2020 SATLA ESSAY PRIZE

Necessity is the mother of innovation. Discuss one or more ways in which the law should change with respect to contemporary issues in crisis management, the government’s use of technology, or the way that lawyers rely on technology to provide services.

The 2020 SATLA Essay Prize offered current JD students at the University of Melbourne a new and interesting way to engage with SATLA and with a topic of particular academic interest related to science, technology and law.

The winning essay, written by second year JD student Sophie Michell, is a timely response to COVID-19 examining the rational utilisation of pharmaceuticals during a public health crisis.

Rational Utilisation of Pharmaceuticals During a Public Health Crisis: The Urgent Need for Global Stewardship 

An emerging contemporary issue in crisis management involves the best approach to the utilisation of finite medical resources, including pharmaceuticals. Coronavirus disease 2019 (COVID-19) is an unprecedented and rapidly evolving pandemic with more than 7 million recorded cases and over 400,000 known deaths globally (as of 12 June 2020)[1]. Approximately 15% of patients infected with COVID-19 have severe illness and 5% have critical illness[2] and while the overall mortality rate is estimated to lie between 0.25% to 3%[3], it is known to be much higher in vulnerable populations including the elderly and those with multiple comorbidities[4]. Furthermore, the true fatality rate in many developing countries may never be known given that widespread testing has been unavailable[5].

There are currently no proven specific therapies for COVID-19 and the mainstay of treatment is supportive care[6]. Though research is underway to develop an effective vaccine, it is a lengthy and expensive process and current conservative estimates suggest that a vaccine might be available within the next 12 to 18 months[7]. In the meantime, health professionals can only offer best supportive care where these efforts are subject to significant challenges, especially for those working in overwhelmed systems[8]. In this respect, some health professionals have had to make rationing decisions with regards to the most appropriate use of scarce medical resources, including personal protective equipment and ventilators[9]. In addition, as the number of patients requiring mechanical ventilation surges, some healthcare systems are reporting parallel shortages of the first-line critical medicines required to ventilate patients[10].

Given these challenges, clinicians are increasingly exploring the novel use or repurposing of pharmaceuticals with in vitro antiviral or anti-inflammatory activity[11]. Investigators hypothesise that drugs which can prevent or reduce the duration or severity of this illness might be ‘ventilator sparing’[12]. Following media reports of the purported efficacy of one particular pharmaceutical[13], supply shortages were reported and continue to impact upon availability for clinical trial use and ordinary use amongst patients who rely on this drug for its approved indication[14]. Of grave concern, some individuals have sought to capitalise on these shortages by funding the acquisition of large quantities of doses and publicising their efforts in major Australian media outlets[15]. While authorities in Australia have introduced new regulations to reduce inappropriate prescribing and stock piling[16], disrupted global supply chains continue to impact upon drug availability[17]. Indeed, drug shortages are a growing global issue[18].

It is clear that drugs constitute a vital resource for health professionals to utilise for many aspects of care related to COVID-19. Furthermore, pandemic conditions mean that, for some time to come, demand for this vital medical resource will outweigh capacity to supply[19]. In these circumstances, governments and regulatory bodies must do all they can to ensure that pharmaceuticals are rationally utilised. This requires a united and coordinated global effort. Major disparities in medical resource allocation will contribute to poorer outcomes in some healthcare systems, and might just defeat efforts to contain this global health crisis. However, to date, pharmaceuticals have been treated just like any other highly commercialised good.  

This article seeks to consider the just and rational utilisation of pharmaceuticals during our current global health crisis. The legal framework that governs access to pharmaceuticals will be briefly described and some of the pitfalls associated with that system identified. In this respect, the author will argue that the current legal framework limits the effective response that can be mounted by health authorities to this public health crisis. Familiar and radical solutions that address the issue of improving access to pharmaceuticals will be examined. Ultimately, the author will argue that the time has come for the international community to reconceptualise the rights related to this vital medical resource.  

The legal framework that governs access to pharmaceuticals

Pharmaceutical innovation is protected by the patent system. A patent confers exclusive commercial rights to a newly developed pharmaceutical whereby the innovator is protected for a significant length of time from external market competition[20]. While the patent system is often cited as necessary to encourage innovation and protect businesses[21], it has also been observed that the generation of ‘monopolies generally lead to high prices that, in many cases, restrict access’[22]. Once a patent expires and the period of market exclusivity comes to an end, generic versions of the pharmaceutical can be produced, often leading to significant price reductions. Of course, innovators are not obliged to seek patent protection. In 1955, Jonas Salk famously announced that his newly developed polio vaccine was ‘owned’ by the people[23]. It should be noted that some drugs currently under investigation as treatment adjuncts for COVID-19 are protected by patents[24] and further, many companies leading the development race for a COVID-19 vaccine are yet to publicly commit to universal open access[25].

Patents are not international: each country enforces to varying degrees their own patent laws[26]. In order to harmonise domestic approaches to intellectual property, in 1994 the World Trade Organisation established a broad treaty to provide international governance on these rights: namely, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)[27]. The Agreement requires all Member States to incorporate into their legislation universal minimum standards for rights related to patents and has ‘considerably limited the freedom previously enjoyed by countries to develop and apply their own intellectual property systems’[28].  Prior to the TRIPS agreement many low and middle-income countries did not confer patent protection to pharmaceuticals and some countries with a manufacturing industry (including Brazil and India) were able to produce drugs covered by patents in other countries and sell them at a much lower cost[29].

While TRIPS ‘effectively closed the loophole that some countries had exploited to manufacture generic drugs’[30], it also significantly curtailed the ability of these countries to respond to major public health crises. Concerns that some aspects of this treaty were being narrowly interpreted by Member States[31] led to the adoption of the Doha Declaration on the TRIPS Agreement and Public Health in 2001 (Doha Declaration)[32]. The declaration affirmed that the ‘TRIPS Agreement should be interpreted and applied in a way that supports the right of WTO Member States to protect public health and, in particular, promote access to medicines for all’[33]. Further, the declaration recognised the ‘gravity of public health problems’ including those resulting from HIV/AIDS, malaria and other epidemics and sought to enhance the mechanisms contained in the TRIPS Agreement that provided for patent flexibility in times of national emergencies and circumstances of extreme urgency[34]. In this respect, Article 31 of the TRIPS Agreement provides that governments or authorised third parties may utilise the subject matter of a patent without the authorisation of the rights holder in accordance with strict conditions, including; that the predominant purpose should be to satisfy the domestic market[35] and that the rights holder be paid adequate remuneration[36]. Following the Doha Declaration, it is now also possible for countries with insufficient manufacturing capacities in the pharmaceutical sector to issue compulsory export licenses. The new Article 31bis of the TRIPS Agreement ‘allows low cost generic medicines to be produced and exported under a compulsory license exclusively for the purpose of serving the needs of countries that cannot manufacture those products themselves’[37]. Though TRIPS flexibilities should facilitate timely access to life saving medications, there is evidence that some WTO Member States have exerted significant political pressure, including threatened trade sanctions, upon countries that have attempted to circumvent patents[38]. Furthermore, some countries now seek to include ‘TRIPS-Plus Free Trade Agreements [that] undercut the flexibilities available under TRIPS’ into international trade deals[39].

The rights and obligations contained in the TRIPS Agreement have largely been implemented into Australian domestic legislation through amendments to the Patents Act 1990 (Cth) (Patents Act). There are two mechanisms for suspending patent rights in Australia. The Patents Act allows Commonwealth and State governments, in certain circumstances, to exploit patented inventions for Crown purposes without the authorisation of the patent holder (Crown use provisions)[40]. The Patents Act also provides a legal framework for compulsory licensing in response to public health emergencies in Australia[41]. These provisions provide the Federal Court with the power in certain exceptional circumstances to order a patent rights holder to grant a compulsory license to a third party[42]. Two sets of circumstances may justify the grant of a compulsory license; anti-competitive conduct[43] and where the exercise of exclusive rights is contrary to the public interest[44]. In respect of the latter circumstance, a series of provisions[45] must be satisfied before an order will be made. These provisions protect the original rights of the patent holder and make a compulsory license an act of last resort.

Patent flexibilities have rarely been invoked by Australian governments[46]. As a wealthy nation, our health system is comparatively robust and well-resourced and there has never been a pressing need to circumvent established systems for procuring essential medical resources. In fact, during negotiations related to the Doha Declaration, Australia supported conservative amendments to TRIPS[47]. Such actions quite possibly sought to protect the pharmaceutical industry within Australia (and other industrialised nations) from the perceived economic threats of patent flexibilities. Moreover, when TRIPS flexibilities were implemented into Australian domestic law, it was plainly assumed that Australia would only ever be in a position to help ‘developing countries experiencing a health crisis … buy vital medicines from Australia at a more affordable price’[48]. However, in these unprecedented times, Australia is just as vulnerable as any other nation to drug shortages.

Pitfalls associated with the current legal framework

The present public health crisis calls for serious reconsideration of the forces that ultimately determine the allocation of essential medical resources. Major pitfalls associated with the current legal framework include prefacing private interests above those related to public health and confining the response of governments and regulatory bodies to nationalist measures. Even in circumstances where the framework should yield to public health needs, the mechanisms for patent flexibility are highly susceptible to manipulation[49]. The public health response to this pandemic must be led by health experts and they must be empowered to take full advantage of all available medical resources, especially pharmaceuticals. However, under the current framework, it is entirely possible for billionaires to exploit the current crisis for political gain through the mass purchasing of drugs[50], diverting supply away from those most in need.

The current framework prefaces private interests 

Underpinning the current legal framework is the notion that pharmaceuticals are ultimately owned by the innovator and can be treated like any other highly commercialised good. This notion is becoming increasingly strained as governments and regulatory bodies from all nations seek to mount effective public health responses to COVID-19. While private industry has sought to improve public relations with charitable acts[51] there have been no firm (nor legally binding) commitments to ensuring that pharmaceuticals will be equitably distributed and prioritised to those health systems most in need. In this respect, not one pharmaceutical company has adopted the voluntary ‘Open COVID pledge’ calling for owners of intellectual property to make critical resources freely available[52].

It must be borne in mind that the private sector is not accountable for the public health response to a global pandemic. As a matter of self-interest, this sector might seek to expeditiously respond to surges in demand and contribute to research and development related to the race to find effective treatments. But ultimately, their efforts are motivated by the likelihood of significant profits: an effective COVID-19 treatment or vaccine could be a ‘blockbuster’[53]. That this is so can be seen by recent statements, later retracted, that if one particular pharmaceutical company was successful in identifying an effective vaccine, supply to the US would be prefaced[54]. Indeed, during the H1N1 (Swine Flu) pandemic in 2009, vaccine distribution occurred according to the relative wealth status, rather than public health need, of various nations[55]. Left unchecked, a legal framework that prefaces corporate interests will lead to major inequalities between various health systems and could defeat efforts to combat this global health crisis.

The current framework confines the range of responses available to governments and regulatory bodies

By vesting the rights to pharmaceuticals in private industry, access to drugs must be bargained for like any other good the subject of a commercial transaction or trade deal. The transactional nature of securing access to pharmaceuticals means that authorities responsible for procurement are narrowly focused on the national interest. Countries are necessarily in competition.

Securing access to vital medical resources is one of the highest priorities for any government responding to COVID-19. Most countries, including Australia, have sought to stock pile pharmaceuticals[56] and some have implemented measures to restrict exports[57]. These actions have certainly arisen out of a fear that health systems might face critical shortages, especially if they become overwhelmed. While counties might have been able to maintain to some degree a sufficient supply of essential medicines through their established commercial relationships, there is growing concern that these systems are failing to meet demand. In this respect, if many nations simultaneously face critical shortages, it is possible to imagine that contract negotiations might break down into frantic scrambles to secure essential goods[58]. In addition, for many medicines ‘there are only a few sites worldwide, mainly in India and China, that manufacture pharmaceutically active ingredients’[59]. Countries which have shifted most of their manufacturing sector overseas are now particularly vulnerable to shortages. A recent report concluded that Australia ‘imports over 90% of medicines and is at the end of a very long global supply chain making the nation vulnerable to supply chain disruptions’[60]. In light of strained international relationships, it is entirely possible that countries with limited sovereign capacity to manufacture might have to trade off the need to secure access to essential medicines with other interests. 

Given the scale of the current health crisis, with demand for resources making them increasingly finite, it is not surprising that many governments have sought to exploit existing mechanisms for drug procurement. However, contract negotiations and trade deals are an inappropriate medium for determining the ultimate allocation of vital medical resources. Distribution will occur according to the relative strengths of the parties to any agreement and are likely to fall into the hands of those with the stronger financial and political will. That access to essential medical resources must be secured through these transactions, where the health interests of one country must compete with that of another, surely misses the point that maximally effective responses to this global health crisis must involve universal measures, not regional ones. The current framework is contributing to a medical resource ‘governance crisis’ as free market competition ultimately favours distribution to ‘geopolitically powerful countries [that can] mobilise economic, political and strategic power to procure stocks for their [own] population’[61].

Possible solutions

Broadly, there are two possible solutions which could be employed to restore rational utilisation of pharmaceuticals. A familiar solution involves countries circumventing patent rights by issuing compulsory licenses. A radical solution calls for a reconceptualisation of rights related to pharmaceuticals by the international community. Countries could come together in the ‘spirit of solidarity’[62] and seek to collectively respond to this crisis by contributing to a global pool of resources[63]. These familiar and radical solutions could go some way (or all the way) towards restoring rational utilisation and responsible stewardship of this vital medical resource.

Familiar solutions: using TRIPS flexibilities to circumvent patents

The most notable example of a government circumventing patent rights occurred in South Africa during the height of the HIV/AIDs epidemic. Indeed, this particular clash between the (largely US based) pharmaceutical industry and the South African Government is attributed as being the catalyst for the Doha Declaration[64]. In 1997 the South African legislature passed an Act[65] which formally invoked TRIPS flexibilities and aimed to ‘make affordable medication available to protect public health’[66] by providing for compulsory licensing and parallel importation of patented antiretrovirals[67]. Despite significant political pressure to reverse the Act, including the threat of trade sanctions (which were largely motivated by private interests),[68] the South African government persevered and ultimately secured access to life saving medications for millions of people affected by HIV/AIDS. Legal action was also instituted by the pharmaceutical industry against the South African government, though later abandoned, which argued that the Act violated their ‘proprietary rights’ as guaranteed in the South African Constitution[69]. These actions were later described as a ‘major embarrassment for the pharmaceutical industry’[70].

During the same period, Brazil also challenged major pharmaceutical manufacturers with the threat of compulsory licenses to negotiate lower prices for patented antiretrovials[71]. The actions taken by South Africa and Brazil to facilitate access to essential medicines marked a turning point in the approach taken by other countries subject to similar public health burdens. TRIPS flexibilities have been employed to ‘significantly increase access to medicines in India, Colombia and many other nations that have produced or procured generic HIV/AIDS medications’[72]. However, in recent years, these mechanisms have been weakened by the emergence of TRIPS Plus Free Trade Agreements[73]. In this regard, some bilateral agreements involving developing countries now include prohibitions on parallel importing, highly restrictive conditions for issuing compulsory licenses and patent term extensions[74]. Furthermore, some industrialised nations seek to aggressively enforce the TRIPS framework by placing ‘non-complying’ Members States on ‘watch lists’ that can be used to justify trade sanctions[75]. Though TRIPS flexibilities should restore the balance between public health and the property rights of innovators, the mechanism is highly dependent on the relative political will of governments to prioritise public health above other national interests.

Compulsory licenses have been issued as part of the response by some countries to the current crisis. In March 2020, Israel issued a compulsory licence in relation to a medication currently under investigation for effectiveness as a treatment adjunct for COVID-19. While the patent is owned by a US pharmaceutical company, the license would allow Israel to import a generic version from an Indian manufacturer[76]. Following this development, the US company announced that it would stop enforcing this particular patent[77]. To date, countries including Chile, Ecuador, Israel, Canada and Germany have initiated the adoption of national measures allowing the use of compulsory licensing to facilitate access to health resources[78]. Australia is yet to adopt such measures[79].

Though compulsory licenses might go some way towards relieving immediate shortages, it is unlikely to provide the much-needed long-term solution. TRIPS flexibilities were never anticipated to be universally invoked in response to a global pandemic. They were designed to strike a reasonable balance between the needs of developing countries to access essential medicines and the property rights of innovators. Overall, it is arguable that TRIPS flexibilities have meaningfully addressed the public health needs of low and middle-income countries: timely and affordable access to pharmaceuticals is still a major issue for countries afflicted by major epidemics[80]. It would seem rather short sighted to expect this mechanism to rise to the present occasion. Furthermore, in these politically turbulent times, countries with the capacity to manufacture generic drugs, primarily India and China, may be reluctant to engage with TRIPS flexibilities: it could be a source of significant inter-State antagonism[81] and might disturb already fraught trade relationships.

More fundamentally, compulsory licensing constitutes yet another nationalist measure that would fail to meaningfully address the current global health crisis. The increased interconnectedness and interdependence of peoples and countries that has resulted from globalisation means that measures to combat this global crisis are only as effective as the least advantaged nations: ‘unaddressed outbreaks in one part of the world put people throughout the world at risk’[82]. Health experts realise that a global approach is needed[83] and yet, by allowing essential medical resources to be treated as ‘property’ rather than as a common good, the current legal framework significantly curtails the effectiveness of any public health response. Ultimately, the current framework enables pharmaceuticals to be treated like any other highly commercialised good and though mechanisms for prioritising public health exist, distribution inevitably occurs along the usual fault lines of wealth and power. In these extraordinary times, it seems that the only sensible way forward involves a global approach that will ‘ensure that all technologies will be simultaneously and promptly available in an equitable and efficient way that is affordable to all’[84]. 

Radical solutions: sharing resources in the spirit of solidarity   

Very recently the Presidents of Costa Rica and Chile and the World Health Organisation have called for the creation of a ‘technology platform that aims to lift access barriers to effective vaccines, medicines and other health products against COVID-19’[85]. The announcement builds upon the statement released by the Extraordinary G20 Leaders’ Summit that acknowledged the need for collective international efforts in the ‘spirit of solidarity’ to combat this global public health crisis. Further, the statement highlighted the urgent need for the expansion of manufacturing capacity ‘to meet the increasing needs for medical supplies and ensure [that] these are made widely available, at an affordable price, on an equitable basis, where they are most needed and as quickly as possible’[86]. Pooling the existing and future rights to medical technologies, including pharmaceuticals and a possible COVID-19 vaccine, could provide every country with free access or licensing on reasonable and affordable terms. In circumstances where pandemic conditions have rendered medical resources increasingly finite, the most sensible way forward is to vest rights to resources equally amongst the international community and coordinate use in a way that ensures rational utilisation. Indeed, given that this ‘virus respect no borders’[87] and further, that the ‘ultimate course and impact of COVID-19 are uncertain’[88] the best strategy for managing this pandemic must involve united and coordinated efforts by the international community.

Reports in March and April 2020 of healthcare systems in certain countries being overwhelmed should have prompted the international community to prioritise the needs of those regions over others less affected by the pandemic. But in the months during which those systems have been subject to this enormous pressure, other countries have increasingly pursued nationalist measures, including limiting exports of medical supplies[89]. In this respect, a global response that sought to fairly allocate scarce resources might have relieved the burden of intensivists working in overwhelmed systems to make individualised rationing decisions. In all likelihood, there are probably many national stockpiles of medicines that will sooner expire then be utilised[90]. Global governance of the ultimate allocation of pharmaceuticals would ensure that resources are maximally and efficiently utilised: they could be distributed to populations most in need in a timely and effective manner. While these resources are finite, and it is possible that many health systems might face concurrent shortages, it is only just that access is shared amongst nations for no human life is worth more than another. Furthermore, lessons regarding medical resource allocation must be quickly learnt as this crisis continues to evolve and is now threatening many low and middle-income countries. As Kavanagh and colleagues recently observed, ‘no single community, country or continent should bear the full brunt of global shortages. Although difficult decisions in resource allocation are inevitable, it is unethical for African countries to have considerably less access and harder choices than others’[91].

Rather than vest the rights to pharmaceuticals in the private sector and allow market forces to dictate their ultimate allocation, now is the time to reconsider who should ‘own’ these rights. The right to health is enshrined in numerous international instruments, including Article 12 of the International Covenant on Economic, Social and Cultural Rights[92]. Increasingly, this right has been expanded to include access to essential medicines[93]. For the first time in our modern history, in circumstances where all nations have been indiscriminately affected by a global health crisis, we might pause to reconsider that rights to essential therapeutics should be vested in the people, not the private sector. By reconceptualising medicines and vaccines as vital tools for public health, as opposed to highly commercialised goods, we might relieve some of the tensions currently limiting their just and rational allocation. Global stewardship by health experts could allow for broad deployment of these resources to ‘prevent infection, reduce transmission and build global heard immunity’[94] (authors word). Most importantly, distribution would occur according to public health need. 

Conclusion

This unprecedented global public health crisis has reminded us of the fragility of human life. It has also brought home to all nations the paramountcy of measures for good health, above all other interests. It is increasingly untenable to vest rights to essential medical resources in those not responsible for public health. The overall effectiveness of measures to combat this crisis rests on ensuring that vital medical resources, including pharmaceuticals, are distributed in a fair and equitable manner according to public health need. Ultimately, the principles of rational utilisation, rather than market forces, must drive the allocation of these resources. This requires a radical modification to the current framework that governs access to pharmaceuticals: the right to own must give way to the right to access. This is the humble aim of the recent calls for global resource sharing.

The law must empower health professionals to maximally respond to this crisis. While necessity might be the mother of innovation, it would be paradoxical to restrict access during our greatest hour of need. We should not allow the law to diminish the utility that can be derived from pharmaceutical innovation. Now is the time for the international community to reconceptualise medicines and vaccines as vital tools for public health and establish a new legal framework that seeks to ensure maximum benefit can be derived from them. And further, now that the gravity of a public health crisis has been brought home to industrialised nations – and not just the developing world – the injustice (the irrationality) of millions of people dying from lack of access to medicines for preventable and treatable diseases must surely be addressed. Essential medical resources must be widely available for the greater good of all humanity.

As the winner of the 2020 SATLA Essay Prize, Sophie has received a $1000 cash prize and a reserved spot at each of SATLA’s Semester Two 2020 events. SATLA congratulates Sophie for her astute and considered essay.