Home > Uncategorized > In fighting COVID-19, intellectual property, not antitrust, is the real problem

In fighting COVID-19, intellectual property, not antitrust, is the real problem

from Dean Baker

Former New York Times reporter Donald McNeil had an interesting Medium piece on how antitrust law could be impeding the development of effective treatments for COVID-19. McNeil argued that COVID-19 treatments that were developed by Pfizer and Merck, and are now in the final stages of testing, may work best when taken together.

He argues that this may be the case because the drugs use two fundamentally different mechanisms for attacking the virus. By using the two in combination, we would be maximizing the likelihood that at least one would be effective. This has been the approach followed with effective H.I.V. drugs, as well as Hepatitis C treatments.

McNeil argues that the reason combinations are not pursued is because of antitrust laws. If, instead of competing with their different drugs, two giant drug manufacturers, like Pfizer and Merck, were to collaborate to produce the best possible treatment for COVID-19, they would be risking an antitrust action from the government or competing drug companies. McNeil recommends waiving antitrust rules when lifesaving medications are involved.

While that would clearly be desirable in this case, it is worth stepping back a minute. Let’s imagine that we were not relying on government-granted patent monopolies to finance biomedical research. Suppose that, instead of granting monopolies, the government just paid for the research upfront. (This is pretty much what we did with Moderna’s vaccine, but we also gave them a patent monopoly.)

If the government was paying for the research, a condition of getting the funding would be that all results are fully open.[1] In that context, Pfizer, Merck, and anyone else doing research on treating COVID-19 would have every reason in the world to examine the effectiveness of using drugs in combination.

The incentive would be for showing results that improved people’s health, not advancing the prospects for a specific drug. (I recommend the funding take the form of long-term contracts, which could be renewed and expanded, depending on the results shown from prior rounds of funding.) This system would also have the benefit that no one would have the incentive to hide results that reflected poorly on particular drugs (e.g. the addictiveness of the new generation of opioids).

In this context antitrust would not be an issue. All drugs would be produced as generics from the day they came on the market. While there could be some basis for concern if manufacturing became too concentrated, there would be no problems associated with companies collaborating in the development of new drugs.

Ideally, we would also be seeing this sort of collaboration internationally. This is what many of us hoped for at the start of the pandemic. Imagine if we had been prepared to collaborate with China to have their vaccines distributed as widely as possible, while we waited for production of the more effective mRNA vaccines to ramp up. (And, everyone in the world would be able to produce the mRNA vaccines if they could develop or convert the manufacturing capacity.) We might have saved hundreds of thousands, or even millions, of lives and substantially slowed the spread.

The pandemic presented an opportunity to experiment with new ways of supporting the development of vaccines, tests, and treatments. Unfortunately, we instead dug deeper into our prior methods, with great cost in lives, as well as the health of people around the world. It might be late in the game in terms of combatting this pandemic, but some new thinking would be tremendously valuable in preparing for the next pandemic, as well as our ongoing struggles with cancer, heart disease, and other longstanding health issues.

[1] I outline how this sort of funding mechanism could work in chapter 5 of Rigged [it’s free].

  1. December 1, 2021 at 12:20 am

    Reblogged this on muunyayo .

  2. Ken Zimmerman
    December 12, 2021 at 2:09 am

    Using the “filed rate” exemption antitrust laws can be suspended to allow such cooperation as you suggest. To do so requires a change in regulatory laws or at least regulatory rules such that prices for prescription drugs are tightly regulated. The regulation could be performed by the FDA or, more likely the FTC or HHH. Either directly or through regulator/company negotiations. For the last 40 years this approach has been opposed, vigorously by pharmaceutical companies, over half of American economists, and every Republican and some Democratic member of Congress. Most studies by policy researchers find these changes would reduce prescription drug costs for Americans by multiple millions of dollars overall.

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