Moderna Pharmaceutical Company announcement on March 7, 2022 that it would develop a site in Kenya to manufacture vaccines against COVID-19. The company owns much of the key intellectual property relating to messenger RNA (mRNA) vaccines. Due to their greater efficacy, mRNA vaccines are the preferred option in developed countries. They count for 92% of all vaccines to date in the United States and the European Union.
Moderna’s decision to continue to manufacture the vaccine itself, albeit at the Kenyan site, is a signal that the company (at least for now) is not considering licensing its technology to a third party for local manufacture. This way, the company retains tighter control over who has full knowledge of its technology and is able to use it productively. Licensing is a less costly but more vulnerable arrangement for licensors.
The decision is important for the mRNA Technology Transfer Center in Cape Town, South Africa. The hub was established in June 2021 by the World Health Organization (WHO) and other parties. The idea was to develop a technological platform for manufacturing mRNA vaccines. It would initially be for COVID-19, but eventually for a range of infectious diseases, including TB and HIV.
Once the platform is fully developed and tested in Cape Town, it will facilitate technology transfer to at least 12 low- and middle-income countries. This will significantly increase global mRNA manufacturing capacity.
Read more: Africa’s first mRNA vaccine technology transfer center gets to work
Africa’s first mRNA vaccine
The hub has already made significant progress towards producing a candidate vaccine based on research published by Stanford University, which forms the backbone of the Moderna COVID-19 mRNA vaccine.
Much of the development work is taking place at South African company Afrigen Biologics and at the University of the Witwatersrand in Johannesburg. Accomplishment was achieved through innovation using the team’s own knowledge and skills, combined with knowledge that is in the public domain.
Read more: How trying to copy a COVID vaccine is changing the outlook for African countries
Afrigen’s Managing Director, Professor Petro Terblanche, recently describe progress of work on the Afrigen mRNA Hub vaccine. The company has developed a lab-scale vaccine batch and expects to complete initial manufacturing of large-scale trial batches, which will be tested in clinical trials, by November 2022.
There are still many hurdles to overcome before its work is completed. Direct participation of either pharma giants Moderna or BioNTech in the initiative would have been beneficial to its programs, including guiding the hub through the technical details of formulation and processing conditions.
BioNTech, which has even been accused of undermine hub activities, announced earlier in 2022 plans build vaccine manufacturing sites in Rwanda and Senegal. Next, Moderna declared its intention to invest in kenyanoting that the investment will “fill the gap” in terms of manufacturing capacity.
The Cape Town hub is supported by a range of partners who bring expertise, experience and resources, all of which are essential for successful technology transfer. The idea of replicating these key entries on other sites seems counter-intuitive.
Patents and Profits in Pharmaceuticals
The decisions of drug manufacturers are reminiscent of the fight over patents for anti-HIV drugs which took place in South Africa in the early 2000s. At the time, HIV drugs were unaffordable in the country, costing $10,000 per person per year for effective treatment. Pharmaceutical companies have pursued an aggressive strategy to protect their intellectual property and their prices, even at the cost of many thousands of lives in developing countries, including South Africa. Constrained by a court case, the companies eventually backed down and allowed generic manufacturers to manufacture and market their antiretroviral products at a fraction of the cost.
Read more: Rwanda and Senegal to host first COVID-19 vaccine factories in Africa: what we know so far
Moderna holds a patent in South Africa which could be troublesome for the hub in the medium term. The patent includes a claim covering the local manufacture of any vaccine containing mRNA. This claim could be used to prevent any scaling of platform technology developed by Afrigen. Already a number of public interest organizations are calling on Moderna to drop its patent claims or grant a royalty-free license to Afrigen.
The actions of patent holders can be understood on the basis that they wish, at all costs, to avoid the prospect of a compulsory license. Compulsory license is permitted under international trade and intellectual property agreements when countries deem it necessary to access patented medicines for a public health emergency such as a pandemic. Now that the hub has demonstrated that it can replicate the technology, it is likely that a compulsory license would be granted, should a request to the World Trade Organization be made.
The companies also appear to be eroding the hub’s business case by establishing competing facilities. Biovac and Afrigen, key partners in the hub’s plans, may struggle to raise funds or sell products in markets where Moderna and BioNTech are now establishing a presence. Market volumes are critical to the viability of vaccine manufacturing, and each new location reduces the prospects for a competitor to build their own business.
Vaccines are mostly public health products. They protect entire populations with minimal expense. It is acceptable for companies that develop and manufacture these products to do so with a reasonable margin. It is typically in the region of 14% net profit as a percentage of revenue.
But the major mRNA companies are now report extreme profits.
Public health should not be held hostage to private gain, nor bankrupted by interventions needed to save lives. The shares of BioNTech and Moderna will to prolong the social and economic costs of the pandemic.