From The Editor | May 24, 2021

What Happens When IP is Redistributed? CDMOs Without Borders


By Louis Garguilo, Chief Editor, Outsourced Pharma


We’ve been talking to pharmaceutical-industry patent-lawyer Troy Groetken of McAndrews, Held & Malloy, Ltd., about the idea of “waiving” patents on COVID-19 vaccines, and legalizing third parties to manufacture and distribute.

While little of how this would work is clear, like Outsourced Pharma readers, Groetken does know (a) CDMOs and other suppliers would be called on to do a lion’s share of this theoretical non-IP-protected production, and (b) our entire biopharma-innovator engine would be negatively impacted.

CDMOs Won’t Go For It

Imagine a world where:

  • Lonza is asked to manufacture Pfizer/BioNTech’s vaccine for a third party, when the originators have been forced to forfeit rights to its intellectual property by an international body (e.g., the WTO empowered by the U.S. president).
  • A vaccine manufacturer (of some kind) in India or South Africa starting up operations to run the Pfizer/BioNTech vaccine, with “no knowhow and no show-how” for the production of the material, as Groetken phrases it.
    • That facility is in China, and the irony would drip from the HVACS.

This is all unwell for industry relationships; unsafe for patients.

But if we have to conjure up this biopharma dystopia – and Groetken assured us earlier every biopharma innovator he knows has to take this directional indication from the Biden administration seriously:

How would a CDMO operate for a third party with “waived” IP?

“First of all, it simply doesn't work,” says Groetken.

“I represent biopharma companies – including some vaccine originators – and as your readers already know, the technology is significant, the personnel experienced, and process knowledge essential.”

My question to Groetken, and all my readers:

Would there be some form of forced tech transfer? Where would the coercion end?

Groetken chooses to answer this way:

“What we need is to be supportive of our current manufacturers, who amongst themselves are already working with and establishing their chosen [trusted] suppliers – those they know who have and can add scalability and capacity without sacrificing quality.  

“Through the incredible capabilities of all the innovators with approved vaccines, and those on the way in clinical development, we've been able to create a situation of safe acceleration.

“Not only in manufacturing, but also to truncate in essence those clinical trials, and yet maintain and demonstrate the safety, efficacy and other elements of these vaccines. In the normal course of business, vaccines take years to pass through the FDA and other regulatory processes, get to the market, and gain a full understanding for setting quality, processing and other controls.”

“How are you going to do that with a manufacturer who comes on the scene – even with some background – unfamiliar with the technology, and no knowhow or show-how? You're going to just start producing vaccines? What of the regulatory process we just mentioned?”

 I’ll jump back in here with a supposition I believe the most essential component in this discussion; hopefully, we never need to find out if it is accurate, because saner strategies prevail in the end:

No respectable contract development or manufacturing organization would agree to utilize intellectual property “waived” by the WTO or other body from a reputable innovator.

The outsourcing industry undergirding the success of our biopharma companies these past decades – and during this current pandemic – has been built on trust.

Always, key questions of any CDMO partner search are:

  • Can we trust them with our IP?
  • What are the chances of a full-but-streamlined, and successful tech transfer?
  • Are their quality and other systems robust?
  • What happens when problems in production occur?
  • Can we effectively communicate?
  • Do our cultures match up? (Will we be part of the same team?)

And I believe knowledgeable CDMOs will be unwilling to participate in this IP scheme for an even more fundamental reason:

The waiving of IP is not a solution; it will not alleviate suffering or save lives against the coronavirus.

There is, though, a solution that will continue to work.

Support The Innovators

The more support – logistical, distribution-wise, and regulatory for starters – for those successful vaccine makers and those on the cusp with new therapies, the better we will fair against COVID-19.

Says Groetken, our biopharma IP specialist:

“After so much continuing success, why would we want to now allow other manufacturers, who will not have that capability to simply take the intellectual property, to attempt to make vaccines?

“I believe within a short period of time, on a global scale, we will achieve our goals.

“Is this opinion based on representing companies in the industry?

“No, my response is based upon the realities of the situation, the technologies involved, and the skill sets necessary to produce these types of vaccines.

“What is the incentivization for a vaccine manufacturer to say, ‘I want to keep making these vaccines,’ when somebody else decides, ‘By the way, we'll just go ahead and waive your IP rights’ That makes no sense.”

In response to that, I tell Groetken I hear echoes of President Biden:

Come on, man. Waiving IP from Pfizer and the other vaccine makers isn’t going to hurt those innovators. We are saving mankind.

“I find that very specious,” concludes Groetken, and concurs this editor, and from what I’ve heard, most Outsourced Pharma readers, and our industry.