Guarding the COVID Cash Cow

Moderna was founded in September 2010 in Cambridge, Massachusetts, by Harvard scientists with the mission to advance mRNA technology. But Moderna’s mRNA vaccine was developed through a four-year partnership with the National Institutes of Health. All told, according to the New York Times, roughly $10 billion in taxpayer dollars went toward helping the company develop, test, and distribute their COVID-19 vaccine.

In a December 2020 statement on the Food and Drug Administration’s (FDA) emergency approval of the Moderna vaccine, the government acknowledged the formulation

was co-developed with scientists at the National Institutes of Health’s National Institute of Allergy and Infectious Diseases (NIAID). This innovative and monumental partnership has enabled NIH and Moderna to develop a safe and effective COVID-19 vaccine within the span of a year that will be manufactured and distributed across the U.S.

Two months before its emergency approval, Moderna announced it would not enforce the patent rights for its new vaccine technology.

“Beyond Moderna’s vaccine, there are other COVID-19 vaccines in development that may use Moderna-patented technologies,” the company wrote in October last year:

We feel a special obligation under the current circumstances to use our resources to bring this pandemic to an end as quickly as possible. Accordingly, while the pandemic continues, Moderna will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic. Further, to eliminate any perceived IP barriers to vaccine development during the pandemic period, upon request we are also willing to license our intellectual property for COVID-19 vaccines to others for the post-pandemic period.

At the time, the company’s stock price was roughly $70 per share. After the company announced the success of its phase three trials, the company’s shares shot up 10 percent — and they have been rising more or less ever since. Today, Moderna’s stock price hangs at roughly $350 per share, with a fifty-two-week high of nearly $500.

With its new valuation, the company is vigorously guarding its cash cow against perceived threats. Moderna has already lined up an estimated $35 billion in supply deals with twenty-six countries through 2022. Of these states, only four are considered low-income, and these countries will receive less than 10 percent of the total supply.

Today, Moderna denies the government’s involvement in the development of its vaccine. Months of negotiations between the NIH and the company to reach an agreement over the intellectual property have yielded no results, and in a July filing with the US Patent and Trademark Office, Moderna left off the names of the NIH scientists who participated in the vaccine research: John Mascola, director of the NIAID, as well as Barney Graham and Kizzmekia Corbett.

The discovery of Moderna’s power play was made by Public Citizen, which alerted the NIH to the matter in a letter, urging the agency to clarify its role in vaccine development. If there is no resolution by the time a patent is issued, the end result could be a lawsuit by the government — although that outcome is not guaranteed.

“Unlimited Rights”

Despite the ongoing global pandemic, the Biden administration claims it is powerless to share the Moderna vaccine recipe with the world.

“This isn’t a White House reading of the contracts,” a senior White House official told the Washington Post on the condition of anonymity in late October. “This is the expert agencies reading the contracts, including the procurement officials who have the expertise to deal with these issues all the time, and the interagency lawyers who are expert in this.”

The Biden White House argues that the contracts negotiated by the Trump administration and Moderna for Operation Warp Speed are airtight in favor of the biotech firm’s control of the intellectual property.

But outside legal experts disagree.

In a September post in Health Affairs, Rizvi, joined by attorney Christopher Morten of Columbia Law School and Ameet Sarpatwari of Harvard Medical School, argued that the administration had legal authority to release the vaccine recipe.

The authors noted a provision in one contract between Moderna and HHS giving the government “unlimited rights” to the information developed with federal assistance.

“The contract, executed in April 2020, provided Moderna with hundreds of millions of dollars to build its manufacturing capacity,” noted the article. “In exchange, Moderna agreed to share knowledge of its manufacturing process with HHS and agreed to give the U.S. government contractually defined ‘unlimited rights’ to use, reproduce, and share knowledge funded under the contract.”

The authors noted that the contract was “​​redacted in significant part,” so they could not conclusively interpret the phrase. Nevertheless, they were confident in their assessment.

“If the contract does not provide rights to all the information needed, the Biden Administration can employ the Defense Production Act (DPA) to share the remaining knowledge,” they added.

In a Health Affairs post from August, Rizvi argued, “Under the plain text of the DPA, the president can mandate the sharing of know-how from US-based pharmaceutical companies to support the national defense need of global vaccination.” According to the DPA, he pointed out, the president has the power to allocate materials — including technical information — to meet the national defense needs of the country.

In an interview, Rizvi said the president’s pledge to make the United States an “arsenal” of vaccines for the world was a positive step. He was also encouraged by a mid-October statement by David Kessler, the administration’s chief science officer for COVID response, who said that the White House expected “that Moderna will step up as a company,” and that “failure to do that would be unconscionable in my view.”

But days after Kessler’s remarks, White House press secretary Jen Psaki dampened hopes for action.

“So, the process of technology transfers, as you know, involves teaching . . . another company how to make a vaccine that takes specialized scientists and transferring intellectual property,” Psaki told reporters when asked about Kessler’s remarks. “We absolutely want that to happen, but my understanding is also that the U.S. government does not have the ability to compel Moderna to take certain actions.”

According to Rizvi, such an about-face leaves much to be desired.

“We’re still waiting on the big effort to vaccinate the world, and we’re still waiting on the Biden administration to lean on Moderna to deliver,” he said. “So, I think that’s still a problem that needs to be addressed.”

Waiting on a Waiver

The White House has also sat on its hands while a proposal to waive the patent restrictions for COVID vaccines, diagnostic kits, medicines, personal protective equipment, and ventilators under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement has languished at the WTO. The TRIPS waiver, proposed by India and South Africa in October, would allow poor and developing nations to cheaply manufacture and distribute COVID vaccines.

In April, Biden’s White House came out in support of waiving patents to address the pandemic. As we noted at the time, making good on the pledge could present a challenge, considering the administration’s strong ties to the pharmaceutical industry. It didn’t help that US trade representative Katherine Tai’s announcement on the matter was not an explicit endorsement of the specific TRIPS waiver proposal being considered. The announcement was narrower in scope, limited to waiving patents only for vaccines.

The administration’s potential conflicts of interest are not the only stumbling block. Thanks in part to the growing power of the pharmaceutical industry in the region, the European Union, the United Kingdom, and Germany have all resisted the waiver push — a state of affairs that is frustrating aid organizations.

As Reveka Papadopoulou, president of Doctors Without Borders’s operational center in Geneva, noted in a statement:

Given the severely limited access to the COVID-19 drugs, diagnostics, and vaccines needed to save lives, it’s truly demoralizing that some governments are opposing an initiative like the TRIPS waiver, which could have such a positive impact on how low- and middle-income countries are able to tackle this pandemic.

On November 26, in the face of the new Omicron variant, Biden reiterated his support for a TRIPS waiver. But as In These Times recently reported, behind closed doors at the WTO three days later, the White House did not clarify whether it supports the current TRIPS waiver proposal, or what — if any — changes it would like to see made, delaying a resolution on the matter. Furthermore, the administration did not apply pressure on countries blocking discussion on the waiver, or call a general council meeting to pass the measure.

Currently, the fate of the TRIPS waiver remains uncertain. The measure cannot pass until the WTO’s next ministerial conference, which has been indefinitely delayed following new Omicron-related Swiss travel restrictions.

Since India and South Africa first introduced the waiver proposal, more than 4 million people around the world have died from COVID-19.