American Biotech Breaks Through on COVID-19
Biotech companies are racing to develop a coronavirus vaccine. Massachusetts-based Moderna, for instance, recently received FDA approval to begin Phase II clinical trials of its experimental COVID-19 vaccine. Pfizer, Novartis, and dozens of lesser-known innovators are close behind.
Unfortunately, some lawmakers could inadvertently make these companies' jobs much harder.
Several House lawmakers have recently pledged to preemptively strip patent protections from vaccine inventors. These lawmakers claim such measures will help patients by preventing "Big Pharma" from price-gouging.
Their concern for patients is admirable -- but their plan is misguided. The entire biomedical research ecosystem depends on intellectual property protections. Instead of helping patients, this effort would slow the development of treatments for the coronavirus and other deadly illnesses.
To see why patents are so essential to drug development, just look at Moderna's history.
In 2010, Boston Children's Hospital researcher Derrick Rossi filed to patent a method for generating stem cells with modified messenger RNA (mRNA). In principle, the foundational process could create any protein or antibody -- resulting in a vast array of powerful new therapies and vaccines.
The potential value of this novel idea, and the fact that Rossi had secured a patent -- thus blocking others from stealing his technique -- helped the brilliant researcher attract much-needed investment from Flagship Ventures (now Flagship Pioneering), a life-sciences venture firm which worked with Rossi and several partners to launch Moderna.
From there, a team of scientists and entrepreneurs experimented with Rossi's basic research hoping to produce a viable medical technology. Along the way, they patented their breakthroughs to safeguard their clinical research data against rival firms. As with most biotech ventures, this process was expensive and time-consuming.
Despite this risk, investors backed the firm. In 2013, Moderna received an upfront investment of $240 million from pharmaceutical giant AstraZeneca. To date, the company has raised $3.2 billion, but has yet to produce a marketed drug. That funding helped lay the groundwork for a robust biopharmaceutical pipeline of 21 drug candidates -- 13 of which are in clinical studies.
Now, the same proprietary mRNA is driving Moderna's speedy response to COVID-19. It enabled the development of a COVID-19 vaccine candidate just 42 days after genetic sequencing.
Moderna's story is one of thousands that exemplifies how academic research, private investment, and intellectual property laws all work together to drive innovation. This intricate ecosystem has made our country the world's leader in biopharmaceutical discovery, producing nearly two-thirds of new medicines.
That experimentation is not cheap. It takes over $2 billion, on average, to create a single successful drug -- largely because the majority of compounds don't survive clinical trials.
Absent strong market incentives and intellectual property protections, investors and companies wouldn't be able to recoup risky investments.
Investment funding would dry up -- and as a result, scientists would develop fewer new medicines.
That's why it's so troubling that some policymakers are pushing measures that would upend the life-sciences ecosystem. The House passed a sweeping drug package that would allow the government to cap the prices of many medicines. The Trump administration has considered a similar policy.
Other reforms would allow the government to dictate the prices of medicines tied in any small part to government-funded research.
Policies like these would make the already precarious process of drug development impossible. If the government reserves the right to dictate drug prices and take patents, the next Moderna would never get off the ground.
John Stanford is the executive director of Incubate, a coalition of life science venture capitalists based in Washington, D.C.