatives, 20 Fordham Intell. Prop. Media & Ent. L.J. 991, 992 (2010).

[ii] Id. at 993.

[iii] Cynthia M. Ho, Inoculation Inventions: The Interplay of Infringement and Immunity in the Development of Biodefense Vaccines, 8 J. Health Care L. & Pol’y 111 (2005).

[iv] Id. at 113-114.

[v] Peter Maybardule & Sarah Rimmingto, Compulsory Licenses: A Tool to Improve Global Access to the HPV Vaccine?, 35 Am. J.L. & Med. 323, 325 (2009).

[vi] Faith Karimi & Dakin Andone, US cases top 32,000 as New York governor estimates 40% to 80% of state will get coronavirus, CNN (Mar. 23, 2020, updated 6:12 AM), https://www.cnn.com/2020/03/22/health/us-coronavirus-wrap-sunday/index.html; see alsoCenters for Disease Control and Prevention, Cases in the U.S, https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html (last visited Mar. 23, 2020) (showing that the total number of coronavirus cases reported in the United States as of last Friday was less than half of the total number of cornonavirus cases reported as of this morning).

[vii] Ho, supra note iii at 149.

[viii] See Kaplan,supra note i; Ho, supra note iii; Maybardule & Rimmingto, supra note v.

[ix] Ana Santos Rutschman, IP Preparedness for Outbreak Diseases, 65 UCLA L. Rev. 1200, 1248 (2018).

[x] Id. at 1261-64.

[xi] See generally Kaplan,supra note i; Ho, supra note iii; Maybardule & Rimmingto, supra note v(each outlining the impact of various public health events).