Big Pharma gets its way with voluntary licensing

Photo by Artem Podrez on

On Wednesday, Reuters reported that G20 leaders would adopt a declaration recommending voluntary licensing (more on this in a bit) to increase COVID-19 vaccine production.

A little over two weeks ago on May 5, U.S. President Joe Biden announced his administration’s support for waiving intellectual property (IP) rights for COVID-19 vaccines. Between these two separate announcements, pharmaceutical companies, oligarchs, government leaders, and their respective minions conducted an all-out war against the the idea of a COVID-19 vaccine patent waiver. A variety of media outlets published the hysteria and intense opposition.

Pfizer CEO Alfred Bourla whined in an article published at CNBC that the IP waiver would subject poor Pfizer to competition for the “raw materials we require to scale our production.” Bourla also attempted to stoke fear about the waiver, stating that it would open the way for unsafe vaccines. German chancellor Angela Merkel expressed similar sentiments, warning us that the waiver would have “serious implications” on production capacities and safety standards. The Washington Post published an op-ed featuring a statement from Rep. Kevin Brady (R-Tex) informing us that the waiver would “reward China with access to U.S. innovation”. The Hill published a truly hysterical op-ed yesterday written by Grover Norquist denouncing the Biden Administration for implicitly endorsing “the rampant theft of American intellectual property by China”. A May 9 op-ed written by former Democratic congressman Ron Klink appeared in the Pittsburgh Post-Gazette arguing that the waiver would only sabotage the distribution of COVID-19 vaccines. And a letter from Senate Republicans urging the Biden Administration to reverse its position and calling the position a gift to China has been featured in Bloomberg and other mainstream outlets.

On May 14, Lee Fang revealed that a lot of the opposition we were reading were straight up talking points distributed by the pharmaceutical industry. The three main talking points:

  • Sharing vaccine production expertise would hurt the American job market and give allow China to exploit American innovation.
  • A COVID-19 waiver would help Russia and China and allow China to “gobble up vaccine supplies and technology”
  • Waiving COVID-19 intellectual property would “undermine the global response to pandemic and compromise vaccine safety”

Indeed as evidenced above, these talking points in direct opposition to the IP waiver appeared again and again all over mainstream media.

Bill Gates has taken a different approach to the COVID-19 vaccine IP waiver battle. After facing widespread ridicule for staunchly opposing it, Gates pulled a 180. Two days after Biden’s announcement, the Bill and Melinda Gates Foundation released an announcement of its own in support of a “narrow waiver during the pandemic.” This is a calculated move from Gates that allows him to give the illusion that he is in support of the COVID-19 waiver while undermining it in less obvious ways.

Back to voluntary licensing. Over the past few weeks, it has gained traction in the press as a method to improve vaccine access. Prashant Yadav, a former strategy leader of supply chain at the Gates Foundation, has advocated consistently for voluntary licensing. Yadav is currently a senior fellow at the Center for Global Development, an organization to which the Gates Foundation has contributed at least $46.8 million in funding for active projects spanning 2018-2023. Yadav went on a media tour recently continuing his voluntary licensing advocacy and urging us to restrain excitement about the positive impacts that would be brought about with a COVID-19 vaccine waiver. He contends that the vaccine waiver would have minimal impact in the short term and that the larger issue is production capacity. More specifically, Yadav believes we should focus on helping existing manufacturers, or the handful of companies like Pfizer who have a stranglehold over IP. Furthermore, we should help them expand production capacity, know-how, and in turn profits from COVID-19 vaccines. While making these points, Yadav is always very careful to praise the US announcement of support for a COVID-19 vaccine IP waiver. Now I’m not saying that Yadav is a proxy for Bill Gates. I don’t have the proof for that allegation. I’m merely suggesting it’s a possibility.

What exactly is voluntary licensing, you might wonder? It works like this: a patent owner like Pfizer gives authorization to a generic company in the form of a voluntary license to produce the patented vaccine. The patent owner runs the show. It defines the standards of production, quality requirements, and the markets in which the generic company can operate.

Is voluntary licensing effective? For pharmaceutical companies and patent owners, yes. For the rest of us, not so much. Médecins Sans Frontières (MSF) has conducted extensive research into voluntary licensing and concludes that they “often come with abusive licensing terms and practices that needlessly undermine access to medicines for others”. It also concludes that the voluntary licensing model forces people and health programs to place an over-reliance on pharmaceutical companies’ voluntary actions. Furthermore, voluntary licensing models lack transparency and regulation.

A recent example of these shortfalls can be seen with remdesivir, a drug used to treat COVID-19. According to more research from MSF, Gilead was granted the primary patent for the base compound of remdesivir in over 70 countries, making voluntary licensing one of the only ways to overcome the patent. Gilead then secretly signed voluntary licensing agreements with only a few select manufacturers. This excluded “nearly half of the world’s population from accessing more affordable generics”, including “many countries with manufacturing capacity”. MSF warned that a “dangerous precedent” was being set and that “voluntary actions of companies are not reliable”.

So this is what the leaders of the biggest economies in the world have decided to go with. The U.S. is of course a member of the G20, so surely they have a comment on the latest news, right? Not yet. And that makes me even more confident in a suspicion that I’ve held for a while. The Biden administration was never serious about the COVID-19 IP waiver. Another victory for Big Pharma.

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