The Remaking of Big Pharma in a Post-Pandemic World

COVID-19 has bucked conventional wisdom on how the industry must operate.

Employees of the Gabonese pharmaceutical factory Sogafam
Employees of Gabonese pharmaceutical factory Sogafam—the first-ever pharmaceutical plant to make generic drugs against HIV/AIDS—gather pills at the Owendo plant in 2005. DESIREY MINKOH/AFP via Getty Images

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Twenty years ago, the world’s top drug producers teamed up with rich nations—led by the United States—to fight a global battle to limit the low-cost generic production of antiretroviral medicines used to treat HIV. In South Africa, where AIDS deaths had reached 100,000 and were growing, the battle raged on several fronts. The Clinton administration was pressuring South Africa to stop production of generics meant to save its citizens’ lives. Big Pharma was suing the country with the same aim (even though brand-name HIV drug manufacturers profited little from a place where few could afford drug cocktails costing up to $15,000 per year). It took years of global pressure to stop the Clinton administration and the lawsuit: South Africa was eventually able to access cheaper generic drugs, which today cost only $75 per year. But even with millions of lives at stake, public health has continued to take a backseat to intellectual property. The coronavirus pandemic may finally change those calculations.

Big Pharma and its wealthy government backers have long defended their high prices and strict patent rules by pointing to the need to protect their intellectual property (IP) given the time and expense involved in research and development. They argue that companies would have little incentive to invest in development without years of high prices first. Only then can they permit widespread production of low-cost generic versions that would benefit everyone.

The new coronavirus has upended this norm. Powerful governments with a long track record of enforcing global intellectual property rules on behalf of their corporations and against the developing world have suddenly loosened up now that they face their own health crises. In Israel, the government used compulsory licensing, a legal tool, to sidestep the pharmaceutical company Abbvie’s patents for its HIV combination drug lopinavir/ritonavir—at the time believed to be effective in treating COVID-19. A compulsory license is a safeguard in IP law that allows governments to use a patent without the owner’s consent when necessary to meet public health needs. Poor countries that have used compulsory licensing have faced retaliation when they’ve used it in the past to battle HIV.

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For years, Abbvie had fought to control the drug’s production. Now, following the Israeli government’s unilateral action, it has gone one step further and dropped enforcement of its patent claims for lopinavir/ritonavir worldwide. That will primarily help HIV patients who have long needed the drug, as it removes the last patent obstacles and will enable widespread production of low-cost generics. Under pressure from the Dutch government, which has already shown signs of a new attitude to medical IP, the Swiss pharmaceutical giant Roche shared the formula for a key component of its coronavirus test so that other companies can also produce kits. These governments’ efforts expose the hypocrisy of rich countries: When it comes to the lives of their own citizens, intellectual property—once inviolate—stops mattering as much.

Conventional wisdom has proved breakable, even irrelevant. European Union countries took no time to pivot to self-preservation in the fight over masks and other resources. Democracies from Israel to South Korea quickly adopted technology to monitor and limit the movement of citizens, with little protest. Many of these changes are unsettling, but some of this disruption can pave the way for a better world.

Pressure is building to ensure the rules that have long benefited Big Pharma do not stand in the way of medicine or technology needed to combat COVID-19. Nearly 150 civil society groups and activists are already demanding it, calling on the World Intellectual Property Organization, a U.N. agency, to support countries prioritizing public health, while encouraging IP holders to voluntarily remove restrictions. The World Health Organization is supporting a Costa Rican proposal to pool IP for technologies needed to combat the coronavirus so that all countries—but particularly poorer countries—may access, develop, and manufacture treatment and other needed technologies at lower cost. The U.N.-backed Medicines Patent Pool, an organization that has successfully shared IP to enable low-cost generic production of medicines related to HIV, tuberculosis, hepatitis C, and other diseases, has expanded its mandate to include COVID-19. The novel coronavirus requires a global response to ensure all countries can successfully combat it. Borders can’t prevent the coronavirus bubbling up again if it lingers in poor countries after being defeated in rich ones.

The level of global unity now is remarkable, with international researchers collaborating at an unprecedented level in a scramble for a coronavirus vaccine and treatment for COVID-19. The question is what happens afterward.

It should not have taken this pandemic for the world’s most powerful countries to learn that the rules it had set in place could undermine their economies, and that these same rules have primarily benefited the pharmaceutical industry, not public health. In recent years, some wealthy governments, including some in the European Union, have balked at skyrocketing costs and also questioned why corporate research and development did not produce more necessary drugs, such as antibiotics. But by and large, little has changed. Now, U.N. agencies including the WHO, the World Trade Organization, and the World Intellectual Property Organization—in close collaboration with civil society organizations and with key leadership from developing countries—should start mapping out a new way of conducting research and development. They should focus on helping develop affordable medicines for the most pressing health needs.

Luckily, they do not need to look far. Starting in 2003, the WHO, with participation from the World Trade Organization and the World Intellectual Property Organization, already launched a series of commissions and member state negotiations that produced plans and recommendations for how a new system would work. They included how a global research and development system could be better coordinated and funded, with the intent not to rely solely on IP and other policies that facilitate drug monopolies. The recommendations in these reports received the support of experts and were endorsed by WHO member states. Nonetheless, the United States, the EU, and to some extent Canada continued to block progress on implementation. Now is the time to revisit those plans. At a moment when global cooperation is more critical than ever, such action would help shore up our badly battered confidence in globalization and the international system.

Despite companies’ protestations that they bear tremendous costs, public money already bankrolls a significant amount of medical research and development. A 2018 report showed that U.S. taxpayer dollars contributed to all 210 drugs approved by the Food and Drug Administration between 2010 and 2016, topping $100 billion. Discoveries made in university labs, frequently the most medically significant, have too often been handed over to private companies with few stipulations on availability and affordability. That should change. The pharmaceutical industry may have the capacity to take university research and turn it into a marketable product, but they do not produce normal commodities. They produce lifesaving medicines.

At present, the system is working for the profits of a few, not the good of everyone, and many people die because of it. They die either due to cost or because the industry has had less of an incentive to focus on diseases that impact the poorest—and greatest—number of people. The focus has been to serve the market—that is, those who can afford to pay for treatments. In the short term, proposals like Costa Rica’s COVID-19 Technology Pool to make relevant technologies globally available to fight the virus, if fully implemented with the assistance of the Medicines Patent Pool and cooperation of patent holders, will help speed access to technologies needed to return the world to some semblance of normalcy.

In the long term, we need to reform the way we conduct research and development and regulate intellectual property. As nations begin to examine how to prevent such an outbreak in the future, larger issues such as how our medications are researched, patented, and priced need to be on the table. Many countries—including some influential ones—will want to take a closer look at the balance between profits and global health. As it turns out, safeguarding health, preparing for outbreaks, and saving lives—even outside our own countries—is actually good for the economy.

Ethan Guillén is an independent consultant working in global health.

Melissa Chan is a national and foreign affairs reporter who previously worked as a broadcast correspondent for Al Jazeera. She is a collaborator with the Global Reporting Centre and a term member of the Council on Foreign Relations.

Audrey Wilson is an associate editor at Foreign Policy. Twitter: @audreybwilson

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