Part III - Alternative Means of Fighting Pandemics

9 Planning for Pandemic and Epidemic-Related Scarcity of Medicines

Sapna Kumar and Ana Santos Rutschman

Pandemics and epidemics pose a substantial and growing threat to global health care systems.¹ When a large-scale outbreak occurs, time is of the essence to repurpose existing health technologies and develop new medicines to prevent or treat illness, to avoid straining hospitals, and to reduce deaths. Delays in implementing licensing agreements for relevant intellectual property (IP) rights and manufacturing know-how can hinder ramping up production of needed medicines.

Intellectual property rights play a mixed role in pandemics and epidemics. Patents provide inventors with the right to exclude others from making, using, selling, and importing their inventions, among other actions.² Coupled with regulatory exclusivities, patents are often credited with incentivizing pharmaceutical companies to develop new medicines and to find new uses for existing ones.³ Trade secrets furthermore encourage the development of medicines by allowing companies to protect valuable know-how, such as complex pharmaceutical manufacturing processes.⁴

Intellectual property rights, however, can also contribute to medicine shortages. When demand for life-saving medicines surges due to a large-scale outbreak, there is a lag time before companies can scale up production.⁵ Although licensing proprietary technology to third-party manufacturers would help speed up production, companies may nevertheless refuse to collaborate. They might also choose to sell these medicines at exorbitant prices, or delay making them available to low- and middle-income countries in order to prioritize orders for higher-paying customers.

Governments in high-income countries provide pharmaceutical companies with substantial funding, for pandemic- and epidemic-specific research and development (R&D), as well as for more general R&D.⁶ Yet they typically fail to secure enforceable promises from the funding recipient to ensuring that life-saving medicines are produced in sufficient quantity. Nor do such contracts generally address whether the final medicine will be provided to low-income countries in adequate quantities or at an affordable cost. This can lead to global shortages of taxpayer-funded drugs at a time when they are most needed. Existing measures under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have proven to be inadequate for addressing these problems.

This chapter argues that when governments and nongovernmental entities fund research for pandemic- and epidemic-specific drug development, they should use contractual provisions to provide safeguards to the public. Funding contracts should require the IP rights holder(s) to commit to taking all reasonable measures to produce sufficient quantities of any resulting life-saving drug in the event of a public health emergency. Were a shortage to arise, the relevant pharmaceutical company would be required to cooperate with willing third-party drug manufacturers to increase supply, in exchange for compensation. Complementarily, we argue that medical research funders should contractually secure promises to ensure fair pricing and access to life-saving medicines in low- and middle-income countries during public health emergencies.

We additionally propose that funders of medical research utilize a contractual mechanism called a “dormant license,” which could impose some, or all, of the obligations outlined above. These licenses would be negotiated ahead of crisis situations and activate automatically when a pandemic or epidemic is declared to ensure an adequate supply of needed medicines.

1 Scarcity of Medicines and Inequitable Allocation in Context

The global allocation of critically needed medicines has long been marked by profound asymmetries. Although low-income countries are often disproportionately impacted by infectious disease outbreaks, high-income countries typically obtain greater supplies of medicines to treat them. This trend is exacerbated when severe public health crises cause a spike in demand for medicines, as is typically the case with pandemics and epidemics. COVID-19 is the most recent of a series of outbreaks in which the Global North purchased most of the treatment and vaccine supply.⁷

Market-based dynamics drive this inequality. High-income countries have both the resources and the bargaining power to capture much of the initial supply of pandemic and epidemic medicines through bilateral channels. During the COVID-19 and 2009 swine flu pandemics, these countries used advanced purchase agreements to buy vaccine doses from pharmaceutical companies before any were actually produced.⁸ Some countries ordered far more doses than necessary to vaccinate their domestic populations.⁹ Others engaged in “vaccine diplomacy,” through which they allocated vaccines to allies, as opposed to those with the greatest need, in order to secure some form of regional or international advantage or influence.¹⁰ This left lower-income countries with scant access to critically needed medicines during worsening public health crises, and it forced them to wait for global manufacturing capacity to increase or for donated doses. During the 2009 swine flu pandemic, donations only occurred after the pandemic had mostly subsided.¹¹

The practice of allocating scarce medicines to the countries that can most readily negotiate with and pay vaccine manufacturers is known as “vaccine nationalism”; it is part of a growing trend of market power overriding need, to the detriment of public health.¹² The allocation of COVID-19 vaccines illustrates this phenomenon. The US government initially refused to support international procurement through the COVID-19 Vaccines Global Access (COVAX), a facility co-led by the Coalition for Epidemic Preparedness Innovations, Gavi and the World Health Organization (WHO).¹³ Instead, the Trump Administration launched Operation Warp Speed, providing billions of dollars to pharmaceutical companies that were working to develop COVID-19 vaccines and placing advanced purchase agreements with six companies. It attempted to secure priority access to foreign companies’ vaccines by offering them large sums of money, sparking immense backlash.¹⁴ The United States was not alone in aggressively stockpiling vaccines – the United Kingdom, Canada, Japan, and some European Union member states procured more vaccines than they actually needed.¹⁵

Various countries chose to support COVAX with the goal of facilitating the manufacturing and distribution of COVID-19 vaccines to all countries. However, COVAX fell short of its promises.¹⁶ Some countries placed orders, but received their vaccines late or without any advanced notice, or received doses that were about to expire.¹⁷ Middle-income countries that did not receive promised vaccines were forced to later negotiate separate deals with vaccine manufacturers, pushing them to the back of the line. The Serum Institute of India was supposed to be a major supplier, but India’s vaccine export ban in 2021 blocked it from delivering orders for several months.¹⁸ A major complaint against COVAX was its failure to push for technology transfers to allow countries to manufacture their own doses.¹⁹

Lower-income countries are supposed to have legal tools to counter vaccine nationalism and, more broadly, problems of medicine scarcity arising during public health crises. Article 31 of TRIPS allows member countries to utilize “compulsory licensing” and issue licenses for patented technology to third parties.²⁰ During emergencies, including pandemics and epidemics, a government need not engage in time-consuming negotiations with the patent holder prior to issuing a compulsory license.²¹ Article 31bis further permits countries in need of particular drugs to import them under compulsory license from a country capable of producing them.²² Theoretically, these provisions should allow lower-income countries to produce or import the medicines that they need during a pandemic or epidemic.

TRIPS, however, lacks a mechanism for compelling pharmaceutical companies to share the know-how that is needed for third-party manufacturers to quickly replicate medicines. Article 39 requires member countries to protect trade secrets and contains no provision expressly allowing for compulsory licensing.²³ Without manufacturing-related know-how, a country may need years to both recreate a vaccine or other complex medicine and to gain regulatory approval.²⁴ Lower-income countries furthermore risk higher-income countries retaliating against them for using compulsory licensing.²⁵

2 Preparing for Pandemics and Epidemics: The Underexplored Role of Contracts

An underappreciated point in the literature is the fact that many components needed to produce medicines for pandemic and epidemic response are developed well in advance.²⁶ When an outbreak occurs, the process of developing drugs and vaccines does not start from scratch. Rather, researchers adapt and use preexisting technology to address the specific challenges posed by a new infectious disease.

The development of vaccines against Ebola and COVID-19 provides an illustration of this point. Vaccines for these diseases were the product of years of pre-outbreak R&D and technology transfer.²⁷ During the 2014–2016 Ebola vaccine race, the leading vaccine candidate had actually been developed by 2005. It did not come to market until 2019 due to a lack of private sector interest in initiating clinical trials and seeking regulatory approval.²⁸ Similarly, Moderna and Pfizer’s COVID-19 mRNA vaccines utilized technology that had been in development for well over a decade.²⁹

The timing of drug development has implications for the practices surrounding technology transfer. During large transnational public health crises, bargaining processes will be rushed, tinged by geopolitics and limited by resource scarcity,³⁰ making it difficult to address allocative inequalities among countries. Yet funding contracts governing R&D, transfer, and commercialization of these medicines generally predate the outbreak causing a spike in demand. Consequently, at least some of the contractual requirements governing the sharing and transferring of technology during a pandemic or epidemic can be established when demand is lower – well before bidding wars to pre-purchase most of the vaccines or treatments occur.

We therefore suggest that bargaining regarding the transfer of technology take place as far in advance as possible. Furthermore, attempts to promote the fair allocation of pandemic and epidemic health goods should occur ideally in the pre-pandemic or epidemic period. We discuss two different approaches that R&D funders could use to address affordability and/or equitable allocation obligations in funding contracts governing R&D on these goods. Many existing proposals to expand access to medicines during pandemics and epidemics occur ex post by constraint – as product scarcity and nationalist behaviors combine to exclude populations in lower-income countries. By contrast, our proposed framework would operate largely ex ante, creating binding contractual obligations that arise if and when pandemic or epidemic-driven scarcity occurs.

3 Safeguarding Access to Medicines through Pandemic-Specific Funding Agreements

When funding the development of medicines that are likely to be needed for a pandemic or epidemic response, funding entities could use their contracts to proactively anticipate scarcity and pricing problems. One possibility would be to insert provisions into funding contracts requiring pharmaceutical companies benefitting from the funding to produce any subsequently developed medicine in sufficient quantity to meet public health needs.³¹ In order to determine whether a particular medicine is tied to funding received under our proposed model, a contract could specify an identification formula or mechanism. For instance, funding could be tied to applied for or granted patents. Under this approach, if funding under the contract results in a patent that covers part of the resulting medicine, then the product as a whole would be covered by the licensing terms.³²

The funding contract could provide an initial grace period to allow the company time to secure raw materials and scale up production of the medicine in question. Alternatively, the contract may bind the parties to decide what the appropriate grace period is once a pandemic or epidemic is declared; this approach would cater to the specificities of a given public health crisis. If the shortage persists, the funder could require the company to license out the relevant patents and know-how to willing third-party manufacturers to scale up production more quickly.

The contract would specify a compensatory royalty rate to be paid to the company under such circumstances. The goal would be to set the rate as close to fair market value as possible, while ensuring that third-party manufacturers have sufficient incentive to help produce the needed medicine. By doing this, the company should end up with a higher rate of profits than if the shortage had continued. The funding contract would further specify significant financial penalties for companies that fail to cooperate and could bar future funding to an uncooperative recipient.

The funder could furthermore require the pharmaceutical company to promise that any resulting medicine be priced fairly for low-income countries and be made available to them in sufficient quantity. As discussed earlier, bidding wars have put needed medicines out of reach for much of the Global South during pandemics and epidemics. What assistance high-income governments provide typically comes in the form of donating excess medicines.³³ It would be far more efficient for funders to secure low-cost access from pharmaceutical companies when the underlying R&D is funded and to require companies to work with generic drug manufacturers in low-income countries to help ensure an adequate supply.

We acknowledge that funding for R&D in this area is often provided by entities in higher-income countries – the same countries that have repeatedly tried to secure early vaccine access for recent pandemics, notwithstanding the pressing need of those living in lower-income countries.³⁴ Although it is unlikely that vaccine nationalism will be fully eliminated ahead of future global public health crises, the COVID-19 pandemic has highlighted the frailty of these approaches.³⁵ Countries lacking the vaccines likely prolonged the pandemic by giving rise to mutations that could evade the vaccines’ protection.³⁶ In light of the need for global cooperative efforts to prevent and respond to pandemics and large-scale epidemics, the time is ripe for funders in higher-income countries to consider the imposition of requirements that align with this goal.³⁷

Moreover, we note that some pharmaceutical companies already utilize licensing agreements to benefit low-income countries. For example, the United Nations-backed Medicines Patent Pool (MPP) negotiated a voluntary license with Pfizer for its oral COVID-19 drug Paxlovid. This allowed MPP to sublicense it royalty-free to thirty-five manufacturers for the duration of the pandemic, benefitting ninety-five lower-income countries; a 5–10 percent royalty will apply for middle-income countries thereafter.³⁸ However, not all companies are willing to participate in such programs, and some withhold their most lucrative medicines from such agreements. For example, both Moderna and Pfizer have refused to license out their mRNA vaccine technology, highlighting the need for more formalized licensing obligations.³⁹

Anticipating the possibility of pandemic- and epidemic-driven shortages of medicines in funding contracts would offer several benefits. It would allow for production to be rapidly scaled up by decreasing transaction costs for third-party manufacturers that are willing to produce the medicine. When compulsory licensing is used, the third-party producer must waste time replicating the medicine and gaining regulatory approval. Indeed, for biologics such vaccines, the timeline for bringing a biosimilar vaccine to market could exceed the duration of the public health emergency. Under our proposal, third-party manufacturers would be able to obtain access to proprietary information about the optimal way to produce the medicine, eliminating such unnecessary delays.

Another benefit to our proposal is that the third-party-produced medicine may not have to go through full regulatory approval, because it would be made under license from the original manufacturer. Depending on the applicable national regulatory frameworks, such medicines would potentially qualify as follow-on drugs (generics or biosimilars) or may be eligible for other shortened review pathways, as was the case with emergency use authorizations for COVID-19 vaccines.⁴⁰ The third-party manufacturer could also potentially benefit from the rights holder’s connections with raw material providers. Furthermore, the funding contract would pre-set the compensation rate, so that time-consuming negotiations do not have to take place once a shortage has arisen.

There are, admittedly, some limitations to our proposal. During the COVID-19 pandemic, there were shortages of supplies that licensing would not have been able to mitigate, such as glass vials to hold vaccine doses.⁴¹ Nor will licensing help if medicine manufacturing capacity is insufficient or if logistical limitations arise. For cutting-edge technology such as mRNA vaccines, a shortage of skilled personnel might also exist, and it could take time to train employees at third-party manufacturing facilities to produce highly novel medicines. Finally, securing these promises in the shadow of a pandemic could lead to funding entities paying more to the recipients and would likely lead to larger pharmaceutical companies declining funding.

4 Dormant Licensing Provisions

A “dormant license” is a set of contractual provisions agreed to by the parties before the occurrence of a specified event.⁴² Although the provisions are not active at the time that they are agreed to – even if other portions of the agreement have taken effect – they come into force if the event occurs.⁴³ We propose that funding entities attach a dormant license when funding R&D for medicines that are typically needed to prevent and respond to pandemics and epidemics. They should condition funding on the acceptance of contractual terms designed to promote the affordability and equitable allocation of the medicines covered by the license.

We recommend a flexible framework to identify relevant medicines, or components thereof, that would be subject to the dormant license. This would be modeled after the list of emerging pathogens maintained by the WHO or a similar group. Funding entities would designate certain emerging pathogens or diseases as “priority” targets and would reserve some funding for recipients who agree to the dormant license terms.⁴⁴ Ideally, the funding recipient would also guarantee the affordability and equitable distribution of any subsequently developed products. However, the funding entity may make strategic choices about which areas of R&D are best suited for the dormant licensing model based on political economy constraints.

Dormant licenses are particularly well suited to providing funding for R&D on emerging infectious diseases. Such work has been grossly underfunded and has failed to attract significant funding even after an outbreak occurs.⁴⁵ For this reason, the realm of emerging pathogens of concern, as identified by the WHO – or by another public health-oriented institution⁴⁶ – constitutes a good field for our proposal. These pathogens are expected to trigger significant outbreaks in years to come, yet are underrepresented in large pharmaceutical companies’ development pipelines.

The funding entity may tailor the dormant licensing requirements based on its priorities. For example, a funding entity that supports vaccine development might require recipients to promise that a percentage of any vaccine doses produced be allocated to an international procurement facility – such as COVAX – in the event of a relevant outbreak. It could choose to impose pricing requirements by adopting a formula to calculate pricing at the time of commercialization or impose requirements specific to commercialization in lower-income countries. It could furthermore obligate recipients to sublicense the technology on a nonexclusive basis to alleviate shortages, or require them to sublicense to preferred or predetermined partners. Overall, the terms can be adapted depending on the specifics of the technology, the field of R&D, and the profile of the target funding recipients to maximize both goals of health equity and practical implementation.

To increase certainty for the funding recipient, we suggest that the trigger for the dormant license be a formal declaration of an epidemic or pandemic by an agreed-upon public health institution. Although we believe that the WHO is well positioned to serve in this function, the parties could alternatively choose a domestic institution or some other body to fulfill this role. The licensing terms would indicate whether the qualifying event is a formal declaration or merely a declaration of concern,⁴⁷ and would identify the institution or institutions producing the qualifying trigger. The contract should also specify how to calculate the period for which the dormant license would remain active, such as the number of months counted from a formal declaration that a pandemic or epidemic is over. It should furthermore address whether the term could be extended if the parties were to desire, and if so, how. Finally, as was the case with our previous proposal, the funding contract could also establish financial penalties for funding recipients that fail to abide by the terms of the license, as well as potentially bar the awarding of future funding to the recipient in breach of the agreement.⁴⁸

The approach outlined here offers several advantages over current licensing approaches.⁴⁹ First, the licensing terms are negotiated before a large-scale public health crisis unfolds, when there are fewer bargaining pressures. Second, a dormant license furthers the goal of increasing legal certainty by setting clear obligations and corresponding rewards before the need for expedited R&D arises. And third, although the dormant license is designed to impose some sort of limitation on licensees, it would contribute toward monetization of the licensed product or products, as it integrates compensation for the rights holder.

The presence of dormant licensing provisions in funding contracts will admittedly not be attractive to all firms. Large and established pharmaceutical companies, such as Pfizer, are likely to refuse any funding with such conditions.⁵⁰ However, several types of firms engaging in pharmaceutical R&D may be willing to agree to a dormant license, particularly for underfunded areas of research. For instance, prior to the COVID-19 pandemic, Moderna was a relatively small company which had never brought a product to market, yet received substantial government funding.⁵¹ Smaller companies, companies that are generally dependent on external R&D funding, and especially companies seeking to establish a relationship with government funders are all more likely to agree to the provisions that we propose.

5 Conclusion

Past and current public health crises have shown that high-income countries have failed to proactively address pandemic- and epidemic-driven shortages of critically needed medicines. Worse still, high-income countries frequently hoard scarce medicines with little thought for whether those located in the Global South have access. Governments and institutions providing funding for pharmaceutical development have generally taken few steps to proactively ensure the adequate production, as well as the fair pricing and allocation of medicines. During the COVID-19 pandemic, existing flexibilities under TRIPS provided little relief, because pharmaceutical companies could not be compelled to share vital medicine-manufacturing know-how with third-party manufacturers.

Moving forward, governmental and nongovernmental entities should take a proactive approach to anticipating such scarcity by using funding as leverage for obtaining promises regarding medicine supply and pricing. We propose two levels on which this can operate. More narrowly, when entities fund pandemic- or epidemic-specific R&D, they could extract contractual promises to make any resulting medicine in sufficient quantity to meet demand and to require that the recipient provide the medicine to lower-income countries at reasonable prices. In the event of scarcity, the funding recipient would be obligated to license out its technology to willing third-party manufacturers in exchange for predetermined compensation. More broadly, they could incorporate such promises into other R&D funding agreements – such as for emerging pathogen research – by using a dormant license that triggers in the event of a pandemic or epidemic. These strategies provide funding entities with a flexible mechanism for mitigating pandemic- and epidemic-driven shortages and preventing distributional inequalities, which could ultimately save lives.

10 Improving Global Governance of Pandemic Response Lessons from COVID-19

Jayashree Watal

As COVID-19 has become less of an emergency and more endemic, the attention of policymakers at the national, regional, and global levels has inevitably shifted to other pressing matters. In the last quarter of 2022, stakeholders in global public health governance – be it international organizations (IOs) such as the World Health Organization (WHO), governments, industry, civil society organizations (CSOs), or academia – are taking the time to evaluate the lessons that policymakers can learn from the global experience of COVID-19 to ensure more equitable access to pandemic response products (PRPs),¹ especially vaccines, diagnostics, and treatments. There is a surprising amount of convergence around what the international community broadly needs to do in order to better respond to the next infectious disease pandemic:² invest massively to upgrade national health systems, especially in poorer countries; make legally binding commitments to build adequate contingency funding for equitably distributing PRPs to populations in low- and middle-income countries (LMICs) at about the same time as in richer countries; ensure geographic distribution of production facilities so that PRPs are available in all regions, thus protecting against supply shortages; strengthen the international global health architecture, including organizations such as the WHO, so that improved rules and better compliance can be ensured during a future pandemic. However, the one aspect that has had less convergence is which entity should be responsible for coordinating the global response to an infectious disease pandemic, including ensuring procurement and equitable distribution of PRPs, and how such an entity should function.

Focused on global response governance, this chapter highlights the crying need for an effective, adequately funded, empowered, lean, and flexible entity to lead the immediate global response to contain any future pandemic everywhere – an entity responsible for coordinating the procurement and equitable distribution of PRPs in LMICs wherever they are urgently needed.³ The primary goal of such an entity would be to contain the pandemic everywhere as soon as possible to minimize both human and economic losses. While there are many worthy long-term causes such as strengthening national health systems, enhancing local technological capacities, sharing intellectual property (IP) rights and manufacturing know-how on PRPs, gender equity, increasing job opportunities, and so on, this entity must stay focused on one goal alone: to effectively respond to containing the pandemic everywhere to minimize its devastating health and economic toll worldwide. This goal would automatically lead to the best outcomes globally, including in LMICs, as equity is best served by a quick end to the pandemic.

While prevention, preparedness, and response (PPR) to a future pandemic have invariably been linked, these require separate sets of actions at different points of time. While during COVID-19, prevention and preparedness – in terms of surveillance of the animal kingdom to detect deadly viruses that can jump to the human species, and to prevent their spread or to detect new variants of circulating deadly viruses; or in terms of building adequate health infrastructure, including training sufficient health personnel; or regionally distributed technological capabilities to produce PRPs – was low to abysmal in LMICs, the major failure in dealing with the pandemic was the lack of an effective, globally coordinated response to the spread of the SARS-CoV-2 virus, in order to end or contain the pandemic as quickly as possible. This chapter is concerned only with coordinating the immediate global response to future pandemics – on which there has been very little focus – as opposed to long-term arrangements on prevention and preparedness where recent efforts by the WHO, the Coalition for Epidemic Preparedness Innovations (CEPI), and the Pandemic Fund seem to be moving in the right direction, even if much more needs to be done. This chapter does not purport to provide all the answers on global governance for pandemic response but at least attempts to raise the questions that the international community needs to ask itself.

This chapter consists of four sections. Section 1 provides a background that situates the global governance challenges in responding adequately to the spread of COVID-19. Section 2 gives a brief description of the challenges faced by global health institutions during the COVID-19 pandemic, and Section 3 lists some of the key initiatives taken and ideas put forward on global pandemic governance following the pandemic. Section 4 then sets out arguments favoring the need for an entity responsible for responding to future pandemics, raising key questions that must be resolved.

1 Background

COVID-19 has been the deadliest pandemic that the world has faced in over 100 years. In the almost four years from its discovery, the SARS-CoV-2 virus and its variants have officially infected over 770 million people and taken about 7 million lives.⁴ The official deaths reported are widely recognized to be vastly underestimated, with total deaths projected to be almost three times more at over 18.6 million deaths by April 2023.⁵ Additionally, countless of the infected survivors are suffering from debilitating long-term symptoms. To put these figures in perspective, in the decades since the beginning of the HIV/AIDS epidemic, 84.2 million people have been infected with the HIV virus, of which about 40.1 million people have died.⁶ Today, about a quarter of the world’s population is infected with tuberculosis, which kills around 1.5–1.6 million persons every year.⁷ By these standards, COVID-19 has killed many more people globally faster than any other known pandemic, with the exception of the Spanish Flu of 1918–1919.⁸

It is widely recognized that the global response to this deadly pandemic was chaotic and uncoordinated.⁹ COVID-19 was not controlled in a timely way despite many key actors in the international health governance community having anticipated the rapid spread and high mortality very early on in the pandemic. And even though several effective COVID-19 vaccines became available at the near-miraculous speed of about a year, thanks in part to the sharing of the genome sequence of SARS-CoV-2 virus by China as early as January 2020. Given the anticipated scale of the pandemic, COVID-19 vaccine manufacturers correctly expected high demand that guaranteed them high revenues and profits. But even so, an important catalyst for the rapid development and deployment of vaccines was the derisking of private research and development (R&D) through public funding, and advance-purchase commitments made by many developed-country governments for some vaccines, even before full knowledge of their efficacy was available, notably by the United States and the European Union.

It is also widely acknowledged that during the COVID-19 pandemic there were sharp inequities in the access to PRPs, especially to life-saving vaccines. As of November 2023, about 80 percent of people living in high-income countries (HICs) had received at least one dose of these vaccines, as against only 33 percent of those living in low-income countries (LICs).¹⁰ The world is yet to reach an average of 70 percent of its population vaccinated, a target meant to usher in herd immunity. Yet only 10.9 million vaccine doses were needed to administer two doses to 70 percent of the global population, while 14.8 billion doses had been delivered, and 12.5 billion doses administered, as of November 2022.¹¹ This is because richer countries were administering third, fourth, and even fifth doses when most in LICs, including priority populations, had not even received one dose. By the second half of 2022, there was not much uptake of vaccines in poorer countries not only due to the decline in COVID-19 infection cases, but also increasing vaccine hesitancy, lack of correct information on vaccines, and the inability to scale up logistics and infrastructure.

At the very initial stages of vaccine supply, the most effective vaccines, the mRNA vaccines, were inevitably prebooked and overbooked by the richer countries, cutting LICs out. In addition, prioritization of supply to local manufacturers of critical components needed to manufacture vaccines by some countries, including the United States, hit vaccine manufacturers in LMICs; and supply to some regions, particularly Africa, suffered inordinate delays due to export restrictions on finished vaccines imposed by India in early 2021 after a deadly second wave of COVID-19 hit that country.¹²

In the initial months of the COVID-19 pandemic when there were no vaccines or treatments, a widely deployed preventive measure to contain the spread of the virus, initiated first in Wuhan, China with some success, was a virtual lockdown of the affected areas/cities/countries. Many governments all over the world restricted movement and closed borders for many months in 2020 and sporadically in 2021–2022. Even though these measures did not fully succeed in controlling the spread of the pandemic, it resulted in a sharp, simultaneous downturn in economic activity in many parts of the world, especially in 2020–2021.

COVID-19 was thus not just a devastating global health crisis; it was also an unprecedented global economic crisis. The International Monetary Fund (IMF) has estimated the loss to global GDP to be $13.8 trillion through to 2024, largely due to a fall in demand that affected many economic sectors, such as travel and tourism.¹³ Many countries stepped up fiscal support programs in 2020 and 2021 – the IMF estimates the global fiscal deficit as a percentage of gross domestic product (GDP) due to stimulus packages and loss of tax revenue on account of COVID-19 to be 10.2 percent in 2020, 7.9 percent in 2021, and 5.2 percent for 2022, the biggest jump from 2019 levels being in advanced economies and emerging-market economies as compared to LICs.¹⁴ In terms of stimulus packages, Japan leads with almost 55 percent of its GDP, followed by Germany, Italy, and the United States. In the United States, this amounted to a cash injection of almost $5.5 trillion to households, institutions, and businesses, which led to a quick economic recovery but adverse medium-term consequences, including unprecedented levels of inflation, leading to the current economic woes in major economies, including stagflation.¹⁵ Poorer and emerging-market economies had less to spend and thus suffered disproportionately higher economic losses, and they will take much longer to recover from COVID-19-related losses. Yet Argentina and Brazil spent 12 percent of their GDP on stimulus packages, while India spent 3.5 percent.¹⁶ The World Bank estimates that the lifelong earnings of students may be $17 trillion less globally due to closures of educational institutions.¹⁷

All in all, the direct and indirect global economic losses due to COVID-19 five years on from the start of the pandemic may be conservatively “guesstimated” to be $20–25 trillion. Therefore, future pandemic governance should embrace the twin goals of containing both the devastating loss of human lives and keeping global economic losses to the lowest possible level. And, in principle, the international community should logically be willing to spend even up to a trillion US dollars to achieve this goal.¹⁸

2 Challenges Facing Current Global Health Institutions

Logically, it is the WHO that has the mandate within the United Nations (UN) system to be the specialized agency to deal with global health challenges such as deadly pandemics. However, despite its Director General (DG) and his senior management team’s early initiatives and strenuous efforts toward global solidarity, the WHO proved ineffective in containing the pandemic even after nearly three years of its declaration of a public health emergency of international concern (PHEIC). The WHO has also been criticized for failing to notify the world in time, for failing to trace the origins of the virus SARS-CoV-2 that caused the pandemic, and for not being able to achieve equity in the distribution of needed PRPs.

That a new virus named SARS-CoV-2 was spreading rapidly in Wuhan, China and resulting in a very high proportion of infected persons dying was known to the world only at the end of December 2019, when China notified the WHO. The WHO’s initial reaction was to play down this news and to advise that no travel restrictions were necessary.¹⁹ Only on January 30, 2020 – after the DG himself visited Beijing – did the WHO declare this to be a PHEIC. By then there were 7,818 total confirmed cases reported worldwide, with 82 cases reported in 18 countries outside China.²⁰ The rate of spread of COVID-19 globally was rapid. For example, by March 7, 2020 the number of confirmed cases outside China surpassed 100,000; twelve days later it reached 200,000; just three days after that 300,000; and within two more days the total number of global cases was 400,000.²¹ On March 11, 2020 the WHO took the additional step of declaring COVID-19 to be a pandemic and began issuing regular advisories – sometimes contested by scientists and experts – on steps to be taken to prevent the rapid spread of the virus. By this date, the health system in a rich country, Italy, was already struggling to cope with the number of hospitalizations and deaths, and the country was in lockdown,²² a pattern repeated in many countries around the world.

One primary reason why the UN system, as it is currently structured, cannot be solely depended upon to fulfill the primary role of responding to deadly pandemics is that its decision-making through a one country, one vote system or through consensus is not only time-consuming but leads to delayed and ineffective solutions, an outcome that is unaffordable in response to a pandemic like COVID-19. As leading scholars have stated, “even as the UN system seeks to bring the world together, governments have too often responded alone, as the universal system of international organizations has faced continuing obstacles in realizing global solidarity.”²³

It should not be surprising that the WHO, dependent as it is on its key members, is not able to pressure any of those member states into acquiescence. This is as true of the United States as it is of China. Leading scholars have pointed out ten specific areas where the response was inadequate and rightly put WHO’s slow responses to the COVID-19 pandemic in context by stating that “the WHO has lacked high-level political backing, financing, and convening power.”²⁴

The High-Level Independent Panel set up by the G20 said this: “The current global health architecture is not fit-for-purpose to prevent a major pandemic, nor to respond with speed and force when a pandemic threat emerges. As the Global Preparedness Monitoring Board highlights, the system is fragmented and complex, and lacks accountability and oversight of financing of pandemic preparedness.”²⁵

Similarly, other public health experts have recognized the need for new governance structures in order to respond to future pandemics. As leading health law scholars aptly put it: “Global health governance is at a crossroads, necessitating a new governance model … The global governance institutions that develop in the aftermath of the COVID-19 crisis will determine the response to future threats.”²⁶

Some of the key systemic reasons why either the WHO needs to be radically restructured or a new global coordination entity set up for pandemic response are listed below.

A UN Agency and Decision-Making

As a specialized agency of the UN, the WHO follows the rule of decision-making by vote, where an agreement cannot be reached through consensus. There is no permanent executive committee of key funding member states that oversees its program and budget, nor does any country hold the right of veto, unlike the UN Security Council. This makes it very difficult for major financial contributors to control the priorities and functioning of the organization. This is, of course, a problem for all UN agencies that are funded by member states’ contributions, but none are as important in the context of a pandemic as the WHO.

B Budget

The WHO’s budget consists of member governments’ assessed contributions (less than 20 percent when COVID-19 struck) and tied voluntary contributions from both member states and private contributors (over 80 percent). This has resulted in a loss of control over its own budget as voluntary contributors tie their contributions to specific projects/programs. Currently, there are no limits on the share of any single voluntary contributor. This could ensure that some voluntary contributors set the global health priorities instead of the member states of the WHO. This topsy-turvy budget structure is reflective of the aforementioned institutional structure.

While an increase in member states’ assessed contributions seems the obvious solution, it is difficult in practice to achieve. An agreement in May 2022 only aims to increase each state’s contributions progressively so as to reach 50 percent of the WHO’s budget by 2030–2031 from about 16 percent.²⁷ It is to be seen if even this will be achieved or will require a further time extension.

C The Nonbinding Nature of Its Recommendations

Even though the WHO, through its Health Assembly, does have the power under article 19 of its constitution to have its member states agree to and adopt conventions and agreements (provided that these are adopted by two-thirds of its membership), this has been done only once in its history, when it adopted the Framework Convention on Tobacco Control in 2003. Despite that exception, the WHO has no means to enforce its agreements as, unlike the WTO, it has no interstate dispute settlement mechanism. In the context of the COVID-19 pandemic, under article 21 of its constitution, the WHO can inter alia put in place quarantines or other procedures to contain the international spread of the disease. The WHO only declared COVID-19 to be a PHEIC at the end of January 2020,²⁸ and while it issued technical guidance all through the pandemic, even if was not always timely or noncontroversial, it has no power over its member states to enforce its guidance in dealing with the pandemic or to ensure compliance.

D Multiplicity of Actors on Global Public Health

In the past, lack of faith in the effectiveness of the WHO has led to a multiplicity of public, private, and public–private actors to finance and implement different global health programs outside of the WHO, for example, Joint United Nations Programme on HIV/AIDS (UNAIDS), the Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria, as well the new Financial Intermediary Fund (FIF) for Pandemic Prevention, Preparedness, and Response located in the World Bank (now called the Pandemic Fund). There has also been a mushrooming of public–private partnerships such as Gavi, the Vaccine Alliance, the TB Alliance, and the Rollback Malaria initiative. The US government too chose to start its own health aid programs rather than work through the WHO or the UN – for example, the US President’s Emergency Plan for AIDS Relief (PEPFAR) and the US President’s Malaria Initiative. Some private actors, such as the Bill & Melinda Gates Foundation, also contribute a major part of the WHO’s budget and can control health priorities there too. As a result, the WHO’s preeminent role in tackling global public health issues has inevitably begun to shrink in recent decades.

3 Initiatives Taken on Global Pandemic Governance during COVID-19

Correctly anticipating that inequitable distribution of vaccines and other PRPs may be a problem (as it was for vaccines during the H1N1 or Swine Flu epidemics), the Access to COVID-19 Tools (ACT) Accelerator was jointly launched by a number of organizations, notably the WHO and Gavi, the Vaccine Alliance, toward the end of April 2020.²⁹ Within the ACT Accelerator, COVAX was the vaccines pillar,³⁰ responsible for the procurement and equitable distribution of COVID-19 vaccines. It was jointly convened by CEPI, Gavi, and the WHO, and worked in collaboration with UNICEF.³¹ In practice, COVAX, including its advance market commitment (AMC) that aimed to supply vaccines free of cost to ninety-two LICs and LMICs,³² was administered by Gavi, in close coordination with UNICEF, which managed the procurement and delivery of the vaccines. Following guidance from the WHO, COVAX aimed to cover initially at least 20 percent of the population of each country equally, and targeted delivery of 2 billion doses by the end of 2021, so that at least priority populations such as health workers and vulnerable persons would be protected, without any attention paid to actual need based on the spread of the disease.³³ There was another arrangement for self-financing participants, including HICs, which was not much used. The idea was that COVAX would procure vaccines for all participating countries (eventually numbering 195). COVAX started functioning in June 2020, well before any vaccines had even been approved, but it soon became clear that the rich countries would be served first by vaccine manufacturers as they were the first in line based on advance-purchase arrangements made outside of COVAX, and as COVAX struggled in 2021 to raise the money needed to place orders on behalf of LMICs.

Following the IMF estimates of $50 billion needed to fully vaccinate 40 percent of the global population by the end of 2021 and 60 percent by mid-2022 to end the pandemic,³⁴ the WHO got this revised to at least 70 percent of the global population being fully vaccinated by mid-2022.³⁵ Yet, according to the IMF and the WHO, by mid-2022 only 61 percent of the global population had received two doses of vaccination and as many as 130 countries had yet to meet the 70 percent target.³⁶

COVAX, although well-intentioned and with the eventual backing of 195 participating economies, was hampered right from the beginning by a lack of funding, shortages of inputs and vaccines, the noncooperation of supplier countries, which opted to prioritize their entire populations with primary and multiple booster doses or reap the benefits of “vaccine diplomacy” through bilateral deals. COVAX could supply only half of this target – that is, 1 billion doses by January 2022.³⁷ Up to October 2022, it had shipped a total of 1.84 billion doses to 146 countries, of which 1.65 were to AMC countries. Seven countries had not received vaccine doses to cover even 15 percent of their population as of October 2022.³⁸

Yet global supply of COVID-19 vaccines had reached 11 billion doses by the end of 2021 and almost 18 billion doses as of October 2022. These changes show that global supply was no longer a problem from the end of 2021, unlike in the first three quarters of 2021. The problem was the delayed funding of COVAX resulting in delayed placement of orders and the highly inequitable distribution of the doses initially, added to the fact that even these deliveries of vaccines were not always rapidly translated into vaccinations, namely jabs into arms, due to innumerable logistical problems and the lack of uptake due to slowing demand.

Although at least fifty vaccines were approved by at least one national authority, and twelve vaccines approved for emergency use by the WHO by December 2022,³⁹ only two were in high demand. These were the mRNA vaccines marketed by Pfizer–BioNTech and Moderna, as they showed high levels of effective protection against severe disease, but they were mostly available only in richer countries. These vaccines also needed storage at very low temperatures, equipment for which is not readily available in most LMICs.

The Oxford–AstraZeneca vaccine did not need such low storage temperatures and was the most widely used in LMICs, with 3 billion doses delivered up to mid-2022, and an estimated 600 million lives saved due to it in the very first year of rollout.⁴⁰ Unfortunately, by the time problems of inadequate vaccine production and supply were resolved, other problems such as the lack of adequate infrastructure, equipment, personnel, and logistics for quick vaccination delivery, as well as vaccine hesitancy and low uptake due to declining rates of infection, became the predominant barriers to improving vaccination rates in poorer countries.

Sadly, the estimated global wastage of vaccines was as high as 1.1 billion doses due to lack of predictability in donated dose deliveries in LMICs, multi-dose packaging, and relatively short expiry dates.⁴¹ Some promising versions of mRNA vaccines are available from China⁴² and India,⁴³ but the demand for COVID vaccines is on the decline for the reasons discussed above, and the goal of vaccinating the world against COVID-19 is losing momentum. It is likely that any annual vaccinations required against COVID-19 will bypass much of the population in poorer countries, just as is in the case with annual influenza vaccinations.

As for treatments, several known medicines were tested against COVID-19 even before vaccines were available. Of these, and after several fatal mistakes, an old generic medicine, dexamethasone, was considered to be one of the most effective treatments for seriously ill patients. The UK government estimated, at the end of 2021, that the drug had saved a million lives worldwide and 22,000 in that country alone.⁴⁴ Gilead’s remdesivir showed some efficacy in reducing time in hospital, but not enough to justify its widespread use.

Toward the end of 2021 or early 2022, two patented drugs, Merck’s molnupiravir and Pfizer’s Paxlovid™ (nirmatrelvir in combination with ritonavir), were approved in many jurisdictions specifically to treat COVID-19 patients to prevent hospitalization and death. By mid-2022, molnupiravir was seen as not being as effective as once believed and Paxlovid™ is effective only in vulnerable populations.⁴⁵ Also, just as for vaccines, the demand for these therapeutics has declined. It is now expected that only 15 million doses of molnupiravir and 50 million doses of Paxlovid™ will have been sold by the end of 2022.⁴⁶ Both these medicines were licensed to the Medicines Patent Pool (MPP) for onward sublicensing for sale in most LMICs.⁴⁷ These licensed companies were expected to begin production by the end of 2022 or early 2023. An Indian manufacturer was the first and only one to get its version of the licensed Paxlovid™ prequalified by the WHO by December 2022.⁴⁸ by which time the demand for the product had waned.

Several evaluation reports are now available on the functioning of COVAX, with recommendations for future pandemic preparedness and response, including one by COVAX itself, as well as an external evaluation of ACT-A with COVAX, commissioned by the Facilitation Council of ACT-A led by Norway and South Africa.⁴⁹ These and other reports agree that there need to be several improvements in governance arrangements to contain future pandemics.

The WHO also launched the Covid-Technology Access Pool (C-TAP), with the hope that producers of vaccines, therapeutics, and diagnostics would deposit their proprietary technology, data, and know-how to enable these to be widely disseminated to enhance global production of the needed PRPs.⁵⁰ While some research organizations and universities, including the NIH, have submitted several technologies to this pool, these are yet to be sublicensed through the MPP, and none of the major vaccine producers have participated.⁵¹

Regional organizations, including multilateral development banks, also took initiatives to help members acquire vaccines and other medical countermeasures. In December 2020, the Asian Development Bank (ADB) launched the $9 billion Asia-Pacific Vaccine Facility (APVAX) to help its members procure vaccines.⁵² As of September 2021, the ADB had committed $2.3 billion under APVAX.⁵³ Others, such as the African Union’s African Vaccine Acquisition Task Team (AVATT) and the Pan-American Health Organization (PAHO), started taking initiatives in early-to-mid 2021 to procure vaccines with the buy-in of their member states as complements to individual countries’ bilateral vaccine contracts⁵⁴ (and to increase the local production of vaccines). Many believe that regional partnerships/platforms are required not just as a first step, but as the only way to successfully deliver PRPs at the country level. And that, ultimately, adequate financing of regional initiatives would lead to global coordination and the advantages of scale.

Several prominent voices in civil society, including academics, in the United States and elsewhere, came together and advocated for greater political engagement, suggesting the convening of a summit of world leaders that would support a global framework for a COVID-19 response.⁵⁵ The background document of September 2021 sets out such a framework, which clearly recognized that a planning and implementation arrangement was needed to end the acute phase of the pandemic. While the tasks to be handled by such an arrangement were set out in some detail, the proposal was less clear about who should be responsible for these. A suggestion was made to appoint a UN envoy who would function with the support of the Multilateral Leaders Task Force, as well as empower a global task force on supply and manufacturing.⁵⁶ Again, in April 2022, one group issued a call for global action to end the pandemic and prevent the next.⁵⁷ Civil society and academia have a useful role to play, and their voices must be channeled, as was usefully done through the Pandemic Action Network.⁵⁸

Several concrete suggestions have been made to engage the global political leadership at the highest level. The Independent Panel for Pandemic Preparedness and Response (IPPPR) was the first to make a recommendation on this, suggesting that a Global Threats Council at the level of heads of state be established under the General Assembly of the United Nations (UNGA) to lead on pandemic preparedness and response.⁵⁹ The DG WHO suggested establishing a Global Health Emergency Council and a Committee on Health Emergencies under the auspices of the World Health Assembly, rather than creating a parallel architecture.⁶⁰ The draft of the Pandemic Agreement⁶¹ under negotiation has proposed a Conference of Parties (COP) at the head of the governance structure, with subsidiary bodies under it. It is clear that member governments of the WHO are loath to hand over control of decision-making to either the WHO Secretariat or any other independent body. However, UN intergovernmental meetings are unable to resolve urgent issues speedily, as attested by the failure of successive COPs to take any concrete steps to halt climate change under the United Nations Framework Convention on Climate Change (UNFCCC) that entered into force in March 1994.

During COVID-19, it was the G20, under the presidency of Italy and then Indonesia, that took the concrete step of establishing a Joint Finance-Health Task Force (JFHTF) in October 2021 reporting to Health and Finance Ministers of G20 countries, to enhance the collaboration and global cooperation on issues relating to this and future pandemic prevention, preparedness, and response. This body endorsed the WHO targets that 40 percent of LMIC populations be vaccinated by the end of 2021 and 70 percent by mid-2022. The JFHTF meetings were attended by representatives of international organizations such as the WHO, World Bank, IMF, and UNICEF.⁶² A High Level Independent Panel (HLIP) on Financing the Global Commons for Pandemic Preparedness and Response was commissioned on January 26, 2021.⁶³ At the fourth meeting of G20 Finance and Health Ministers, it was agreed that a Finance & Health Coordination Platform for Pandemic PPR Financing (Coordination Platform) could work to raise funds and assist in the optimal allocation of financing resources for pandemic PPR and could gradually and selectively be broadened beyond the G20 membership. This idea, however, failed to take off. Instead, at the same time, the World Bank Pandemic Fund was endorsed, which effectively put an end to the Coordination Platform idea.⁶⁴

The G20 – despite being an incoherent grouping of countries with divergent national interests – has been a source of excellent reports and ideas in the JFHTF. The G20 works with a temporary secretariat brought in by each rotating president on an annual basis, although the JFHTF is assisted by a temporary secretariat located at the WHO and financed by the World Bank.⁶⁵

From as early as April 2021, in a panel discussion convened by the Center for Strategic & International Studies (CSIS), I began advocating for the establishment of an International Pandemic Fund with sufficient funds to procure PRPs for LMICs, and which would have a lean, flexible governance structure headed by an Executive Board consisting of donors/contributors that would take decisions on the basis of votes weighted according to the amount of contributions made.⁶⁶ Based on an interview in May 2021, the following was recorded:

One way to distribute vaccines globally and equitably would be to establish an “International Pandemic Fund” as proposed by Jayashree Watal. Largely (pre-)financed by the EU and the USA, such an organization would provide money and expertise and, with a speedy decision-making process and without much ado, would distribute the necessary goods where they are needed. According to Watal, setting up this body would be possible in the short term and could already be used in the multilateral fight against this very pandemic.⁶⁷

The details of the proposal were shared widely in the publicity garnered through the CSIS panel, as well as a presentation made at Georgetown University Law Center, based on which I held discussions with several experts in this area.⁶⁸

In July 2021, the G20-commissioned HLIP submitted its report and called for both a finance and governance mechanism and proposed a Global Health Threats Board as well as a Global Threats Fund, structured as a FIF at the World Bank. The HLIP authors believed that such a board, bringing Health and Finance Ministers together within an inclusive G20-plus group, would offer the best alternative in effective pandemic governance.⁶⁹

In May 2022, Ruchir Agarwal and Tristan Reed fleshed out a credible proposal on finance and governance. They advocated the establishment of an “Advance Commitment Facility” (ACF) for the pooled procurement of vaccines and other countermeasures for LMICs that would have funds ready from day zero of the declaration of a future infectious disease pandemic.⁷⁰ To ensure finance from day zero, they proposed that a financier (a commercial bank/consortium of development banks/private foundation/newly established global health financing agency) establishes a credit line of $20 billion for the ACF on day zero, backed by advance commitments made by participating countries. This is about the amount raised by ACT-A.⁷¹ They put forward four options to mitigate the credit risk: one, legally binding pledges by donors, as done for Gavi; two, participating LMICs themselves give joint guarantees to cover risk, as done in PAHO’s Revolving Fund, or to obtain credit in advance, as done by the AVAT, which secured credit from the African Export–Import Bank to purchase COVID-19 vaccines; three, the financier issues a pandemic-linked bond and holds the proceeds in safe securities, ready to be distributed in a pandemic or for the principal to be repaid if no pandemic is declared before its maturity;⁷² and four, the financier and its shareholders retain all the risk, where payments are made only during the pandemic and no commitments are made in advance.⁷³ The last option appears to me to be the most feasible that can be rapidly agreed to, say in the Executive Board of the World Bank, in the face of a deadly pandemic, even if there is currently no enthusiasm for it.

In terms of governance, Agarwal and Reed suggest that the ACF be governed by an independent board, comprising the representatives of LMICs, donor countries, and the financier, which would delegate the day-to-day management to an independent management team with no conflicts of interest, and would follow rules agreed in advance by all participating countries. The model of both users and donors being part of the governing board exists in the Global Fund.⁷⁴

Significantly, these ideas were largely endorsed in October 2022 by the aforementioned independent external evaluation report of ACT-A. The modifications rightly introduced in this evaluation report from the Aggarwal–Reed paper are the representation of regional bodies to ensure better regional and global coordination, mobilization of additional funding, and the idea that contributions should be based on a fair-share allocation model. Details on governance are not included except to say that it should be strong and inclusive. A close reading of the external evaluation report shows that key lessons for future pandemic response would inter alia include:

• A pandemic ACF with access to a credit line that relies on strong and inclusive governance with a stronger representation of regional bodies.

• A coordinated mobilization of additional funding during the pandemic rather than by individual agency efforts.

• A central funding pool, which allows for a stronger needs-based allocation (this was not agreed to by all stakeholders).⁷⁵

• Additional resource mobilization by a fair-share model that defines a minimum amount to be pledged by donors with the proviso that this needs to be acceptable to all.⁷⁶

Based partly on the June 2021 report of the HLIP,⁷⁷ which called for a fund with an annual investment of $15 billion in pandemic preparedness and response, a FIF for pandemic prevention, preparedness and response was approved by the World Bank’s board in June 2022. It was finally established in September 2022 and launched as the Pandemic Fund in November 2022 by the G20.

On the eve of the World Bank proposal of April 2022 for the establishment of a FIF for pandemic preparedness and response, the WHO put out a press release supporting the FIF but at the same time laying down multiple conditions for its functioning. The WHO said inter alia that:

“The FIF should move away from an outdated and inequitable donor/beneficiary framework and adopt a global public goods approach where all countries contribute in some way, and all have access to benefits from the fund. … Many of the pandemic preparedness and response roles envisioned for the FIF demand deep expertise, capacities, and implementation support that only the WHO can provide. … The participation of the WHO in the FIF should go beyond the role of a technical advisor, or operations. The WHO should have a seat at the decision-making table and a central role in implementing the FIF.⁷⁸

Although the G20 Health and Finance Taskforce gave the WHO and the World Bank an equal role in planning the FIF, there were obviously tensions between the two organizations right from the planning stage. As of mid-November 2022, only a little more than 10 percent of the annual budget of $10.5 billion (an amount of $1.4 billion) had been committed to the Pandemic Fund, of which only about $536 million had been received.⁷⁹ This fell far short of its own target of $10.5 billion and of the $15 billion annual commitment called for by the HLIP or the $20 billion advocated by Agarwal and Reed based on the actual expenditure of the ACT-A.⁸⁰

The Pandemic Fund’s remit is defined narrowly as bringing “additional, dedicated resources for pandemic prevention, preparedness, and response, incentivize countries to increase investments, enhance coordination among partners, and serve as a platform for advocacy.”⁸¹ It has also been said to provide “a dedicated stream of additional, long-term financing to strengthen PPR capabilities in low- and middle-income countries and address critical gaps through investments and technical support at the national, regional, and global levels.”⁸² The Pandemic Fund’s website further states:

FIF financing could help strengthen and sustain PPR capacity in areas such as zoonotic disease surveillance; laboratories; emergency communication, coordination and management; critical health workforce capacities; and community engagement. FIF-financed projects can also help strengthen PPR at the regional and global levels, for example, by building capacity for medical countermeasures. The FIF can support peer-to-peer learning, provide targeted technical assistance, and help with the systematic monitoring of PPR capacities.

(Emphasis added)

This would reassure existing organizations/entities involved in different aspects of pandemic preparedness and response that there is no intention of taking over or duplicating any of their functions. However, if a critical gap in funding is involved, what of the other critical gap of global pandemic response governance, namely pooled procurement of PRPs for LMICs? How can the Pandemic Fund achieve its avowed goal of enhancing coordination among its partners involved in a global response to a pandemic? How would the international community address the total lack of coordination in the global response to COVID-19? If the charter of the Pandemic Fund were to merely strengthen national health systems or route funds to various implementing agencies, would many LMICs be motivated to use such an entity, let alone finance it?

In terms of governance, the Pandemic Fund’s Governing Board⁸³ led by two co-chairs (Indonesia and Rwanda) includes twenty-one voting members with representation of nine sovereign donors, nine sovereign co-investors (countries that could benefit from Pandemic Fund projects while also contributing to them), one philanthropic and two civil society organizations (one from the Global North and the other from the Global South).⁸⁴ In addition, there are several nonvoting members, including the chair and vice-chair of the Technical Advisory Panel and the G20 Presidency. The World Bank, in its various capacities, and the WHO participate as observers on the Governing Board alongside other multilateral development banks (MDBs) and agencies selected as implementing entities.⁸⁵

4 Need for a Global Response Coordinator and Chief Procurer for Future Pandemics

As demonstrated in the preceding section, the existing global governance architecture failed to respond coherently and effectively to end or contain the COVID-19 pandemic. Therefore, the world needs to come together and agree a global strategy as well as a credible implementation entity to better respond to future global infectious disease pandemics. Such a planning and implementation entity must have the necessary funding to enable efficient manufacture and procurement of vaccines and other PRPs and ensure their equitable distribution in LMICs based on actual need, even if it means swapping periods of delivery with HICs and UMICs so that those in greatest need get the products first.

While it may look as though the international community has solved the global pandemic governance issues with the establishment of the Pandemic Fund, it is becoming increasingly clear that this entity will only deal with preparedness and not with response.⁸⁶ It will provide initial funding to incentivize national governments to invest in three priority areas: comprehensive disease surveillance and early warning systems; laboratory systems; and human resources and public health and community workforce capacity. Clearly the Pandemic Fund will not deal with procurement and distribution of PRPs, a role assigned in COVID-19 to ACT-A and in the future possibly to an ACF, as recommended by the ACT-A evaluation report. It is certainly not the one-stop International Pandemic Fund – that should be the overarching coordinating entity responsible for containing a pandemic as quickly as possible – that I had advocated for. Many questions arise about the management of a global response to a future infectious disease pandemic and about the nature of governance of a new LMIC procurement and global response coordination entity that would be most effective in containing a future pandemic. Some of these questions are raised below and require consideration by the international community but, given the October 2023 draft of the WHO Pandemic Agreement,⁸⁷ it is clear that only general language on response may be agreed and that, despite the activism around this issue, equity in the distribution of PRPs will remain a vague objective.

A Scope of Mandate of a Procurement and Global Response Coordination Entity

There is therefore a case for an independent entity responsible for the procurement of PRPs for LMICs in order to contain a pandemic. The task of global coordination of pandemic response and procurement and distribution of needed PRPs can logically be combined. The key question that the international community needs to ask itself is whether there should be a designated overarching coordinating agency that was so badly lacking during COVID-19 or whether this job would once again be divided between the WHO, the World Bank, or other IFIs, Gavi, the Vaccine Alliance, UNICEF, the G20’s JFHTF, the Global Fund, and others, as was the case during COVID-19. As we have seen, the Pandemic Fund does not, so far, claim such an ambition for itself.

Where should this overall response coordinating entity be housed? The WHO Pandemic Treaty negotiations that are set to be decided upon by WHO member states at the World Health Assembly by May 2024 do not seem to call for any such entity. It is as yet unclear which entity would succeed the ACT-A, that was set up inter alia to be responsible for the procurement and equitable distribution of PRPs during COVID-19. A transitional plan for ACT-A ran until March 2023. The plan outlined the role of the ACT-A Tracking and Monitoring Task Force, co-chaired by India and the United States, to “provide an important forum for maintaining a coordinated approach to tracking financing requirements and pledges and facilitating resource mobilization for ACT-A if needed in this next phase.”⁸⁸

If the entity is housed at the WHO, which currently has the mandate to respond to pandemics, how would the WHO be financially and politically empowered to effectively undertake these twin tasks and how would the proposed COP deal with potential conflicts among its members? For example, were the entity to share crucial price and availability information on PRPs, as called for in the Agarwal–Reed proposal, would some member states object? So far the WHO has left decisions and implementation up to national authorities. The distribution of PRPs in accordance with the dynamic, changing needs in LMICs calls for global coordination. This is why there is a need for a neutral and political independent entity responsible for the procurement and equitable distribution of PRPs.

Would it be more effective to empower the existing Pandemic Fund to take on the role of global response coordination, as well as of the procurement and distribution of PRPs for LMICs? For the Pandemic Fund to be able to raise adequate money, it needs to be closely linked with both the IMF and the World Bank, following from option 4 of the Agarwal–Reed proposal. If the Pandemic Fund could control funds of up to $20 billion upon its inception, as eventually raised for ACT-A, it would be able to effectively coordinate with producers of PRPs to decide allocation based on need, keeping in mind the goal to end the pandemic as quickly as possible. The WHO could continue to chair the Technical Advisory Panel of the Pandemic Fund, which would include independent experts to ensure that decisions are taken based on actual need and capacity to use these PRPs, and not on extraneous political considerations. However, there is little appetite in the Pandemic Fund to take on this role. More on political leadership below.

What should be the scope of the tasks undertaken by this entity:

• Is there a perceived procurement advantage in financially supporting the product innovators of PRPs most likely to succeed (the “winners”) early in a future pandemic and even before regulatory approvals in order to supply LMICs – as done by rich country governments during COVID-19? This would certainly facilitate the quicker and more assured supply of essential products such as diagnostics, PPE kits, vaccines, and therapeutics, starting early during a future pandemic for LMICs. If there is no LMIC procurement and response coordination entity, who would take the risky decision to do so? On the other hand, would such a new entity cause confusion with CEPI, the Foundation for Innovative New Diagnostics (FIND), and others that already are or will be separately seeking funds to finance R&D to get effective PRPs within 100 days of any future pandemic, and clash with HIC and UMIC procurers? This would not happen if it is the entity mandated to ensure global coordination. If the new entity were merely to be an additional donor/financier of these organizations – as the Pandemic Fund was intended to be – it would not have sufficient clout to coordinate among its partners to find the most effective path to ending the pandemic.

• The new procurement and response coordination entity should ideally aim to be a monopsony procurer itself, instead of part-financing several implementing entities – a large single buyer – acting on behalf of LMICs. It would thus require the requisite technical and commercial expertise to identify potential producers, negotiate legally binding contracts, and release grants to them, based on predetermined milestones. Through this power to choose manufacturers/suppliers, this entity could ensure that the supported private companies, including product developers, agree to strictly enforced pre-agreed production targets, equitable distribution, and, ideally, to appropriate, differential prices. Realistically, the entity would have to leave it to each supported originator company to decide whether, to whom, and where, to license its product to meet predetermined output targets. However, incentives could be built in to ensure geographical distribution of manufacturing of PRPs in the interest of minimizing supply disruptions. Similarly, while intellectual property rights could be retained by originators, incentives could be used to encourage voluntary licenses. However, the top priority of the entity should always be to end the pandemic as soon as possible.

• Currently, there is no one-stop shop to which potential vaccine or other PRP producers in LMICs could turn to obtain the technical expertise and know-how to produce needed vaccines and other PRPs. There has been an increasingly vociferous demand from the developing world for originator companies to share their technologies, including any IP rights and know-how, with entities located in LMICs in different regions of the world. The pharmaceutical industry has, however, consistently pushed back against this demand, claiming that it would discourage necessary innovation to market new PRPs. This is turning out to be one of the contentious points in the WHO Pandemic Agreement negotiations.⁸⁹ What kind of incentives – both carrot and stick – should be given to originator companies for the widespread, voluntary sharing of their technologies? Some promising ideas include carrots, such as limited subsidies to originators to finance the additional costs of continually updating technology transfer documents/know-how to LMICs or ensure staff visits, or sticks, such as imposing strict contract conditions that spell out the duty to transfer continually updated technologies to a minimum number of regionally distributed manufacturers or, in appropriate cases, outright patent, and know-how, buy-outs. However, the sticks may inhibit PRP originators ex ante from making agreements with the entity and therefore must be used judiciously.

• Would the new procurement and response coordination entity itself finance projects to build regional/local capacity to produce PRPs, or should this be left to MDBs? The former is inadvisable as this entity would need to retain the services of experienced technical and commercial personnel to build capacity and facilitate technology transfer across multiple possible platforms (such as viral vector or mRNA for vaccines). All this should be left to individual companies supported and incentivized by this entity to achieve the goal. However, regional organizations such as PAHO and Africa CDC could be financed to assist/monitor projects set up by supported companies to build such capacity for R&D and manufacture of PRPs. There is no reason why the entity could not finance innovative, quality, “homegrown” PRPs in LMICs.

There are other areas that proved to be weak links during COVID-19 and need strengthening:

• How would the entity be equipped to deal with supply chain problems, be it equipment, raw materials or expendables needed in local manufacture? In the interest of keeping the mandate of the entity focused and within reasonable bounds, it should only deal with urgent, important supply chain problems that require global coordination. It should be left to regional organizations to help LMICs build capacity for independently assessing which vaccines, diagnostics, or treatments are optimally suited for the region, taking account of the availability of existing infrastructure and numbers of health and other workers. Similarly, building local drug regulatory capacity in LMICs should be outside the mandate of this entity.

There are other lesser matters which can have many correct responses.

• Would it be necessary for the procurement and response coordination entity to commit all participating governments, as a quid pro quo for participation, to prohibit export restraints and forced priority supply of any kind, including inputs and components, on PRPs financed by it; and also to reduce tariffs to zero on these, or should this be left to the WTO?⁹⁰

• Should it be the task of the procurement and response coordination entity to create the most reliable one-stop global dashboard and analysis of pandemic statistics, be they the number of cases, deaths, or supply of PRPs? During COVID-19 there were multiple sources for this kind of data and no one source that was comprehensive for all purposes.

• Should it be the task of the procurement and response coordination entity, upon technical advice of health experts, including those at the WHO, to put out authenticated daily information bulletins on every aspect of prevention and treatment during the pandemic that would clearly call out misinformation being spread? If this entity is to be central to the global effort to coordinate the response to future pandemics, this should be one of its roles so that – for example – vaccine hesitancy does not become one of the biggest barriers to vaccine distribution efforts. However, coordination with the WHO should remain very close.

B Funding

Given the meager funding so far of less than $1.5 billion as against the target of $10.5 billion,⁹¹ how could the Pandemic Fund begin to deal effectively and adequately with pandemic preparedness for and response to future pandemics? Clearly, now that the pandemic is not the top priority for policymakers, it is difficult to obtain annual financial commitments or even one-off commitments from key economies such as the G20 countries and other HICs/UMICs.

The first point that needs to be agreed to is a charter for the proposed procurement and coordination entity. This charter has to state clearly that the entity’s goal is to end the pandemic as soon as possible, and to this end it will procure and distribute PRPs to participating LMICs, focusing on an equitable pandemic response. This may have to be led by and agreed with two or three major donors, who will then invite others to join in according to a fair-share formula. One idea that I espoused to incentivize such contributions was to allow for weighted voting in the General Board based on the level of contributions. If contributing governments competed to get more votes on the Board, they would contribute more. This comes up against the problem of the inclusion of and voting rights for beneficiary LMICs, and this can be addressed in terms of representation in governance structures. However, it is only fair that those who pay more into the kitty of the principal procurement and response coordination entity should have a greater say compared to those who make a much smaller contribution. Another way is to guarantee a seat on the Board only to those who make a minimum contribution of, say, $300 million. This is the principle followed in other FIFs administered by the World Bank, although the minimum amount varies. These may not be sufficient to incentivize rich-country donors, who may continue to narrowly prioritize national-level goals, despite the huge economic losses to their countries from future pandemics.

Therefore, alternatively, following the Agarwal–Reed proposal, the World Bank could be the obvious financier to extend a credit line to finance a new pandemic procurement and response coordination entity that would take effect once the WHO declares a pandemic, making its shareholders take the credit risk. Clearly, shareholders of the World Bank, notably the HICs and UMICs, need to agree to this in advance. Given the estimated $20–25 trillion of global economic losses, one would expect this to be agreed more readily in national self-interest by the Executive Board of the World Bank, but this too requires statesman-like leadership from key members.

Another source of future pandemic response funding could have been the IMF’s Resilience and Sustainability Facility (RSF)⁹² but this confines itself to providing long-term loans to countries undertaking policy reforms to reduce possible balance of payments risks, including those related to pandemic preparedness. The IMF should rise to the economic challenge of the next pandemic by taking a quick decision to allocate additional money through SDRs to its members and better incentivize its richer members to rapidly reallocate to the RSF, say, within a month of the WHO declaring a pandemic. This would enable LMICs to make timely commitments to respond to the pandemic and contribute to the procurement and response coordination entity.⁹³ During COVID-19 this decision was taken more than a year after the WHO declared it to be a pandemic, and even then it was unclear that LMICs could use this money for PRP procurement. The IMF then must also be included in the governance structure of the proposed response entity. Indeed, the proposed entity could be a joint subsidiary of the IMF and the World Bank, just as the International Trade Centre in Geneva is for the WTO and UNCTAD.⁹⁴

For the proposed entity to be truly in control of global coordination efforts, it would need to be able to make significant budgetary contributions to the implementing agencies it wishes to coordinate with, including the procurement agency, to play a role in the crucial decision-making of these agencies. In other words, the entity must have real clout with these agencies. For example, if a separate ACF were to come together to procure vaccines and other needed PRPs for LMICs, its main financier, say the World Bank/IMF, should be in a position to provide more than half of its budget.

On the other hand, if most of the funding of such an entity must come from LMICs on a fair-share allocation model, an idea that has merit even if little support, then the quid pro quo for participating LMICs could be that the entity be held accountable to deliver a timely, equitable share of the PRPs to each participating country according to its needs during the next pandemic. The fair-share allocation formula, as also advocated by the ACT-A evaluation report, will have to be worked out but one can imagine that variables such as GDP, population, and economic stability will play a role. For this model to work, there must be a high degree of trust in the Governing Board and management of the entity as “need” has necessarily to be a dynamic concept that is reviewed regularly by the management team as guided by its Board. It will be necessary to work out how many LMICs – or what share of the LMIC population – would need to participate and procure from this entity for it to reach the tipping point where other LMICs would believe that they too had to join to get the best deals – in terms of both price and quantities supplied.

The Pandemic Fund has already accepted contributions from private/philanthropic/other nonstate donors. For example, the Bill & Melinda Gates Foundation has contributed $15 million.⁹⁵ In today’s world, where nonstate donors contribute large sums to global health, it would be foolish to exclude them from financing the procurement and response coordination entity. However, it is unclear whether the entity should necessarily be intergovernmental, whether a limit should be placed on nonstate actors’ contributions to its kitty, and what role such entities will play in decision-making in the Governing Board. The following section will consider these governance issues.

C Governance

Much of the effectiveness of the global procurement and coordination entity in fulfilling its goal of coordination with its partners will depend on its close relationship with implementing or collaborating agencies, most importantly the WHO. It is unclear how the Pandemic Fund would fulfill this coordination function. If turf battles ensue on multiple issues that come up for decision to the Board, the Pandemic Fund will remain largely ineffective even if it is fully funded to the extent needed. From the aspirational statements on equity in the draft pandemic instrument being negotiated in the WHO it is clear that member states are unwilling to dramatically change the structure and functioning of the WHO and create a future procurement and response coordinating entity within it. It is to be seen if the potential reform of the International Health Regulations envisages a restructuring of the WHO such that its powers, finances, and credibility improve, overcoming potential criticism of its handling of the COVID-19 pandemic in the early months and equipping it to deal better with the next pandemic. As we saw earlier, the WHO has publicly demanded a seat at the decision-making table and a central role in implementing the Pandemic Fund. Yet the WHO must recognize that its very governance structure as a specialized UN agency will stand in the way of major financial contributors trusting it fully. Much will depend on the maturity and expertise of the Pandemic Fund’s board members as well as the working relationship between the secretariats of the implementing partners.

Returning to the principle of voting on the Board being weighted by the contributions made by each member, it seems only fair that those who pay more into the procurement kitty should have a larger say compared to those who make a much smaller contribution. To give a seat at the decision-making table to a $500 million contributor and to a $1million one does not seem conducive to attracting large contributions from donors, as their role in governance would seem to be diluted. However, the charter and rules of the proposed entity need to make clear that the one objective that cannot be diluted in any way is to end the pandemic as quickly as possible by providing the PRPs where they are needed most. In other words, there can be no favoritism or other external objectives to detract from this objective. Similarly, it would not be working to fulfill this objective if it didn’t make the funds of the entity go as far as possible in the procurement of PRPs by negotiating the lowest possible prices with suppliers.

If the future procurement and coordinating entity is open to all LMICs to contribute (in finances or in kind), all should, in principle, be represented on its Board. This would not only ensure democracy but also accuracy in decisions taken. As there are 136 LMICs,⁹⁶ in the interest of not making the Board too unwieldy one could allow a group of countries in the same region (say Sub-Saharan Africa or the African Union) or like-minded countries (say emerging market economies or smaller Organisation for Economic Co-operation and Development countries) to get a seat on the General Board if their pooled contribution is over the minimum threshold of say $300 million. The issue of which country would represent the group on the Board would then be left to inner-group democratic processes. There are several options: either the seat is fixed with the highest contributing country or rotated among the top contributors within this group on a six-monthly or yearly basis. In any case, all countries should participate to decide on group-level positions for all issues coming up for decision and, in turn, receive a detailed briefing after each meeting.

As for nonstate actors, such as philanthropies, the rules should be the same – only those contributing the minimum amount would be seated at the Board. It is possible to allow a group of nonstate actors to get a seat, with the same principles of inner-group democracy applying as described above. This may motivate some of the large public health philanthropies to contribute the minimum to “buy” a seat on the board.

How could recipient countries have a say in the decision-making of a future procurement and coordinating entity? Other pooled funded organizations such as the Global Fund do include recipients as members of the Board, as in this case there is a clear distinction between donors and recipients. Recipients who are also funders can be represented by group, as noted. However, recipients who make no contributions to the kitty could also play a useful role in decision-making, for example by anticipating problems in the timing of financing or delivery of PRPs. The Board must be aware of possible conflicts of interest.

Post-COVID-19, CSOs that are involved with various aspects of pandemic PPR have mushroomed. These organizations can play an important role in ensuring transparency, for example in monitoring the proper use of funds by the entity, or securing PRPs at appropriate prices. Should CSOs be included in the decision-making process of a future procurement and coordinating entity, or merely be observers on the Board? I would suggest that observer seats be allocated to a group of the most relevant and responsible CSOs, adhering to the same principle of group representation and rotation discussed above.

D Political Leadership

It is clear that during the earlier stage of the COVID-19 pandemic, it was the G20, under the leadership of Italy and Indonesia, that took a proactive role in establishing the Pandemic Fund. A Joint Health and Finance Task Force was set up at the meeting of the first G20 Joint Meeting of Health and Finance Ministers in October 2021. In the communique issued after this meeting the ministers said inter alia:

[W]e will take steps to help boost the supply of vaccines and essential medical products and inputs in developing countries and remove relevant supply and financing constraints. We reiterate our support to strengthen the resilience of supply chains, to increase vaccine distribution, administration, as well as local and regional manufacturing capacity in LMICs, including through voluntary technology transfer hubs in various regions … building on the work of the G20 Informal Group of Finance and Health Experts, we establish a G20 Joint Finance-Health Task Force (the Task Force) aimed at enhancing dialogue and global cooperation on issues relating to pandemic PPR … The Task Force is member led and operates by consensus. Task Force members will be Health and Finance officials … It will report to Health and Finance Ministers in early 2022 and will be assisted by a secretariat housed at the WHO, with the support of the World Bank.⁹⁷

In its report submitted in July 2021 the HLIP recommended the establishment of a Global Threats Board consisting of G20+ Finance and Health Ministers, which would complement the Global Threats Council comprising heads of state under the UNGA recommended by the IPPPR. This is a role that can be undertaken by the G20.

The G20 Joint Health and Finance Task Force did continue under India’s presidency but appears to have only taken note of work of the Pandemic Fund,⁹⁸ This has put paid to the idea that this body could become the preeminent political body giving credence to a procurement and response coordination entity. Given the continuity of this task force through three different rotating presidencies, it is now up to Brazil to ensure that the G20 Joint Health and Finance Task Force remains a coherent forum to monitor, coordinate, and supply PRP needs in LMICs in a future pandemic. The WHO has itself recommended that the “G20 Finance and Health Ministers must prevent any territorial disputes,”⁹⁹ and, as mentioned earlier, the G20 has already agreed to a Finance and Health Coordination Platform for Pandemic PPR Financing (Coordination Platform). This could work to raise funds and assist in the optimal allocation of financing resources for pandemic PPR and could gradually and selectively be broadened beyond the G20 membership.

The G20 includes, of course, the G7 countries. While the leadership of the G20 countries is important, the money has to be raised from G7 countries. Could the proposed entity be solely financed by LMICs’ contributions, and are there other effective existing MDBs in the Global South that work in the interest of LMICs and could take on this political leadership responsibility? Would, for example, the New Development Bank – the BRICS (Brazil, Russia, India, China, and South Africa) bank based in Shanghai, China – be able to effectively deal with providing the financing and political leadership to ensure PRP equity in LMICs?¹⁰⁰ The management task of bringing COVID-19 to an end through equitable distribution of vaccines needs more than mere distribution of loans and it is unclear that the New Development Bank can rise to this task in the absence of strong political leadership from China to mobilize the LMICs. Besides, it would not be in the interest of LMICs to cut themselves off from G7 funding. These are matters that need to be discussed further in the G20 under India’s leadership before the pandemic is forgotten altogether.

Last but not least, the existing Multilateral Leaders COVID-19 Task Force (World Bank, IMF, WHO, and World Trade Organization) that aimed to nudge governments, industry, international institutions, and other relevant stakeholders to do the right thing though a data dashboard and joint statements, cannot provide the political leadership but can play a role in conceptualizing future procurement and response coordination efforts.

E Relationship of the Pandemic Fund with Regional Institutions

Even within the global procurement and response coordination entity, it could be more effective if each region was assigned the responsibility for containing the pandemic, or specific regional institutions or entities such as the AVATT, the PAHO, or the Asian Development Bank were financed to do so. It must be borne in mind that splitting vaccine procurement by region, though having the advantage of tailoring demand to specific conditions and needs, may leave each entity with insufficient bargaining power to obtain adequate quantities at fair prices and in a timely manner. Therefore, it may be more important to work closely with such regional entities even while centralizing procurement of PRPs.

What about the day-to-day functioning of the global procurement and response coordination entity? It would be crucial to ensure effective and speedy decision-making through a small, independent, and efficient decision-making team supervised closely by the Board, as suggested by Agarwal and Reed – an idea that has been endorsed by the ACT-A evaluation report. However, much will depend on how “independent” and “neutral” the team can really be. This will in turn depend on the prior affiliation and character of those chosen for the team.

5 Conclusion

What we have learned from our experience so far with containing COVID-19 is that the key constraint for overcoming a future pandemic is inadequate funding and coordinated global response to contain the pandemic, and that the glaring lack of a coherent, well-coordinated global strategy to procure and equitably distribute vaccines and other PRPs to LMICs led to new variants of the SARS-CoV-2 virus, thus unnecessarily prolonging the pandemic. In response, this chapter advocates for a new, independent, global procurement and response coordination entity and has raised key questions that need to be debated in considering how the effectiveness of this entity can be optimized to plug this gap for future pandemics.

LMICs urgently need an effective entity that is responsible for ensuring the timely procurement and equitable distribution of vaccines and other PRPs to contain or end global infectious disease pandemics as quickly as possible. Such an entity should be fully empowered financially, and be independent, lean, and flexible if it is to meet its primary goal to contain the pandemic everywhere as soon as possible in order to minimize both human and economic losses. This goal would lead to the best outcomes globally, including in LMICs, as equity is best served by a quick end to the pandemic.

Although the financial solutions on offer by multilateral development and financial institutions, including the Pandemic Fund, would help pandemic preparedness at the national level, the pandemic would not end unless there was a coherent, empowered, and efficient global response coordination and procurement entity. Unfortunately, effectively containing global pandemics is not the only transboundary public good problem that the international community is grappling with; a few others that come to mind are reducing the deleterious impact of climate change, eliminating extreme poverty, dealing with antimicrobial resistance, and addressing other urgent public health and economic development and security challenges to prevent cross-boundary spillovers. The international community, including the international financial institutions, need to find ways to effectively tackle all these transboundary public goods without further loss of time; and in doing so should not underestimate the reality of future pandemics. Should the international community not take the steps now to empower an entity to effectively lead the world out of future pandemics as quickly as possible then humanity will be fated to muddle through – as we have done during COVID-19 – based upon the underlying, incorrect premise that that each country can solve its own problems without concern for the rest of the world, resulting in an unprecedented loss of lives and livelihoods all over the globe.

11 Compelling Trade Secret Sharing

David S. Levine and Joshua D. Sarnoff ^*

The unprecedented scale of the COVID-19 virus has brought to the forefront many questions associated with exclusive rights, information sharing, and innovation. How do we get effective vaccines, therapeutics, diagnostics, medical devices, and personal protective equipment (PPE) quickly, safely, and affordably to people around the world? More specifically, how do we ensure that effective products in sufficient quantities are researched and developed, approved by regulatory agencies, and produced for public distribution; that repairs of existing equipment can be performed as needed; that such health products are affordable; and that the needed products are equitably distributed globally and locally? Among many challenges on the road to these outcomes is the difficult question of how to handle information that is valuable, in part, because others do not know it. In other words, what do we do about trade secrets? Addressing this issue will continue to be critical to COVID-19 responses, as well as to responses to future pandemics and similar worldwide problems.

Because trade secrecy can apply to wide swaths of information, it can hide a shockingly broad range of critical and life-saving information from view. For this reason, assertions of trade secrets constitute much of the primary knowledge necessary for countries to combat and even potentially eradicate COVID-19. Indeed, trade secrets are everywhere in the battle to defeat COVID-19, including clinical trial data, pharmaceutical and medical equipment manufacturing processes, and regulatory compliance information.

Trade secrets raise three primary issues. First, if an entity is forced to share trade secrets to expedite development and to expand the supply of needed products, must or should the government compensate the rights holder? Although we address this question, we think it is largely unnecessary to answer it. This is because compensation is not required under international law (at least to address public health emergencies), because national law may sometimes already provide for compensation when compelling licensing (as well as when mandating sharing that eliminates secrecy), and because we think reasonable compensation should normally be provided for compelled trade secret sharing. Second, does international law prohibit governments from compelling the sharing of trade secrets, including by compulsory licensing? The short answer is no. Third, what authorities currently exist or could be adopted for governments to compel the sharing of trade secrets? We present below a general overview of a range of existing authorities, as well as a framework for addressing the latter two questions and for understanding the complexity of the first question.

Section 1 provides brief background on the nature of trade secrets, trade secret laws, and takings law. Within trade secrets, we distinguish between codified knowledge and recorded data on the one hand and uncodified “know-how,” “show-how,” and expertise on the other. All of these may qualify as trade secrets and may need to be shared to expedite or expand research and development (R&D) and manufacture of needed products such as pandemic vaccines, although it may be much more difficult both legally and practically to compel the sharing of uncodified knowledge.

Section 2 discusses COVID-19 and the experiences with trade secrets regarding vaccines. We use the COVID-19 vaccine example to explain why trade secret sharing is needed, why patent disclosures and compulsory licenses are inadequate to meet current needs, and what kinds of trade secrets may need to be shared from rights holders to other users, with or without rights holders’ voluntary consent. We thus demonstrate the necessity of compelled trade secret sharing to address public health needs generally, as the voluntary sharing of trade secrets has proven inadequate to assure timely, affordable, and equitable global access to the medical products described above. The need for such trade secret sharing will only grow in the event of an even more serious, rapidly escalating future pandemic.

Section 3 explains why the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)¹ of the World Trade Organization (WTO)² does not prohibit governments from compelling trade secret rights holders to share trade secrets with others in the same or different jurisdictions, at least to address public health needs. Because such compelled sharing may take the form of compelled licensing where compensation is awarded, or because governments may themselves award compensation for the sharing, there should be no need for additional compensation. Nevertheless, the TRIPS Agreement does not prohibit compelled sharing to address public health needs even when compensation is not provided.³ And we do not believe any investor expropriation or unfair treatment claims for compensation against governments, under bilateral or regional investor–state dispute settlement (ISDS) treaties, would be successful (particularly if some compensation is already provided under national law for compelled trade secret sharing or licensing).

Section 4 surveys some of the existing authorities already possessed by federal and state governments in the United States and by the European Union to compel trade secret sharing, with or without compensation, or to compel trade secret licensing by trade secret rights holders. These authorities include the Defense Production Act (DPA),⁴ antitrust authorities, federal health authorities, and state police powers (to the extent not preempted by federal law). The point of reciting these provisions is to demonstrate that compelling trade secret sharing is much less “exceptional” than opponents may claim, and that there is nothing, save for political opposition, standing in the way of assuring that trade secrets can be compulsorily shared or compulsorily licensed to ensure expanded R&D, clinical testing, and production to better protect global public health. We also discuss the possibility of legislative changes that would provide even more explicit authority, as well as the use of conditional funding approaches that would make the acceptance of government funds conditional on voluntary agreement to share trade secrets as needed.

We believe that global public health needs must be given greater importance in the debates on international policies concerning intellectual property (IP) rights and trade. These are ultimately political decisions, and legal authority already exists to make them. We explain the pathways for policymakers who choose to compel trade secret sharing, along with the theoretical foundations that underlie those pathways.

1 Trade Secret and Related Protection

In the COVID-19 context, trade secret law raises a critical policy question: Is information sharing needed to rapidly combat the spread of disease and to enable vaccine production? In the case of COVID-19 vaccines, potential trade secrets included manufacturing processes, test data, medical formulas, and other biological resources.⁵ This is because vaccines and other biologic medicines, cell lines, genomic information, and other biological material can also be held as trade secrets. Similarly, data about the effectiveness of medicines and vaccines are trade secrets. Manufacturing processes – the “know-how” of producing vaccines – can be a paradigmatic trade secret,⁶ or can fall into the amorphous quasi-trade secret categories of “know-how” or “show-how.”⁷ All of this information is essential to the rapid development of, and access to, safe and effective COVID-19 diagnostics, treatments, and vaccines worldwide.

Similarly, data for developing vaccines may be held as trade secrets.⁸ Typically, clinical data are not required to be made public as a condition of regulatory marketing approvals, even if the government can use such data when evaluating requests for generic product approvals.⁹ In many cases, such data and methods need not be disclosed to assure compliance with good manufacturing practices that permit product marketing.¹⁰ Methods of assuring that the public can “make and use” patent disclosures and legal authorizations in the patent context, such as compulsory patent licenses, cannot assure private access when needed to scale up research, development, regulatory approvals, and manufacturing supplies.¹¹

Methods for manufacturing may also be treated as trade secrets. Such methods often are colloquially known as “know-how,” a subset of trade secrecy doctrine involving information that is valuable and difficult to transfer but that is not necessarily secret because it is generally known among industry players.¹² Such information may not always be protectable under trade secret law.¹³ Nonetheless, because of its value in manufacturing processes and difficulty to acquire, know-how that does not achieve trade secret status operates similarly to trade secrecy as property that can be licensed.

In the case of COVID-19 research, product development, commercialization, and data and manufacturing processes are key trade secrets.¹⁴ After all, if a company knows what works and what does not then it has a competitive advantage over others who lack that knowledge. When it possesses efficient means of production, the trade secret owner enjoys a significant competitive advantage. As has been evident regarding COVID-19 vaccine production from the beginning, such information sharing is critical to worldwide supply needs, but has occurred only to a limited extent through voluntary licensing among a mostly restricted set of global pharmaceutical companies and manufacturers.¹⁵ Global pharmaceutical companies have rejected requests from various generic pharmaceutical producers to license the trade secrets and know-how to scale up production.¹⁶

A What Are Trade Secrets?

Often labeled as “confidential information,”¹⁷ or “proprietary information,”¹⁸ trade secrets can encompass vast quantities of information needed to discover, test, create, and manufacture diagnostics, treatments, medicines, and vaccines. Chemical formulas, when they are kept secret and cannot be reverse engineered, are classic trade secrets. So are processes for manufacturing. Even “negative information” – information about what does not work – can be a trade secret.¹⁹

Trade secrets are often, but are not always, a prerequisite to product, process, and commercial service development and innovation, as well as to the advancement of knowledge and science.²⁰ Federal laws, primarily the federal Defend Trade Secrets Act (DTSA)²¹ and state laws modeled after the Uniform Trade Secret Act (UTSA),²² enable trade secret owners (such as pharmaceutical companies) to bring trade secret misappropriation actions against former employees and others, particularly competitors that gain unauthorized access to their claimed trade secrets. The federal Economic Espionage Act (EEA)²³ allows federal prosecutors to bring criminal actions under certain circumstances, especially those involving what is colloquially called computer “hacking.” Other federal and state laws can be used to prevent public disclosure of information that has been previously disclosed to public authorities.²⁴ At the international level, the European Union’s Trade Secrets Directive and the WTO’s TRIPS Agreement article 39 provide or require similar trade secrets protections.²⁵

Unlike patents, regulatory entities do not grant or confirm trade secrets; rather, one has a trade secret by keeping valuable information secret.²⁶ Thus, there is no specified term for trade secrets; instead, they exist for as long as they remain secret. This can be a long or short period of time depending upon several factors. Importantly, trade secrets can be lost due to no fault of the trade secret owner or any act of misappropriation. This can happen, for instance, if the alleged trade secrets are independently discovered by another or reverse engineered and thereafter made generally known.

The use of trade secrets is either by the entity that owns it or, as is relevant here, by another person or entity under a license. Trade secrets are not meant to be shared unless the owner authorizes the sharing, and then (usually) under a requirement of secrecy imposed on the authorized party.²⁷ As a result, trade secrets rely heavily on licensing.²⁸

There are three amorphous categories of informational concepts that are also at play and relate to trade secrets. The first (and easiest to understand) is “confidential information.” Such information has been “roughly” defined as “data, technology, or know-how that is known by a substantial number of persons in a particular industry (such that its status as a technical ‘trade secret’ is in doubt) but that, nonetheless, retains some economic and/or competitive value by virtue of the fact that it is unknown to certain industry participants.”²⁹ While this information is not technically a trade secret, its limited availability renders it valuable. Thus, we consider it here due to its need for distribution to combat COVID-19 (albeit without having to overcome trade secret law challenges).

Arguably the most amorphous informational concept is the “know-how” associated with vaccine manufacturing. “Know-how” is a highly controversial term in trade secret law generally because “there are so many types of proprietary information that have value in an industrial environment.”³⁰ As Eckstrom explains:

Know-how encompasses trade secrets and unpatented manufacturing processes as well as other industrial or commercial techniques outside the public domain … Intangibles, such as laboratory practice, sampling techniques, marketing schemes, and the availability of consultations with skilled technicians or professional advisors, acting for the licensor, also fall within the definition of valuable, and therefore licensable, know-how.³¹

For present purposes, we define “know-how” (sometimes referred to by others as “tacit knowledge”³²) as valuable information that may not rise to the level of a trade secret, and therefore is not protected by trade secret law if it is used in a way unauthorized by its owner. Nonetheless, because it is valuable and not easily accessible, it requires some “nudging” or “compulsion” (absent a voluntary license) to be transferred.

Lastly, some information that might be a trade secret can be designated as “show-how.” This distinction has little meaning in the world of trade secrecy generally (because information is either a trade secret or it isn’t) but is important to delineate for purposes of this chapter because of its need for sharing in order to address COVID-19’s (and similar future) challenges. Put simply, whereas “know-how can be committed fairly easily to paper or to some other recorded form, … show-how can only be transmitted effectively by demonstration, e.g., by in-house training.”³³ In the same way as know-how, “show-how” requires a similar “nudge” or “compulsion” to be shared.

In sum, trade secrets, confidential information, know-how, and show-how are all at play in the COVID-19 arena. Because the lines between these concepts are blurry, and to avoid confusion, we will often collectively refer to all of them as “trade secrets.” Where necessary, we may draw lines between trade secrets and the other informational concepts due to their differing methodologies for sharing and differing degrees of legal protection.

B Trade Secret Policies and Considerations

Trade secrets operate within a field of competing values, ranging (among other things) from property to contract concerns.³⁴ Conceived primarily as a body of law designed to protect trade secret owners from unfair competition,³⁵ trade secret law and doctrine leaves little ground for broader principles tied to sharing of information among competitors for reasons of public health.³⁶ Indeed, without permission or a license, there are only very limited scenarios when trade secrets might be accessed without at least some misappropriation concerns. Nevertheless, it is important to distinguish both the kinds of information and the kinds of disclosures that might “result in the loss of associated information rights.”³⁷

The mere designation of information as a “trade secret” can result in wide swaths of information being withheld from public inspection, regardless of whether the information qualifies as a trade secret.³⁸ Government regulators can also run into challenges getting access to trade secrets, especially absent clear statutory mandates for such access.³⁹ Even when regulators are granted access to information deemed a trade secret, there are normally limitations on disclosure of the same information to the public.⁴⁰ Thus, the designation of information as a “trade secret” is among the most powerful legal weapons against public access, and even regulatory access, to information.

Primarily, trade secrecy is a form of information access control. Trade secrets are part of the control mechanisms that form what Frank Pasquale calls the “black box society,” which includes a range of tools from the attorney–client privilege to exemptions from the application of the Freedom of Information Act (FOIA).⁴¹ Additionally, trade secrets are at the center of national security concerns for many nations, including nations that produce COVID-19 vaccines.⁴² As a general matter, if you want to stop information moving from one holder to another (whether trade secrets or not), raising “national security” concerns is the best way to halt the transfer.

Governments should and increasingly must decide what values and concerns are paramount. As explained by one of the authors, as “difficult, time-consuming, and expensive as it may be, because information may not qualify as a trade secret upon closer inspection and because public needs may need to trump private, profit-maximizing interests, we should always question, interrogate, and weigh any designations of untrammeled trade secret protection over valuable information.”⁴³

2 Trade Secrecy and COVID-19

Should actual trade secrets be shared? To answer this question, it is important to understand how and when trade secrets ensure that the protected information best serves public uses, and how and when they do not. Here we focus on the vaccine manufacturing process.

In the COVID-19 context, certain possible trade secrets, like production processes, might serve society more thoroughly through wider public access to the information, allowing full technology transfer that would foster more rapid expansion of needed manufacturing capacity and also might reduce prices through greater competition and increased supplies. Other trade secrets, like those in the R&D phase, might be held as trade secrets to encourage market entrants to act quickly, although doing so may hinder follow-on competition.⁴⁴ Deciding when trade secrecy promotes or hinders such developments poses questions that historically have been answered by experts in vaccine manufacturing and industry structure, as the economics literature does not provide clear answers.⁴⁵ As they involve public choices about competing values, moreover, they invariably require political determinations.

Because trade secrecy spans the range of vaccine development, clinical practice, and regulatory approvals, production, and distribution, changes in how trade secrets are treated can have vast and rippling consequences. We do not address all these issues, much less the difficult issues involved in assuring better global public health systems and adequate supply and distribution chains.⁴⁶ Rather, we make the case that compelled knowledge sharing notwithstanding trade secret law is possible and desirable.

A How Has the Lack of Sharing Impeded Production and Public Access to Vaccines?

Trade secrets are causing bottlenecks throughout the effort to provide vaccines to the world.⁴⁷ Even with access to patents that cover vaccine IP, trade secrets still may block the best way for the patented inventions to be implemented. As explained by several scholars who modeled an open trade secret pledge after the Open COVID Pledge for patents,⁴⁸

The [Open COVID] pledgers, however, have not committed to transfer those technologies [including materials, cell lines, prototypes, designs, plans, data, trial results, software, or anything else] to the implementers. They may not be willing to teach the implementers how the technology works, or how to make the product. … As a result, the implementers still need to develop or learn how to use these patented or patent pending technologies on their own.⁴⁹

The authors go on to note that “unpatented know-hows, such as production methods or skills,” face similar challenges.⁵⁰ These are all problems that derive from lack of access to trade secrets, and they prevent rapid manufacturing and distribution of COVID-19 vaccines.

Thus, trade secret sharing needs to be examined. To understand the parameters, we can look at product manufacturing as the primary area of concern. In a recent article, Olga Gurgula and John Hull explained the six-step “method required to make the mRNA vaccines currently supplied by Moderna and Pfizer-BioNTech.”⁵¹ The authors then explain that the various steps, methods, equipment, and experience of engineers in controlling the process “taken together constitute the kind of trade secret that, along with any patents protecting, say, the vaccine formula, create all-round protection for the product and the process by which it is produced.”⁵²

Based on Gurgula and Hull’s description, there is a combination of traditional trade secrets (“equipment” and “method”), know-how (“steps required”), and show-how (“experience of the engineers controlling the process”) that combine to make this method almost impossible to replicate without access to the foregoing information.⁵³ While others might make educated guesses at how these processes could work, or do the work to figure them out, neither approach is remotely optimal in the face of the dire demand for production outside of the few countries that have to date manufactured vaccines.⁵⁴ Thus, the need for sharing these collective trade secrets seems obvious, if the world is more effectively to address global shortages on a timely basis.

But manufacturing know-how is not the only concern. Bottlenecks also arise when production process trade secrets are combined with many other trade secrets at issue in COVID-19 vaccine creation, regulation, and distribution. These other trade secrets range from “test data, specific (unpatented) medical formulae, cell lines, genomic information and other biological materials,” to “results collected from clinical trials.”⁵⁵ It is no wonder that trade secrets “about the highly complex process of producing vaccines and other biologics can create natural exclusivities that are daunting to overcome.”⁵⁶ Those “natural exclusivities” are arguably not natural but caused by specific policy choices.

Despite the foregoing, trade secrets have not received nearly as much attention as patents in the COVID-19 policy debates. Still, there has been some movement on the COVID-19 vaccine trade secret front. Perhaps the most noteworthy has been Afrigen Biologics’ development of the mRNA COVID-19 vaccine using Moderna’s publicly available sequence.⁵⁷ This occurred after the World Health Organization (WHO) called for the creation of COVID-19 vaccine “technology transfer hubs,”⁵⁸ and after the WHO’s later support of a South African consortium to establish the first COVID-19 mRNA vaccine technology transfer hub.⁵⁹ The significance of this development, however, is the noted lack of trade secret sharing (including from Pfizer and Moderna), and the resulting delays that have yet to be fully overcome.⁶⁰

The decision not to collaborate, of course, was based on preserving trade secrets. While Moderna did declare it would not enforce any of its COVID-19 vaccine patents during the pandemic,⁶¹ that didn’t address the problem of information sharing needed for production. As explained by Reuters in October 2021, “it is hard to replicate a vaccine without the information on how it is made, and the World Health Organization-backed tech transfer hub in South Africa – set up in June [2021] to give poorer nations the know-how to produce COVID-19 vaccines – has so far not reached a deal with the company.”⁶²

Nonetheless, in November 2021, Afrigen began developing the first complete lab sample from Moderna’s publicly available genetic sequence for the vaccine.⁶³ The patent, unsurprisingly, failed to disclose the trade secrets necessary for production. Petro Terblanche, managing director of Afrigen, noted that the patent is “written very carefully and cleverly to not disclose absolutely everything.”⁶⁴ While most of the equipment and specialized ingredients have been disclosed, they “don’t know some of the mixing times – some of the conditions of mixing and formulating,” including how to replicate Moderna’s essential “lipid nano-particle” technology, the carrier for the mRNA strand at the heart of the vaccine⁶⁵ (regarding which Moderna itself is accused of infringing Arbutus’ and Genevant’s patents).⁶⁶

On February 3, 2022, Afrigen announced that it had made its own version of the mRNA COVID-19 vaccine using Moderna’s publicly available sequence.⁶⁷ Again noting the roadblocks from failure to share trade secrets, Terblanche explained, “We haven’t copied Moderna, we’ve developed our own processes because Moderna didn’t give us any technology. We started with the Moderna sequence because that gives, in our view, the best starting material. But this is not Moderna’s vaccine, it is the Afrigen mRNA hub vaccine.”⁶⁸ Interestingly, Afrigen had help from unknown “outside advisers” in developing the vaccine.⁶⁹ And because it is an Afrigen vaccine, it needs to undergo separate clinical trials and regulatory approvals.

The Afrigen consortium hoped to be able to test the shot on humans before the end of 2022.⁷⁰ Meanwhile, Moderna announced it would work to build its own manufacturing and distribution facilities in Africa for its vaccines.⁷¹ One can only speculate how much faster vaccines might have been distributed in Africa, which in early 2022 had an 11 percent vaccination rate,⁷² and at what cost, had the critical manufacturing trade secrets been shared in 2020 or 2021. Duplication of effort is inefficient for global health, generates a massive waste of resources, and in the case of a pandemic results in otherwise avoidable losses of life.

B Inadequacy of Patent Disclosures to Assure R&D, Testing, and Production at Scale

The basic quid pro quo of granting patent rights is to place the public in possession of the patented invention by disclosure and publication of the specification of the invention in the patent application.⁷³ The US patent statute itself requires a specification that describes the invention and the “manner and process of making it … to enable any person skilled in the art … to make and use” it.⁷⁴ Under the current case law interpreting this statutory language, the patent specification does not need to actually describe all aspects of how to make or use the invention.

Nor does the specification have to describe all (or even any, as there may have been none identified at the time of filing⁷⁵) preferred claim embodiments or methods (“best modes”⁷⁶) for making or using any embodiments. Rather, the disclosure is adequate so long as a skilled practitioner in the relevant technological field can make and use some unspecified range of embodiments within any given claim without “[un]reasonable” or “undue” experimentation.⁷⁷ Accordingly, patent disclosures typically are not required to disclose any trade secrets beyond the basic nature of the invention sufficient to meet the patent law “enablement” requirement.

In other words, notwithstanding that the public is supposed to receive the benefit of the bargain of being placed in “possession” of the invention, and that inventors are normally described as having to choose between patent rights and trade secrecy, inventors now may routinely seek to protect their innovations through simultaneous use of both patents and trade secrets. For this reason, compulsory licensing of only patent rights may not be sufficient to assure competitive R&D, testing, regulatory approval, and manufacturing at scale. Sharing trade secret knowledge may also be necessary, and where patent holders also possess relevant trade secret rights, the compelled sharing of those trade secrets may be needed as well.

3 Compelling Trade Secret Sharing Complies with International Treaty Law

Any government-compelled actions may make a trade secret public (and thus destroy its secrecy) or may only assure competitors’ abilities to use the trade secret (as by compelled licensing that also requires secrecy relative to the public).⁷⁸ Either the loss of the trade secret through publicity or the government-authorized third-party use of the secret may be compensated. This should (in most cases) avoid concerns about uncompensated regulatory expropriation of the value of the trade secret. And even if international law does not prohibit – or even if it explicitly authorizes – compelled trade secret sharing, national laws may need to be amended or existing national legal authorities may need to be exercised, such as by issuing orders compelling the sharing.

The WTO’s TRIPS Agreement is the principal international treaty governing IP. The TRIPS Agreement incorporates relevant provisions of the Paris Convention for the Protection of Industrial Property.⁷⁹ But the TRIPS Agreement does not expressly or impliedly prohibit governments from compelling trade secret sharing, unlike its provision expressly prohibiting compulsory licensing of trademarks.⁸⁰ Further, as a matter of interpretation, the obligations for trade secrets (“undisclosed information”) apply only to protection against “unfair competition,” defined as “disclos[ur]e … or use” “contrary to honest commercial practices”;⁸¹ for “undisclosed test or other data,” the provision applies only to protection against “unfair commercial use.”⁸² Although the nature of the prohibited acts has not been officially interpreted in any dispute resolution proceeding in the WTO,⁸³ it is unlikely that the TRIPS Agreement prohibits governmental decisions to compel sharing of such information for public need or public benefit, as the recited prohibitions are focused on commercial morality.

Even if the TRIPS Agreement did impliedly prohibit compelled licensing or other compelled sharing of trade secrets, the TRIPS Agreement’s national security exception⁸⁴ may authorize national governments to compel trade secret sharing in a pandemic.⁸⁵ Specifically, article 73 provides that “nothing in this Agreement shall be construed: … (b) to prevent a Member from taking any action which it considers necessary for the protection of its essential security interests … (iii) taken in time of war or other emergency in international relations.”⁸⁶ In short, the TRIPS agreement cannot and does not prohibit member countries from compelling trade secret sharing to address public health needs.⁸⁷ Nor would any ISDS treaties authorize any injunctive relief to prevent trade secret sharing from being compelled.

A The TRIPS Agreement Does Not Prohibit Compelled Trade Secret Sharing

As shown below, the plain text of the TRIPS Agreement, traditional interpretive principles, legislative history, and the national security exception all support an interpretation of the TRIPS Agreement to retain within national discretion the authority to compel trade secret sharing. The contrary view is likely the result of misplaced (and particularly American) concerns that governments should not compel the actions of individuals or of corporations and should not intrude on markets to establish industrial policy. As the COVID-19 example has shown (particularly regarding the Defense Production Act),⁸⁸ however, governments (including the US government) engage in industrial policy all the time, particularly in the context of pandemic responses.

Textual Interpretation of TRIPS Supports the View That It Does Not Prohibit Governments from Compelling Trade Secret Sharing

The TRIPS Agreement imposes on countries obligations to adopt minimum requirements for protection of various forms of intellectual creations or intangible products or associations with them. These include the obligations to protect trade secrets against “unfair competition”⁸⁹ and for undisclosed test or other data noted above against “unfair commercial use.”⁹⁰ Unlike with trademarks,⁹¹ however, the TRIPS Agreement does not prohibit compulsory licensing (much less compelled sharing) of trade secrets or undisclosed data. And unlike for patents,⁹² the TRIPS Agreement does not regulate compulsory licensing of trade secrets.

Generally, interpretation under the TRIPS Agreement applies the interpretive principles of the Vienna Convention on the Law of Treaties (VCLT), particularly articles 31 and 32.⁹³ The Vienna Convention requires understanding the text of the TRIPS Agreement in good faith and in light of its language, structure, and context. If interpretation remains ambiguous, negotiating history may also be consulted.

Significantly, for trade secrets in general (“undisclosed information”), the TRIPS Agreement requires only that they be protected against disclosure, acquisition, or use by third parties “in a manner contrary to honest commercial practices.”⁹⁴ The latter phrase is explained in a footnote to “mean at least practices such as breach of contract, breach of confidence and inducement to breach, and includes the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in the acquisition.”⁹⁵ Therefore, the focus is not only on commercial actions (and thus commercial actors), but also third parties who know or should know that their actions are improper.

Importantly, nothing suggests any application to governmental action, much less any limitation on governmental ability to provide such disclosures for use by third parties. Nor does it imply that action by a government, when authorized by law to provide or compel sharing of such information would be either a “commercial” activity or one “contrary to honest commercial practices.” This “plain” textual meaning of article 39’s prohibition requirements is supported by inferences derived by the structure of the text and the context of usage within the TRIPS Agreement.

Canons of Construction and General Principles against Legislating Unexpressed Treaty Provisions by Interpretation Support the View That the TRIPS Agreement Does Not Preclude Compelled Trade Secret Sharing

Starting with the text of the TRIPS Agreement, two standard structural interpretive principles apply here. The first is the expressio unius est exclusio alterius canon of construction,⁹⁶ where a text having expressed something implies the exclusion of something not mentioned – and conversely where the failure to express something implies its exclusion where something similar is mentioned elsewhere. By expressly adopting a prohibition on compulsory licensing of trademarks,⁹⁷ the drafters of the TRIPS Agreement should be understood to have intentionally imposed no similar prohibition on compulsory licensing or compulsory sharing of trade secrets. The second relevant structural canon of construction is the rule of interpreting language to avoid redundancy or surplusage. If silence on compulsory licensing or sharing alone were interpreted to preclude such actions (for trade secrets), then the corresponding express prohibition against compulsory trademark licensing would be unnecessary surplusage. Further, courts and arbitral bodies applying the Vienna Convention are reluctant to impose terms or conditions that treaty language does not itself supply. This is because treaties by their very nature are limitations on the otherwise unfettered sovereignty of nations. Thus, such “derogations” from the natural state of international relations are to be construed narrowly. And the drafting history, to the extent the textual interpretation were unclear, similarly does not support a prohibition on compulsory trade secret sharing. The failure to reach agreement on, or to even discuss, compulsory trade secret sharing or licensing invokes the principle of the Vienna Convention and the WTO’s interpretive framework that matters not resolved by treaty text are left to country discretion.⁹⁸

The National Security Exception and Implied Authority to Adopt Regulatory Exceptions

Even assuming that the TRIPS Agreement were to prohibit compelled trade secret sharing or licensing under article 39, article 73’s national security exception may provide adequate authority to adopt domestic measures as “exceptions or limitations” to article 39’s requirement. Specifically, article 73 provides that “nothing in this Agreement shall be construed: … (b) to prevent a Member from taking any action which it considers necessary for the protection of its essential security interests … (iii) taken in time of war or other emergency in international relations.”⁹⁹ Significantly, the article by its own terms focuses on a member’s self-determined perception of “necessity,” which may largely preclude contrary judgments by the WTO’s Dispute Settlement Understanding.¹⁰⁰

Particularly in light of the express “protect the public” language of article 39.3,¹⁰¹ it is highly unlikely that the WHO would find members that compelled trade secret sharing to address public health needs to be in violation of their TRIPS obligations, particularly in light of the TRIPS Agreement’s objectives and principles,¹⁰² and with regard to the regulatory authority of states to protect public health.¹⁰³ And, again invoking the expressio unius canon, the TRIPS Agreement provides no provision restricting trade secret exceptions and limitations to article 39 obligations. Similarly, article 8.2 provides that “[a]ppropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of IP rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.”¹⁰⁴ Article 66.2, moreover, obligates developed-country members to provide incentives to private entities to foster technology transfer to least-developed country members.¹⁰⁵

Finally, it is important to remember human rights obligations when interpreting treaty requirements, which may form jus cogens or create other obligations in addition to topical treaty rights and obligations.¹⁰⁶ Article 15(1)(b) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) “recognize[s] the right of everyone … [t]o enjoy the benefits of scientific progress and its applications.”¹⁰⁷ Access to needed medical products to protect against or to treat pandemic disease and potential death should clearly fall within the scope of that right (as may corresponding research and manufacturing),¹⁰⁸ as well as the article 12(1) “right of everyone to the enjoyment of the highest attainable standard of physical and mental health.”¹⁰⁹

B The Proposal for a TRIPS “Waiver” and the Adopted Ministerial Decision

The TRIPS Waiver Proposal

Within about six months after the COVID-19 pandemic became widespread, the governments of India and South Africa introduced at the WTO a proposal to waive the regulatory requirements and enforcement obligations of the TRIPS Agreement.¹¹⁰ The subsequently introduced version of the waiver proposal clarified the application of the waiver, limited it to “health products and technologies,” and provided for a minimum three-year duration, followed by annual evaluations and termination at a date determined by the General Council after deciding that the “exceptional circumstances” justifying the waiver have ceased to exist.¹¹¹ The waiver proposal, which has not been adopted, would have applied to all of the regulatory requirements in Part II of TRIPS, including copyrights, industrial designs, patents, and undisclosed information (which includes article 39’s trade secret and regulatory approval data provisions) but not to trademarks, as well as applying to any enforcement obligations relating thereto in Part III.¹¹²

The TRIPS Ministerial Decision

On June 17, 2022, the TRIPS Council adopted a Ministerial Decision on the TRIPS Agreement.¹¹³ In contrast to the waiver proposal, the Decision did not generally waive substantive provisions of the TRIPS Agreement during the COVID-19 pandemic. Rather, it expanded for five years various flexibilities regarding the existing article 31 and article 31bis patent compulsory licensing provisions, and only in regard to COVID-19 vaccine production. In particular, the Decision authorized such compulsory licensing of COVID-19 vaccine-related patents by administrative or judicial orders (which could include “emergency orders”) even without compulsory licensing legislation in place.¹¹⁴

The Decision permits restricting the requirement to predominantly supply domestic markets and makes clear that required remuneration for compulsory patent licenses can be based on emergency conditions to assure access and not on “‘ordinary’ market principles.”¹¹⁵ But the Decision also adds a requirement to undertake “all reasonable efforts to prevent the re-exportation of products manufactured under the authorization,” that is, to prevent diversion and price arbitrage.¹¹⁶ Although the Ministerial Decision is limited to patent rights, it does reflect an international consensus that such patent rights should not pose restrictions to compulsory licensing for manufacturing for export of vaccines needed to address the COVID-19 pandemic.

Compensation Considerations

The waiver proposal would have waived any need for compensation by eliminating any obligation to protect trade secrets. Nevertheless, we think it is advisable to provide reasonable compensation (but not lost profits based on monopoly prices, or unreasonably high royalties) to trade secret rights holders for the use of their IP when expanding capacity and assuring affordable access.

C ISDS and Compensation Obligations

Compelling trade secret sharing may not necessarily result in any loss of trade secret status and may sometimes require compensation under domestic law (particularly if it occurs in the form of compulsory licensing with secrecy obligations). Where compensation is already provided under domestic legal systems, there should generally be no grounds for a trade secret owner to complain about an uncompensated or unfair “taking” of their property. Nevertheless, many ISDS treaties permit filing of claims without “exhausting” domestic law remedies.¹¹⁷ But even without such compensation, such as when exercising public interest exceptions to trade secrecy rights, so long as the exceptions predated the investments no “taking” would occur and no compensation would be required.¹¹⁸

New legislation to provide more explicit authority to compel trade secret sharing that is adopted after such investments may be more likely to result in successful ISDS claims. This assumes that similar authority did not previously exist, that adequate compensation was not awarded, and the investment was made prior to enactment of the relevant legislation. But even then, ISDS treaties implicitly recognize the right to regulate to protect public health, even if adopted by new legislation.¹¹⁹ It is important to note that nothing in ISDS treaties would provide grounds to prevent the adoption or exercise of domestic authorities to compel trade secret sharing.¹²⁰

4 National Routes for Expanding Access to Trade Secrets

Compelling trade secret sharing or requiring compulsory licensing of trade secrets is not in any way unusual or exceptional. Even if it is not a “commonplace” occurrence, the authority exists to be employed whenever it is appropriate to do so. Such authority has been used routinely in the past without any concern for destroying the trade secret status or for the adequacy of compensation to the rights holder. It is only where legislation specifically and expressly prohibits agencies from exercising authority to publicize trade secrets that the authority to share (much less to publicize, and thus render no longer secret) a trade secret may be lacking.¹²¹

A Existing Mechanisms under US and EU law

Numerous mechanisms exist under US and European laws to compel trade secret sharing, and which have been used during the COVID-19 pandemic or could be used to address COVID-19 and other health emergencies. These include: (1) the US Defense Production Act (DPA),¹²² which was invoked “to equip two Merck facilities to the standards necessary to safely manufacture the J&J vaccine” and “to expedite critical materials in vaccine production, such as equipment, machinery, and supplies”;¹²³ (2) antitrust (competition law) authorities; (3) public health powers; and (4) state law authorities. This list is not exclusive, as other powers (including more general emergency powers¹²⁴) may also provide such authority.

Defense Production Act

From the beginning of the COVID-19 pandemic, discussions focused on the question of whether there were specific policy levers that could be used to ramp up production of COVID-19-related medical products to address health needs ranging from masks to medical devices to vaccines.¹²⁵ Given the analogy of the fight against COVID-19 to “war,”¹²⁶ it should be no surprise that people looked to “war powers” to see if there were ways to spur or force rapid production.¹²⁷

Attention quickly turned to the Defense Production Act.¹²⁸ Under the DPA, the President can prepare for and respond to “natural or man-caused disasters” by expanding domestic production as needed (by prioritizing private contracts and by requiring the performance of government contracts by private industry).¹²⁹ As Congress found, “the security of the United States is dependent on the ability of the domestic industrial base to supply materials and services for the national defense and to prepare for … natural or man-caused disasters.”¹³⁰

The DPA defines “services,” “industrial resource,” “critical technology,” and “critical technology item” in ways that seem to encompass vaccine production.¹³¹ President Trump and later President Biden used the DPA to prioritize production and input supply needs for a range of diagnostic, therapeutic, preventive, and other products, from ventilators to vaccines.¹³² Because the President “is authorized under the DPA to create, maintain, protect, and expand the domestic industrial base essential for the national defense,”¹³³ managing information like trade secrets in the national interest is contemplated.

Under the DPA, the President may “allocate materials, services, and facilities in such manner, upon such conditions, and to such extent as he shall deem necessary or appropriate to promote the national defense.”¹³⁴ Accordingly, allocating the knowledge and processes required for vaccine production falls within the President’s remit under the DPA. Moreover, confidential information can be “published or disclosed” if “the President determines that the withholding thereof is contrary to the interest of the national defense.”¹³⁵ Again, the DPA seems explicitly to authorize emergency disclosure of trade secrets.

The DPA also generally allows the President to prioritize contracts and requires private persons (including corporations) to accept those contracts “to ensure timely availability of critical materials, equipment, and services.”¹³⁶ This prioritization power means that the President can alter the private ordering of production by requiring private producers to share trade secret information rapidly so as to act on prioritized orders first. Those who have studied the DPA agree that such levers exist.¹³⁷ Additionally, President Biden used the DPA in March 2021 to give Merck priority in securing equipment for two facilities that Merck agreed (under threat of further invoking the DPA¹³⁸) to be used for production of Johnson & Johnson’s COVID-19 vaccine.¹³⁹

Antitrust Authorities

Compelled trade secret sharing and licensing are commonplace in the context of antitrust matters, whether as judicial or regulatory responses to violations of antitrust laws or to obtain regulatory approvals for mergers and acquisitions, Accordingly, such sharing is required frequently in consent decrees. For example, in the important prewar and wartime case of United States v. National Lead Co.,¹⁴⁰ the defendants were held to have violated Section 1 of the Sherman Act¹⁴¹ by forming an “international cartel” for titanium compounds in the form of a patent pool. At an early stage of the cartel, there was also associated know-how sharing.¹⁴² The judicially ordered remedial decree required that third parties can license manufacturing know-how (“methods and processes”).¹⁴³ The decree also imposed a reasonable pricing term on such licensing, and retained jurisdiction for the judge to assure that the actual royalty rate charged for any such license was reasonable.¹⁴⁴

More recently, the US Federal Trade Commission (FTC) has ordered or approved through consent orders mandatory know-how licensing or sharing as a remedial measure in the context of patent and copyright antitrust violations. For example, the FTC required sharing formulas, blueprints, manuals, tests, and other information when Xerox violated unfair competition requirements¹⁴⁵ following a series of mergers in the paper copier market.¹⁴⁶ Similarly, the FTC has ordered mandatory know-how licensing or sharing in the context of prior approval of mergers or acquisitions, including under the Hart–Scott–Rodino Antitrust Improvements Act.¹⁴⁷ In the same vein, European antitrust decrees have ordered mandatory data sharing in the information technology sector.¹⁴⁸

Federal Public Health Regulatory Authorities

Section 3(c)(1)(F) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which was discussed in the Ruckelshaus v. Monsanto case,¹⁴⁹ currently requires ten-year data exclusivity for new chemical entities (and applications relating solely to new uses) before the EPA can rely on it to approve competing products.¹⁵⁰ In other cases, EPA can rely on that data for competitive approvals so long as compensation for the originator’s data generation costs is either agreed upon or subject to binding arbitration.¹⁵¹ Under current federal drug and biologics laws, new active moiety pharmaceutical products may be provided with “market exclusivity rights” for differing time periods.¹⁵² Given these provisions, any requirement to share such trade secret data, or for the government to share that data with competitors, may violate the Trade Secrets Act, which criminalizes the release of trade secret data in the government’s possession without legal authorization.¹⁵³ These market-exclusivity protections are additional to any patent rights, and there are complex provisions regarding regulatory approval linkage to such patent rights.¹⁵⁴

Congress could amend the relevant federal laws to explicitly authorize the sharing of trade secrets or to require licensing of trade secrets in exchange for regulatory approvals, without triggering any unconstitutional conditions.¹⁵⁵ Further, Congress might rebalance the market-exclusivity provisions themselves by conditioning them on the government’s potential need to share trade secrets or compel trade secret licensing to address significant public health needs. The exercise of such rights could also be compensated. Such additional protection for the public, whether in the United States or elsewhere, may be a bargain relative to the massive amounts of economic damage that pandemics can cause, or even relative to the amounts of donations of the more limited supplies of products that are being purchased and exported at taxpayer expense.¹⁵⁶

In contrast, European health regulatory authorities may more readily compel the sharing of regulatory data with third parties, which then permits third parties to prepare and provide their own regulatory approval requests. As Gurgula and Hull have explained, third parties have a right to access marketing authorization information, including clinical trial data, submitted to the European Medicines Agency, and public interest concerns may override an exception to the right of access when disclosure would undermine commercial interests.¹⁵⁷

State Police Powers

States have inherent powers to regulate to protect the health and welfare of their citizens.¹⁵⁸ These powers are not readily preempted by federal law, including federal constitutional law.¹⁵⁹ To the extent that trade secret rights may interfere with the ability of states to protect their citizens from pandemic diseases, states may be able to exercise their powers to compel trade secret sharing through legislation or executive order. This is true regardless of whether the trade secret is protected by federal law, by state law, or by both.

Unlike federal government regulatory powers,¹⁶⁰ state powers to protect their citizens are plenary. Thus, there should be no concern that states are interfering with core functions of the federal government when they do so, particularly regarding pandemic diseases. Nor would such compelled trade secret sharing (so long as it does not involve sharing inherently dangerous products or pose national security risks¹⁶¹) interfere with federal authority in international relations, even if the transfers were to companies in foreign countries. Instead, such state government-compelled sharing of trade secrets should be effective, assuming that they are properly adopted as legislative or administrative measures under state constitutions and legislation and are not expressly preempted by or in conflict with specific federal laws.

It is unlikely that either federal patent law or federal trade secret law would preempt such state-compelled sharing of trade secrets. In Kewanee Oil Co. v. Bicron Corp.,¹⁶² the US Supreme Court held that a state trade secrecy law that protected unpatentable or doubtfully patentable inventions would not unduly interfere with federal patent applications and consequent public disclosure incentives, nor would providing such protection deter potentially successful patent applicants from applying, given the differences in strength of protection afforded by the different rights.¹⁶³ Perhaps more importantly, Kewanee Oil implied that gaps in federal patent standards were not necessarily preclusive of the simultaneous exercise of state authority to regulate such gaps as trade secrets.¹⁶⁴ Similarly, the failure of federal trade secret regulation to address state government-compelled sharing suggests preserving such authority to the states, particularly when addressing traditional police powers and when federal trade secrecy law contains an express non-preemption provision.¹⁶⁵

B New Legislation to Compel or Induce Trade Secret Sharing

More explicit new legislation also could be adopted to provide compulsory trade secret sharing authority, at least for important matters like pandemic R&D, testing, regulatory approvals, and manufacturing. Although new legislation might impose compensation obligations regarding retrospective investments if any subsequent sharing or licensing resulted in a regulatory taking, the legislation should prospectively avoid the need for any such compensation requirements where the conditions have been met. Such legislation nevertheless could provide for compensation in such circumstances, which then should be determined to be adequate precisely because no constitutional compensation obligations should exist.

For example, Nicholson Price and Arti Rai have suggested providing incentives or mandates to disclose trade secrets: (1) by amending US patent law’s initial disclosure requirements (and adding supplemental disclosure requirements) to better permit competitive manufacturing; (2) by requiring public access to already codified information submitted to the FDA for biologics approvals or by offering additional exclusivity periods or accelerated regulatory approval reviews; and (3) by encouraging collaborative research, including through financial incentives.¹⁶⁶ To the extent that the suggested incentives proved insufficient, presumably trade secret owners simply would not apply.

Thus, we recommend creating a general “emergency power” exception to federal trade secret rights that would explicitly authorize compelled trade secret sharing and licensing. Adopting explicit limits on the scope of trade secret rights directly granted (even if the limits are imposed by other statutory provisions) would make clear that there is nothing sacrosanct regarding trade secret protection. It also would not trigger conflicts between statutory regimes requiring interest-balancing or rights-balancing measures. Perhaps more importantly, making clear that trade secrets are always a matter of a limited grant of rights should help quell political opposition and rhetorical efforts to prevent the exercise of such authorities when needed. After all, like patents,¹⁶⁷ trade secret rights do not exist in “natural law.” Like all other forms of IP law, trade secrecy should serve society broadly, in addition to the private interests of trade secret holders.

Between overt government compulsion and purely voluntary actions, moreover, there are several legislative actions that can induce private willingness to share or license trade secrets. Such “nudges”¹⁶⁸ are endemic to our legislative policies, including things such as tax incentives, rebates, and regulatory discounts that induce people to take actions.¹⁶⁹ The US National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority provided extensive up-front funds and advance-purchase commitments to induce private companies to engage in costly and risky R&D, clinical trials, regulatory approvals, and manufacturing scale-up.¹⁷⁰ Similarly, the threat to exercise the DPA or other government powers may have induced voluntary licensing even without it actually having to be formally invoked, as well as having provided incentives to assure supplies that in turn may have influenced willingness to license technology to others.

New legislation could also be adopted to provide greater incentives to nudge private trade secret rights holders toward fulfilling sharing or licensing needs. Such legislative measures again would not run afoul of any constitutional concern. Politically, such nudges may be easier to enact. However, precisely because they may be insufficient to induce the desired actions in particular cases of urgent need, they may be inadequate substitutes for government compulsion or voluntary, private, moral conduct.

5 Conclusion

Because the sharing of, or failure to share trade secrets creates life-or-death consequences for hundreds of millions of people around the world, COVID-19 has forced the question of public access to trade secrets to the front of the long list of global health challenges that we face. If we are to defeat pandemics in a safe, effective, and expeditious manner, then we will need to find a new balance between the interests of trade secret owners and the public. As a recent review has noted, when arguing for changing worldwide IP and health rules through the yet-to-be negotiated Pandemic Treaty, the COVID-19 funding agreements did not adequately transfer know-how for vaccine production, leaving many parts of the world without needed protection.¹⁷¹

The ability to compel trade secret sharing is critically important, and not just for COVID-19 pandemic protection. Adding these measures to the routine arsenal of government actions can help address future pandemics and other global problems, such as climate change mitigation and adaptation.¹⁷² This chapter makes the case that it is also unexceptional to do so, as worldwide sentiment has already produced significant agreement (albeit with some gaps) on sharing requirements for different kinds of information that might be kept as trade secrets or as confidential business information – that is, access to the pathogens themselves and to genetic sequence information that can accelerate global response to pandemic diseases.¹⁷³

The potential for litigation and compensation, and the desire to preserve competitive trade and technology advantages, should not deter governments (particularly wealthy governments) from taking needed actions to compel trade secret sharing to protect global health. Even without treating this as a moral obligation (the “Golden Rule”),¹⁷⁴ it will likely protect the citizens of the sharing jurisdiction from death, disease, and hardship far more than any short-term competitive advantages and benefits that might otherwise be obtained.

12 Voluntary Intellectual Property Pledges and COVID-19

Jorge L. Contreras

At the outset of the COVID-19 pandemic, numerous observers recognized the potential for patents and other intellectual property (IP) rights to hinder the development and dissemination of medical equipment and products responsive to the virus. Concerns over the impact of IP rights on pandemic response led to a range of national and international governmental interventions. Yet these concerns also spurred voluntary, private action by IP rights holders. This chapter discusses and assesses these private initiatives, with a focus on the Open COVID Pledge (OCP), an initiative that I helped to organize. The OCP eventually led to the voluntary commitment of an estimated 500,000 patents to the COVID-19 response, was endorsed by Universities Allied for Essential Medicines (UAEM) and adopted by the World Health Organization’s (WHO) Covid Technology Access Pool (C-TAP) as a recommended mechanism for making technology available in the COVID-19 response.¹

1 COVID-19 and IP Rights Concerns

Concerns about patents and other IP rights emerged in early 2020 as the COVID-19 pandemic began to spread globally. Many potential vaccines, diagnostics, and treatments for COVID-19 were originally targeted at related diseases including malaria, hepatitis C, influenza, Marburg virus, Ebola, Middle East Respiratory Syndrome (MERS), severe acute respiratory syndrome (SARS), and human immunodeficiency virus (HIV).² A number of these compounds were covered by existing patents and patent applications held by companies and institutions across North America, Asia, and Europe. One study identified over 120 different entities holding patents covering diagnostic tests relevant to COVID-19.³ In addition, researchers identified a large number of patents covering the manufacture, operation, and components of devices and equipment used to treat the symptoms of COVID-19 and to monitor and contain its spread, including respirators, ventilators, diagnostic kits, facial masks, algorithms, mobile apps, and the like.⁴

Early in the pandemic, a number of high-profile incidents involving patents galvanized concern over these issues. For example:

• In February 2020, the Wuhan Institute of Virology in China announced that it had filed a patent application claiming the use of Gilead Sciences’ experimental antiviral drug remdesivir to treat COVID-19.⁵ The announcement caused significant concern, given that the Wuhan Institute did not develop the drug and its effectiveness against COVID-19 was still unproven.⁶ Gilead’s own patents on the drug also caused controversy, prompting thirty state attorneys general to request that the US National Institutes of Health (NIH) exercise its march-in rights under the Bayh–Dole Act of 1980 to authorize additional manufacturers to operate under Gilead’s patents in order to meet predicted demand for the drug.⁷

• In March 2020, two engineers in Brescia, Italy, a region particularly hard hit by the pandemic, used a desktop 3D printer to fabricate replacement valves for more than 100 ventilator machines used at a local hospital.⁸ Early news reports claimed that a ventilator manufacturer threatened to sue the engineers for infringing patents covering the valves.⁹ While the existence of the threat and the patents themselves remains murky, the incident sparked a flurry of commentary regarding the risks that volunteers and hospitals could face from patents.¹⁰

• Later in March, patent assertion entity (PAE) Labrador Diagnostics sued French firm bioMérieux and its Utah-based subsidiary BioFire Diagnostics for patent infringement. Labrador alleged that diagnostic kits being developed for COVID-19 infringed patents it had acquired from defunct blood-testing company Theranos.¹¹ News of the lawsuit sparked a wave of negative publicity that quickly persuaded Labrador’s parent company, Fortress Investments, to end the lawsuit and offer royalty-free licenses to anyone conducting COVID-19 testing.¹²

• On April 1, Kentucky governor Andy Beshear publicly called on 3M Corporation to grant broad access to more than 400 patents covering “N95” respirators used by healthcare workers and other individuals at high risk of infection.¹³ Beshear was responding to severe shortages of protective equipment in his state, which he and others attributed to patents that prevented firms other than 3M from manufacturing them.¹⁴ He is reported to have urged 3M to license its patents to “the nation” as its “patriotic duty” in a time of national crisis.

• Beginning in April, another PAE, Swirlate IP, brought patent infringement suits against more than a dozen manufacturers of products including ventilators and blood glucose monitors.¹⁵ The asserted patent covered wireless communications technology and was originally owned by Panasonic.

• In July, Vancouver-based AbCellera Biologics sued rival Berkeley Lights for the infringement of eight patents originally issued to the University of British Columbia.¹⁶ In the suit, AbCellera sought an injunction to prevent Berkeley from selling its Beacon Optofluidic System, which was used for the discovery and development of antibodies against COVID-19.

• From the earliest weeks of the pandemic, patents were also perceived as hindering research efforts relating to COVID-19. As one senior molecular biology researcher recalls:

  [F]rom the first moment we started having these [COVID-19] meetings there were discussions of patents. There were discussions of things that we couldn’t do because they were patented; there were discussions of things where we didn’t know if we could do them, if they were valid things that we could use to pursue strategies to deal with the pandemic because of patents. And even more astonishingly to me, there were already discussions about patenting the things that were going to happen in these Covid labs.¹⁷

• Finally, in the crucial area of vaccine research, it soon became apparent that a patent “gold rush” was on. One news report in May 2020 announced, “Virus Researchers Race to File Patents,”¹⁸ long before any vaccine candidate was close to approval. Echoing concerns over the inaccessibility of patented vaccine technologies during the SARS and Ebola outbreaks, the WHO urged governments and the private sector to make patents broadly available in the fight against COVID-19.¹⁹

These examples demonstrate that the specter of patent liability and litigation manifested itself from the early days of the pandemic in areas ranging from basic research and vaccine development to the manufacture, supply, and distribution of medical supplies and equipment.

2 Private Ordering Responses to COVID-19 IP Threats

The public reaction to concerns over IP rights was swift and included the issuance by half a dozen countries of compulsory licensing orders for COVID-related biomedical technologies.²⁰ Later in 2020, calls were made to the World Trade Organization (WTO) to waive trade-related penalties on countries that imposed compulsory licensing requirements on COVID-19 vaccines and other technologies.²¹ But voluntary efforts also emerged to address perceived areas in which patents and other IP could hinder the response to COVID-19.

A Patent Pools and Clearinghouses

Patent pools are arrangements among patent holders that typically enable the participants to operate under one another’s patents, to manage and administer the pooled patents through a centralized mechanism, and to grant licenses to third parties, with the proceeds allocated among the participants according to an agreed formula. Patent pools have been utilized for more than a century in industries ranging from oil refinement to aviation to semiconductors to digital media. In all of these cases, pools have enabled the efficient consolidation of patents in a manner that has facilitated licensing and commercialization.

Patent pools have also been proposed as mechanisms to address public health crises such as disease outbreaks. Patent pooling structures were actively discussed and considered in response to the SARS outbreak of 2002–2003,²² the H5N1 influenza outbreak of 2006,²³ and the H1N1 influenza pandemic of 2009.²⁴ Yet despite the perceived need for aggregation of patent rights to combat these outbreaks, patent pools were never formed for a range of practical, administrative, and competitive reasons.²⁵

In addition to formal pooling arrangements, some have sought to address public health needs through more flexible structures. For example, in 2010 the Unitaid arm of the WHO created the Medicines Patent Pool (MPP). The MPP’s mission is to aggregate patents, clinical trials data, and other IP relating to HIV/AIDS, Tuberculosis, and Hepatitis-C medications and make them available at low or no cost to manufacturers that commit to produce and sell drugs to users in low-income countries.²⁶

Despite its name, the MPP is not a patent pool as that term is commonly understood. Rather, it is a clearinghouse that obtains inbound licenses from willing IP holders and then sublicenses those rights to generic drug manufacturers operating in developing countries. These licenses, which may be royalty-bearing or royalty-free, are generally available on an à la carte basis, and do not necessarily aggregate all of the rights necessary to produce a patented product. To date, several significant patent holders, including AbbVie, Bristol–Myers Squibb, Gilead Sciences, Pfizer, ViiV Healthcare, and Johns Hopkins University, have licensed IP to the MPP, which has in turn granted twenty-two sublicenses to generic drug manufacturers for distribution of products in the developing world.²⁷

In March 2020, the President and Health Minister of Costa Rica requested that the WHO “undertake an effort to pool rights to technologies that are useful for the detection, prevention, control and treatment of the Covid-19 pandemic.”²⁸ On May 29, the WHO announced the creation of the C-TAP,²⁹ a program “intended to provide a means to accelerate the development of products needed to fight Covid-19 as well as to accelerate the scale-up of manufacturing and the removal of barriers to access in order to make products available globally.”³⁰ Supported by thirty countries, C-TAP’s goals included the “promotion of open innovation models and technology transfer that increase local manufacturing and supply capacity, including through the Open Covid Pledge.”³¹ Despite its promising beginnings, however, little or no technology has been contributed to the C-TAP to date.

B IP Pledges

The formation of a patent pool often requires significant legal planning, negotiation, and an administrative infrastructure. As a result, IP holders have found it increasingly expedient to make commitments regarding the enforcement and licensing of IP rights without the legal trappings and overheads of formal pools. These commitments – IP pledges – are voluntary commitments made by IP holders to limit the enforcement or other exploitation of their IP rights, and are often coupled with more detailed public licensing agreements or statements.³²

Pledges as Landscape Clearing Mechanisms

Intellectual property pledges enable a broad range of users to operate freely under the pledged IP. For the most part, such pledges are made without direct compensation or other consideration to the pledgor.³³ This is not to say, however, that IP pledges are economically irrational; they may be supported by motivations ranging from promoting market development to forestalling governmental action to improving employee relations.³⁴ A number of pledges have also been made to support IP holders’ philanthropic, environmental, and corporate social responsibility (CSR) goals.³⁵

Intellectual property pledges can be unilateral – made independently by a single entity – or collective – part of a group effort that relies on a single set of principles.³⁶ All of these pledges typically enable users to operate under the pledged IP without fear of infringement. This freedom to operate can both encourage and enable users to develop, manufacture, and sell products otherwise covered by the pledgor’s IP. For example, when Tesla Motors CEO Elon Musk famously pledged in 2014 that Tesla would not assert its patents against others in the electric vehicle market, it was widely believed that the purpose of this pledge was to encourage the rapid development and deployment of electric vehicle infrastructure systems and components, thereby benefitting Tesla over its gasoline-powered competitors.³⁷

COVID-19 Pledges

The COVID-19 pandemic gave rise to a number of unilateral and collective IP pledges in addition to the OCP. Several of these are described below.

(a) Wellcome Trust Publishers Pledge

The first pandemic-related IP pledge addressed copyrights. On January 31, 2020, the Wellcome Trust, a large UK-based medical charity, led a group of approximately thirty scientific and medical publishers in committing to make all peer-reviewed research publications relating to COVID-19 available without charge on an open-access basis.³⁸ The initiative echoed earlier Wellcome-led pledges made with respect to research concerning the Zika and Ebola outbreaks.³⁹

(b) Fortress/Labrador

As discussed in Section 1, in March, 2020 PAE Labrador Diagnostics sued bioMérieux and BioFire for the infringement of patents, allegedly claiming diagnostic test kits being developed for COVID-19. The patents had been acquired by Labrador’s parent company, Fortress Investments, from defunct blood-testing company Theranos. News of the lawsuit sparked a wave of negative publicity that soon persuaded Fortress to end the lawsuit and publicly offer royalty-free licenses under the patents to anyone conducting COVID-19 testing.

(c) Ventilator Manufacturers

Some of the first pandemic-related patent pledges were made by hospital ventilator manufacturers Smiths Group (March 21, 2020)⁴⁰ and Medtronic, Inc. (March 30, 2020).⁴¹ In connection with its pledge, each of these companies released the electronic design files associated with a particular ventilator model and authorized others to use those files and accompanying software to manufacture and sell ventilator products on a royalty-free basis.

Medtronic requires any user that wishes to download its design files to register on its website. It then grants users a nonexclusive license that extends until the end of the WHO-declared public health emergency of international concern (PHEIC) or October 1, 2024, whichever is later. The license requires users that modify the Medtronic files or software to make those modifications available on terms identical to those extended under Medtronic’s license (that is, a share-alike or copyleft-style requirement reminiscent of similar requirements imposed under open source code software licensing agreements).

The Smiths pledge is not publicly available and appears to have been extended only to other members of the UK government’s Ventilator Challenge Consortium.

(d) University of California Berkeley Innovative Genomics Institute

The Innovative Genomics Institute (IGI) at the University of California Berkeley is a Howard Hughes-funded, semi-autonomous research group that has achieved global recognition for its groundbreaking work on CRISPR-Cas9 gene editing (an accomplishment for which its President, Jennifer Doudna, shared the Nobel Prize in Chemistry for 2020). On March 23, 2020, IGI released an “Emergency Covid-19 Technology Pledge” in which it committed to make technology that its researchers developed after March 13, 2020 (the date of a pivotal, multiparty meeting convened by Doudna), available on a royalty-free basis to any entity conducting research on the diagnosis or treatment of COVID-19.⁴² To effectuate these rights, a user is required to enter into a license agreement with the University of California enumerating the specific patents that are licensed.

(e) Harvard–MIT–Stanford (HMS)

On April 7, 2020 (the same day that the OCP was launched), Harvard University, the Massachusetts Institute of Technology (MIT), and Stanford University announced a “Covid-19 Technology Access Framework” (HMS Framework) that would make available nonexclusive, royalty-free licenses for the purpose of making and distributing products to prevent, diagnose, and treat COVID-19 infection.⁴³

As of January 2021, twenty additional US research institutions and one non-US university had also “signed” this commitment. While the HMS Framework does not utilize a self-executing “public” licensing agreement, the universities commit to using a “rapidly executable” agreement. The licenses to be granted are both nonexclusive and royalty-free, features designed to ensure broad access. The term of the licenses is the COVID-19 pandemic plus “a short period thereafter.”

One important feature of the HMS Framework is the express expectation that users will commit “to distribute the resulting products as widely as possible and at a low cost that allows broad accessibility during the term of the license.”⁴⁴ This type of “downstream” pricing constraint is intended to ensure that technology licensed on a royalty-free basis is not priced so high by manufacturers that certain users cannot afford it.

It is unclear at this time how many, and to whom, licenses have been granted under the HMS Framework, if any, and with respect to what IP, as this information does not appear to be publicly available.

(f) Oxford and AstraZeneca

Approximately two weeks after the announcement of the HMS Framework, Oxford University unveiled a similar program that also included the express expectation of downstream pricing constraints.⁴⁵ But in August 2020, Oxford is reported to have granted pharmaceutical giant AstraZeneca an exclusive license to the university’s COVID-19 vaccine technology with no pricing constraints.⁴⁶ Oxford’s apparent abandonment of its earlier pledge attracted criticism,⁴⁷ but has also been justified based on the large number of vaccine doses distributed to low-income countries at a modest cost.⁴⁸

(g) AbbVie – Kaletra

On March 18, 2020, Israel’s Minister of Health issued a permit for the importation of generic versions of AbbVie’s patented AIDS drug Kaletra for the purpose of treating COVID-19.⁴⁹ Two days later, AbbVie announced that it would no longer enforce patents relating to Kaletra anywhere in the world.⁵⁰ AbbVie’s pledge was widely viewed as a response to Israel’s action, and was possibly an attempt to deter compulsory licensing orders by other governments.

(h) Open COVID-19 Declaration (Japan)

In early May 2020, two Japanese business executives and a professor from Kyoto University organized a Japan-focused pledge community similar to the OCP.⁵¹ The pledge, administered by biotechnology firm GenoConcierge, quickly attracted major Japanese industrial participants from the automotive, electronics, and healthcare sectors. Pledgors included LSI Medience and SRL Inc., which provide COVID-19 diagnostic testing, Mitsubishi Chemical, which operates in the healthcare sector, and Teijin, a pharmaceutical manufacturer.⁵² The Japanese program reported that over 100 organizations pledged nearly 1 million patents toward “any activities whose sole purpose is stopping the spread of Covid-19, including diagnosis, prevention, containment and treatment.”⁵³ In addition to patents, the pledge covers utility models, designs, and copyrights.

Like the OCP, the Japanese pledge permitted firms to modify the terms on which they were willing to make their IP available to users. As reported by one press account, eighteen pledgors had modified these terms by late May 2020.⁵⁴ The modifications included requirements that users notify pledgors of their activities and the patents that they intended to use, and potential limitations to the term of the license extended.⁵⁵ In addition, concerns were raised regarding the scope of the Japanese pledge, which extended only to activities whose “sole” purpose related to COVID-19.⁵⁶

(i) Gilead – Remdesivir

In May 2020, amidst calls for foreign governments to impose compulsory licenses on Gilead’s patented drug remdesivir,⁵⁷ Gilead granted nonexclusive licenses to, and committed to share manufacturing technology with, five generic pharmaceutical manufacturers based in Egypt, India, and Pakistan for distribution in 127 low-income countries.⁵⁸ The licenses were to remain royalty-free until the WHO declared the end of the COVID-19 PHIC, or until a pharmaceutical product other than remdesivir or a vaccine was approved to treat or prevent COVID-19.

(j) Moderna – mRNA Vaccine

On October 8, 2020, mRNA vaccine maker Moderna, Inc. publicly pledged not to enforce its COVID-19-related patents during the pandemic against “those making vaccines intended to combat the pandemic.”⁵⁹ In its pledge, Moderna refers to its “special obligation under the current circumstances to use our resources to bring this pandemic to an end as quickly as possible.” The reasons for Moderna’s pledge were not publicly disclosed, but some have speculated that the company sought to defuse a brewing ownership dispute over the patents with the NIH.⁶⁰ In addition, one watchdog group alleged that Moderna failed to make legally required disclosures of federal funding for the inventions underlying some of its patents, leading to an ongoing investigation by the Defense Advanced Research Projects Agency (DARPA).⁶¹

In March 2022, Moderna issued an “update” to its pledge, making the pledge perpetual with respect to vaccine producers in low-income countries.⁶² It is not clear, however, whether Moderna, by this update, intended to terminate its pledge for producers outside of low-income countries and, even if this was its intent, whether it could legally terminate the commitment that it made in 2020.⁶³ In August 2022, Moderna sued rival vaccine manufacturers Pfizer and BioNTech in the United States and Germany, asserting that it was no longer bound by its pledge,⁶⁴ a position that could be challenged in the litigation, which is ongoing.

Table 12.1 summarizes the principal terms of the pledges made and royalty-free licenses granted in response to COVID-19 and situates the OCP chronologically within this group.

Table 12.1 Intellectual property pledges for COVID-19

Pledge	Date	Duration	IP	Restrictions and limitations
Wellcome Trust Publishers’ Group	1/31/20	Duration of outbreak	Publications relating to COVID-19	n/a
Fortress/Labrador	3/17/20	?	Diagnostic patents relating to COVID-19	n/a
AbbVie	3/19/20	?	Kaletra/Aluvia patents	n/a
Smiths	3/21/20	?	Ventilator designs, software, patents	Only offered to members of UK Ventilator Challenge Consortium
UC Berkeley Innovative Genomics Inst.	3/23/20	Term of patents	Specified patents	Only covers technology invented after 3/13/20
Medtronic	3/30/20	PHEICa or 12/1/24	Designs, software, patents	Sharealike for modifications; User registration/identification
Open Covid Pledge	4/7/20	Pandemicb + 1 year or 1/1/23	Patents, copyrights	Defensive suspension
Harvard–MIT–Stanford	4/7/20	Pandemicb + short period	Unspecified	Licensed products must be distributed at low cost
Oxford–AstraZeneca	4/8/20	Pandemicb	Unspecified	Licensed products must be distributed free of charge, at-cost or cost + limited margin
Open COVID-19 Declaration (Japan)	5/7/20	PHEICa	Patents, utility models, designs, copyrights	Applies to activities whose “sole purpose” is addressing COVID-19 Add’l restrictions may be added by pledgors
Gilead Sciences	5/12/20	PHEICa or approval of alternate drug	Remdesivir patents, know-how	Licensed to five generic drug makers for sale in low-income countries
Moderna	10/8/20	Pandemic	mRNA vaccine patents	Pledge “updated” in March 2022 to cover post-pandemic period for low-income countries

^a Duration of WHO-declared PHIC.

^b Duration of WHO-declared COVID-19 pandemic.

3 The Open COVID Pledge

This section describes the genesis and evolution of the OCP and details some of the considerations that went into its design, drafting, and implementation, as well as its adoption in the market.

A The Impetus for a New COVID-19 Pledge Community

The designers of the OCP believed that a generalized platform for IP contributions could facilitate pledges by organizations that did not wish to reinvent the wheel (with the concomitant expenditures of managerial and legal resources), or that wished to participate in a collective activity with broad-based industry support. Such a platform could also offer an avenue for meaningful contributions by holders of IP in industries that were not directly targeted by organized pooling efforts (that is, while vaccines and therapeutics received significant attention in international pooling proposals, medical equipment and software applications did not). For all of these reasons, the need presented itself for an independent, lightweight framework to enable IP sharing by a broad range of entities in the response to COVID-19.

B Design Requirements

A number of fundamental design requirements were recognized early during the process of creating the OPC. These included:

1. 1. Legal enforceability: Any commitment made by IP holders had to be legally enforceable. Mere aspirational statements and expressions of intent were not sufficient. What’s more, given the number of lawsuits brought by PAEs, even in the COVID-19 area, the pledge needed to bind not only the pledgor, but any subsequent holder of the pledged IP.

2. 2. Broad use of pledged IP: The commitments made through the OCP needed to ensure the broadest possible use of the committed IP. It was recognized that a requirement of broad usage would rule out the granting of exclusive licenses. However, it was also believed that the typical rationale for exclusive licensing – the need to give large financial incentives to innovators in order to induce them to incur significant development risks and costs – might be offset in the context of COVID-19 by governmental grant and procurement programs that could provide enormous financial incentives to innovators.

3. 3. Supplier acceptance: The legal framework for pledging IP could not be so burdensome or punitive to IP holders that it would dissuade them from participating. That is, the requirements on IP holders needed to be as reasonable as possible within the constraints established by requirements 1 and 2.

4. 4. Limited scope: In order to attract large enterprises with significant patent portfolios, it was necessary to design the OCP so that it did not extend beyond the scope of the immediate emergency: the COVID-19 pandemic. Accordingly, the scope of the pledge was limited to diagnosis, prevention, containment, and treatment of COVID-19 and related research, and was limited in duration to the pandemic as defined by the WHO or January 1, 2023, whichever occurred first.

C Adoption of the Open COVID Pledge

The OCP was “launched” on April 7, 2020 via the public website opencovidpledge.org. It consisted of a short statement of intent linked to a more formal public licensing agreement – a model derived from open-source software licensing and Creative Commons.

The first major pledgor was Intel, followed within two weeks by Amazon, Facebook, Hewlett Packard Enterprise, IBM, Microsoft, and Sandia National Laboratories. More large IP holders joined the pledge in subsequent weeks.

In May 2020, the WHO recognized the OCP in its global Solidarity Call to Action, calling on IP holders to help end the pandemic by sharing “relevant knowledge, intellectual property and data to enable widescale and worldwide production, distribution and use of such technologies and necessary raw materials” through mechanisms including the OCP.⁶⁵

By mid-June 2020, the OCP had attracted more than thirty pledgors with an estimated 500,000 pledged patents. These included twenty-six corporate entities, four nonprofit entities (universities or research institutes), and two US national laboratories. Twenty-six pledgors were based in the United States, four in Europe, and two in Japan. The following section analyzes the adoption patterns of the OCP and assesses its value in fields in which adoption has been high and low.

D Pledged IP

Frank Tietze and colleagues have identified five categories of product innovation that are critical when responding to a major infectious disease outbreak such as COVID-19 (“crisis-critical products”).⁶⁶ These categories include:

• Vaccines and treatments;

• Diagnostic tests;

• Medical equipment (especially hospital/intensive-care devices such as ventilators);

• Personal protective equipment (PPE);

• Digital innovation, including “artificial intelligence (AI)-enabled tracking apps for cases and spreaders and epidemic modeling to monitor and understand the spread and development of the virus across populations.”

Intellectual property in each of these crisis-critical product categories was pledged to the COVID-19 response under the OCP. The following discussion summarizes and offers examples of pledges in each of these categories.⁶⁷

Biopharmaceuticals (Vaccines and Cures)

Private Sector

The biopharmaceutical sector – particularly vaccine development and manufacture – has been among the most visible in the public debate over patents and COVID-19. Not surprisingly, given the large amounts at stake, patent assertions and litigation affected this sector from an early date. As a result, repeated calls have been made by government officials for open access to vaccine-related patents and other IP.

Yet compared to other market sectors, there was comparatively little adoption of the OCP, or any voluntary pledging activity, with respect to IP covering COVID-19 vaccines or therapeutics (a few exceptions being the unilateral pledges made by AbbVie and Moderna, discussed earlier, and pledges by a number of Japanese firms in the biomedical sector). Firms in the biopharmaceutical sector likewise avoided participation in the WHO’s C-TAP pool.

Simple economic forces may be at work here, as firms that anticipate a direct and significant windfall from the sale of COVID-19 products to governments and health plans may be less inclined to commit their IP to a public cause or to make it available to their competitors. This economic logic underlies the vaccine industry; as Ana Santos Rutschman describes it, “patents have permeated the ethos of vaccine R&D.”⁶⁸ And, more generally, scholars have long observed the high value placed on patents and exclusivity within the biopharma sector.⁶⁹ These longstanding attitudes pose a substantial barrier to participation in arrangements that tend to limit the enforceability of IP rights – more so than in industries, such as information technology, in which patents have traditionally played a smaller role in innovation and product development.⁷⁰

In addition, biopharmaceutical firms point to legitimate concerns about the quality and safety of products that may be manufactured under open licensing regimes.⁷¹ For these reasons, it is not surprising that companies in the biopharmaceutical sector have had limited participation in the OCP and other pledging and pooling initiatives.⁷²

However, not all vaccine-related initiatives are profit-seeking. The Rapid Deployment Vaccine Collaborative (RaDVaC), which was formed by researchers affiliated with Harvard Medical School, sought the “rapid development, testing, and free and open-source sharing of vaccine designs and essential protocols.”⁷³ RaDVaC freely shares all information on its vaccine designs, production, self-administration, and testing on its website under the OCP.

In addition, a number of large firms that are not directly engaged in the biopharmaceutical industry have contributed potentially valuable IP to the development of vaccines and therapies targeted at COVID-19. For example, a pledged IBM patent covers the use of cationic polyamines for the treatment of viruses. Moreover, numerous firms have pledged IP covering artificial intelligence and computational methods for enhancing drug discovery, design, testing, manufacture, and administration.

Universities

A significant amount of biomedical innovation in the United States and elsewhere originates in academic research institutions, much of which is funded by governments and charitable foundations. Yet no major research institution participated in the OCP with respect to biopharmaceutical inventions. The lack of broader OCP adoption by research universities has been disappointing, given that universities generally have broad public charters that would seem to support the advancement of public health.

Twenty-four academic research institutions committed to use the Harvard–MIT–Stanford COVID-19 Technology Access Framework described in Section 2.B (HMS Framework). This Framework, announced on the same day as the OCP, shares many of the OCP’s fundamental design features, including royalty-free licensing of IP related to the COVID-19 response. The HMS Framework is more administratively burdensome than the OCP, in that it appears to require bilateral, signed licensing agreements between participating universities and licensees. It also imposes downstream pricing constraints on licensees, as do programs such as the Medicines Patent Pool. It is not known how many, if any, licenses were executed under the HMS Framework.

But even with these programs, the vast majority of academic research institutions worldwide declined to make any pledge whatsoever with respect to their IP. There are several possible explanations for this lack of interest. First, some universities may genuinely believe that the granting of exclusive licenses to patents covering fundamental discoveries is most likely to result in the commercialization of products based on those discoveries.

Alternatively, like private firms, universities may wish to maximize revenue generation from their IP portfolios. While such a profit-seeking motive may seem incongruous with the public missions of many universities, it has been well documented over the past several decades.⁷⁴

Diagnostics

Early efforts to develop diagnostic tests for the SARS-CoV-2 virus were led by research groups at the University of California Berkeley and the Broad Institute, which avoided seeking patent protection on these developments.⁷⁵ Patents covering COVID-19 diagnostic tests gained prominence early in March 2020, when Labrador Diagnostics asserted patents, which its parent Fortress Investments acquired from defunct blood-testing firm Theranos, against diagnostic test makers. As discussed in Section 2.B, Fortress and Labrador eventually bowed to public pressure and withdrew those suits, instead pledging not to assert their patents against COVID-19 diagnostics.

Numerous other pledges relating to diagnostic equipment, testing, and methods have been made through the OCP. Intel, for example, holds a patent covering methods for detecting target bioanalytes using ferromagnetic microdisks. IBM pledged several relevant patents, including one claiming a method for detecting a nucleic acid (for example, DNA or RNA) sequence using a cellular phone, and a pending patent application claiming a microfluidic device with programmable verification features – a technology similar to that allegedly developed by Theranos. Sandia National Laboratory, which holds a number of patents covering the detection of proteins and other organic molecules, also pledged IP relating to the design of a “low-cost, easy-to-use outdoor shelter for healthcare workers to conduct safer Covid-19 drive-up or walk-up testing.” Together, these pledges represent a meaningful body of technology that could be useful in the development of new diagnostic tests for COVID-19, the improvement of existing diagnostic tests, and the efficient manufacture and supply of diagnostic test kits, all with reduced concerns of patent infringement.

Medical Equipment

As noted in Section 1, the lack of hospital ventilators and ventilator replacement parts during the early weeks of the pandemic was one of the precipitating factors that led to calls for greater access to proprietary IP. The unilateral Medtronic and Smiths Group pledges with respect to ventilator equipment were significant steps toward opening these markets to broader participation. The Oxygen and Ventilator System Initiative (OVSI), an OCP participant, is a UK-based project that designed a portable and affordable ventilator device for deployment in low- and middle-income countries. With these pledges, significant access was granted in the area of hospital ventilator equipment, and numerous open-source ventilator projects have since emerged around the world.⁷⁶

Intellectual property covering a number of other medical products and devices relevant to COVID-19 was also pledged. These products include simple yet innovative devices such as a nasal forceps swab for sample collection and a plastic device for spiking intravenous bags. These devices, produced by smaller entities, may be protected by a single patent application. Yet by joining the OCP alongside some of the largest corporations in the world, these entities highlight their products in a favorable light.

Personal Protective Equipment (PPE)

Personal protective equipment (PPE) such as masks and face shields are essential to preventing the spread of airborne infectious agents, in both public places and healthcare facilities, but also at vaccine and drug manufacturing facilities where contagious agents may be concentrated. Shortages of PPE became acute during the early months of the pandemic and continued to plague hospitals, clinics and testing sites. Both Sandia National Laboratory and the NASA Jet Propulsion Laboratory (JPL) were early contributors of PPE IP to the fight against COVID-19. Sandia analyzed 200,000 designs for face coverings and 900 designs for face shields made using commonly available materials and made its findings publicly available. The JPL published the digital design files for four different 3D-printed respirators. One small business, ProBuccal, pledged its IP in an oral bioaerosol shield for dental applications. And Leonardo, an Italian industrial conglomerate, pledged a patent for monitoring PPE usage in the workplace.

Though not as highly publicized as PPE, other technologies have become important for preventing and containing the spread of infection. The use of ultraviolet radiation as a powerful disinfecting agent attracted significant attention during the COVID-19 pandemic.⁷⁷ A pledged IBM technology sanitizes touchscreen devices using ultraviolet light after use. In a slightly different vein, recent patents and patent applications held by Microsoft and Intel, respectively, cover the authentication of a user’s identity using contactless gestures in three-dimensional space (avoiding the need for direct contact between an individual and a device). Technologies such as these were utilized with increasing frequency during the pandemic due to concern over contamination and the spread of contagion through human touch.

Digital Innovation

In terms of both number of pledgors and number of patents, the greatest uptake of the OCP was in the information technology sector. Large multinational firms such as Intel, IBM, Microsoft, Facebook, Fujitsu, Uber, Mitsubishi Electric, Amazon, and SAP each made thousands or tens of thousands of patents available through the OCP. Any accurate inventory of the close to half a million patents pledged in this area is impossible. However, some of the industry subsectors into which such patents fall are summarized below:

(a) Biopharmaceutical Research Tools

Over the past decade, drug discovery and development have become increasingly dependent on computational methods and machine learning. A number of patents covering artificial intelligence systems and algorithms for computational drug discovery and design (including vaccine design) were pledged under the OCP by firms including Microsoft and Fujitsu. One particularly relevant Microsoft patent covers the use of machine learning algorithms to facilitate the assembly of vaccine cocktails for pathogens, such as HIV, that evolve quickly under immune pressure of the host. And a recent IBM patent claims methods for identifying clinical trial site locations based on epidemiological and demographic factors.

In addition, Hewlett-Packard Enterprise pledged a substantial portfolio of IP relating to data handling and exchange in cryo-electron microscopy systems, important research tools for drug discovery and development. With respect to the administration of therapeutics, IBM pledged IP covering a computerized decision support tool for optimizing long-term drug therapy. The fact that these advanced digital innovations were pledged may have enabled firms in the biopharmaceutical sector to research and develop COVID-19 vaccines and therapeutics more effectively and rapidly, without exposure to patent infringement.

(b) Contact Tracing and Epidemiology

The rapid spread of COVID-19, its long latency period, and the uncertainty surrounding its precise vectors of transmission, led to a need for reliable and pervasive methods of modeling, predicting, and tracing the spread of contagion. So-called contact tracing applications, which allow users to track the individuals with whom they have had contact, helped epidemiologists to understand the nature of the disease and its spread.

Numerous patents claiming contact tracing methods and technologies, as well as epidemiological modeling techniques, were issued and asserted during the pandemic.⁷⁸ Nevertheless, a significant number of patents, patent applications, and other IP relating to contract tracing and epidemiological modeling were pledged under the OCP by firms including apheris AI, IBM, Mitsubishi Electric, and Microsoft. These contributions, together with the prior art identified by Unified Patents, provided significantly enhanced freedom to operate in the area of contract tracing technology.

(c) Infrastructure and Logistics

Though seldom making headlines, the COVID-19 pandemic placed unexpected strains on global network infrastructures, supply chains, and transportation systems. As governments and institutions struggled to cope with aging systems, new technologies were deployed to ensure the rapid, safe, and efficient allocation of resources across physical spaces. In many cases, these technologies were covered by IP pledged through the OCP.

For example, IBM, which pledged all of its patents under the OCP, developed significant technology to secure the medical product supply chain, particularly for compounds (such as vaccines) requiring refrigeration. Hewlett-Packard Enterprise, which also pledged its patents under the OCP, deployed wireless technology and location-based services to enable pop-up clinics and hospitals, including at least one shipboard “floating” hospital in Italy. And another pledgor, Mitsubishi Electric, contributed IP relating to the efficient allocation of personnel to service machines across multiple locations, such as hospitals.

Efficiently routing emergency vehicles through traffic is particularly important during spikes in demand. One pledged AT&T patent application covers methods for optimally routing ambulances and other emergency vehicles to hospitals. A patent pledged by Uber allows drivers to select routes based on safety conditions, which can be particularly relevant for families with children or drivers wishing to avoid congested or crowded areas during pandemic conditions.

(d) Information Reliability

One highly publicized development that emerged from the COVID-19 pandemic is the spread of misinformation about the disease and its prevention and treatment. Much of this misinformation is spread via social media, and numerous firms operating in the IT space have developed methods for assessing the reliability and accuracy of information posted to social media accounts. For example, Facebook developed methods for automatically generating and collecting contextual information about posts, including credibility indicators, additional content, and statistical information, and for displaying this information for users. Microsoft, another pledgor, also developed methods for using credibility-related data in conjunction with servicing web requests such as search queries. And IBM pledged patents covering methods for aggregating data from multiple sources to validate incidents reported via social media, and also for measuring a recipient’s perceived degree of trust in an online message. The patents and patent applications underlying these and many other technologies for increasing the accuracy and reliability of public information were pledged under the OCP.

E Pledges in Support of an Open Innovation Landscape

Table 12.2 offers an assessment of the adoption of the OCP by providers of the five crisis-critical product categories, based on a subjective three-tier assessment (low, medium, high) of the quantity of IP pledged in each category. In addition, the table includes an assessment by category of the IP pledges made in such category when combining the OCP with the other unilateral and collective pledges described above.

Table 12.2 Pledges of crisis-critical product IP

Product category	Pledged through OCP	Pledged through all pledges
Biopharma	Low	Low–medium
Diagnostics	Low	Medium
Medical equipment	Low–medium	Medium
Personal protective equipment (PPE)	Medium	Medium
Digital innovation	High	High

As shown in Table 12.2, there was wide variation in pledging activity among product categories. The lowest degree of activity occurred with respect to biopharmaceutical products such as vaccines and treatments, most likely due to the substantial economic windfalls at stake. Vaccine-related pledges such as those by Moderna and RaDVaC could facilitate the development and production of vaccines by alternate sources, though the majority of technologies in this space remain fully protected by proprietary rights.

At the other end of the spectrum, a significant amount of IP was pledged in the areas of PPE and digital innovation. With respect to PPE, pledged IP appears sufficient to enable the manufacture of respirators and other forms of equipment without significant risk of infringement – an achievement with immediate potential benefit to society.

Few pledges of any kind can assure a user of complete freedom from patent risks when it produces a commercial product. In the high-technology sector, many products are covered by thousands of patents held by multiple firms, and even biotechnology and pharmaceutical products, once viewed largely as single-patent products, are covered by an increasing number of diversely held patents.⁷⁹ What’s more, it is increasingly common that, through a combination of expansive claim drafting and shrewd market prediction, a firm’s patents can cover products developed entirely by others and to which the patent holder made no contribution at all. Finally, there may always be “outsiders” who are not bound by the patent nonassertion commitments of others, but whose patents cover an otherwise pledged technology.⁸⁰ As a result, even the most carefully orchestrated patent landscape clearing mechanisms – whether implemented through patent pools or pledges – cannot assure complete freedom from patent risk.

That said, it is not essential that complete clearance exist in order for markets to be made more accessible through pledging programs. The relevant question is how much “freedom to operate” is conferred by a particular pledge or pledge community. If infringement risk is reduced below a certain threshold, then a market may be considered open, even if residual risks exist from outsiders.

Likewise, numerous categories of digital innovation appear to be substantially “opened” to innovation and product development through the OCP and other pledging mechanisms. This effect is particularly striking in areas such as contact tracing, in which pledges by leading multinational firms signal an openness to market entry that might have been attractive to innovators in this area. Moreover, even if innovators are unaware of specific pledged IP, or the existence of such pledges, the resulting lack of IP enforcement in these market segments should, itself, have encouraged further development and innovation that might otherwise have been chilled in an atmosphere of active IP enforcement.

The broad nature of most OCP pledges, and the public licensing structure of the OCP, further contributed to the open innovation landscape. That is, within fields in which OCP (and related) pledge coverage was high, potential users of pledged IP need not identify specific patents or copyrights that they wish to use, as required by the various university COVID-19 frameworks described in Section 2. Such an identification exercise is both time consuming and technically difficult, requiring an investigation of each pledgor’s IP portfolio with a degree of expertise that may be unavailable to many potential users. The OCP’s public license structure also eliminated the need to identify individual IP licensors and negotiate licenses with each of them, another time-consuming and potentially daunting exercise for a small entity with limited legal resources.

Thus, while quantitative measurement of the precise impact of IP pledges on markets is difficult, there is cause to be optimistic that such pledges may had an effect, direct or indirect, on the willingness of innovators to invest in the development of products relevant to pandemic response. This “opening” of fields to innovation and new market entry is among the principal benefits of the OCP.

F Extension of the OCP Model beyond COVID-19

While the OCP was developed as a direct response to the COVID-19 pandemic, the IP pledging framework that it established is not unique to COVID. The OCP provides a lightweight, legally enforceable mechanism for the coordinated pledging of IP rights within a defined scope and for a limited period. As such, the OCP may be a useful model for the response to future public health emergencies in which IP rights may constrain research, development, or the supply of crisis-critical products.

It is important to note that these benefits can be achieved even without the participation of biopharmaceutical firms. For example, with sufficient public notice, pledges of technologies relating to pathogen detection, manufacturing processes, cold storage and transport, disease modeling, contact tracing, and the like (all of which were pledged as part of the OCP) could accelerate the response to future disease outbreaks. It is also possible that the successful “test run” of the OCP during the COVID-19 pandemic will demonstrate to IP holders that there are few risks or adverse consequences to participating in such a program, thereby increasing participation in future efforts.

Of course, pledge mechanisms alone may not be sufficient to address many aspects of a new disease outbreak. The COVID-19 pandemic made apparent the criticality of trade secrets and know-how to the manufacturing and distribution of drugs and vaccines.⁸¹ Nevertheless, IP pledges may represent a first step toward transferring knowledge necessary for effective disease response, as they could signal a firm’s willingness to assist in the global response, potentially with compensation from governmental or philanthropic funders.

In addition, IP-sharing frameworks may not be suitable for addressing all public health crises. For example, there are many devastating health conditions, such as cancer and heart disease with far higher mortality rates than COVID-19. Yet broad IP-sharing mechanisms may not be well suited to addressing conditions such as these. One of the defining characteristics of COVID-19 and other disease outbreaks is the strain that they unexpectedly place on existing resources, infrastructure, manufacturing capacity, and supply. Intellectual property sharing can help to alleviate bottlenecks in the supply chain by authorizing additional producers to enter the market in order to meet sudden spikes in demand for critical products. Thus, while there are innumerable societal challenges associated with chronic health conditions – cost, reimbursement, unequal access, and the like – broad IP sharing mechanisms to increase the supply of critical products may not be the ideal solution for these public health issues.

Another looming health crisis is posed by climate change. Limited IP pledging efforts such as the EcoPatent Commons, which ran from 2008 to 2016, have previously been undertaken in this area, yet none has made available significant amounts of IP.⁸² Climate change poses many daunting challenges – technological, social, and political – and it is not clear whether IP is currently blocking or promoting progress toward their solution.⁸³ Moreover, it is not clear that a generalized pledging framework would achieve meaningful gains when issues are tied to local conditions (sea-level rise, drought, storms), require substantial services, know-how, and technical expertise to address, and do not lend themselves to commoditized solutions that are usable by large segments of the affected populations. The adaptation of IP pledging frameworks to such future challenges will require careful consideration of the specific design requirements and principles suggested by those challenges.⁸⁴ Thus, even if the OCP is not adaptable wholesale to future crises, it is hoped that its design and features may help to inform future efforts to coordinate the public IP response to national and international public health emergencies.

4 Conclusion

Intellectual property concerns characterized the COVID-19 pandemic from its outset. In addition to various governmental and international efforts to address these concerns, private sector organizations made a number of voluntary pledges in an effort to facilitate the pandemic response. One such effort was the Open COVID Pledge, which was modeled on successful public licensing structures previously developed by the open-source software community and Creative Commons. An estimated 500,000 patents were pledged under the OCP within a short period of time. However, the willingness of IP holders to make pledges varied considerably by market segment. At one end of the spectrum, few pledges were made with respect to biopharmaceutical products such as vaccines and treatments, most likely due to the substantial economic gains that awaited the successful producers of those products. In this area, more direct governmental intervention may be required to encourage IP holders to make their IP more broadly available to expand access to lifesaving vaccines and therapies.

At the other end of the spectrum, however, a significant amount of IP was pledged in the areas of PPE and digital innovation, and to a lesser degree in diagnostics and medical devices. Pledges made through the OCP and other pledging mechanisms enabled the development and manufacture of hospital ventilators and replacement parts, respirators, and a variety of other medical tools and devices. In addition, large quantities of IP covering digital innovation were pledged for public use, including biopharmaceutical discovery tools, contact tracing methodologies, disease modeling algorithms, emergency response systems, supply chain enhancements, and social media mechanisms for ensuring the accuracy of information disseminated to the public. The participation of leading multinationals in this effort signals an openness to market entry that should be attractive to innovators in a broad range of technology markets. Moreover, even if innovators are unaware of specific pledged IP, or the existence of such pledges, the resulting lack of IP enforcement in these market segments should, itself, encourage further development and innovation that might otherwise be chilled in an atmosphere of active IP enforcement.

Thus, while measuring the impact of IP pledges on markets is difficult, particularly given the large pledges made under the OCP and similar programs, there is cause to be optimistic that such pledges may be having an effect on the willingness of innovators to invest in the development and supply of products that may contribute to the pandemic response. This “opening” of fields to innovation and new market entry is among the principal benefits of the OCP.

Regrettably, COVID-19 is not likely to be the last public health emergency to afflict the world. Future pandemics, as well as global climate change and its associated health impacts, will create even greater demand for access to innovative, lifesaving technologies. It is hoped that the OCP, which was designed to balance the competing interests of broad user adoption with acceptability to IP holders in a lightweight and legally enforceable manner, may be a useful model for future IP sharing endeavors.