Pfizer CEO Pens Open Letter on COVID-19 Vaccine IP Waiver

By Donald Zuhn --

On Friday, Dr. Albert Bourla, the Chairman and Chief Executive Officer of Pfizer, sent an open letter to Pfizer employees regarding the U.S. Trade Representative's announcement last week that the Biden-Harris Administration would support waiving intellectual property protections for COVID-19 vaccines.  Dr. Bourla (at right) begins the letter by noting that the U.S. Trade Representative's announcement had "created some confusion" about whether Pfizer had "done enough to ensure fair and equitable distribution of our COVID-19 vaccine" and whether the proposed waiver was "going to bring solutions or create more problems."  The Pfizer CEO's letter sought to address these questions.

With respect to the global distribution of Pfizer's COVID-19 vaccine, Dr. Bourla declared that the "[f]air and equitable distribution [of its vaccine] was our North Star from day one," noting that there were two conditions that had to be met in order to ensure that every country would have access to its vaccine: (1) a price that anyone can afford, and (2) reliable manufacturing of enough vaccine for all.

With regard to pricing, Dr. Bourla explained that Pfizer had decided in June 2020 to offer its vaccine through tiered pricing, where "wealthier nations would have to pay in the range of about the cost of a takeaway meal and would offer [the vaccine] to their citizens for free . . . middle-income countries were offered doses at roughly half that price and . . . low-income countries were offered doses at cost."  He also noted that "[m]any of the poorest communities will receive their doses through donation," stating that "[e]quity doesn't mean we give everyone the same.  Equity means we give more to those that need more."

As for being able to manufacture "enough vaccine for all," Dr. Bourla acknowledged that while this second condition had been "much more challenging," the company was "getting there with remarkable speed."  Commending "the ingenuity and hard work of [Pfizer's] scientists, engineers and skilled workers," and pointing to "multibillion dollars of Pfizer investment," he noted that the company will provide more than 2.5 billion doses globally in 2021, and expected to provide 4 billion doses in 2022.  Dr. Bourla states that:

These doses are not for the rich or poor, not for the north or south.  These are doses for ALL.  We have concluded agreements to supply 116 countries and we are currently in advanced negotiations with many more for a total of approximately 2.7 billion doses in 2021.  Upon finalization of all agreements, we expect that 40% of them, or more than 1 billion doses, will go to middle- and low-income countries in 2021.

The Pfizer CEO acknowledges, however, that of the approximately 450 million doses that have been shipped to date, "the balance is more favorable to high income countries."  He explains that when Pfizer asked countries to place orders so the company could allocate doses, "the high-income countries reserved most of the doses."  He also explains that he "became personally concerned" with dose allocation and had "reached out to many heads of middle/low-income countries by letter, phone and even text to urge them to reserve doses because the supply was limited."  Unfortunately, most of these countries "decided to place orders with other vaccine makers either because mRNA technology was untested at that time or because they were offered local production options," and "other vaccine producers were not able to meet their supply commitments for varying technical reasons."  According to Dr. Bourla, Pfizer expects to be able to better supply its vaccine to middle- and low-income countries in the second half of 2021 and "to have virtually enough supply for all in 2022."

Turning to the U.S. Trade Representative's announcement, Dr. Bourla writes that he recently had an opportunity to discuss distribution of the Pfizer vaccine with Ambassador Tai, and "explain why the suggested waiver of IP rights could only derail this progress."  His discussion with Ambassador Tai leads to the second question he raised at the start of his open letter -- whether the proposed IP waiver was "going to bring solutions or create more problems."  And to this question, his answer is "categorically the latter."  Dr. Bourla explains that:

When we created our vaccine there was no manufacturing production of any mRNA vaccine or medicine anywhere in the world.  We had to create manufacturing infrastructure from scratch.  With 172 years of quality manufacturing tradition, substantial deployment of capital, and more importantly, an army of highly skilled scientists, engineers and manufacturing workers, we developed in record time the most efficient manufacturing machine of a life-saving vaccine that the world has ever seen.  Currently, infrastructure is not the bottleneck for us manufacturing faster.  The restriction is the scarcity of highly specialized raw materials needed to produce our vaccine.  These 280 different materials or components are produced by many suppliers in 19 different countries.  Many of them needed our substantial support (technical and financial) to ramp up their production.  Right now, virtually every single gram of raw material produced is shipped immediately into our manufacturing facilities and is converted immediately and reliably to vaccines that are shipped immediately around the world (91 countries to date.)  The proposed waiver for COVID-19 vaccines, threatens to disrupt the flow of raw materials.  It will unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine.  Entities with little or no experience in manufacturing vaccines are likely to chase the very raw materials we require to scale our production, putting the safety and security of all at risk.

Aside from the manufacturing challenges, Dr. Bourla also suggests that "waiving of patent protection will disincentivize anyone else from taking a big risk."  He explains that Pfizer spent $2 billion before the company knew that it could successfully develop a vaccine because the company "understood what was at stake."  While acknowledging that "[t]he recent rhetoric will not discourage us from continuing investing in science," he is "not sure if the same is true for the thousands of small biotech innovators that are totally dependent on accessing capital from investors who invest only on the premise that their intellectual property will be protected."

Dr. Bourla concludes his letter by stating that "[e]nding the pandemic and vaccinating the world is a massive, but achievable undertaking," and that Pfizer remains "fully focused on getting high-quality, safe and effective vaccines to patients all over the world as quickly as possible and to putting an end to this deadly pandemic."

For additional information regarding this topic, please see:

• "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?" May 9, 2021
• "The Road to Hell Is Paved with What Everybody Knows," May 6, 2021
• "BIO & IPO Issue Statements on Biden Administration's Support for Proposed WTO Waiver," May 6, 2021
• "Biden Administration Supports Waiver of IP Protection for COVID-19 Vaccines," May 5, 2021
• "Suspending IP Protection: A Bad Idea (That Won't Achieve Its Desired Goals)," April 26, 2021
• "Sen. Tillis Asks Biden Administration to Oppose WTO Waiver Proposal," April 21, 2021
• "IP Organizations Support Continued Opposition to Waiver Proposal," April 5, 2021
• "Industry Coalition Supports Continued Efforts to Oppose Waiver Proposal," March 29, 2021
• "BIO and PhRMA Urge Biden Administration to Oppose Proposed WTO TRIPS Waiver," March 11, 2021
• "IPO Sends Letter on IP Law and Policy to President-Elect and Vice President-Elect," January 4, 2021

Comments

[Dan Feigelson]

Unmentioned - unsurprisingly - is the difficulty in distributing a vaccine that needs to be stored at -20 degrees C to many parts of the world, e.g. rural India. An IP waiver will do nothing to help that.

[Karl P. Dresdner, Jr., PhD, US Patent Agent 63,319]

Than you Pfizer for the approach you are taking to make the Covid-19 vaccine available to any country in need. I agree 100% that innovator companies are incentivized and protected by their IP rights.

[Rosanne Kosson]

Dr. Bourla did not mention the several billion $ that Pfizer received from the Trump administration. But revoking patent rights is absurd & will backfire big time. Inventions will become trade secrets, yet patent Applicants will still file. They will omit the critical details that make the inventions work, the preferred embodiments, so that they have nothing to lose.
Omitting/hiding preferred embodiments in the spec is easy in chemical & biotech cases. Chemical compounds have a core structure with many R groups. Each R group is a variable corresponding to a set of substituents. Each R group is many R1 groups, each R1 group being another set of variables, R2s, etc. Each compound is millions of compounds. Applicants would simply indicate as preferred the specific compounds that do not work very well and keep the preferred embodiment (or 2) well hidden in the background. DNA and protein sequences also have variable positions & will be disclosed & hidden likewise; vector constructs will be partial disclosures. Deposited/claimed cell lines will be the worst embodiments. And forget tech support w/o exclusive rights. It would be much better to encourage the vaccine companies to offer free/low-cost licenses to third world countries. As Joe Biden wants huge tax hikes, he could offer big tax credits to companies that send doses of corona virus vaccines to third world countries. And why obliterate the patent rights for patents to products that cannot be used in the third world (mRNA vaccines) or that are not FDA-approved (AZ vaccine)? Biden needs better advisors. When the Govt takes away private property, it's beyond socialism.

[Greg DeLassus]

"Biden needs better advisors. When the Govt takes away private property, it's beyond socialism."

Just to be clear, *no one* in the administration has floated the idea of taking private property. The administration has expressed public support for the idea of a *TRIPS* waiver, not for the idea of waiving *US* IP rights.

US patent holders will have all of the same patent rights after a TRIPS waiver as they have before a TRIPS waiver. US trade secret holders will have all of the same trade secret rights after a TRIPS waiver as they have before a TRIPS waiver. A TRIPS waiver will not affect any US IP rights.

[Greg DeLassus]

"Dr. Bourla also suggests that 'waiving of patent protection will disincentivize anyone else from taking a big risk.'"

I call bull$#!+. I simply do not believe that any pharma innovator anywhere in the world takes more than a microsecond to consider the implications of IN or ZA patent protection when making investment decisions.

Folks, almost everyone reading this blog works in this industry. You *know* how often your clients want you to file in India or South Africa. How often? Once every 100 applications? Once every 500 applications? These markets are *irrelevant* to the pharma innovator business models. Be serious, do.

The US is not proposing to waive any patent rights. No EP country (even the small ones) is proposing to do so. China is not proposing to do so. Really, in every single country in which your clients regularly file, everyone knows that IP rights are going to be just as secure post-TRIPS waiver as they ever were.

The whole premise of the argument that we should be concerned about this is that a TRIPS waiver for COVID is just the thin edge of the wedge, or the first step onto the slippery slope. But *why* should we think this? Does anyone seriously believe that the COVID-19 pandemic is *not* an exceptional circumstance? The argument that it *is* an exceptional circumstance is a thousand times more compelling than the argument to the contrary.

We are talking about a meaningless gesture, that arises from a uniquely serious set of circumstances that are wholly unlikely to occur again in our lifetimes. There is no real cause for concern here.

[Greg DeLassus]

"The restriction is the scarcity of highly specialized raw materials needed to produce our vaccine. These 280 different materials or components are produced by many suppliers in 19 different countries... Right now, virtually every single gram of raw material produced is shipped immediately into our manufacturing facilities... The proposed waiver for COVID-19 vaccines, threatens to... unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine."

This is far and away Dr. Bourla's most compelling argument. In a functioning market, a rise in demand should drive up prices, which in turn should incentivize new market entrants to increase available supply. Hopefully, then, the long term result of the supply disruptions that Dr. Bourla predicts should be that the market adjusts to reach an equilibrium in which even more vaccines are produced. Even then, however, this will possibly mean some short term (1 month?, three months?, six months?) period during which supply chain disruptions crimp vaccine production. That would be bad.

Of course, this bad scenario will only come into play if there are actually new manufacturers who plan to launch operations once a TRIPS waiver is granted. Color me skeptical on that point. As already discussed, there are no IP obstacles to launching vaccine manufacturing operations in IN or ZA *right now*. Therefore, it is hard to see why a waiver of IP rights in those jurisdictions would change anything.

More likely, a TRIPS waiver will have no effect on supply chains. It will be an empty gesture, and nothing more.