On 27th October 2021, Merck Sharpe Dohme (MSD) and the Medicines Patent Pool (MPP) announced a voluntary licensing agreement covering 105 low-and middle-income countries (LMIC) for the promising investigational oral COVID-19 antiviral molnupiravir. The voluntary license (VL) permits multiple local manufacturers to produce generic versions of molnupiravir, but it has significant flaws. Many high-burden countries currently being devastated by COVID-19 are excluded from the VL (including Argentina, Brazil, Colombia, Kazakhstan, Mexico, Peru, Russia, Ukraine, Thailand, Turkey, and several others). These countries must pay the price MSD wants to charge for molnupiravir ($712/course), instead of having access to affordable generic versions ($19,99/course).
The MPP-Merck VL includes unprecedented new language and new provisions that contradict the spirit of voluntary licensing as the solution for speeding up access to lifesaving COVID-19 diagnostics, vaccines and treatment during a pandemic. For example, a new provision in the license allows MSD to terminate the VL with the MPP if their molnupiravir patents are challenged by any sub-licensees.
“Patent oppositions are an important and legal TRIPS flexibility. Generics manufacturers and civil society organizations have successfully used them to challenge unmerited patents. These oppositions have enabled countries to provide life-saving treatment for more people while saving millions of dollars in their health budgets,” said Othoman Mellouk, Access to Diagnostics and Medicines Lead at the International Treatment Preparedness Coalition, “This industry-inspired termination clause sets a very alarming precedent for MPP voluntary licensing and constitutes a real abuse of intellectual property rights.”
Other provisions in the MPP-Merck VL also require closer analysis and scrutiny. For instance, a new and vague clause in the VL allows MSD to decide whether sublicensees are infringing on its “…Patents and/or any other intellectual property (IP) rights,” giving the pharmaceutical giant leeway to prevent generics manufacturers-licensees from supplying molnupiravir to countries that are excluded from the territory, even if their governments issue compulsory licenses (CL) or reject patent applications.
The VL’s clauses on the purchase and supply of the raw material or active pharmaceutical ingredients API) of molnupiravir also require close scrutiny (Clause 3B 1.3). MSD has already entered into bilateral deals with several Indian generic companies for molnupiravir, and the MPP-Merck VL further obligates licensees to enter into additional supply agreements to supply Merck with molnupiravir at the cost of production plus a “reasonable” mark-up (Clause 3B 1.2). The MPP/Merck VL includes a provision that requires licensees to obtain written permission from MSD for clinical trials of molnupiravir, which is likely to limit opportunities to maximize the drug’s benefit by studying it with other COVID-19 antivirals, undermine the use of the Bolar provision to conduct studies or trials that may be required for registration in excluded countries, or the research exception for trials with products from competitors (Definition of Product and Clause 11.1 of sub-license agreement form attached to the MPP VL).
More detailed analysis of the voluntary licensing agreement shall be published by ITPC in the near future.
While more analysis is needed to fully understand the complex provisions of this voluntary license, ITPC considers this agreement to be extremely disappointing. Voluntary strategies, including voluntary licensing, allow Pharma to retain control of competition, markets and pricing, while purporting to be a global good, public health measure in the service of enhancing their image. Instead of increasing access to a potentially lifesaving medicine, this VL aims to establish a lucrative market monopoly for MSD and to narrow the small existing space available for using TRIPS flexibilities (such as patent oppositions, compulsory licensing and Bolar provision).
“The molnupiravir VL is like a market-guarding wolf dressed as an access-expanding lamb,” says Sergiy Kondratuk, ITPC, “The MPP-Merck VL is a clear demonstration that the voluntary licensing model fails to meet the needs of an effective pandemic response. World Trade Organization Member States need to urgently adopt the TRIPS waiver, to suspend all forms of intellectual property protection on ALL COVID-19 medical technologies, for the benefit of ALL countries. At the national level, countries should pro-actively use automatic compulsory licensing and exercise their right to use the security exception in the TRIPS Agreement to override any intellectual property barriers in order to ensure access to affordable COVID-19 diagnostics, vaccines and medicines”.