Shortly after taking office, the Biden administration signed a waiver of the TRIPS agreement. The TRIPS Agreement requires member states to have at least minimum standards for the protection of intellectual property. That waiver allowed developing countries to copy our COVID-19 vaccine. Naturally, no one wanted to imitate Chinese or Russian vaccines.
This was done under the false assumption that patent rights prevented these countries from receiving much-needed vaccines. was the difficulty of expanding production to meet the global demand for Efforts are underway to extend TRIPS waivers to his COVID diagnosis and treatment (a poorly defined term), as unused vaccines now flood the planet. By the way, China is considered a “developing country” with exemptions available.
The Office of the U.S. Trade Representative has asked the U.S. International Trade Commission to investigate whether such an extension is warranted. This commitment includes seeking public comment by Friday, May 5, 2023.
The Bayh-Dole Coalition, which I lead, has just submitted the following letter to US ITC Director Lisa Barton.
Dear Secretary Burton,
The Bayh-Dole Coalition appreciates the opportunity to provide important context regarding the US International Trade Commission’s investigation into expanding waivers of trade-related aspects of the World Trade Organization’s Intellectual Property Agreement.
The upcoming TRIPS exemption decision will have a significant impact on the future of innovation in the United States. It will determine whether the United States remains at the forefront of cutting-edge research and development or abandons world-class medical and technological breakthroughs.
For context, the Bayh-Dole Coalition is a diverse group of innovation-minded individuals and organizations dedicated to safeguarding one of the most important laws of the 20th century, the Bayh-Dole Act of 1980. . From firefighting drones and quantum computing to cervical cancer screening and rotavirus vaccines for children, we offer a range of innovative technologies. The list goes on.
By re-establishing long-standing American intellectual property principles, the Bayh-Dole Act has restored incentives to stimulate innovative talent in our country. That is, its ownership is subject to inventorship. In the 1970s, most scientific breakthroughs at universities and non-profits (that were federally funded) were gathering dust on the shelves. reason? The government has claimed ownership of the patents derived from the inventor’s discoveries and licensed only 5% of them for commercialization.
Passing the Bayh-Dole Act rectified that. The law allows universities, nonprofits, and small businesses to retain ownership of patents on their inventions and entitle private sector partners who can turn major scientific breakthroughs into viable consumer products. I was able to license it. It also enabled federal laboratories to effectively license their findings for commercialization. These artifacts have benefited not only Americans, but people around the world. However, it must be remembered that these partnerships carry enormous costs and risks for developing companies. Gambling often pays off. Our system works and is recognized as the most effective system in the world. It has helped make the United States a world leader in innovation. However, while this system is successful, it also strikes a delicate balance.
On behalf of the Bayh-Dole Coalition, we are concerned that expanding TRIPS exemptions could catastrophically undermine this important ecosystem.
Lessons learned from Covid-19
Covid-19 underscores the beneficial results produced by public-private partnerships operating within robust intellectual property frameworks. Early in the pandemic, life sciences companies, research universities, and federal laboratories responded to calls to develop vaccines, treatments, and diagnostics for Covid-19 in record time. Partly because the Bayh-Dole and the US patent system have been working flawlessly in the background for years. This gave us confidence that the rules of the game were well established and that the government could be trusted in high-risk partnerships.
Bayh-Dole has driven the university’s basic research that underlies many Covid-19 technologies, including an mRNA vaccine platform developed at the University of Pennsylvania and the antiviral drug molnupiravir developed at Emory University. The university has licensed this research to a private company with the necessary expertise and resources to provide life-saving medical products to patients around the world.
Suspending the intellectual property rights that made these discoveries possible undermines the government’s credibility as a trusted partner. Such behavior undermines the incentives for companies to license scientific research from university researchers. The promising but risky medical innovation pipeline will quickly dry up.
The investment calculation is clear. Considering the many failed research projects, developing just one successful drug costs about $2 billion and up to 10 years of development. Only 12% of patients enrolled in clinical trials ultimately receive FDA approval for patient use.
The government, primarily through the National Institutes of Health, plays an important role in supporting university-led research that advances medical discovery. However, it is the private sector that bears the costs of developing approved discoveries and bringing new drugs to market. They spend about three times as much on drug development as the NIH. In total, nearly 70% of US medical and health research and development funding comes from the private sector. In fact, according to a new study, companies invested $44.3 billion in the development of 18 food- and drug-approved treatments that cited NIH-backed inventions, while the NIH invested in the underlying research. of $670 million.
No company licenses a university-patented molecular platform and invests billions in its development and commercialization. This scenario eliminates any possibility of recovering their investment, as well as directing additional capital to new ventures. And this threat is especially detrimental to small businesses, which license his 70% of academic inventions and produce about 60% of new prescription drugs.
Such companies must rely on venture capital to survive. Investors know they have to wait years to recoup their investment. What kind of investor would make such a bet, at the added risk that the government might hand over the inventions on which the company is based if it were politically favorable?
Why would we risk throttling the very system that made many Covid-19 vaccines, treatments and diagnostics available in the first place?
The truth of supply and demand
The TRIPS vaccine waiver, adopted by the World Trade Organization last year, was proposed as a way to address low vaccination coverage in developing countries and make Covid-19 vaccination more widely available.still there was There is no evidence of an IP-related vaccine supply shortage. In fact, there was a global glut and millions of shots were wasted.
The real problem was vaccine hesitancy and field logistical challenges, all of which had nothing to do with IP protection.
The same applies to Covid-19 treatment and diagnosis. Indeed, according to correspondence from Mexico and Switzerland to his WTO TRIPS Council,
“Governments and NGOs have purchased 35 million COVID-19 treatments for LMIC in 2022, but as of September this year, only 10 million had been delivered. Global demand for testing is declining. , there is no evidence to suggest that supplies are limited relative to actual demand.Diagnostic companies that work closely with WHO and provide sample collection kits to WHO report that there is a large surplus of product ordered. This includes logistical and distribution issues, which are not IP related but need to be addressed.”
This landmark global pact, a completely unnecessary suspension of TRIPS, ignores the real cause of the uptake challenge and will not increase access to Covid-19 products worldwide. , it would impede the development of life-saving technologies across the US IP-intensive sector, jeopardizing the US economy and national security.
Precedents for America’s Research Ecosystem
The United States is now the world leader in the production of new drugs. Expanding TRIPS exemptions not only jeopardizes this, but also allows competitors such as Russia and China to steal our technology and steal our research.
U.S. leaders are well aware that public-private partnerships foster innovation and fuel economic growth. It is therefore concerning that the US government would consider sending this signal to US researchers and innovators. This is especially true now that the economy is on the brink of recession.
Expanding TRIPS exemptions would set a dangerous precedent for all research-intensive industries. If the federal government can revoke IP protections for technology needed to fight the pandemic, there is little that can be done to stop other governments from doing the same. In fact, the UN Secretary General has already called for the denial of patent protection for critical energy technologies in order to keep them freely available.
The proposed TRIPs abandonment opens the door for using the same strategy for other important techniques that rivals want to imitate. It would have devastating consequences for American innovation across the board. Such precedents would undermine incentives for innovation and stifle life-saving ventures. People in this country and all over the world will suffer as a result.
The United States must reject attempts to undermine the innovative ecosystem by expanding TRIPS exemptions. Our ability to defeat the crises of today and tomorrow, for the benefit of people around the world, depends on it.
Please consider this.
