Intellectual Property Makes Sure Drug Makers Deliver
By Jon Soderstrom, Ph.D.
House Democrats Peter DeFazio, Rosa DeLauro, Lloyd Doggett, and Jan Schakowsky want to nullify intellectual property rights on any experimental treatments for COVID-19. They believe their proposals will prevent "price gouging and profiteering" without harming innovation.
But they're wrong, according to Dr. Tony Fauci. The nation's leading public health expert recently warned against such efforts, noting that drug makers won't make huge research investments if there's no chance to realize "some degree of profit."
That doesn't mean any future vaccines and treatments will be expensive. In fact, Johnson & Johnson, AstraZeneca, Pfizer, and GlaxoSmithKline have already pledged to sell any potential vaccine at a nonprofit price.
How can these drug companies make such generous offers and still recoup their investments? Intellectual property.
Researchers know from experience that innovation is rarely a predictable or linear process. But they can reasonably anticipate that unexpected discoveries warranting intellectual property protection will be identified in the discovery process.
Discovering one medicine while looking for another is relatively common in biopharmaceutical research. Proscar, once sold to treat prostate enlargement, became Propecia once it was discovered to treat baldness; Viagra evolved from a failed heart-disease treatment.
The story of Zerit is less well known. A researcher at the Michigan Cancer Foundation first synthesized the compound in 1966, but found that it did not work against cancer. A couple of decades later, as the AIDS pandemic spread, two scientists at Yale University developed the drug further and discovered it was effective against HIV.
Yale, which held the patent, licensed it to Bristol-Myers Squibb, which took on the expense of conducting trials and brought the drug to market as Zerit in 1994. It became an important part of the first drug cocktail that transformed HIV from a death sentence into a chronic but manageable condition. In 2001, Bristol-Myers Squibb lowered the price of Zerit and another AIDS drug to below cost in African countries hard-hit by the disease.
The many years and players it took to get Zerit into the hands of millions of patients illustrate the complexity of drug development.
Only 12 percent of potential treatments that enter clinical trials are eventually approved by the FDA, and the average cost to develop a new medicine is $2.6 billion. If drug companies can't cover the cost of those failures through sales of their few successful products, they'll go out of business -- plain and simple.
That's why companies care so much about retaining the IP on any coronavirus vaccines or treatments. Even though they won't make money on the treatments themselves, the underlying antiviral technology could prove useful -- and thus lucrative -- in fighting other diseases in the future.
Unfortunately, as we battle the pandemic that has killed more than 130,000 Americans, calls to seize intellectual property from companies making medicines for COVID-19 are getting louder. Doctors Without Borders pressed governments to "suspend and override patents," while the group Universities Allied for Essential Medicines made a similar call.
These groups are motivated by fear of drug company profiteering, but there is no evidence that that is happening -- or will.
To the contrary, the system is working: Dozens of companies and universities are now investigating COVID-19 vaccines, and many more are researching treatments. If we strip away intellectual property rights, the system will break down and we'll find ourselves farther from ending our global health crisis.
Jon Soderstrom is the Managing Director of the Office of Cooperative Research at Yale University.
