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Intellectual Property Rights are a driver of innovation in the healthcare sectorBy Patrick Kilbride

The COVID-19 pandemic brought systemic challenges to the healthcare sector: A race for technological breakthroughs to develop effective treatments and new vaccines for the virus; concerns about global equity and access to those solutions; supply chain and logistical hurdles to the delivery of vaccines and treatments; psychological barriers to vaccine uptake; and, an intensification – in part an occlusion – of the long-running debate about the role of Intellectual Property (IP) Rights in the research and development, production, and distribution of, and access to, healthcare technology.

In the process, IP rights were misunderstood, mischaracterised, and too often stigmatised. Without an appreciation for the economic function of IP rights, the world could find itself much less capable of securing the technological solutions needed to deal with future crises, in the form of a new pandemic, an energy shortage, climate disaster, or any number of other dreaded scenarios. How then should we understand the role of IP?

Let’s think of IP in terms of three critical functions it fills in the economy: First, IP rights enable the allocation of scarce resources – time, attention, leadership, money – to long-term, high-risk, capital-intensive investments necessary for transformative innovations, such as the mRNA vaccine technology. Second, IP forms the basis for transactions in knowledge assets, enabling the technology transfer, production partnerships, and commercial relationships that collectively form a stakeholder ecosystem that spans the lifecycle of innovation from early-stage scientific research to product development and delivery. Third, IP ownership enables trust relationships among diverse stakeholders, including governments, academia, businesses, and consumers – patients in the healthcare setting – by forcing all actors to consider and agree on the relative value of the contributions and commitments each brings to the process of innovation, and enabling commensurate accountability for the value they pledge to deliver.

Transparent and appropriately enforced IP rules also help to control the menace of counterfeit medicines, a parallel plague threatening India and a world in desperate need of specialised and specific, safe, and effective medicines and therapies during the pandemic.

The healthcare sector in India: Hits and misses
Assuming the mantle of the panel of experts behind India’s 2016 National IPR strategy, in July 2021, the Parliamentary Standing Committee on Commerce released a review of the Intellectual Property Rights Regime in India. This review offered a comprehensive and detailed study of the strengths and weaknesses of India’s national IP environment. The review acknowledges the strong link between economic activity, innovation, and the protection of IP rights, and the significance of this nexus to the Indian economy. The Parliamentary Committee is of the opinion that strengthening IPRs in India would also spur economic development by encouraging foreign exchange inflow, thereby increasing productivity and generation of employment opportunities in the country. This logic, sound though it is, unfortunately, has not been applied to all industries.

This disconnect is most noteworthy with respect to the research-based biopharmaceutical industry. The committee rightly recognised that although a world leader in the production of generic and follow-on medicines, India lags far behind in development of novel and innovative biopharmaceuticals. However, while urging the government to effectively address this issue through introduction of research and development (R&D) friendly policies, the committee failed to recognise that a key reason for this lack of activity in India is its relatively weak IP environment. Instead of recognising how damaging existing limitations on biopharmaceutical IP rights are (such as restrictions on biopharmaceutical patentability) and the lack of critical IP rights (such as patent term restoration, regulatory data protection, and market exclusivity incentives for development of orphan drugs), the committee recommended maintaining some of the largest existing barriers, including patentability restrictions imposed through Section 3(d) of the Patent Act. This was a missed opportunity that is making itself felt in the pandemic.

IP as a driver of research and innovation in healthcare
The globalisation of Indian healthcare sector and free movement of its goods and services have had enormous benefits. For example, patients can now access medicines that were either not produced locally or were far too expensive to import.

Healthcare sector is innately related to bioinformatics, biotechnology, pharmaceuticals and drug discovery, medical and clinical research, diagnostic and medical devices, and pharmacological products. Indian innovation, supported by clear, reliable IP rights, can have a striking impact on both global access to healthcare and India’s economic success. The pharmacy to the world should be also the innovator to the world.

The 2022 U.S. Chamber International IP Index highlights that an effective IP system encourages innovators and creators to embrace new ideas, take risks, and drive change. And a weak IP system undermines innovation and creativity and, perhaps more importantly, access to the latest technologies, medicines, and creative content around the world.

In 1979, the total cost of developing and approving a new drug stood at USD 138 million. Four decades later, in 2016, this figure was estimated to be USD 2.6 billion. Thus, the international experience and the basic economics of the biopharmaceutical industry show how critical IP rights are to provide a stable and transparent framework to encourage industry partnerships and encourage large investments in R&D for discovery of new drugs, products, and therapies.

IP rights provide inventors and creators a time limited market exclusivity before their technologies can be replicated, which, assuming their new product or service is successful, provides them with a window to recoup and reinvest some of their R&D investments, before competitors (who bore none of the costs of early-stage investment, R&D, and product commercialization) can enter the market. However, there is of course no barrier to other firms attempting to develop a more effective technology in the same space – they simply cannot copy whatever has been made public through the IP system, at least until these temporary protections expire over time. IP is an essential component of drug discovery, more especially given some of the latest biological technologies that are involved.

IP laws during and beyond the pandemic
There is a strong correlation between the availability of biopharmaceutical IP rights and levels of biopharmaceutical research and innovation. Like any IP-dependent industry, research-based biopharmaceutical sector cannot exist and thrive in the absence of strong and clear IP incentives.

The vaccines, therapeutics, and technologies that have led the global community through the pandemic are the fruit of a pre-existing innovation ecosystem that relies on IP rights to enable allocation of resources, formation of trust-based partnerships, and voluntary transfer of technology on mutually agreed, commercial terms.

India and the US have played a crucial role in containing the pandemic. Indian vaccine companies and US institutions have collaborated to develop reliable and affordable COVID-19 vaccines. The Serum Institute of India (SII) and Maryland-based firm Novavax produced Covavax. Merck’s COVID-19 drug Molnupiravir is being produced by Indian companies at a lower cost. Multiple companies and corporations from Houston, the largest medical centre, are involved with Indian companies for sharing technologies, manufacturing, and partnering in supply chains.

In February this year, the GreenLight Biosciences Holdings PBC announced a licensing agreement with SII to accelerate accessibility to messenger RNA (mRNA) products. Their shared vision is to produce enough mRNA vaccines to meet the health needs of people every year. GreenLight will make a technology transfer of its scalable and cost-effective manufacturing process to SII.

Possession of the IP rights linked with a product or therapy encouraged companies to commit to R&D and other expenses needed to develop health technologies. The development and testing of new products take years before reaching the market. However, the coronavirus pandemic stepped up this process.

The Quad and how IP can unlock opportunity
The Quad, also known as, the ‘Quadrilateral Security Dialogue (QSD), is a strategic forum including four nations – the United States (US), India, Australia, and Japan. The purpose of Quad is to work for a free, thriving, and inclusive Indo-Pacific region. In the context of global vaccine equity, the goal of the Quad Vaccine Partnership is to expand COVID-19 vaccine manufacturing for the Indo-Pacific region Leveraging India’s manufacturing capacity, the idea is to produce at least 1 billion doses of COVID-19 vaccines by the end of 2022. Japan will provide soft loans to develop manufacturing capacity in India, and Australia will provide support for last-mile delivery and financial support for the provision of vaccines. The Quad plans to support countries with vaccine readiness and delivery, vaccine procurement, preparedness of healthcare professionals, community engagement, and immunisation capacity. Quad partnership could be a useful opportunity for India due to greater regulatory coherence between members and greater mutual FDI. For this opportunity to be properly seized, greater alignment on IP policy will be a prerequisite to the fostering of innovation ecosystems across Quad members.

An effective IP system is critical to ensure that the global community continues to deliver the next generation of innovative and creative goods and services to compete for a better tomorrow. Effective IP rights also facilitated hundreds of voluntary licensing agreements that allowed the rapid scale-up of global manufacturing. Data indicates that by June 2022, the global vaccine manufacturing capacity will reach 24 billion doses.

By Patrick Kilbride, Senior Vice President, Global Innovation Policy Center

(DISCLAIMER: The views expressed are solely of the author and ETHealthworld does not necessarily subscribe to it. shall not be responsible for any damage caused to any person / organisation directly or indirectly.)


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