April 8, 2020 at 5:00 am ET
The pressure of fighting a global pandemic amidst shortages of crucial supplies can bring out the best and the worst of our globally connected community. Except for the hoarders buying more toilet paper than can possibly be used in a lifetime, the world’s civilian population has held it together.
We’ve avoided mass looting and riots that have marked similar natural disasters. Instead, our social media platforms are flooded with impromptu balcony musicals and celebrities reading stories to toddlers.
However, some panicky countries are pulling the trigger too soon on policy options that promise grave consequences down the road. The use of compulsory licensing to loot innovators of promising COVID-19 treatments and slapping export bans on the trade of medical supplies are short-sighted and undermine the innovation markets responsible for the greatest advancements in medicine.
Canada is currently the only country to pass COVID-19 legislation granting broad powers for the government to “make, construct, use and sell a patented invention.” Chile and Ecuador have similar bills moving through their legislatures that would allow for their governments to “issue compulsory licenses for any medicines, vaccines, or diagnostics for combating the pandemic.”
The first country to actually approve a compulsory license for a drug used in the fight against the coronavirus was Israel. The company responded by stating it will not enforce its patent rights in any country when being used to treat COVID-19.
This was the best course of action as it allows AbbVie to enforce its intellectual property rights against non-coronavirus use. It is also a sign that patents are not the obstacle activists paint them out to be.
Echoing a similar sentiment, Stephen Hoge, the president of Moderna, the first company to start human trials of a COVID-19 vaccine, stated: “It’s us versus it. And the only way we’re gonna beat the coronavirus is all working together.”
That doesn’t mean patents should be up for grabs. In reality, access to medicines is a complex issue involving supply chains, regulatory restrictions and national health bureaucracies. Focusing on patents, especially at this stage, is a distraction.
Currently, there is no known treatment for COVID-19, or a vaccine. Yet it’s only a matter of time.
The world has placed its profound confidence in the free enterprise of the leading scientists and innovators to reach as many solutions as possible in the shortest amount of time. It is obviously a heavy weight for researchers to bear, but not a burden. Already, at least a dozen companies are working on solutions to COVID-19, while at least two have started clinical trials.
Removing the ability of these first responders to own their work while they are in the process, or after completion, undermines their efforts. Keeping these rights intact not only allows more knowledge-sharing in the fight against COVID-19 but also ensures long-term research to ready the fight against the next pandemic, as well.
After property rights, the free flow of goods and services is another indispensable element of our global innovation ecosystem. Here, too, governments need to keep it holstered. Simon Evenett of Global Trade Alert reported 68 governments have imposed 82 export restrictions on needed medical supplies such as personal protective equipment, while others threaten to use government procurement orders to increase local supply.
These are also incredibly short-sighted. In the United States, an otherwise unlikely alliance of generic and brand pharmaceutical manufacturers has come out against a proposed “Buy American” order for medical products. In fact, the Association for Accessible Medicines issued a statement saying the order would “limit patient access to essential medicines, increase the risk of shortages and increase the cost of prescription drugs.”
Only open trade buttressed by property rights can supply the free exchange of ideas and immense production needed to stave off this disease. When a South Korean firm invents a 10-minute COVID-19 test kit, “Buy American” provisions nor Food and Drug Administration regulations should keep it from reaching U.S. citizens. Likewise, production of ventilators shouldn’t be limited by export restrictions from a second or third country in the supply chain.
The solution is to keep supply channels open. A growing coalition of countries — Singapore, New Zealand, Canada, Australia, Brunei, Chile and Myanmar — has led the way by pledging to reduce trade barriers on medical supplies. Similarly, assurances of patent protections will speed up the collection of clinical trials needed across the world for competing vaccines.
The increase in export restrictions by some of the world’s main exporters of respirators, PPE, sanitizers and soap make these necessary products harder to find in large swathes of the world, including Sub-Saharan Africa, Latin America and Southeast Asia. Where they are accessible, tariffs and regulatory non-tariff measures need to be reduced to ensure import restrictions are not reducing supply there and to prevent government revenue offices from war profiteering. Such burdens, especially in the United States, can be especially restrictive, causing pallets of needed equipment to wait in warehouses for inspection by the FDA — a major reason why the United States is 54th on the International Trade Barrier Index.
Obviously, the exact solutions are not here yet. But what is clear is that the global COVID-19 pandemic will be solved by harnessing the efforts of the world’s researchers, innovators and manufacturers across industries. Restricting trade and removing property rights can only serve to exacerbate this already formidable task.
Philip Thompson is a policy analyst for IP and trade at the Property Rights Alliance.
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