The Covid-19 Technology Access Pool: Sharing is caring?

David Knight, partner and Joshua Marshall, senior associate at Fieldfisher discuss the implications the Covid-19 Technology Access Pool is having on innovation in pharma. 

Devising a vaccine to immunise against the coronavirus is a priority for many of the world's leading pharmaceutical companies, research facilities and national governments.  This "call to arms" is necessary at a humanitarian level, to save as many lives as possible, but also has economic and social implications by allowing people to resume their usual day-to-day lifestyles.  However, there remains a concern that a pharmaceutical arms race to produce a vaccine may have the undesired consequence of leaving many low-income countries behind when it comes to immunising against the coronavirus.

The patent system in the UK

The prevailing theory underpinning the patent system is based on a need to incentivise invention. The State agrees to grant the owner of an invention a 20 year legal exclusivity in exchange for a detailed disclosure of the invention and how it works. At the end of the 20 year period, the technology behind the invention falls into the public domain and competitors are free to manufacture their own variants. The theory is that, during those 20 years, the inventor and/or patentee can generate revenue from their invention which, it is hoped, will offset the investment incurred in creating the invention and result in profit. In this sense, the State incentivises innovation through a legal exclusivity as well as disclosure of a technical advancement, which enriches the state of the art to the benefit of everyone.

Due to the market authorisation required to sell pharmaceutical products in the UK, it can take time to make the product available on the market. This delay eats into the 20 year window in which the patent holder has exclusive rights to exploit their invention. However, where the patent protects an active ingredient used in a pharmaceutical product, the patent holder can apply for a supplementary protection certificate (SPC). The SPC compensates for this delay by granting up to 5 years of additional protection over the active ingredient on the expiry of the 20 year patent term.

The pooling initiative

There is a growing fear that the patent system could be utilised so as to restrict the ability of poorer countries to purchase coronavirus vaccines and treatments. This is because the patent system restricts who can utilise the invention, increasing demand and driving up the price.  Similarly, there is likely to be a stockpiling of effective vaccines and treatments in anticipation of a second wave of coronavirus, which will create scarcity. As a result of this fear, the World Health Organisation has proposed an initiative through which any patents which cover vaccines, pharmaceuticals and/or methods of treatment that relate to the coronavirus are to be shared worldwide. This initiative has been termed the Covid-19 Technology Access Pool ("C-TAP").

The aim of C-TAP is to ensure the equitable distribution of supplies relating to coronavirus and that poorer countries are not left behind. These less economically developed countries can often fall outside of a patentee's target market when seeking to exploit a patented invention and may not be able to afford the vaccine. The initiative would see patents being pooled, with companies and governments able to request a licence for the use of the patented invention. This, in turn, would allow vaccines and treatments to be shared globally with the potential manufacture of generics in poorer counties. It would also facilitate the sharing of information between entities, including trial data which, in theory, will speed up the process for successfully creating a vaccine. 

In addition to poorer countries, the initiative has the backing of wealthier countries, including Belgium, Norway, the Netherlands, Luxembourg and Portugal. The scheme also has the backing of India, one of the world's largest generics drug manufacturers. Notably, the US has not backed the initiative, stating that it sends the wrong message to innovators by removing the incentive for them to innovate. Similarly, several large pharmaceutical companies have distanced themselves from the initiative, arguing that removing the protection of IP rights is dangerous because it removes the incentive to innovate at a time when global demand is, arguably, at its highest.

Collaboration during Covid-19

The global pandemic has led to collaboration between entities which, ordinarily, would be competing with one another. Companies like Rolls Royce and Dyson have commenced manufacture of ventilators to meet demand whilst other companies, such as Smiths Group, are making the details of their ventilators available for other manufacturers to produce. Similarly, through data sharing, the Covid-19 symptom tracker app is harvesting patient data from across the UK to map those areas most affected and help researchers to assess the rate of infection.  Even pharmaceutical companies are finding ways to collaborate. Sanofi’s CEO recently described the Sanofi-GSK Covid-19 vaccine partnership as an “unprecedented alliance of two vaccine giants”.

In light of these collaborative endeavours, it is hoped that the issues which C-TAP seeks to guard against will not materialise. The patentee of a successful vaccine may well elect to structure its pricing so as to reduce its own profits and keep the cost down for poorer countries. Additionally, the reputational benefits and goodwill flowing from the invention of a viable vaccine and subsequently ensuring that vaccine is widely available, are likely to be huge. This may have a material value to the relevant entity concerned. 

How effective will C-TAP be?

It is interesting to note that many governments, including the UK's, are providing public funding to pharmaceutical companies and research facilities to support the development of a vaccine. It is hoped that this will go some way towards offsetting the large overheads incurred in getting a drug from the R&D phase, through development and market approval and to distribution. If that is the case, a patentee should be able to generate profit through the sales of the patented drug much sooner than they would otherwise do so during their 20 year patent term.  

The C-TAP initiative does not prohibit revenue from being derived by pharmaceutical companies through their patented inventions. It is envisaged that licence fees will be paid by governments in exchange for the right to utilise the patented invention, but at a lower price. This is not all that dissimilar to the FRAND licensing system that exists in the UK for standard essential patents.  How effective C-TAP will prove remains to be seen. Interestingly, there is a similar licensing system already in place to allow the manufacture of medicines to treat HIV, Hepatitis C and Tuberculosis.  

One solution may be for State-funded prizes to be awarded to entities that invent a vaccine or effective method for treating coronavirus. This may maintain the incentive to innovate by guaranteeing financial recompense for patentees once their product is patented, approved and ready for distribution. Of course, such a prize would be yet a further drain on the public purse.

The UK government has already set out its proposals to indemnify manufacturers of ventilators against potential intellectual property infringement claims. It is anticipated that the indemnity fund will be in excess of £3 million. There is an argument that a similar offer could be made to the manufacturers of generics in an attempt to guarantee a supply of any future vaccine. The issue is that patent infringement proceedings which relate to protected pharmaceuticals can be of extremely high value. The UK government would, therefore, be required to make an exceptionally large fund available to indemnify generics manufacturers. Also, the dynamic for coronavirus vaccines and treatments is different: the intellectual property around ventilators largely is already known, and the indemnity scheme is intended to remove the obstacle that such intellectual property might present to others wishing to step up to make ventilators, whereas coronavirus vaccines and treatments have yet to be discovered and the associated intellectual property created. The issue is how to incentivise research in the field, while at the same time enabling rapid take-up of any successful fruits of that research. 

Whoever is the first to invent and patent an effective coronavirus vaccine would likely have reasonable grounds to claim the invention is of outstanding benefit, given the global demand. It may be that this results in the UK Courts applying, for the first time, the judgment of the Supreme Court in Shanks v Unilever [2019] UKSC 45 in determining whether that inventor is entitled to claim compensation. However, any such claim would likely materialise several years from now, if at all.