COVID-19, Compulsory Licensing, and the Battle Between Health and Economy

By: John Stevelinck, Jr.

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At present, there have been over 2.5 million confirmed cases of COVID-19 and over 100,000 COVID-19 related deaths in the United States. As a result, efforts to develop a vaccine are in full swing, placing the U.S. Government in a unique situation when it comes to patent rights.

In the United States, patent owners enjoy significant benefits and often exercise firm control over licensing and third-party access to their patents. This often leads to patent owners setting high price points on essential medications. An expensive COVID-19 vaccine that is only affordable to a select few will do little to cull the dangers of the devastating virus. Thus, the unique circumstances of the COVID-19 pandemic have some calling for the U.S. government to invoke compulsory licensing, which would compel the owner of a COVID-19 vaccine patent to allow others to use the patent. Compelling patent owners to license a vaccine patent during the pandemic would increase the vaccine’s accessibility while also decreasing its cost to consumers. This call to action begs two questions: First, does the U.S. government have the authority to intervene? And second, if the government does possess the authority, should it invoke that authority?

To answer the first question, yes, the government has the authority to implement compulsory licensing under two different laws. The Bayh-Dole Act grants the U.S. government “march-in” rights to compel patent owners to license their patents if necessary to meet health and safety needs. It is important to note, however, that the government’s march-in rights are limited to patents that were developed with federal funding.

As a member of the World Trade Organization, the United States also has the authority to implement compulsory licensing under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”). The TRIPS Agreement permits member countries to invoke compulsory licensing power in times of national emergencies. Several countries have already passed or introduced compulsory licensing legislation in response to the COVID-19 pandemic. The United States can join these other member countries in doing the same, but, as of June 2020, no compulsory licensing laws have been officially introduced in the U.S.

The answer to the second question is more complicated. Unfortunately, the pandemic has shown that there is a delicate balance between public health and economic stability. Minimizing the cost and increasing the availability of a vaccine in the midst of a pandemic would be quite beneficial to public health. However, opponents of compulsory licensing argue that it will ultimately hinder economic growth and disincentivize innovative approaches to developing a COVID-19 vaccine.

Although economic growth and innovation are essential to our nation in many ways, it is difficult to think that either is more important than the health and safety of American citizens. The government’s compulsory licensing power is also limited by the bounds of the relevant laws and the duration of the pandemic. If the American government has the power to invoke its march-in rights or the TRIPS Agreement when a COVID-19 vaccine is finally developed, it should do so. A dip in economic growth and innovation is a small price to pay for saving American lives.

 

John M. Stevelinck, Jr. is a second-year law student at Wake Forest University School of Law. He holds a Bachelor of Arts in Cognitive Science from the University of Michigan. Upon graduation, he intends to practice corporate law.