U.S. International Trade Commission Covid-19 Diagnostics and Treatment Development and Access Report

The U.S. International Trade Commission released a corrected version of its COVID-19 Diagnostics and Therapeutics: Supply, Demand and TRIPS Flexibilities Report in December of 2023.  Chapter 7 is a summary of views of interested parties.  I found that interesting, particularly the section on jobs related to the pharmaceutical and biotech industries.  The following is an excerpt from the Executive Summary:

The TRIPS Agreement sets minimum standards for the protection and enforcement of IP rights. It also includes flexibilities. Persons providing input to the Commission disagreed about the extent to which the 2022 Ministerial Decision expands flexibilities and whether the decision should be extended to COVID-19 diagnostics and therapeutics.

Determining a definitive scope of what products are covered by the terms “diagnostics” and “therapeutics” as they pertain to COVID-19 and what constitutes relevant COVID-19 diagnostics and therapeutics covered by patents is complicated and subject to interpretation. Based on definitions in the medical field of “diagnostics” and “therapeutics,” a COVID-19 diagnostic is a good used to diagnose or identify how patients respond to treatments for COVID-19, and a COVID-19 therapeutic is a good used to treat COVID-19. The universe of COVID-19 diagnostics and therapeutics covered by patents or in development that fall within those definitions is broad and varied. There are various parameters that could be applied, individually or in combination, to identify relevant COVID-19 diagnostics and therapeutics, including whether the product is covered by patent, whether the product is directed to COVID-19 (virus-directed), and whether the product has received regulatory approval or authorization; application of each comes with its own challenges.

The development and commercialization of COVID-19 diagnostics and therapeutics occurred on an extremely compressed timeline. Manufacturing of diagnostics and therapeutics involves multiple stages, each of which requires careful attention to detail and strict quality control measures. The two fields of diagnostics and therapeutics are composed of different producers, inputs, know-how, and so on. Generally, COVID-19 diagnostics can be brought to market faster than COVID-19 therapeutics, and the knowledge and manufacturing base globally for small-molecule drugs is larger than for biologics. Research and development of virus-directed COVID-19 diagnostics and therapeutics primarily occurred in HICs, but manufacturing of diagnostics and therapeutics occurred in countries of all income levels except for LICs. As of summer 2023, China (UMIC) reportedly had the highest number of manufacturers of COVID-19 diagnostics (247), and India (LMIC) had the largest number of reported therapeutics manufacturers (56). It is difficult, however, to ascertain how much COVID-19 diagnostics and therapeutics production came online or is still ongoing.

A variety of advantages and challenges are associated with the use of voluntary licenses to provide access to IP associated with COVID-19 therapeutics and compulsory licenses to access COVID-19 therapeutics and other patented pharmaceutical products. Voluntary licenses and compulsory licenses generally were not used to access IP associated with COVID-19 diagnostics. Voluntary licenses have been an important mechanism that was used to offer COVID-19 therapeutics for sale at reduced prices in LICs, LMICs, and some UMICs; however, many UMICs have been excluded from coverage under voluntary licenses. Voluntary licenses also provided a mechanism for technology transfer and knowledge sharing to support the manufacture and regulatory approval of less expensive licensed products. Compulsory licenses have been used by a small number of countries to access IP associated with certain COVID-19 therapeutics. The primary, commonly cited benefits for countries utilizing compulsory licenses are reduced costs and improved access. Another primary benefit of compulsory licenses reportedly is that they provide leverage to negotiate voluntary licenses. One of the main disadvantages is that they do not provide a basis for sharing knowledge.

The availability of supplies to meet global demand for COVID-19 diagnostics and therapeutics has been a moving target throughout the pandemic. Estimates or calculations of demand for these goods differ depending upon whether the metric is market demand or need. When infection rates rose sharply in early 2021, before manufacturers had scaled up production and regulators had granted approvals, access was limited and available only to a few HICs. During 2021, more products became available for procurement. By early 2022, infection rates and deaths from COVID-19 steadily declined as vaccination rates grew and natural immunity strengthened. By early May 2023, the World Health Organization (WHO) declared that COVID-19 would no longer be classified as a public health emergency of international concern. Today, market demand has waned in some countries, with several manufacturers no longer pursuing regulatory approval and stopping production altogether.

The disparity among countries of different income groups is wide in terms of access and availability to COVID-19 diagnostics and therapeutics. About 80 percent of government procurements were by HICs, 14 percent by UMICs, and 5 percent by LMICs. No government purchases were made by LICs, although products were made available to them through multilateral organizations. The wide disparity among countries in their ability to access COVID-19 diagnostics and therapeutics is the result of multiple factors, including access to IP, prices and affordability, regulatory approvals, healthcare infrastructure, and the healthcare priorities of governments. The importance of each of these and other factors impacting availability and demand varies greatly among countries, although high prices and the lack of price transparency appear detrimental to many countries seeking access.

Academic literature on the effects of patent protection, compulsory licenses, and the MPP is limited and would benefit from additional research. From the available evidence, patent protection is generally found to be more beneficial to innovation in the health sector for developed countries and less so for developing countries. Patent protection is often found to result in higher prices for medicines, which decrease access, but patent protection can also have some counteracting effects, such as increases in international trade flows of pharmaceuticals and faster drug launches in markets, that help improve access. Researchers have found that compulsory licenses and the MPP are associated with increased generics and lower prices, and increased access to pharmaceuticals. Researchers have not studied the relationship between compulsory licenses and the MPP and access to COVID-19 diagnostics and therapeutics.