From Bharat Biotech to Moderna and BioNTech, private drug firms have profited enormously from public research

The statement of the Union health minister in Parliament on August 2 should ordinarily have set at rest all the concerns and misgivings about ownership of a vaccine manufactured by a drug company in Hyderabad at the height of the Covid-19 pandemic, in collaboration with state-owned research organisations. However, four years after Bharat Biotech filed its first patent application for Covaxin, and twice revised critical information in the application on who invented the jab, questions still remain—a good example of the obfuscation and concealment that has characterised the functioning of both the company and the government.

While Bharat Biotech claims the omission of the National Institute Virology (NIV), which had isolated the virus strain and given it to the company for making the vaccine, was an inadvertent error, its subsequent actions only confirmed that it was determined not to share the honours. NIV, established 72 years ago is a major institute of the Indian Council of Medical Research (ICMR), with which Bharat Biotech had entered into an agreement to produce the vaccine. Thanks to the persistence of two journalists who uncovered the patent deception that the company was attempting, Bharat Biotech has been forced, obviously rather reluctantly, to acknowledge the role of three scientists at NIV who were key to developing the vaccine.

Yet, much remains unknown. The black hole is the issue of payment sharing. Although the minister said that the government had received Rs 172 crore as royalty under the terms of a Memorandum of Understanding (MoU) it has signed with the company, he has not given any details. The MoU remains confidential and the Narendra Modi government, as is its wont, has refused to make it public. In fact, the government has shown little interest in protecting its interests; ICMR has been markedly lackadaisical in following up on the question of patenting. That its scientists were coolly ignored in the patent claim does not seem to have upset the organisation. Meanwhile, Bharat Biotech has seen its revenues soar—to Rs 8,148.1 crore in FY2022 from Rs 1,501.2 crore in FY2021, because of the “ramp-up in Covaxin supplies in the domestic market,” according to a rating agency.

You could rationalise that this is all of a piece with what is happening elsewhere. The most blatant case of patent grab related to a Covid-19 vaccine was in the US where Moderna Inc excluded scientists of the government’s National Institutes of Health (NIH), while staking claim to four patents on the new technology messenger RNA or mRNA vaccines against the Sars-Cov-2 virus. The Moderna action was egregious since NIH had provided both the technology rights as well as funds running into billions of dollars to bring the vaccine to market as quickly as possible.

But unlike the apathetic ICMR, NIH has been quick to challenge the company to protect its intellectual property rights (IPRs) and the image of the institution. Although the organisation has not gone to court because of the costs involved, the dispute has been widely reported and cast a cloud over Moderna’s ethics since the two had been working together on the project for four-five years. There are two aspects to the case. One is a matter of “fairness and morality at the scientific level,” as one leading scientist described it, and the other is of the legal and commercial consequences of including the NIH scientists. The main reason why NIH has been in talks with the company is that the inclusion of the names of the three agency scientists would give the government a big say in licensing deals, apart from bringing millions into the treasury. No such calculation appears to have weighed with the previous Modi government which signed the MoU or with the current coalition National Democratic Alliance (NDA) government led by the same Prime Minister.

Even though the patent issue is to be resolved, NIH has notched up a small but telling victory against corporate capture of profits on a related front. After long negotiation, Moderna has made a US $400 million payment for the technique used in the creation of the mRNA vaccine, which dealt with employing protein engineering to stabilise the spike proteins on the coronavirus before they fuse with other cells. This is foundational to the making of many coronavirus vaccines, including those made by Moderna and its main competitor BioNTech, which tied up with Pfizer to make the hugely successful Comirnaty vaccine. The technology fees paid by Moderna will be shared by NIH and two US universities where the method was invented. Even if the payment is a fraction of Moderna’s huge earning (its net income in 2022 was $8.3 billion), it is much-needed in the US, where companies rarely acknowledge their debt to the government and academic researchers.

BioNTech, for instance, is yet to pay up and is disputing the NIH claim. The government agency has, therefore, slapped the company with a notice of default over royalty payments related to the sales of its vaccine Comirnaty.

NIH says that BioNTech is in breach of its licence agreement, under which the agency is entitled to certain royalty payments on revenues from Comirnaty. But do we know the details of the agreement between ICMR and Bharat Biotech, which tried sleight of hand by naming NIV scientists as co-owners and not co-inventors of Covaxin? Can we envisage ICMR taking or being allowed to take the vaccine company to court for any possible contractual violations? Covaxin has become one of the symbols of the ruling Bharatiya Janata Party (BJP)’s “nationalist achievements” and thus a holy cow, whatever the controversies be surrounding the company. Remember, too, that in 2022 the founders of Bharat Biotech, Krishna Ella and his wife Suchitra were conferred the Padma Bhushan, the third highest civilian honour.

There is, however, an unexpected twist to Bharat Biotech’s patent claims, which have also been made at the World Intellectual Property Organization (WIPO). It appears that the Indian Patent Office (IPO), which looks into patent eligibility of applications made by Indian companies at the international organisation, is none too convinced that Covaxin deserves a patent. IPO in its preliminary investigation for WIPO is said to have rejected all the claims that Bharat Biotech has made to prove “inventiveness”, one of the main criteria for grant of patent. Another criterion is “novelty”. Here, too, IPO is not satisfied that Covaxin meets the requirement. We are at an interesting point.