The Moderna and Pfizer vaccines both use this brand new technology known as messenger RNA. So you can manufacture quicker, higher quality, and to a global scale. The clinical trial lists, the companies, Moderna had been working on an mRNA based HIV vaccine before SARS-CoV-2 was even known to exist. So I'm cautiously optimistic that we will see a working HIV vaccine, let's say, in the next decade. Whenever there is a blockbuster drug, there are disputes about who owns it, who owns variations of it, who owns it for how long, and in what context.
More than 30 biotech and pharmaceutical companies around the world are racing to develop a safe COVID-19 vaccine. Investors, public health specialists, and other experts are watching closely to see which company gains regulatory approval first. But there's a big question lingering over the process: how do we balance safety with speed? Because of the urgency of the pandemic, the White House has launched Operation Warp Speed, which provides funding and other assistance to help companies speed up the development and distribution process. Under this program, the White House has chosen seven different candidates to fast track. Six of the seven candidates are being developed by seasoned companies such as Pfizer, AstraZeneca, Merck, Sanofi partnered with GlasgowSmithKline, Novavax, and Johnson and Johnson. The only newcomer on the list? Moderna.
Moderna. Moderna. Moderna, which is one of the most promising COVID vaccine creators, has already started phase three trials late last month. We're putting our bets behind Moderna. Shares of Moderna are swinging this morning. You sell Moderna, you buy Gilead.
If Moderna can do it, you know that we're going to hire. Moderna was founded ten years ago and has yet to bring a product to market. But its new approach to a vaccine have many people hopeful for an alternative viable candidate during the pandemic. Here's where the high stakes race for a coronavirus vaccine stands. Biotech company Moderna, as well as Pfizer, which partnered with the German biotech company Biontech, have been working on what's called an mRNA delivery approach to a vaccine. Many think it could be the best option for rapid production during the pandemic.
Traditional immunization methods involve injecting a dead or weakened form of a virus into the body. This triggers the immune system to create proteins called antibodies, which protect a person in the event a live virus gets into their system. The mRNA vaccine approach doesn't require injecting a virus into the patient in order to create those antibodies. Messenger Ribonucleic Acid, or mRNA,
are molecules that exist within the body that transport instructions to the part of the cell that creates proteins. The mRNA approach to the vaccine is to encode instructions into a synthetic strand of mRNA on how to create antibodies to fight the virus. Once those programed strands of mRNA are introduced, the body's natural process of creating proteins takes over and it reproduces the antibodies without needing the weakened virus present in a person's system.
The Moderna and Pfizer vaccines both use this brand new technology known as messenger RNA, and there are differences in the two vaccines, in the way they're formulated, in the way they're put together, and actually in the way they're dosed. Pfizer's vaccine is given as two doses, three weeks apart, whereas Moderna's is given us two doses four weeks apart. Now, from the outside, these vaccines are going to look very, very similar, except in that dosing regimen. But because there are these small differences in the way they're made and designed, they could work differently in different populations. This new approach to a vaccine has never been approved by any world regulatory body.
There are some advantages to the mRNA approach. Because the vaccine doesn't contain a virus, the participant can't get infected by the vaccine, which is a risk for traditional immunization methods. The mRNA vaccine would also be easier to manufacture. Traditional vaccines that use a dead or
weakened form of the virus must be grown inside live cells. The production of these vaccines is slower. For example, the most common way for the flu vaccine to be manufactured at scale is to grow the vaccines viruses within fertilized eggs. Those eggs are incubated for several days to allow the viruses to replicate. The viruses are then killed, purified and go through extensive quality testing before distribution.
You're not doing any live virus, so issues relative to containing the virus don't exist. It is a streamlined process. It's new. So you're not dealing with legacy manufacturing issues and it's quicker so you can manufacture quicker, higher quality and to a global scale, which is exactly what we need.
The only questions are, these are new technologies. We're still learning how to do it exactly right. And I'm convinced that there won't be any vaccine in the market that has not done it exactly right, because the only thing worse than no vaccine is a vaccine that is either not efficacious or unsafe. That's not permissible. When the White House selected the five vaccine candidates in early June 2020 to receive prioritized access to clinical trials, it signaled that the government favored these drugmakers approaches to the vaccine over others.
The U.S. government doubled down on this preferential treatment by pre-ordering 100 million doses from Pfizer in July 2020 and 100 million from Moderna in August 2020. But the vaccines are still being tested, with both Pfizer and Moderna's mRNA candidates entering late stage clinical trials in the summer of 2020. Vaccines typically go through three stages of clinical trials before they receive regulatory approval. The first stage tests the vaccine on a small group of healthy volunteers to ensure the drug is safe to give to a larger group of people before moving forward. Phase two is larger, with several hundred
people receiving the vaccine. This stage is to help figure out the best dosage for the vaccine, as well as to continue monitoring risks and side effects. Obviously everything is a risk-benefit proposition. So for some conditions, like, for example, ovarian cancer or lung cancer, the drugs can be very lethal, but the disease is even more so.
So you wouldn't accept the same degree of risk for a cancer medication as you would for an allergy medication. Phase three studies are conducted on thousands of people. During the third stage of a study, researchers are monitoring for safety, as well as how effective the vaccine is. Moderna's phase three study involves around 30,000 participants across 89 sites in the United States. Half of them will receive the vaccine, while the other half receive a placebo. A placebo is a drug that is made with inactive ingredients, so it will not have any real effect on the patient's health.
The trial is a double blind study, meaning neither the candidates nor the researchers know who received the placebo and who received the vaccine in order to prevent bias. Phase three trials typically last anywhere from 1 to 3 years, but the pandemic has led to the studies being fast tracked. We anticipate a base plan for efficacy for the first interim readout to be in November. That's our base plan.
Our best plan is October. I think it's unlikely, but it's possible. And if the infection rate in the country was to slow down in the next weeks, it could potentially be pushed out as a worst case scenario, I would say, in December. Part of what's extraordinary about this process is everything has been shrunken.
It is unheard of in vaccine history to go from the development of the vaccine into phase 1, 2, 3 trials within a span of, what has it been, like less than six months at this point. People always ask me, who's going to win the race? Who's going to be first? And here's my answer. I don't care. You know, I just want a safe and
efficacious vaccine as quickly as possible that passes the appropriate regulatory and scientific muster. It doesn't necessarily matter who gets to the finish line first on a vaccine, because the supply of the vaccine will be so limited at the beginning that it's not a winner take all situation here. Basically, you need all hands on deck to be able to supply this vaccine, to try to build up immunity so that we can stop the transmission of the virus. Because of the urgency of the pandemic, many experts expect some of the vaccines to be approved for wider use by the FDA through what is called an emergency use authorization or an EUA. That doesn't necessarily mean it's a lower standard.
That EUA allows them to stage the authorization, the access to the vaccine, to different high risk groups. An emergency use authorization is not the same as full approval. It sets a lower bar, essentially, in order to get drugs or vaccines to market faster. Now, they would emphasize that the lower bar in terms of vaccines doesn't mean that they aren't sure that it works and they aren't sure that it is safe.
It just requires less paperwork to get through the approval process. The FDA has granted an emergency authorization for certain coronavirus treatments that have shown promising results in treating the virus in severe cases. One notable example is the emergency authorization for Gilead Science's Remdesivir, a drug typically used to treat Ebola. For drugs, for example, the threshold for getting an EUA is to prove that there may be a benefit of using the drug that outweighs any risks.
Vaccines have a higher bar because they're given to healthy people. So where you're using a drug to treat somebody who is already sick, there might be more of a tolerance for risk there. With vaccines, the tolerance for risk is very low. They have to be extremely safe. You can't cause problems with vaccines when you're trying to prevent problems in healthy people.
The FDA announced in late August 2020 that it was considering fast tracking of vaccine before phase three trials are completed. Soon after the announcement, nine CEOs of major biotech and pharmaceutical companies working on vaccines pledged to only submit for approval or an emergency use authorization after demonstrating safety and efficacy through a phase three study. Operation Warp Speed makes some people concerned that speed is the main goal here in developing vaccines. And speed is a goal in developing vaccines. But folks involved in the process emphasize that proving that these vaccines actually work and that they are safe is the foremost consideration here. Reuters has reported that Moderna has been, quote, squabbling with U.S.
scientists during the regulatory process. Moderna is showing that it's got problems understanding how to work with the FDA. I'm not present at these meetings, but the press has been that Moderna is arguing with the FDA over a number of different issues, scientific issues. And it's good to have those types of robust debates. But at the end of the day, the FDA is going to call the shots based on what it feels is the best path forward and Moderna, while it's free, of course, to do whatever it feels is the best thing for it to do as a company, will ultimately have to let the FDA make its decision.
So early arguments are oftentimes a harbinger of problems to come a bit later. A company that is bringing its first product through the FDA approval process. This product happens to be a vaccine to try to help stop a pandemic. There are going to be a lot of questions there. And we're watching a relatively young company, a relatively unproven company, figure this out in real time.
A lot of times there are bumps in this road, but the world isn't watching that. Moderna is trying to go as fast as possible. The FDA is also trying to go as fast as possible.
But they need to work out exactly how to go as fast as possible while also ensuring the highest degree of safety and getting the best data. And so while that report came out a few months ago, I haven't heard as many rumblings about potential disagreements between Moderna and regulators recently. When asked for comment on the report, a Moderna spokesperson told CNBC, We are focused on our goal of producing a safe and effective vaccine expeditiously and rely on several important collaborations in reaching our objectives. On any given day, we have many different interactions between Moderna and representatives of the U.S.
and other governments as we work together to successfully respond to the pandemic. Even though an mRNA vaccine will be easier to manufacture, there will still be an issue of creating enough doses for mass distribution during a global pandemic. What we anticipate is if you look at the few manufacturers that are both in the clinic already and that have scaled for manufacturing, and if you do the math, it's only a couple companies, we will all be supply constrained for quite some time, meaning we won't be able to make as many products as we require to vaccinate everybody on the planet. In order to speed up the process and make sure vaccines are immediately available after approval, many companies are manufacturing doses before the clinical trials are completed. This process is called manufacturing at risk.
You're manufacturing tens of hundreds of millions of doses with the hope that once their product gets approved, they'll be that much further ahead of the game and we can begin inoculating people sooner on the proposition. However, if their programs do fail, and some will, all the doses that they manufactured will have to be destroyed. And that's an extremely expensive proposition. So one of the things that Operation Warp Speed does is it cushions that fall a little bit. It allows everybody to be smart and also more aggressive. And that's what we need to really defeat this virus in warp speed.
Since there will be a limited amount of vaccine doses at first, the distribution process must be more selective. I like to make the analogy that an emergency room doctor doesn't go to everyone waiting and say, All right, I'm giving everyone 5 minutes equally. No, they look at who's having the most severe health problems, who's got the heart attack.
They focus the attention there. And that should be the same approach with a vaccine. Where can the vaccine do the most in terms of saving lives initially? And then, once you've saved a lot of lives and you've reduced the mortality rate, where can it do the most to reduce the adverse economic impacts of Covid? Those are the two primary considerations in distributing vaccine among countries.
More than 170 countries are in talks to participate in the World Health Organization's global effort, called the COVID 19 Vaccines Global Access, or COVAX. facility. The goal of the program is to speed up vaccine development, ensure all countries have access to the vaccine, and distribute doses to the highest risk population within each country. The White House announced on September 1st, 2020, that the U.S. does not plan to join the initiative, a move which has experts concerned.
Vaccine nationalism, it's called. Keeping the vaccine for my country is a natural response. Governments are responsible for the freedom and well-being of their citizens, but there's a l imit to what they should do, and there's also some obligation to the world.
The consistent message through all my experiences has been, you know, an outbreak anywhere is an outbreak everywhere. I think it's narrow minded for us to go back to looking at this as a nationalistic approach, because you can't with infectious diseases, they do not care what border they're in. They don't need a passport. It is in our benefit to ensure that the rest of the world continues to get the vaccine, access to the successful vaccine, and that the rest of the world is protected because we live in this world. Until we can get this vaccine to every corner, or vaccines, to every corner of the world, we can't really go back to normalcy.
It's also possible that an American company may not develop the vaccine first. If a country involved in the COVAX facility develops an effective vaccine, the U.S. could be excluded from the coordinated effort to distribute it equitably. So what will a post-vaccine world look like? The head scientist of Operation Warp Speed, Dr. Moncef Slaoui, said in early September 2020 that he expects there will be enough doses to vaccinate 20 to 25 million Americans by the end of 2020.
I think it's possible that we'll see a vaccine broadly available towards the end of the first quarter of 2021, but it's clearly going to slip into 2021. I do not think you're going to see a vaccine licensed by the FDA, get a biologics license application for broad distribution in 2020. I think you're likely to see a staged authorization where where incremental groups are getting access to the vaccine through the end of this year, assuming that they work and that they're demonstrated to be safe and effective. That means that there's going to be a period of time between now and next summer where our reality stays about the same. We don't know what's going to happen with the virus itself, but I don't think that I see a lot changing. I hope that what we find is a better
balance in which we continue to take the mitigation measures so we don't have to take more extreme measures, such as lockdowns. As long as we find that in-between space where we can operate businesses, where we can keep the community transmission down enough to continue pursuing colleges, schools, you know, a huge part of this is going to be keeping the numbers down. There's concern among public health experts that distrust of vaccinations could hinder achieving herd immunity.
And unfortunately, one of the groups that is most suspicious of the government are communities of color. For lots of reasons. But there is suspicion. And these are the same communities that have higher rates of infection. So it's the perfect storm of problems here. There will be a question of whether or not we need to continue vaccinating the population.
And does this coronavirus, this SARS-CoV-2, become like the flu, where we need to continue vaccinating every year or every other year? And what would that mean in terms of continuing to maintain that herd immunity? So those are some of the things to think about in terms of normal, the question of whether or not we go back to normal. Well, it will depend on where you live in 2021. The two mRNA COVID vaccines were sequenced, developed and approved for widespread use in the U.S. in record time, but they were actually decades in the making. Almost everybody working on COVID vaccines comes from the HIV world. The clinical trialists, the companies, Moderna had been working on an mRNA-based HIV vaccine before SARS-CoV-2 was even known to exist.
MRNA technology meant wonders for developing COVID vaccines, but its effectiveness in the fight against HIV is still unclear. We knew the human immune system could get rid of COVID. That's not seen with HIV. Essentially no one self-cures HIV.
MRNA is a very promising new technology. HIV is still an incredibly formidable foe. A crucial component to all vaccine research and development is government funding. Operation Warp Speed allocated about $10 billion in a matter of months for private companies to use toward developing a vaccine, as well as treatments for COVID 19.
By contrast, between 2000 and 2020, the U.S. government contributed about $12 billion toward HIV vaccine research and development. Just about every vaccine that we get today was developed by some private company. Even though the actual research and development may have been a shared enterprise.
We have really at the moment, very little corporate interest in HIV. The reason of that at the moment is that it's very risky. But the success of the COVID vaccine showed the risk could pay off.
If we leave exclusive control of manufacturing and pricing and distribution of lifesaving medical technologies to for-profit companies, then the result is inequitable access. We clearly see in HIV that this remains a disease of people who are marginalized and stigmatized and in some countries, criminalized. So what does the success of the COVID mRNA vaccine mean for HIV? And who would profit from an HIV vaccine? If you asked many AIDS activists of the 1980s about the race toward a cure for HIV, they would probably describe it as more of a crawl. The Center for Disease Control documented the first case of what would later be identified as AIDS in 1981.
President Ronald Reagan didn't make his first public speech about the AIDS crisis until May 1987, six years after the first case was reported. Only medical science can ever truly defeat AIDS. Activists in the eighties and early nineties protested aggressively, staging die-ins to urge the government, which included Dr. Anthony Fauci, who was appointed director of National Institute of Allergy and Infectious Diseases in 1984, to move faster to develop treatments and eventually find a cure. Researchers and historians do place a lot of credit to activists, especially in fomenting anti-HIV drug development. They also had a role to play in stimulating research in other forms of HIV prevention, one of which is the development of vaccines.
In the past three decades, there have been many more resources devoted to HIV research from both the public and private sectors. The U.S. government is an incredibly valuable partner in biomedical and pharmaceutical R&D. The U.S. government has contributed more money toward developing an HIV vaccine than any other revenue source, including the commercial sector. In 2020, the U.S.
government contributed nearly $650 million to HIV vaccine research. Philanthropic donations were the second leading contributor, with a total of about $94 million contributed that year. $92 million of it was from the Bill and Melinda Gates Foundation. The total commercial investment was $7 million in 2020, though that number may be too low due to underreporting. Overall, the public sector, including from governments other than the U.S., made up 87% of investments into
HIV vaccine research and development in 2020. These funding sources frequently end up going to private companies to conduct the research and development of a vaccine. Without companies, you can't actually get these vaccines to market. In 2015, Merck and Moderna launched a partnership to develop vaccines and immunity therapies for HIV based on Moderna's mRNA technology.
Moderna then won a $20 million grant from the Bill and Melinda Gates Foundation to go toward developing an mRNA vaccine for HIV. The investment into HIV research paved the way for huge advancements in vaccine development. People were really looking to this mRNA technology as a new way to rapidly produce vaccines for a lot of different infections. The vaccine is made up of two critical things. There's a vector, or what I often think of as kind of the vehicle or the car, that's delivering something and the passenger, which is the kind of information we're trying to deliver to the cells to protect you from getting infected. And we know in COVID that mRNA is an incredibly great vehicle or platform or vector to deliver that information.
Traditional immunization methods involve injecting a weakened form of a virus into the body. This material is frequently referred to as an antigen. This triggers the immune system to create antibodies which protect a person in the event a live virus gets into their system. An mRNA vaccine doesn't use the virus itself. It instead creates a blueprint to instruct the body on how to fight the virus.
The antigen for COVID 19 is called the spike protein. Hiv has what scientists call the envelope protein. Early on, the thought was that if we could produce antibodies to this envelope protein, which is akin to the spike protein, more or less, on the coronavirus, that could hopefully prevent people from acquiring HIV. But in clinical trials, the antibodies that were produced against HIV were not effective. Johnson and Johnson announced in late August 2021 that its trial for an HIV vaccine failed to offer enough protection to keep the study going. The study was a public-private partnership between J and J, the NIH, Bill and Melinda Gates Foundation, and the HIV Vaccine Trials Network.
HIV mutates very rapidly, although we have learned already that the virus that causes COVID mutates and that if we have a long enough epidemic, we'll get lots of different variants. HIV is just far more unstable, and it has to do with the way in which the virus makes copies of itself. It just makes bad copies in the sense that it doesn't make perfect duplicates, and every one of those copies is another mutation. The traditional thinking around vaccines is to mimic the body's natural immune response to a virus.
The problem with HIV is, the body's natural immune response isn't strong enough to fight the virus. This means a vaccine has to come at the problem in a different way. We knew the human immune system could get rid of COVID. That's not seen with HIV. Essentially, no one self-cures HIV.
There have been many attempts to create a vaccine for HIV. In one of the more notable studies conducted in Thailand between 2003 and 2009, researchers combined two different vaccine approaches to see if they can produce neutralizing antibodies, which are antibodies that could be strong enough to block HIV from infecting the cells. The problem is, is that all prior HIV vaccine regimens have not been able to produce these neutralizing antibodies. If we can get vaccine antigens designed in such a way that then we can teach the immune system to produce these neutralizing antibodies. And that's where the mRNA technology comes in, is because we suspect that this will be a very iterative process, meaning that we'll have to try something and go back and change it.
Or you may start with one antigen and then you tweak it slightly and then you tweak it slightly again. With serial vaccinations over time to produce those really holy grail neutralizing antibodies. The fact that, on its face, the vaccine models for HIV were failures, disguises the fact that they were great successes in developing the tools and the know how and the understanding in order to move forward with a number of other vaccines that were successfully developed. The partnerships between the government and private companies are significant for other reasons. It can leave in limbo who controls various patents of a vaccine, and that means who makes the money off of sales. We can see this issue playing out now
between Moderna and the NIH regarding a key patent over Moderna's COVID 19 vaccine. Moderna and the NIH are currently locked in a patent fight over credit in developing the antigen for the vaccine. The NIH says several of its scientists deserve to be listed as co-inventors of the genetic sequence, while Moderna maintains its scientists are solely responsible for its creation. I think part of what the NIH is thinking here is that it wants its scientists to get credit for creating this medical breakthrough. It doesn't want this vaccine to be known as the Moderna vaccine.
It wants it to be known as the NIH Moderna vaccine. Which is indeed, by the way, how NIH referred to the vaccine in early press releases, if you go back to last year. Part of I think the NIH's claim here is about credit, but an equally, maybe more important part, is about control. Moderna projects that its COVID vaccine could draw up to $18 billion in sales in 2021 and up to an estimated $22 billion in sales in 2022.
As of November 2021, the case between Moderna and the government is ongoing. If the government is included on this patent, it could have a say in how the vaccine is licensed. Given the staggering cost of drugs and health care more broadly in the United States, and given how successful the United States government has been in partnering with industry .
I think the U.S. government has enormous expertise and more leverage, more power, than it realizes. Than we realize.
We need a concerted public-private partnership that really is dedicated to HIV vaccines. And we need the citizens of the world, as well as the scientific community and the commercial technology community to work on this. And they need to be compensated for their time and efforts. I think what's remarkably frustrating is that agreements were made with tens of billions of U.S.
taxpayer dollars to fund the development, to fund the clinical trials, to get it authorized and not ensure that there would be allowance for pooled patents to share those patents to share that technology. I don't think it means that we are needing to deny companies access to resources from the federal government to partner. I certainly don't think it means we don't want companies involved. It can't mean that because then we won't have any innovation. And it can't mean that companies can't make money. But we have to think about what is fair and what is right and what is just and what gets us global health impact.
Funding has implications beyond money. Licensing rights can change who ultimately gets access to a vaccine. Vaccines for COVID are covered under numerous patents. In fact, it would be better to describe that as a web of patents, since one patent per a company licenses patents from another, which in turn then develops its own patents.
And some of these patents are held by the U.S. government, for example. Others are held by private academic institutions.
And there may be a trend in the future to release the constraints on this intellectual property so that vaccines against COVID will be able to be produced in other countries that may have the manufacturing facilities and the know how, but really are barred from doing it. Despite the tremendous investment into the COVID vaccines development, the distribution has not been equal across different countries, with only about 1% of people in low income countries receiving at least one dose. I think we've learned something really important that not only do you have to do great science, but you have to plan for success, much more robustly and much more equitably, before you even get the clinical trial results. I would hope that the lesson we have learned,
when you're debating an emergency use authorization or an actual approval from a regulatory agency, you need to have a global manufacturing plan in advance. And to their credit, we have vaccines that got authorized very quickly and those of us in America got access to it. But clearly, there was not the vision and the foresight to think about global manufacturing. I would hate to see the inequities that we now see with access to COVID vaccines, or the inequities that we've seen over the last decades in access to HIV treatment medications and HIV prevention medications. Repeat themselves with an HIV vaccine, and that's something I'm really concerned about. It's obviously a pressing human health need. It has been for decades.
It's been really frustrating. But at the same time, I think there's huge promise in mRNA and other new platforms, viral vector vaccines too. So I'm cautiously optimistic that we will see a working HIV vaccine, let's say in the next decade. Covid vaccines have changed the course of the pandemic.
They prevented over 1 million deaths in the U.S. and over 10.3 million hospitalizations in 2021. But what's equally impressive was the speed and efficiency in which they were created.
I have never seen the level of attempts at collaboration, like wanting to try and figure this out between the public-private partnership form in my 20 year career. However, the groundbreaking collaboration might be giving way to another looming battle on the horizon: a battle over who truly owns the COVID vaccine. We're following a developing story. Moderna, the drug maker, locked in a fight with the NIH over its COVID vaccine. These two entities have essentially been partners on the COVID vaccine, but now they are in a battle over one of the key patents behind it.
Patents had historically been viewed as important, in part because they assure the company that if they are successful in getting the drug to market, that they stand to have essentially a monopoly on the rights to sell that drug for a certain period of time, typically, say, around 20 years. Whenever there is a blockbuster drug, there are disputes about who owns it, who owns variations of it, who owns it for how long, and in what context. We are likely to see these battles playing out in the U.S. courts and in international courts for a long time to come.
Controversy over COVID vaccine patents has grabbed the attention of the world and the likes of President Biden and Bill Gates, and its outcome could have ramifications on how the world ends the pandemic. Like any other invention, vaccines are often covered by patents that provide legal protection against imitation. That's because investing in pharmaceutical research can be an expensive and risky gamble. On average, developing a new drug can range from less than $1 billion to more than $2 billion per drug. Yet just under 14% of all drugs in clinical trials eventually win approval from the FDA to make their way to the market.
There are tons and tons of research and development or patents or papers or initiatives that get spun up that never really go anywhere, that don't really see the light of day. I did a general search, Google patents, anybody can do this, look at vaccines for COVID, right? I found one that's known. I just literally said how many other patents are sort of kind of like that. The number that got spit out on Google patents was 134,000 patents. You would never know, never seen them, never heard about them, that all were somehow related to research in the area that led ultimately to that patent.
That's all market. A successful patent, however, can often result in a big payoff. Not only does it give the inventor the sole right to produce and sell their products, but it also allows them to earn royalties whenever their patent is used to create a product. Patents have historically been presented as a way to reward a company that has developed and brought a drug to the market and to compensate it for all of the costs that were incurred in getting it to the market.
They stand to have essentially a monopoly on the rights to sell that drug for a certain period of time, typically, say, around 20 years. Lawsuits over valuable pharmaceutical patents have been common throughout history. A fair percentage of the litigation that happens in the United States relates to pharmaceutical patents. Our legal system spends a lot of time trying to figure out who owns what and what are the boundaries of those rights. Pharmaceutical patents, if they lead
particularly to blockbuster medicines, have a lot of money at stake. So that means there are a lot of resources to hire lawyers to try to argue over who owns what. In November 2021, a similar conflict broke out over the COVID 19 vaccine, putting Moderna at odds with the U.S. government.
Moderna collaborated with the researchers at the National Institute of Health, a federal agency, to develop their vaccine, spikevax. When Moderna excluded the NIH researchers as co-inventors in a central patent covering the mRNA sequence, NIH publicly challenged the patent, arguing that three of its scientists made meaningful contributions to its research. When you have large industry, you have government, and you're trying to blend commercial interests with governmental do-good interest, there's always going to be some kind of natural tension, and that's to be expected. They are arguing over methods of stabilizing the spike protein within the vaccine. So it's critically important to the Moderna vaccine. Who actually owns that? If the government is listed on the patent, then it has remarkable control over what the parties can do with it.
While Moderna eventually backed down in their fight against the NIH, the dispute could foreshadow more to come. Another dispute can potentially rise over NIH's patent for the spike protein that allows the vaccine to induce a stronger immune response. While companies like Pfizer paid money to obtain a license from NIH, Moderna did not.
Moderna could also be facing another patent infringement lawsuit by Arbutus BioPharma Corp., a company with a similar patent on its delivery system. Multiple reports surrounding Moderna's patent complications haven't helped with the company's dwindling performance in the market. In October 2020, Pfizer was also sued by Allele Biotechnology and Pharmaceuticals for allegedly using their proteins in their vaccine testing that infringe on their existing patent. I do anticipate going forward that we're going to see more lawsuits and disputes arise over COVID 19 vaccine patents. I think at some level it's pretty much unavoidable.
We are likely to see these battles playing out in the U.S. courts and in international courts for a long time to come. The COVID vaccine patents can also pose other threats beyond legal conflict. Patents within the U.S.
also extend throughout the world, thanks to an international agreement known as TRIPS. Some experts argue this is why vaccines are less accessible in lower income countries. The existence of patents, and specifically intellectual property protections, does two things. One is, it limits how much manufacturing there
can be of that product or that vaccine. And the other thing that it does is it keeps the price of that product and the vaccine artificially high, or keeps it high enough that it limits the ability of other countries in the world, particularly low middle income countries, to be able to purchase those vaccines. In response, calls to waive the patents on COVID vaccines have continuously gained traction throughout the world. Some of the recent ideas that have been floated include things known as patent waivers, which is basically saying, okay, you may have a patent, but we're going to administratively say that patent no longer gives you protection on the market. You have to give
your recipe away to everybody in an effort to get more vaccines out there, to help get us as a global economy back on fair footing. In October 2020, India and South Africa first brought the matter to the spotlight after formally proposing the WTO to waive intellectual property rules over the COVID vaccines. While patents might have a place in the normal world, the hope is that the pandemic could force countries to consider an exception. Until we have full vaccination around the world, we're going to continue to see new variants arise. And every time there's a new variant, we're
going to realize very quickly that it's not possible to contain that variant in just one part of the world. The world can't wait. It certainly can't wait 20 years for the patent to end, but it can't even wait for the period of time necessary to get through the existing waiver processes. There is also the question of ethics.
The U.S. government played a major role in funding the vaccine. Research from 2021 discovered that most of the technology used for the COVID vaccine was mostly funded by the public sector. So is it ethical for drug companies to make a profit off of their patents? The reason that public investment happens is that we're trying to protect the public from new diseases, protect and improve the health of the public.
And so I do think there are some major concerns with specific companies making large amounts of profits from drugs that were developed in part with federal government support. And moreover, when the health of the public is also suffering at the same time. But not everyone is in support of a patent waiver.
Critics argue that such an unprecedented move will only have dire consequences in the long run. If we take that slippery slope of patents are devalued because legally they're not protected any more. At a global level, we're going to be disincentivizing innovation at a massive, massive level. There is also conflicting opinion on whether a waiver can actually improve global vaccine distribution.
Bill Gates also originally spoke out against the patent waiver, arguing that there are problems beyond patents that stay in the way of global vaccination, although he later reversed his position. If you don't have the actual health care infrastructure that can deliver those, you don't have the logistics and transportation components that are there. Having a billion vaccines sitting in a warehouse of a lab that's developing it will do no good for siting getting us back to normal. While the debate remains a hot topic among scholars throughout the world, many expressed doubts on whether a patent waiver can actually come to fruition. The likelihood that at a global level, because it's not a U.S. decision, it's a global World Intellectual
Property Organization decision, to be clear, that we will get to a point where we're going to say, Yeah, we're going to use the TRIPS waiver in this case. I doubt it very seriously. I think that the best hope of it was last year when there was a proposal that was put forward at the WTO and the Biden administration had supported it. But we had European countries that objected to those patent waivers. No matter the outcome, the current debate over intellectual property will have a lasting impact on global public health.
This is not the last pandemic and it's not the last epidemic. We are going to face these questions of how we encourage innovation, how we make sure it spreads through the world in an accessible manner, these are issues that will plague us long after COVID 19. Hopefully, God willing, has been solved and we've learned to live with it.
2022-09-03