The Duke of Sussex has joined a pious crusade that would damage vaccine research

Removing patents will do little to help the world's poorest become vaccinated, contrary to Prince Harry's belief

Source - Daily Telegraph - 13/12/21

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Our pious age really needs a snappy phrase for “high-status opinion”. These are political positions that are fashionable amongst finger-wagging elites, but which are undesirable and even completely unworkable in the real world. Worryingly, in the age of the pandemic one of these is gaining ground.

Two weeks ago, the Duke of Sussex joined Pope Francis in calling for a global waiver of vaccine patents. Today, those patents are held by the handful of large pharmaceutical companies who also make them. 

But many of the world’s poorest have not been vaccinated against Covid, and for Harry, the solution is “breaking pharma monopolies that prevent vaccines from getting to communities around the world in need”.

Activists want to invoke an emergency compulsory licensing mechanism built into the World Trade Organisation processes to allow copycat products to be produced anywhere in the world. So far, the WTO has refused.

But the campaign has powerful supporters in Washington and Brussels. President Biden backed the waiver in the spring and the EU may follow suit. A deal forcing EU-based manufacturers to offer licences to anyone who wants one is reportedly close. This should not be a surprise, as the EU has a deep historical antipathy to both major pharmaceutical companies and patents.

In 2008, the European Commission launched dawn raids on five companies including GSK, Pfizer and AstraZeneca, alleging a number of competition violations, including “patent thickets”.

The Commission argued that the number of new drugs that had come to market had dwindled in the 2000s. Indeed it had, but not by very much – from 40 a year in the nineties, to 29. Might EU regulation itself be to blame? The American regulator the FDA saw no significant decline in approvals in the first decade of the new century.

The process that began with those raids ended in farce. The sinister “patent thickets” proved elusive, and no charges were ever brought. But the paranoia lingered on with fatal consequences last year. EU officials grumbled and postured about “big pharma”, then found themselves unable to acquire the coronavirus vaccines their citizens needed.

The problem with the high-status assault on intellectual property (IP) is that it fails to suggest a convincing alternative system to such rights, which today provide the incentives that deliver billions of investment to researchers.

I’ll readily acknowledge that the pharmaceutical market is a difficult one to defend. Last year Pfizer demanded that nation states hand over their foreign embassies, and even military bases, as collateral in case of damages claims. 

The demands “led to a three-month delay in a vaccine deal being agreed. For Argentina and Brazil, no national deals were agreed at all,” the Bureau of Investigative Journalism, which reported on the demands, noted.

But nevertheless, pharmaceuticals is a market, and this is better than no market at all. If the “IP monopoly” disappeared overnight, the poor wouldn’t be getting more jabs. Most countries either don’t have the facilities to manufacture them, can’t distribute them safely to remote areas, or lack the skills to administer them, or all three. 

One country which can, of course, is the real beneficiary of the campaign: China, which has a spectacularly ineffective coronavirus vaccine of its own, and is ruthless about stealing other people’s ideas.

So how do we know that patents are preferable to patent abolition? Here, Professor Sir Robin Jacob is worth listening to. For years, Sir Robin was our leading patent judge, and is the author of the standard textbook on IP. (He also ensured that Lego couldn’t copyright the Lego brick.)

During the entire lifetime of the Soviet Union, he notes, not one major new pharmaceutical product was created. In the USSR where intellectual property was collectivised, and there was no market, bureaucrats instead held research competitions with prizes, a model favoured by patent abolitionists (and civil servants) today. “Not one of these schemes has ever worked,” says Sir Robin.

In fact, we have empirical evidence to see what happens when a country abolishes patents, because the Netherlands tried it as an experiment. Patents were abolished in Holland in 1869. That, Sir Robin notes, “enabled a Mr Philips to set up a copycat electric lamp company free from the Edison and Swan patents”.

But Gerard Philips was infuriated that the clever inventors at the company that bore his name were being ripped off just as rapidly. At his urging, the Dutch patent system was restored in 1912, and just in time.

Philips would go on to make many contributions, including the cassette and the CD, and today is the world leader in medical technology IP. The introduction of patents in 1907 also created a world class pharma sector, led by Hoffman-LaRoche, and later Ciba-Geigy, in Switzerland.

But IP abolitionists can never let a crisis go to waste. Last week Maryland became the latest American state to try and impose a compulsory licence for e-books, something that the former head of the US Copyright Office, Maria Pallante, points out it has no power to do.

The prominent University College London economist, Mariana Mazzucato, not only backed a vaccine waiver, but a waiver for any intellectual property on medical equipment - “ventilators, masks and other products” - too. Why would she stop there?

By all means, let’s make the patent system work better for inventors and entrepreneurs. But with or without the Duke of Sussex on board, the destruction of intellectual property is a high-status opinion the world’s poor can do without.