This pandemic has become a crusher of what the economist John K. Galbraith called the “conventional wisdom”. In less than a year and a half, much of what was true in economics and politics appears to be subject to accelerated reconsideration, the consequences of which are still unpredictable.
The last of these accepted truths that has been questioned is that of intellectual property as an essential support for scientific innovation and the development of biomedical products that our societies need. If the pharmaceutical sector – which has received a unprecedented amount of public resources against the coronavirus and whose only obligation is to meet the demand for vaccines, diagnostics and treatments – breaches its part of the agreement, society has the right to deprive them of the oligopolistic exclusivity offered by patents and to extend production to other manufacturers.
So far, (almost) everyone agrees. The problem – we have already said it in this blog – is that the temporary exemption of intellectual property rights is a complex and delayed issue. And what is more important, of dubious consequences if it is not accompanied by other measures such as the transfer of technology, knowledge and infrastructure that allow production to scale in low- and middle-income countries. And this is an area where moral certainties are scarce: even with an installed capacity and a trained and available staff, the cost of setting up three Moderna vaccine production lines in a Swiss factory was 210 million dollars (174 million euros). This amount would save the lives of 2,620,000 children in low-income countries, financing a complete immunization routine against 18 diseases over a decade. Where should we put the money, knowing further that half of these pre-covid vaccines are already produced in developing countries?
The debate on the reform of the biomedical innovation model and access to medicines seems to have stalled on the issue of exemption, but we need to open a broader conversation. And in that conversation we are all going to have to answer some awkward questions. I propose four to which I have been going around for some time:
- Can the pharmaceutical sector justify the perpetuation of a model whose disproportionate benefits depend on public protection against competition? Even accepting that the business of biomedical innovation requires taking on significant financial risks, the reality is that the benefits of this sector vastly and unjustifiably exceed the average of other comparable business sectors (29.4% ebitda margin, compared to 19% on average for the S&P 500). Public protection begins with investment in basic research, continues through clinical trials, and extends through a patent system obscenely manipulated to keep the competition away for decades.
- Are NGOs putting the political trophy before solving the problem? Activists carry more than twenty years fighting for the reform of this model of intellectual property. It is very understandable that the opportunity opened by the covid-19 and the doubts expressed by previously immovable actors such as the US have aroused illusions and are now concentrating all tactical efforts. But there is a risk that the trees prevent us from seeing the forest. It is urgent to explain to society that this measure is necessary, but not sufficient. And to work on the generation of an alternative model for the incentive of innovation that, until now, the NGO sector is not proposing. Businesses are a tool, not the enemy, and we must find a way to put their value at the service of a fairer and smarter system.
- Does the Government of Spain offer more than good words? Our country has been one of the first in the EU to be open to the exemption of patents, against the criteria of partners such as Germany. The last public statement was this week, by President Sánchez himself and in the very Financial times. But, when it comes to the lobby Pharmacist, everything is bull up to the tail. In his recent (April 30) letter of reply to 83 organizations that requested a commitment from the Government in this regard, the director of the Presidency’s Cabinet included almost everything except that. We will have the opportunity to verify the true disposition of Spain during the G20 health summit next week, where the government must get wet in the measures of facilitation of the trade in vaccines and support to COVAX that the president stands out in his rostrum for the FT.
- What if the exemption is actually a lifeboat for this model of intellectual property? My colleague in ISGlobal Rafael Vilasanjuan has a lucid look about this issue. One of the arguments that he repeats – and with which I agree – is that the approval of the exemption is not a questioning of the model, but rather an adjustment within its rules that may end up strengthening it, rather than the other way around. As happened in the case of antiretrovirals against HIV ago twenty years, big companies and their allied governments can agree to take a small turn to return to the exact point where we are now. If we do not take the opportunity to introduce structural reforms in other areas, such as the public procurement system, we run the risk of making bread like cakes.
The economist Galbraith always encouraged us to question accepted truths. His career allowed him to do it on occasions as famous as the New Deal, of Roosevelt, or the Great Society, by Johnson. Both were transformative responses to crises and social gaps of a generational magnitude. It is not uncommon to find similarities with the situation we now live in.