Breaking vaccine patents will only make next pandemic worse

The government’s decision to dip into COVAX, an international program intended to procure COVID-19 vaccines for low- and middle-income countries, was widely seen as another sign of its botched response to the pandemic, which has promised, but so far failed to deliver adequate supplies of vaccines for Canadians.

On Super bowl Sunday’s episode of CTV’S Question Period, Stephen Lewis, former united Nations’ special envoy for HIV/AIDS in Africa, called the decision a “profound mistake.” Host evan Solomon then asked Lewis whether pharmaceutical patents should be suspended to allow less developed countries to produce the vaccines domestically. Lewis said yes, because vaccine manufacturers are profiting from drug discoveries that are mostly funded with public money.

That is not correct. Pharmaceutical research and development (r&d) is funded from both public and private sources. Governments support basic scientific research by public institutes and universities. At this early stage, scientists identify potential chemical or biological candidates that might be useful for treating a particular health condition. Pharmaceutical companies also sponsor drug discovery, either as partners or by purchasing the intellectual property rights to the most promising candidate drugs, thereby compensating publicly funded research organizations for the cost of the basic science.

But, as the pandemic has shown, discovery is only the beginning of a long and much more expensive process involving several phases of clinical testing to confirm drug safety and efficacy. These later stages of r&d are almost entirely funded by industry, not government.

The most recent Oecd data show that in 2016, governments collectively spent us$53 billion ($67 billion) for all health-related r&d, including pharmaceuticals, across the Oecd countries. The pharmaceutical industry, on the other hand, spent us$101 billion, almost twice that amount.

Stephen Lewis’ hostility to the pharmaceuticals industry is misguided and, ultimately, harmful to public health. breaking vaccine patents will destroy the reward for taking on the risk of investing in clinical testing for potential new drugs, many of which fail to become useful medicines.

The most recent study of clinical trial success rates was conducted by a group of authors from the Massachusetts Institute of Technology using data from 406,038 trials and over 21,000 compounds. Their results were published in the journal biostatistics in 2018. They found that the overall probability of success for all drugs and vaccines was only 13.8 per cent, ranging from 3.4 per cent for oncology drugs to 33.4 per cent for vaccines.

High failure rates are a major driver of the cost of drug development. The most recent estimate of this cost was published in the Journal of Health economics in 2016 by researchers from Tufts university in boston. They found that the risk-adjusted capital cost of developing a new prescription medicine from initial clinical trials to regulatory approval by the u.s. Food and drug Administration was between us$2.6 billion and us$2.9 billion (in 2013 dollars). That translates to $2.9 billion to $3.2 billion in today’s u.s. dollars. And the whole process takes more than a decade.

Suspending pharmaceutical patents would unfairly transfer profits from the investors who funded the r&d to generic companies that have invested nothing and it would distort the risk-reward calculation that encourages people to invest in pharmaceutical r&d. Capital would flow out of the pharmaceutical business into non-pharmaceutical industries that produce higher or safer returns. Governments could not reasonably rely on taxpayers to fill the gap and fund the risky business of pharmaceutical development.

breaking patents would not ensure access to current vaccines. It would only hobble the development of future vaccines. It is also based on a false assumption that low- and middle-income countries have the domestic capacity they would need to manufacture their own generic versions of the vaccines. Most of these countries lack the basic infrastructure needed to store, distribute and administer vaccines.

Instead of suspending patents, wealthy countries can commit to subsidizing the cost of vaccines for people in low- and middle-income countries — as in fact the World Health Organization’s COVAX program is intended to do.

At the same time, the federal government should follow Israel’s example and negotiate a price that will incentivize patent-holders to license vaccine production to other pharmaceutical innovators with available capacity in Canada, thus using spare capacity to manufacture vaccines in larger volumes more quickly.

HIGH FAILURE RATES ARE A MAJOR DRIVER OF THE COST OF DRUG DEVELOPMENT.