Patents are Not the Problem!
For the last year and a half I have been shouting from the rooftops, "invest in capacity, build more factories, shore up the supply lines, spend billions to save trillions." Fortunately, some boffins in the Biden administration have found a better way, "the US supports the waiver of IP protections on COVID-19 vaccines to help end the pandemic."
Waive IP protections. So simple. Why didn’t I think of that???
Patents are not the problem. All of the vaccine manufacturers are trying to increase supply as quickly as possible. Billions of doses are being produced–more than ever before in the history of the world. Licenses are widely available. AstraZeneca have licensed their vaccine for production with manufactures around the world, including in India, Brazil, Mexico, Argentina, China and South Africa. J&J’s vaccine has been licensed for production by multiple firms in the United States as well as with firms in Spain, South Africa and France. Sputnik has been licensed for production by firms in India, China, South Korea, Brazil and pending EMA approval with firms in Germany and France. Sinopharm has been licensed in the UAE, Egypt and Bangladesh. Novavax has licensed its vaccine for production in South Korea, India, and Japan and it is desperate to find other licensees but technology transfer isn’t easy and there are limited supplies of raw materials:
Virtually overnight, [Novavax] set up a network of outside manufacturers more ambitious than one outside executive said he’s ever seen, but they struggled at times to transfer their technology there amid pandemic travel restrictions. They were kicked out of one factory by the same government that’s bankrolled their effort. Competing with larger competitors, they’ve found themselves short on raw materials as diverse as Chilean tree bark and bioreactor bags. They signed a deal with India’s Serum Institute to produce many of their COVAX doses but now face the realistic chance that even when Serum gets to full capacity — and they are behind — India’s government, dealing with the world’s worst active outbreak, won’t let the shots leave the country.
Plastic bags are a bigger bottleneck than patents. The US embargo on vaccine supplies to India was precisely that the Biden administration used the DPA to prioritize things like bioreactor bags and filters to US suppliers and that meant that India’s Serum Institute was having trouble getting its production lines ready for Novavax. CureVac, another potential mRNA vaccine, is also finding it difficult to find supplies due to US restrictions (which means supplies are short everywhere). As Derek Lowe said:
Abolishing patents will not provide more shaker bags or more Chilean tree bark, nor provide more of the key filtration materials needed for production. These processes have a lot of potential choke points and rate-limiting steps in them, and there is no wand that will wave that complexity away.
Technology transfer has been difficult for AstraZeneca–which is one reason they have had production difficulties–and their vaccine uses relatively well understood technology. The mRNA technology is new and has never before been used to produce at scale. Pfizer and Moderna had to build factories and distribution systems from scratch. There are no mRNA factories idling on the sidelines. If there were, Moderna or Pfizer would be happy to license since they are producing in their own factories 24 hours a day, seven days a week (monopolies restrict supply, remember?). Why do you think China hasn’t yet produced an mRNA vaccine? Hint: it isn’t fear about violating IP. Moreover, even Moderna and Pfizer don’t yet fully understand their production technology, they are learning by doing every single day. Moderna has said that they won’t enforce their patents during the pandemic but no one has stepped up to produce because no one else can.
The US trade representative’s announcement is virtue signaling to the anti-market left and will do little to nothing to increase supply.
What can we do to increase supply? Sorry, there is no quick and cheap solution. We must spend. Trump’s Operation Warp Speed spent on the order of $15 billion. If we want more, we need to spend more and on similar scale. The Biden administration paid $269 million to Merck to retool its factories to make the J&J vaccine. That was a good start. We could also offer Pfizer and Moderna say $100 a dose to produce in excess of their current production and maybe with those resources there is more they could do. South Africa and India and every other country in the world should offer the same (India hasn’t even approved the Pfizer vaccine and they are complaining about IP!??) We should ease up on the DPA and invest more in the supply chain–let’s get CureVac and the Serum Institute what they need. We should work like hell to find a substitute for Chilean tree bark. See my piece in Science co-authored with Michael Kremer et. al. for more ideas. (Note also that these ideas are better at dealing with current supply constraints and they also increase the incentive to produce future vaccines, unlike shortsighted patent abrogation.)
Bottom line is that producing more takes real resources not waving magic patent wands.
You may have gathered that I am angry. I am indeed angry that the people in power think they can solve real problems on the cheap and at someone else’s expense. This is not serious. I am also angry that they are sending the wrong message about business, profits and capitalism. So let me end on positive note. Like the Apollo program and Dunkirk, the creation of the mRNA vaccines by Pfizer and Moderna should be lauded with Nobel prizes and major movies. Churchill called the rescue at Dunkirk a "miracle of deliverance," well the miracle of Moderna will rescue many more. Not only was a vaccine designed in under a year, an entirely new production process was set up to produce billions of doses to rescue the world. The creation of the mRNA vaccines was a triumph of science, logistics, and management and it was done at a speed that I had thought possible only for past generations.
I am grateful that greatness is still within our civilization’s grasp.
Addendum: Lest I be accused of being reflexively pro-patent, do recall the Tabarrok curve.
Comments
I've been waiting 48 hours for a response on this topic and the response did not dissapoint.
It's one his better recent posts.
Here is the real world. Patents aren't about getting vaccines less available, whatever shortages experienced more are functions of regulatory, supply chain, capacity 'issues.'
Apparently, Moderna seven months ago announced it would not defend its patent.
So, the immediate pomp and circumstances is really about an honest politician - he who stays bought. Senile puppet (and World-class liar) Chinese Joe and the Chinese occupation Junta simply are facilitating their CCP masters' massive, decades-long IP theft operation.
This is an excellent post, but I wonder if a shorter and more measured message would have gotten the point across more persuasively to someone inclined to disagree. I have talked to several friends in the past few days who reflexively distrust anyone who, in their words, "wants to give more money to pharmaceutical companies".
Did your friends identify whose more money would be given to pharma companies?
lemme see here.... this is about giving taxpayer money to pharmaceutical companies as part of the global communist conspiracy?
ok. got it.
I am as angry as you are, while not as well informed. This is a betrayal of heroes. The researchers and their backers who created these miracle drugs are heroes. The system that enabled them needs to be preserved. Instead, the global left and the weak-willed pseudo centrist in the White House destroy the only system that has worked, and, in its place, erect a massive disincentive to replicate this success.
It's interesting to see the return of Being Stupid as American government policy. Bring back the Orange Oaf!
Thank God!
About 85 millions Americans democratically stopped that hateful dastard's policies fostering soaring family incomes, historic low unemployment, low taxes, high growth, rising asset prices, peace, . . .
Put down the peace pipe, Dick. Your Very Stable Genius' policies led to dropping in family incomes, historic high unemployment, increase in crime, record deficits, and shortages everywhere. But you do what keeps you happy!
And It's not like it's that expensive to begin with. Like $10/dose. I get for the super poor countries that's prohibitive, but most countries, even for very poor ones, the cost of the vaccine isn't the biggest barrier.
Betrayal of heroes? Are you fucking shitting me? Heroes aren't trying to save lives for the money or the recognition. Heroes do what they do because it's the right fucking thing, damn the consequences. How much money did Jonas Salk make from the polio vaccine, or was that a betrayal of heroes as well? Please, fucking educate yourself on the issues with sources other than Fox News and ONA before you go on another ignorant uninformed rant about something you clearly know absolutely nothing about.
"erect a massive disincentive to replicate this success."
You're worried that if this happens again the taxpayers won't throw billions at the companies in subsidies next time?
> You're worried that if this happens again the taxpayers won't throw billions at the companies in subsidies next time?
We are increasingly seeing government using their powers to give away that which isn't theirs. For example, many cities govs have decided to mandate grocery stores pay workers $4 more per hour. In spite of the grocery stores earning $3 in profit per hour of labor.
We're seeing govs mandate landlords not evict anyone for not paying rent. Meaning during the pandemic landlords are just expected to absorb a 12+ months of free rent.
We're seeing federal gov mandate more paid leave, time off, more health care benefits, etc.
And now we're seeing the federal gov give away IP. Just take it and give it away.
Notice in all cases the gov is very, very quick to give away the money of others. But if you try to take away the govs money, you will be met with a gun. You must never, ever touch their money.
I hate to burst your robot bubble but governments set the minimum wage, the terms of patents, the working conditions of federal workers, and none of these are new powers unless you live in a time machine. I think you need to upgrade your hardware, MrRoboto. You likely have a small unit.
I wonder, how much government money went into the R&D and production of these vaccines you're so quick to criticize them giving away at someone else's expense. We know Merck got $269M on he production side of the J&J vaccine. We also know that Moderna got $2.5B in direct grants for development from the US govt and close to another billion indirectly from other research awards funded by the NIH. Please do yourself a favor and at least attempt to understand the funding for developing a product before you complain about the govt deciding it should be given away "at someone else's expense", you'll look less like an uninformed tool.
https://www.usatoday.com/story/news/factcheck/2020/11/24/fact-check-donations-research-grants-helped-fund-moderna-vaccine/6398486002/
"Notice in all cases the gov is very, very quick to give away the money of others. "
Notice also, in all cases, the government is giving that money to somebody.
> Notice also, in all cases, the government is giving that money to somebody.
Yes, in return for votes. Which makes it even worse.
A small group of engineer/scientists and organizers produce all of the stupendous value in our society. Ordinary people who do the tasks that help actualize that value play a certain role too. However, most of what we are doing as a society is merely fighting over how to distribute the value created by that tiny cadre of highly talented people amongst ourselves.
"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as "bad luck." ~ Robert A. Heinlein
Great post.
I think COVID-19 is the kind of rare crisis that could justify a patent waiver if it actually helped. However, I don't see any evidence that it will help. It amounts to punishing pharma companies (again) because they are the "bad guys".
It's sort of like a capital gains tax hike that doesn't raise any money...
What it will do is enable copycat vaccines to appear, say, a year from now--when the supply shortages will be over, but the concerns about disincentivising innovation will be ongoing.
To be slightly more precise, this is what an actual patent waiver would enable; but what Biden's announcement enables is nothing.
This waiver requires universal agreement of member states, which presumably has a 0% chance of happening.
His administration could unilaterally announce that they won't enforce TRIPS patents claims (the relevant international agreement here). However, to my knowledge they haven't done so.
Perhaps you understand better than I exactly where the authority lies for waiving patents, and the scope allowed. Can the feds do that for ANY patent, or only a patent where some non-trivial government funding was involved? Alex's post and other pieces I have read don't seem to challenge the legal authority to waive these patent rights. The focus is on right vs. wrong based on various arguments, and not can vs. cannot do it (e.g., is it a "taking" of some kind?).
I have only read a bit based on this controversy. I'm sure others know more.
But basically, the issue is TRIPS, an international agreement that countries will enforce each others' patents. (Absent this agreement, a US patent has no relevance in India or Nigeria).
All the signatories to TRIPS (who are all the WTO countries) can agree to waive it in this instance, and it will no longer legally be in force. A US patent would still be applicable within the US, but other countries that did not grant patent protection themselves would be free to use US patented vaccines.
Also, only countries can bring legal cases related to TRIPS. An individual in the US can't sue an individual in another country for failing to abide by this agreement. So, if the Biden administration said they would not bring any such cases, there would be no international enforcement of the relevant US patents. (Such selective enforcement might be on legally dubious grounds--I don't know. But that horse has definitely left the barn, since presidents have been rewriting law through selective enforcement on many big issues for awhile now).
https://en.wikipedia.org/wiki/TRIPS_Agreement
"TRIPS, an international agreement that countries will enforce each others' patents. (Absent this agreement, a US patent has no relevance in India or Nigeria)."
I don't believe this is true at all. Countries do not enforce each others' patents. Nothing in the WIkipedia article says anything about that. It is always universally acceptable to practice a patented invention in a country where it is not patented. If you want patent protection in a country, you have to apply for it.
FunkyButt, not sure why you are being downvoted, because with further research, you are correct, and my comment wasn't right.
The agreement guarantees a minimum standard of patent rights in all countries; it doesn't make patents apply internationally.
The effect is the same (as long as it's something indisputably patentable), in that it's a mechanism for global patent protection. But it doesn't work quite how I described.
If you are going to downvote me, please explain how I am wrong because I actually would love to know.
Patents are national in scope. That is, if you want to stop someone from "making, using, or selling" the invention in India, you will need an India patent. A U.S. patent won't help.
The corollary is that if you don't have a patent in one country, then anyone can practice the invention in that country. And only in that country e.g., they can't export it to a country where there is patent protection.
There are some treaties that help patent owners file for protection in each country, but you still need to send in the paperwork and pay the fees in each patent office.
>I think COVID-19 is the kind of rare crisis that could justify a patent waiver if it actually helped.
Even if so, "waiver" is a horrible remedy. The better approach would be mandatory licensing.
Pretty detailed treatment of this specific topic here, covering US, Canada, and Europe:
https://www.americanbar.org/groups/intellectual_property_law/publications/landslide/2020-21/november-december/compulsory-patent-licensing-time-covid-19-views-united-states-canada-europe/
>However, I don't see any evidence that it will help.
The big deal is that this will be the first TRIPS waiver. Once that firewall breaks, everyone expects that more waivers will follow.
Can someone explain how the taxpayers throw billions at drug companies in subsidies, plus the immeasurable value of advance market guarantees... and the companies still end up owning the IP?
It's also weird that in this system how some people are fretting about incentives to innovate. Don't worry kiddos, if another pandemic comes along, Uncle Sugar will prime the pump again. All will be fat and happy at the trough.
> Can someone explain how the taxpayers throw billions at drug companies in subsidies, plus the immeasurable value of advance market guarantees... and the companies still end up owning the IP?
Because the US is only guaranteeing to purchase the vaccine if approved. Just because you promise to buy an iphone doesn't mean you get to own the patents too. If we want to co-own the patents to any company, buy their stock. It's that simple.
The aim with OWS was to make vaccine makers comfortable with starting production early. That had to be done because with H1N1 many countries cancelled contracts leaving the vaccine makers with hundreds of millions of unused doses.
OWS said "We'll buy them no matter what. Just go as fast as you can"
Yes, I understand what OWS did.
I just don't understand what a Koch-backed Libertarian blog is doing pushing it... and then complaining about patents v. incentives.
Tax payers pay in governance. We are willing to be governed and so we must pay. It's mostly the fact of at what age do agree in to it? And if we had known the whole time then why would we impact our wealth?
The US trade representative’s announcement is virtue signaling to the anti-market left and will do little to nothing to increase supply.
It is more than virtue signalling, IMO, it is a message guaranteed to be amplified by an innumerate and equally ideological press corps. News headlines are a substitute for measurable outcomes. When was the release of vaccine stockpiles announced?
Keep shouting Alex, and follow-up with hard numbers that falsify their claims.
What sickens me about all of this is that we could easily do some real good by simple things like paying people to develop alternatives (i.e. direct subsidies, prizes, or production capacity contracts). Yet somehow there was precious little of this in the trillions Biden is already doling out.
Maybe we are at the hard limits for production, but so far everything I see keeps showing private capital leading to increased output once deals are inked. Dumping $100 billion into global vaccine bottlenecks seems like it might be just tad more effective at stopping population harms from Covid than bailing out state governments who have actual surpluses.
> simple things like paying people to develop alternatives
There are plenty of incentives in place to encourage all that you mention. I'm always curious why people talk about X-Prizes for inventions that already have a willing and able market.
If you are capable of putting together a vaccine factory today, you will be rewarded lots and lots of money. If not, a lump sum from the gov won't really change that. If you can come up with a new vaccine or better battery or better solar panels or better electric car--you will be made a billionaire. All the inventive is already there.
> Yet somehow there was precious little of this in the trillions Biden is already doling out.
We learned yesterday that 20% of renters are behind on payments. Many renters haven't paid rent in a year. Companies cannot hire people, because people are happy to sit in a free apartment, eating chicken nuggets and living on the internet. So much so that Montana yesterday cancelled federal jobs programs.
Biden is focused on the wrong things for sure.
The market has a lot of frictions in the real world. We are still seeing new deals being inked as parties are taking time to find financing, customers, and the rest. Burning a hundred billion to remove those frictions allow us to do a couple of things:
1. It makes the frictions for finding financing go away. Granted a lot of those are created by legal requirements but a large pot with few strings attached goes a long way.
2. It stops coordination problems where it would be highly profitable for one or few actors to jump, but highly unprofitable if many jump.
3. It sends a signal that governments are committed to these innovations and expansions. We don't want people in the private sector having cold feet that the government will be stiffing them the moment it no longer matters for elections. The fickleness of government adds a layer of risk to all pandemic matters but a strong, costly commitment tends to foster trust.
4. It helps the populace see this is a global problem. If there are legs to the variant scare stories they are overwhelmingly likely to arise overseas. Getting the population to do things (like take sensible precautions with international travel) is easier when the population sees that the government makes real investments.
End of the day we run into the problem of timeliness - and in an exponential pandemic a half-assed solution today beats are superior market solution next week - and the problem of signaling. Maybe a large pile of cash would not do much for either, but it is cheap enough to be worth trying with only a 5% chance of success on either front.
> It makes the frictions for finding financing go away.
This is already being done and it's not bearing much fruit. Remember the Freedom Car? Remember Solydra? Remember A123? The gov does this all the time and the ROI is really, really poor. VCs assume 90% of their investments will be failures. But their one big hit will offset the 9 losses. Sadly, the gov record on this stuff is awful--for every 1000 investments, the gov likely sees 999 failures. Their track record is nowhere near that of VCs. And in the aftermath the "system" of investment is loaded with graft. Solydra got money for round solar cells that 10 seconds of physics would judge stupid. They got the money because they were well connected. There was zero scrutiny.
The financing friction you imagine doesn't exist from private sector if the idea/people are good. And if a gov really wants to signal they are open for innovation, then they will let you write off R&D and tax exempt your first $X million in profit.
Biden instead is getting rid of R&D writeoff and upping corp profit. The exact opposite.
> Getting the population to do things (like take sensible precautions with international travel) is easier when the population sees that the government makes real investments.
The population is responding slowly because the experts have burned every ounce of credibility they could muster in order to achieve political goals. Over and over govs and experts have put themselves first and citizens last. Experts have lied to people.
DOCTORS HAVE TOLD PEOPLE SOCIAL DISTANCING IS A MUST, BUT GATHERING IN A ROOM TO MAKE PROTEST SIGNS, and then protesting shoulder to shoulder for 12 hours, sharing water, holding hands, etc, IS FINE.
Do you know how stupid that comes across to the average person??? If you want people to take you seriously, then quit with the tiktok dances and moralizing and instead act like a serious person.
999:1 is still a good trade on a global basis.
And the financing friction certainly exists. Moderna took months to contract out everything. Maybe that was because they were looking out for future profits, maybe that was because they were slow to negotiate, but private deals have negotiations to ensure that neither side leaves too much on the table. Their private valuation of speed is almost certainly lower the public valuation of speed so it makes sense for the public to pay for faster deal making.
Better, faster, cheaper; pick two and we should be skimping on cheap all the way.
If only to remove the political cover that exists to blow trillions of dollars on dubious payouts, it is worth it to expedite anything that moves things up globally by a few weeks or months. After all, every month of Biden Covid spending is something like $200 billion, so we can afford a lot of really crappy, high failure takes on things.
>I'm always curious why people talk about X-Prizes for inventions
I'm skeptical too. But the steel-man case is that there are some needed innovations for which the actual/known market may be >20 years away e.g., materials for a space elevator
The problem is that there are an infinite supply of things that MIGHT be valuable in the future. At one point, a horse that had twice the endurance of a regular horse was very valuable. Why not an x-prize for a material that is stronger, lighter and cheaper than aluminum? That would be game changing! How about gasoline that has half the carbon intensity? There are a million things like this, and all would be huge.
All are worthy. None need gov intervention.
Waiting for the unbiased media to admit that Biden has royally screwed up vaccine delivery here in the states by constantly wearing a mask, by listening to all the bs coming from a corrupt (teacher-union-driven) CDC about people having to wear double masks indoors and outdoors after having taken the vaccine, and the idiocy in pulling the JnJ vaccine off the market.
Trump gave us the vaccine in record time with a delivery system in place and Biden/Dems screw it up in 100 days because Dem always put politics ahead of the lives of American citizens.
Not only Biden, but the Veep as well, kissing her husband while both are wearing masks. Remember, she did say she would refuse to take any vaccine that Trump promoted since it couldn't be trusted.
Notice, though, in the now famous Giant Bidens pic, that nobody, not even the 90-something Carters, is wearing a mask.
If the US has screwed up, so has every country except for Israel, UAE, Chile, Bahrain and the UK.
If we drill down to the state level, a number of states including Massachusetts, New York, New Jersey, and California have administered more doses per capita than any country in the world except for Israel and UAE.
And yet, CA still lags states like South Dakota and Wisconsin. Vermont and Maine are leading the US in terms of doses per capita. VT has exceeded 50%.
Indeed but CA is interesting because it is big enough to be its own country. It does not lead in terms of doses administered within the US but beats any mid-sized European country, including the UK.
The logistics and production bottlenecks were all solved at the latest a couple of weeks ago and the US is winding up with one of the most successful vaccination programs in the world.
> The logistics and production bottlenecks were all solved at the latest a couple of weeks ago and the US is winding up with one of the most successful vaccination programs in the world.
Jan 20 we did 1.45M shots a day. May 6 we did 1.8M. The success was built-in long before Biden took office. I just checked and Trump says "your welcome"
This will halt venture money into early stage vaccine companies. It was always a difficult sell prior to 2020. It now just got much worse. These are the future BioNTechs and Modernas of the world that will never be.
Yeah, but what about income inequality? That's the main thing we need to worry about. That, and "racism."
Millions of lives lost is just a statistic.
At least one mention of BioNTech. When the movies are produced, please don't forget that Pfizer licensed the vaccine from them.
Boy, doesn't Pfizer wish it had wrapped up its vaccine trial and announced results a week earlier?
Play stupid games, win stupid prizes. Pfizer willingly withheld results to elect Joe Biden. The prize will be loss of IP which they are counting on for ongoing profits. The future prize is support for no IP protection for any breakthrough patents. Good job.
So then the guy that said just a few weeks ago that the J&J halt was due to Pfizer being in bed with Biden’s FDA would be in charge.
A remarkably little known fact is that Pfizer halted lab processing of its clinical trial results from late October until the day after the election. This was reported in Stat News by Matthew Herper, quoting a Pfizer SVP of vaccine R&D, but virtually nobody noticed:
https://www.statnews.com/2020/11/09/covid-19-vaccine-from-pfizer-and-biontech-is-strongly-effective-early-data-from-large-trial-indicate/
"fortunately, some boffins in the Biden Adminstration"
Dr Tabarrok, you have misspelled 'buffoons'. Please fix.
I read it as "Unfortunately, ..."
> I am indeed angry that the people in power
Gee, whatever you do, don't say The Biden Administration.
"The people in power." Just unbelievable!!
I don’t think supply is the problem in the US. People are declining vaccines. In Pennsylvania, shots administered have dropped 93% in a month. Beers are being offered, free tickets to sporting events and a constant barrage of PSAs is shown on TV. I see the same thing on NY TV.
Ain’t gonna work. Best thing for the state to do is give it up and declare victory. I think the current count of "cases" in the US is about 33 MM. I would guess that the actual exposed is 2-4 times that (based on many studies), the total number vaccinated plus unvaccinated exposed is probably a majority of adults in the US. Young people do not need to be vaccinated, except in unusual cases.
I am giving shots again this Sunday at a semi-rural area in PA. I expect to repeat what we have done on other recent weekend days and spend the last couple hours trying to find people to come in so we dont waste anything.
Steve
Supply is the problem in the rest of the world; this policy is about them, the pan in pandemic.
We have plenty of excess supply to lavish on the world.
Yes, plenty of excess supply, in a hand-waving "let them eat cake" kind of approximation. I'd prefer hard numbers on current capacity in the U.S. and around the globe rather than rhetorical flourishes. Supply Chain Management and Manufacturing Resource Planning are best not left to intuition.
Building out vaccine capacity for incumbent firms may actually reduce competition and innovation in the future. We would be better off subsidizing expanding vaccine capacity for small players.
Let's say we expanded the vaccine capacity for Pfizer, creating excess capacity after the pandemic is over. A new manufacturer would be unlikely to enter the industry. And, as an incumbent with excess capacity, Pfizer would be in a strong bargaining position with an innovator that could now only license its vaccine discovery. Pfizer is both a licensor, and licensee, and a manufacturer, and acquirer.
yes, I think the correct way to do this is to ask Pfizer and Moderna "who are your leading candidates to manufacturing expansion" and then help them get up and running. That means expediting permits, expediting customs clearance on machinery and ingredients, etc. All the stuff that gov is good at.
The patent thing is largely symbolic (and stupid). Patents are supposed have enough information to allow someone "skilled in the art" to replicate. But often small but important pieces are left out as trade secrets. And it's those small nuggets that really matter. In other words, absent any patent protection, China is unlikely to read the patent and make a vaccine. Pfizer and Moderna are way too smart for that.
The idea that opening the patents up and letting everyone build their own factory is a sure way to get people killed as governments that are on the cusp of joining the modern economies try to prematurely show the world they are ready by manufacturing something that is almost but not quite there.
FYI
In the US, patents will never be a problem because the US government can infringe:
"There seems to be some misunderstanding about the U.S. law governing enforcement of patents that claim pharmaceutical compositions, especially in epidemic situations. The press often reports on efforts to "revoke" or "cancel" patents on drugs perceived to be in great public need and not available in quantities or at prices regarded as reasonable. There is sometimes talk of compulsory licensing of these patents. While such procedures are available in some other countries, the United States has a different, simpler, and more expeditious statutory regime for dealing with public health emergencies vis-a-vis extant patents: The government and its contractors simply go ahead and infringe them. There is no injunctive remedy against such activities, and no remedy at all against contractors or others operating with the government’s permission.
The applicable statutory provision is 28 U.S.C. § 1498, which provides in part:
(a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture....
For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.
This section was enacted "for the purpose of enabling the Government to purchase goods for the performance of its functions without the threat of having the supplier enjoined from selling patented goods to the Government." Coakwell v. United States, 372 F. 2d 508, 511 (Ct. Cls. 1967).
Thus the government can order any amount it wishes of any drug, from any contractor; and can authorize any person to take the drug. There is no need to revoke, repeal, or do anything else to the applicable patent."
https://www.law.uh.edu/healthlaw/perspectives/Food/011207Current.html
The technology involved in the mRNA vaccines is half black magic and art to make it work. You can read and copy all the patents but the minor differences are huge. The best example I can think of is the difference between a good french sauce and a runny mess is just the art of the chef, not the raw materials or recipe.
The difference is in the details of how the emulsion forms as a thick creamy water-in-oil emulsion or an oil-in-water salad dressing emulsion. The mRNA vaccines are one major step more complex and require a water-soluble mRNA inside a very small diameter oil droplet in a water-based background, which is a WOW (water in oil in water) emulsion.
I have known for at least four decades that the solution to a very vexing problem is a solid-state WOW emulsion to stop the diffusion of water-soluble chemicals, but haven't consistently succeeded, but it has occasionally worked.
I am very familiar with the literature and practice in this area and have experience trying to teach and educate people and you sure can't do it easily and in fact, most people don't "get it". I have also seen other scientists "not get it". Even to the point of having a grant reviewer say "well Dallas could make this proposal work, but nobody else can so we shouldn't fund it". I think this mRNA vaccine is in that category and the political class will find out that they can't command someone else to make it work.
Most of the political class can't even do what a good chef can do.
As a patent lawyer and something of a skeptic about the value of patents (not to mention a bit of a commie), I fully endorse Alex's reasoning here. My colleague and I published a fairly high-profile paper about the question of compulsory licensing for patented COVID treatments last year; we both found ourselves scratching our heads over this announcement. Patents were never the bottleneck for vaccine production. If they were, governments have lots of options for removing that bottleneck. But there's no need, because it's 100% about 1. manufacturing capacity and 2. regulatory approval.
What is so great about the mRNA vaccines when the adenovirus ones were developed just as fast, don't need extreme temperatures to stored transport, can be delivered in one shot rather than two, and are more time tested? I don't get it.
Several things:
1. Some percentage of the population already has or may develop antibodies against the vector rather than the payload. There are a huge number of exposed proteins on the shell of the virus that can provoke antibodies they would prevent immune response against the spike protein. This becomes particularly acute if we need boosters against new variants as the number of well tested adenoviral vectors is limited.
2. Large scale cell culture is highly variable. While I remain bullish that we could take a large scale fermentation plant and eventually churn out truly massive scale amounts of vaccines, these cell lines are finicky and highly variable unless you are throwing gobs of money and manpower at them. This also means that you need more testing and batch monitoring. Likewise, while it is rare, you do need to monitor more for reversion or other harmful mutations in your culture stock.
3. mRNA vaccines can be reprogrammed on the fly. Because they are synthesized without cell culture you can simply swap sequences in the abiotic synthesis of the mRNA. This also means that all the ingredients will be identical except for the target payload. This massively lowers the risk of updated vaccines being different enough to cause different side effects. This even more true if the only difference is a couple of base pairs on the spike protein. The amount of safety data needed for booster doses against novel variants is easily an order of magnitude less than for adenoviral vaccines.
They are much more efficacious; particularly against the most concerning variants (new data in that published yesterday). They have fewer serious side effects and can be rapidly modified as new variants emerge.
mRNA has a more consistent immune response to the antigen alone compared to the viral vectored vaccines which also generate a response to the vector. I think single dose is a hedge used when designing trials, much like the length of the second dose interval. The mRNA vaccines are the backbone of the American vaccination effort and this impacts perceptions but non-U.S. vaccine hesitancy demonstrates a similar sentiment. The world needs Novavax and Medicago too but we can’t blame their slower rollout on perceptions alone. Take the first vaccine that is offered to you is still a good rule of thumb.
Thanks for the replies. I was/am hesitant about mRNA from the comments section in this article posted here on MR:
https://blogs.sciencemag.org/pipeline/archives/2021/01/11/rna-vaccines-and-their-lipids
The blood brain barrier stuff plus possible long term effects. it was mostly one poster in the comments, but no one had a good response to him.
Where I live, it was easy to pick your vaccine - I got JJ right before the pause.
Have a friend waiting for Novavax. I don't understand why, heard second hand, will find out at some point.
According to Paul Offit, safety issues with vaccines appear within the first six weeks of a random control trial. Adverse effects that are rare enough that they don't occur in the trial population are caught by established adverse effects monitoring systems which is how VITT was detected in both AZ and J&J.
In January, it may have been rationale, though overly cautious, to avoid the mRNA vaccines if you had an alternative platform vaccine available to you, but at this point after millions of mRNA doses have been administered, I think mRNA avoidance is more of an "uneasy feeling" than anything else.
Agree with your views on this and posted mine on Barron's here: https://www.barrons.com/articles/big-pharma-is-not-the-tobacco-industry-51620315693
There are still quite of few companies working on vaccines, how will they allocate resources under this threat? Translate Bio (partnered with Sanofi) is in phase I/II with an mRNA vaccine, will they rush to get it approved? Having more vaccines would also provide some protection against new variants. The biggest effect I see from this, is slowing down development of not yet approved/new vaccines - creating less supply. A stupid move.
An economist wrote this - Bottom line is that producing more takes real resources not waving magic patent wands.
I'm skeptical of the value of patents but this is not the way to do reform.
I'm pretty ignorant here, but is there any legal recourse for the pharmaceutical companies and is this clearly within the presidents ability to do unilaterally?
You wanted utilitarianism, you get utilitarian outcomes, principles need not apply.
It's not clear to me what "waiving intellectual property protections for Covid-19 vaccines" means, as contained in the Ambassador's statement. Does it mean anyone can use the patent royalty-free, or does it basically conform to the public health exemption to TRIPS as reflected in the Doha Amendment?
Tabarrok seems to interpret this to mean the US will tolerate use of the patents royalty-free and without the necessity of a license. He might be right, but that's not the only interpretation.
The TRIPS Agreement provides for "compulsory licenses" in times of public health crises provided that the use of the patent is primarily for the "domestic market". The Doha Declaration proposed an Amendment to TRIPS that essentially allows developed countries to use a compulsory license to export to developing countries (which normally don't have the capacity to manufacture themselves). That Amendment (the only one to TRIPS) was ratified by the required two-thirds members in 2017. Here's a good brief explanation:
https://www.mofa.go.jp/press/release/press4e_001455.html
I agree this is largely signalling and probably won't to much to increase supply (at least in the short term). On the other hand, if it won't, we seem to be exaggerating a bit the potential damage to the likes of Pfizer, Moderna and Astra-Zeneca. I'd like to see more details on the proposals before becoming angry (I'm angry enough as it is).
The president of the United States is not, despite the demented ravings of the talking heads on cable TV or the even more delusional rantings of the twitteratti, is not a king whose word is law. He has only those powers granted to him by the Constitution subject to the limitations therin.
One of the most important limitations on governmental power is the 5th Amendment to the Constitution which states, in pertinent part:
nor shall any person … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.
Intellectual property may be intangible but it is property. If the US government wants to take any part of it it will have to observe due process and compensate the property owners for the deprivation.
But, that, as they say, is only money and the US Government owns the printing press.
More importantly, the real limitation on producing the vaccines is the very deep skill and knowledge of the employees of the companies. And the ability of the government to command that is even more constrained by the 13th Amendment "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States …" [military draft?, jury duty?, I don’t see it]
In sum, the President has promised far more than he can deliver, and pharmas have less to worry about than the hysterics fret.
Oh, yes, in case you wondered IAAL. I didn’t just make it up.
It looks like we have plenty of vaccine for the US, especially since a lot of people wont accept vaccination. At this point we would be spending billions to produce vaccines for the rest of the world. Congress was willing to set aside what seemed like a lot of money in March 2020 and there was additional spending beyond what was spent by OWS, but that was clearly focused on supplying vaccines domestically. What you are proposing, I agree, is that we need an international effort and that the benefits of vaccinating the rest of the world will have a good ROI for the US.
However, we just dont have much history of doing anything like this other than brief disaster relief. Tell the country we want to spend trillions to invade some foreign country and you can get a lot of support. Spend billions to help people in other countries at a time when a lot of Americans are still out of work? I dont think we have the political leadership either willing or able to pull that off. Whoever would even be willing to try would be attacked for not attending first to the needs of Americans.
I think we will continue to see lowish level efforts by the US govt and the other richer nations. I actually have more hope that some of the major charities might be able to band together and generate a response that might also be more cost effective.
https://crsreports.congress.gov/product/pdf/IN/IN11556/1
Steve
Soros could easily drop $10 billion into this effort. I suppose it’s not a priority.
The problem with private money is that it seems like it is difficult to target. Suppose you invest or donate money to a pharmaceutical company in the US or Europe to expand capacity to develop vaccines for the developing world. What kind of credible commitment can you get from the host country that exports of those vaccines will be allowed?
India's SSI is a case in point in the developing world. The Gates Foundation (via GAVI) gave them a $150 million grant to produce covid vaccines but then they went public warning they were running out of raw materials and India banned exports. It was still a worthwhile and targeted investment but India is one of the few non-rich countries with vaccine production capabilities. Sub-Saharan Africa, most of Asia, and all of Latin America except for Brazil don't have this capability; creating not just vaccine production facilities but entire supply chains within a single country is something only states have the resources to do. So there needs to be a global plan and a better commitment from the producing countries to free exports. If only there was an international institution that could help coordinate public health policy among national governments...
Virtue signaling marches on! Pols. uninformed knee jerk reaction to the seen, and of course missing the unseen true cause of the problem.
I frequently do not agree with AT, but this was spot on blog post and any anger of AT is warranted
Should be interesting to see what the negotiations with the US government are after this, since they need Pfizer and Moderna to help set up the supply chains and production for the mRNA vaccines elsewhere, and to ramp up doses in general.
Taken by itself, the IP announcement is a minor - and possibly insignificant - aid to global vaccine supply. As part of Biden Administration's (and the Left's) campaign to crush Capitalism, it is something more malevolent. I voted for Biden, I didn't vote for an apparently senile old man incapable of moderating his attack dogs. Oh well, unfortunately it was the least worst alternative. I wonder how we can dismantle our 2 Party system effectively...
>with the product for local use or for export to other non-covered countries. Is that allowed?
Yes. So, in practice, companies will focus on getting patents in the major markets.
I understand where your frustration is coming from, but a $100 incentive is a lot for most countries. We know who is most vulnerable to the virus at this point, and we should focus on protecting them, not maintaining a fear pandemic to keep demand for vaccines high: the opportunity costs of that fear are just too high to justify it. If we could focus on vaccinating all vulnerable populations, worldwide, we'd be in a much better place than if we were to just focus on getting the United States to herd immunity. Demand for vaccines has been driven too high by the hysteria: with supply so limitted this makes it tough to get a vaccine if you're old, sickly, and live in, say, central Africa.
And no Ray Lopez comments...
Hi. Generally patents are often observed in the breach, meaning, an infringer of a patent worries about infringement as an afterthought, after rushing to market first. In this sense AlexT is right, in that patents are irrelevant. I'd like to see a world where patents really matter, but we're not there yet. If we were, we'd have a cure for old age and a flying car by now...but that's neither here nor there.
Mighty forceful
Shout from the
Rooftops in
Support of the
Defense Production Act and
All that it has accomplished.
Next, Let's pay those US drug companies
To build more capacity at taxpayer expense.
Well, it's not socialist because
They get to keep the plant.
Nah, forget about it. Wait until the name is changed after this fiasco before cheering them on again.
And I am not shocked that you have nothing to say about Tabarrok talking about Emergent Biosolutions, then conveniently not saying anything a few months later about American licensing involving the AZ vaccine. Not even to mention that he highlighted its production in the U.S. using taxpayer money as an example of the sort of program he enthusiastically gets behind.
This is why well connected government contractors never go away. They can always find people to publicize their work, and when they fail, the same people say nothing about the failure.
"Here’s the factory in Baltimore. It’s capable of producing tens to hundreds of millions of vaccine doses a year. Isn’t it beautiful?" Do you think Alex will write an angry post at some point, for example saying you cannot judge the product of a government contractor factory by looking at the building? Maybe quote from reporting like this - "The 13-page report says the Emergent BioSolutions Bayview plant in Baltimore was too small, poorly designed and dirty. Unsealed bags of medical waste were observed, along with peeling paint and damaged floors and walls that could inhibit proper cleaning, the inspectors said."
As it turns out, that building is not capable of producing any doses at all currently, after winning a 628 million dollar contract.
Pfizer did not develop the vaccine, BioNTech did. Is there some particular reason for this fairly consistent miscrediting?
Is there some particular reason for this fairly consistent miscrediting?
Branding. Pfizer is the recognized brand name associated with the BioNTech developed vaccine. Both partners executed exceptionally well and Pfizer deserves credit for fast time-to-market and production scale.
Actually, DARPA, part of the US government, funded and sponsored it:
"DARPA was behind the creation of DNA and RNA vaccines, funding early R&D by Moderna Inc. (NASDAQ:MRNA) and Inovio Pharmaceuticals Inc. (NASDAQ:INO) at a time when the technologies were considered speculative by many scientists and investors."
Here is the link: https://www.biocentury.com/article/304691/darpa-s-gambles-might-have-created-the-best-hopes-for-stopping-covid-19
> Actually, DARPA, part of the US government, funded and sponsored it:
DARPA invests in everything. But they are not enablers. They are coat-tail riders. R&D in mRNA was happening in the 90's. People understood the potential, they refined, sought money from private investors and got it. Claiming we'd not have mRNA if it weren't for gov investment is wrong.
Moderna would still exist if it weren't for gov funding. As would Tesla. As would the internet.
This idea that nothing would exist if it weren't for paltry gov funding is wrong.
BioNTech was founded in 2008, and its work was generally directed to using mRNA before this happened -"When DARPA began pursuing nucleic acid vaccines in 2011, it was far from clear that they would work."
But fair is fair - when BioNTech started in 2008, it was not clear either.
Um, If you read the article, DARPA was funding the research in 2000 through sponsorship of a consortium led by Curvac and had funded similar research. The article is very good and detailed.
Um, also, I am not saying that privately funded institutions did not advance the research, but, I do want people to see the long tail of discovery, and the effect of public risk taking that also contributed to the result.
"Public risk taking" implies some sort of feedback loop beyond wasting other peoples money and time.
Unsurprisingly, this broken record continues to skip.
Meant as a reply to Shame about negative capacity.
I know that the carpenter always blames his tools but I think the respond feature is buggy.
And I am not shocked that you have nothing to say about Tabarrok talking about Emergent Biosolutions, then conveniently not saying anything a few months later about American licensing involving the AZ vaccine. Not even to mention that he highlighted its production in the U.S. using taxpayer money as an example of the sort of program he enthusiastically gets behind.
This is why well connected government contractors never go away. They can always find people to publicize their work, and when they fail, the same people say nothing about the failure.
"Here’s the factory in Baltimore. It’s capable of producing tens to hundreds of millions of vaccine doses a year. Isn’t it beautiful?" Do you think Alex will write an angry post at some point, for example saying you cannot judge the product of a government contractor factory by looking at the building? Maybe quote from reporting like this - "The 13-page report says the Emergent BioSolutions Bayview plant in Baltimore was too small, poorly designed and dirty. Unsealed bags of medical waste were observed, along with peeling paint and damaged floors and walls that could inhibit proper cleaning, the inspectors said." Beauty is always in the eye of the beholder. Odd that the FDA found the facility anything but beautiful.
As it turns out, that building is not capable of producing any doses at all currently, after winning a 628 million dollar contract.
neighborhood eliteX meme zombie media watch
-if the washington post "journalists" are still obsessively linking the
word "identity" to the word "republican"
-does any body wanna bet the proposition
" identity politics" is still polling beaucoup badly?
I for one applaud Bidens attempts to finally address white supremacy and the legacy of colonialism.
#dobetter
Unsurprisingly, a government contractor ruined tens of millions of doses after receiving hundreds of millions of tax payer dollars. Is there some reason not to mention that AZ also licensed production to Emergent Biosolutions too? "Emergent BioSolutions has a factory in Baltimore that operates under an innovative long-term private-partnership agreement with BARDA. Essentially BARDA subsidized the factory in return for an option to use it in an emergency–Operation Warp Speed exercised that option and in June-July AstraZeneca signed a licensing agreement with Emergent for large-scale manufacturing of its vaccine.
According to the Baltimore Sun the AZ vaccine is already being made at the facility. I hope they are making millions of doses. I want the AZ vaccine approved in the United States immediately but if we won’t take it (yet) they can still export it to Britain and the many other countries which will approve the vaccine."
I am not grateful that government contractor waste involving vaccine production that stretches back decades is impossible to stop some from touting. Touting that will undoubtedly return as soon as people conveniently forget such a contractor's last failure.
And this is just silly - "Moderna has said that they won’t enforce their patents during the pandemic but no one has stepped up to produce because no one else can." Moderna does not really manufacture its vaccine, it contracts that work out, for example to Lonza. "Contract drug manufacturer Lonza plans to double Swiss production capacity for Moderna's COVID-19 vaccine, helping the US drugmaker boost total output to as many as 3 billion doses in 2022.
The deal, an extension of a 10-year pact announced in May 2020, foresees three further production lines at Lonza's site in Visp, Switzerland, in addition the three built since last year." "Each production line has capacity to make ingredients for roughly 100 million doses annually, so this expansion would bring Lonza's total capacity to 600 million doses. Lonza did not give a value for the extension with Moderna, but it has said each line it built starting in 2020 cost around 70 million Swiss francs ($77 million), and required 60-70 employees to staff."
I am deeply, deeply shocked that you brought up those AstraZeneca doses being ruined. I never would have guessed that you are going to talk about that.
The fact that Moderna is using contractors is irrelevant, of course. The point is that all manufacturing capacity is already being used.
Pity the poor billions of dollars in government subsidies and market guarantees that can't get any respect.
When the recipients of these taxpayer gifts succeed, they win commercial patents and private profits, and the government genesis is forgotten; but when they screw up, they become "government contractors" and walk away with the "gubmint" holding the blame.
In all earnestness, I do not recall you talking that much about investing in supply chains. In fact I can’t think of a single post that directly called for this, at least here on MR. But I do recall quite a bit of shouting about the FDA.
In any case, I will point out that using taxpayers money to invest in private processing capacity, in order to create vaccines for export, is the sort of thing some Libertarians used to complain was trying to do something "at other people’s expense."
How about the one titled, "Shoriing Up the Vaccine Supply Chain" from August? Opening paragraph:
"Supply chains were hit hard early in the pandemic. Disinfectant couldn’t be produced because of a lack of bottles, tests couldn’t be processed because nasal swabs or PPE wasn’t available, the decline of passenger air traffic hit commercial delivery and so forth. I worry about forthcoming stresses on the vaccine supply chain. Billions of doses of vaccine will be demanded in the next year and a lot will depend on complicated supply lines including cold storage, air traffic, styrofoam, vials, bags, needles and many other inputs. Companies and the awesome team at CEPI (give them all a Nobel prize) are planning for vials and needles and other inputs but there are many non-obvious inputs higher up in the supply chain that also need shoring up."
https://marginalrevolution.com/marginalrevolution/2020/08/shoring-up-the-vaccine-supply-chain.html
Thanks. I knew when I said that I could not recall a single post that I was setting the bar low and someone would find a single post.
What I would have said if I wasn't slothful was to ask him to back up his claim that he has been shouting it from the rooftops for a year and a half. (Which of course means that he has been doing this since December 2019).
In many of his FDA rants, numerous commenters have in fact pointed out his failure to talk about supply chains.
So... can you cite, say, two or three more?
Alex was a giant supporter of Emergent Biosolutions, pointing to them as a future oriented example of how to ensure a better response to future pandemics. Then for some reason, he hasn't said anything about them at all, not even including their OWS sponsored American license in the list of countries of AZ licensees.
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