Why Moderna Won’t Share COVID-19 Vaccine Patent Rights With the U.S. Government, Which Paid for Its Development

A quiet months-long legal battle between the US National Institutes of Health and drugmaker Moderna over COVID-19 vaccine patents recently erupted into public. The outcome of the battle has important implications not only for efforts to contain the pandemic, but more broadly for drugs and vaccines that could be critical to future public health crises.

I teach drug regulation and patent law at Saint Louis University’s Center for Health Law Studies.

Moderna recently offered to share ownership of its main patent with the government to resolve the dispute. Whether or not this is enough to satisfy the government’s claims, I think the dispute points to serious problems in the way US companies market drugs and vaccines.

US was a major funder of the Moderna vaccine

Vaccines have played a vital role in the response to the pandemic.

In December 2020, Moderna became the second pharmaceutical company after Pfizer to receive approval from the Food and Drug Administration to market a COVID-19 vaccine in the United States. Since then, people have become so accustomed to talking about the “Moderna vaccine” that a crucial element in the history of its development is in danger of being overshadowed: Moderna was not the only developer of the vaccine.

Unlike many of the other pharmaceutical companies involved in the COVID-19 vaccine race, Moderna is a newcomer to the commercialization of drugs and vaccines. Founded in Massachusetts in 2010, the company had never marketed a product until the FDA approved its COVID-19 vaccine last year.

Throughout the 2010s, Moderna focused on developing mRNA technology, raising more than US$2 billion in funding from pharmaceutical companies and other investors. In 2018 it went public.

Even before the pandemic, research on both coronaviruses and vaccine candidates against emerging pathogens was a priority for public health agencies. In 2015, the National Institute of Allergy and Infectious Diseases, an institution within the NIH, signed an R&D collaboration agreement with Moderna for basic research, including the development of new vaccines. The agreement resulted in an undisclosed amount of funding and research assistance.

In addition, after the COVID-19 outbreak began, Moderna received nearly $1 billion in funding from the Biomedical Advanced Research and Development Authority, which operates within the Department of Health and Human Services. This funding was specifically aimed at developing a vaccine candidate against COVID-19.

Researchers have calculated that the US government has collectively provided $2.5 billion for the development and commercialization of Moderna’s COVID-19 vaccine.

Scientists from the US and Moderna work side by side

In addition to providing financial support, the federal government played an important role in the development of Moderna’s vaccine for other reasons. Federal scientists collaborated with scientists from Moderna on several components of the vaccine.

These contributions include working on dosing mechanisms, and the NIH said federal scientists have created the stabilized spike proteins that are an important part of the vaccine made by Moderna.

The importance of the role of federal scientists in their work with Moderna would soon become apparent. A 2019 agreement with a third party explicitly acknowledged this, referring to mRNA vaccine candidates “developed and jointly owned by NIAID and Moderna.” And in late 2020, the US government dubbed it the “NIH-Moderna COVID-19 Vaccine.”

While the US government has spent money on COVID-19 vaccines made by other companies, it stands out for its close involvement in Moderna’s R&D phases.

How it became a patent dispute

As vaccine development progressed, Moderna filed for several patents, each covering different components of the vaccine. US law allows inventors to patent products or methods that are new, non-obvious, and useful. While some early modern vaccines — such as the polio vaccine developed by Jonas Salk’s team — were not covered by patents, from the late 20th century it became very common for one or more patents to cover a newly developed vaccine.

When applying for some patents related to its vaccine, Moderna named scientists from the National Institute of Allergy and Infectious Diseases as co-inventors alongside scientists from Moderna. This was the case, for example, with a May 2020 patent application for a relatively small part of the vaccine.

However, in July 2021, Moderna made it clear that it would not name government scientists as co-inventors in a patent application for a much more important component of the vaccine: the mRNA sequence used to produce the vaccine, known as mRNA-1273.

Moderna’s stance was that only Moderna scientists had chosen the series. The company informed the Patent and Trademark Office of its position in a 2020 statement.

In November 2021, government officials publicly challenged the company’s decision after months of failed negotiations with the company. Moderna then took to social media to defend her position, tweeting:

“Just because someone is an inventor on one patent application related to our COVID-19 vaccine does not mean that someone is an inventor on every patent application related to the vaccine.”

Our official statement on intellectual property. wire.

— Moderna (@moderna_tx) November 11, 2021

In contrast, the National Institutes of Health argued that three NIAID scientists — Kizzmekia Corbett, Barney Graham and John Mascola — had made meaningful contributions to the invention, though they declined to publicly specify how. If true, patent law says they should be called co-inventors.

But this dispute is not just about scientific principles or technical aspects of law. While patents are also considered proxies for measuring scientific reputation, their most direct and powerful effect is to give patent holders a significant amount of control over the technology covered — in this case, the key component of the vaccine made by Moderna.

From a practical standpoint, excluding federal scientists from the application means that only Moderna gets to decide how the vaccine will be used, whether to license it, and to whom. In contrast, if the government co-owns the vaccine, the federal patent law allows each of the joint owners to take various actions — from making and selling the vaccine to licensing it — without the consent of the other. owners.

This is especially relevant in cases of product scarcity or potential pricing issues associated with the commercialization of the vaccine. For example, the US would have the option to allow more manufacturers to produce vaccines using the mRNA-1273 technology. In addition, it could send vaccine doses wherever it wants, including to lower-income countries that have received few vaccines so far.

Wider implications

The ongoing battle between the government and a rising star in the pharmaceutical industry is yet another episode in a complicated relationship between actors with complementary yet different roles in drug and vaccine production.

On the one hand, the federal government has long played a crucial role in both the execution and the financing of fundamental research. On the other hand, it lacks the resources and capacity to market most types of new drugs and vaccines on its own.

Moderna explains its mRNA technology.

The pharmaceutical industry thus plays an important and necessary role in drug innovation, which I believe should be rewarded – although not limitless.

If the NIH is right about co-ownership of the vaccine, then Moderna is unlawfully using a legal tool to gain a position of market control — a reward it doesn’t deserve. This position of sole control becomes even more problematic in light of the significant amounts of public money that have funded the development of this vaccine. This offset some of Moderna’s financial risk, even as the company expects $15 billion to $18 billion in revenue from vaccine sales in 2021 alone, with much more expected in 2022.

But even if the NIH has the upper hand in the patent dispute, it’s important to understand the limitations of such a “victory.” For example, the US would be able to license the vaccine, and could do so by requiring licensees to agree to an equitable distribution of vaccine doses.

But co-ownership would not allow the government to solve any of the other problems currently affecting the production and distribution of COVID-19 vaccines, such as scaling production or building infrastructure. to deliver vaccine doses.

In my opinion, the dispute is a reminder of the many problems embedded in the way vaccines are made and delivered in the US. And it shows that when taxpayers fund basic research on a drug, they deserve more scrutiny — and rewards — when that drug succeeds.

Written by Ana Santos Rutschman, Assistant Professor of Law, Saint Louis University.

This article was first published in The Conversation.