Coronavirus Vaccine Development: Intellectual Property and International Poverty

by Oscar Delaney

Intellectual property rights are widely believed to be the only plausible way to incentivise productive but risky or costly intellectual labour. However, our intellectual property system contributes to massive avoidable suffering and death, as monopoly prices preclude poor people from purchasing essential medicines. The key to reforming the system seems to be designing incentives for pharmaceutical innovation that do not rely on exorbitant prices. The Health Impact Fund achieves this by paying companies for reducing the global burden of disease, provided they forgo intellectual property rights. In this paper, I argue that this scheme succeeds for key stakeholders—governments, innovators, and consumers—while remaining robust to both theoretical and practical critiques, and I propose that it be trialled for coronavirus-related innovations (to be adopted more broadly if it proves successful). Other mechanisms to combine strong research incentives with low drug and vaccine prices exist, but are not directly addressed here.

The current intellectual property regime as codified by the Agreement on Trade-Related Aspects of Intellectual Property Rights (known as TRIPS) is arguably deeply flawed when applied to life-saving drugs and vaccines. Under TRIPS, all governments are obliged to uphold the strong intellectual property rights of creators and innovators by (in the case of drug and vaccine patents) granting monopoly privileges to the developer for at least 20 years.[i]  The most obvious and widely discussed problem with this arrangement is that the only company legally allowed to manufacture the vaccine[ii] has a very strong monetary motivation to sell it far above the natural market price that would prevail if many companies competed to produce and sell it as cheaply as possible.[iii]  Indeed, pharmaceutical products are often sold at over 500% of their competitive market price, which means the global poor often cannot afford them.[iv]In the case of coronavirus and other infectious diseases, such an outcome is disastrous for not only the poor, but the world at large—herd immunity would be unobtainable, health services overwhelmed and the global economic recovery jeopardised.

A further problem under TRIPS is that profit-maximising pharmaceutical companies know that billions of poor people could never afford monopoly prices, so there is little motivation to put research and development dollars towards making vaccines accessible for all.[v] Thus, in the case of coronavirus, there is a huge financial incentive to design a vaccine that works for the rich (perhaps one which requires continuous refrigeration and specialised equipment and expertise to administer), but little incentive to design a vaccine that can easily and economically be administered the world over.  Coronavirus aside, this is an even greater problem for diseases that almost exclusively affect the world’s poor, such as malaria, tuberculosis, and parasitic worms, as there is little money to be made from creating a vaccine for such diseases.[vi] Hence the lessons learned by designing an intellectual property regime for coronavirus would potentially extend to other diseases.

Realistically, developing-world governments and perhaps even richer countries will likely succumb to overwhelming public pressure and confiscate the intellectual property rights to a coronavirus vaccine in order to facilitate affordable mass inoculation.[vii] This action is known as ‘compulsory licensing’, and is allowed under TRIPS in the case of a public health emergency, which the coronavirus pandemic clearly is.[viii] However, this is only a viable solution for the relatively few developing countries with generic drug and vaccine production capabilities, as under TRIPS it remains illegal to export a patented drug, even during a pandemic.[ix]  Compulsory licensing also comes with a high hidden cost; namely, that pharmaceutical companies will be disinclined to heavily invest in vaccines in subsequent pandemics, knowing that upon success compulsory licensing could ruin their profits.[x] Indeed, even in the current pandemic, it appears that companies already realise that compulsory licensing is likely and are therefore unwilling to self-fund vaccine research and development.[xi] Consequently, most vaccine research for coronavirus is currently being directly funded through government grants.[xii] This is problematic, not least in that it requires extraordinary government discretion[xiii]to choose the most promising corporations and universities in which to invest, and that it will inevitably lead to much wasted funding. It also reduces the incentive for a company to quickly develop a successful vaccine, given that any delays and failures will likely be met with continued government funding.[xiv] Another existing solution, differential pricing, is also problematic, as pharmaceutical companies are reluctant to sell drugs at low prices in poor countries for limited profit, knowing that drugs smuggled back to rich countries and sold on the black market will slash overall profits.[xv] These issues associated with the development of a coronavirus vaccine should hopefully draw attention to the fact that the TRIPS system is broken, and that better options are available.

The intellectual property regime which is best able to foster innovation while keeping drug and vaccine prices low is the Health Impact Fund (HIF). Under this scheme, national governments would contribute to a global fund in proportion to their gross domestic product (GDP), and funds would subsequently be disbursed to innovators who create a successful coronavirus vaccine or treatment.[xvi] A fixed price might be set at, for instance, $100 per quality-adjusted life-year (QALY) saved. Companies would then be rewarded in accordance with their product’s actual global health impact over the first decade of sales.[xvii] The intellectual property would then be released permanently into the public domain, allowing many companies to compete for market share, thus driving the price down to affordable levels.[xviii]  While the HIF was originally proposed as a universal solution for medical intellectual property, I propose that it could first be trialled for coronavirus-related innovations, and then adopted more broadly only if it proves successful. I argue that this is an effective intellectual property regime in that it succeeds in meeting the needs of the three key stakeholder groups: governments, pharmaceutical companies, and vulnerable populations.

For governments, the HIF ensures that only successful innovations receive government money.[xix] This is unlike the provision of grants,[xx] wherein much of the research fails, or the purchase of patent with a large upfront payment,[xxi] in which the expected number of QALYs saved is highly unpredictable. While, for coronavirus, the government outlay would be considerable (in the order of $100 billion)[xxii] this pales in comparison to the expected global financial gains of $375 billion[xxiii] for every month sooner that a vaccine is rolled out.  Moreover, affluent countries pay many thousands of dollars per QALY as a matter of course in their domestic healthcare systems, so this is a relatively modest valuation of a QALY.

While the interests of the corporate elite should arguably not play a key role in global public health planning, realistically, any scheme that is actively opposed by the financial and lobbying might of pharmaceutical companies is unlikely to be implemented. I therefore believe that their interests should be taken seriously. If we assume that the primary concern of companies is safeguarding profits, then under the HIF, setting a sufficiently large price per QALY would enable this.[xxiv]  Indeed, the HIF could provide a stronger financial incentive for effective innovation than the current patent system, as a company’s possible market could expand by billions of people to include those unable to afford monopoly prices.[xxv] Given the uncertainty around possible compulsory licensing, pharmaceutical companies would also likely welcome the predictability and stability of a HIF, provided the national government funding of the HIF was assured.  Further, companies which lose the initial race to develop a successful vaccine would also benefit, as their subsequent research and development would not be hampered by a requirement to pay the patent holder for the right to experiment on or modify the vaccine in order to improve it. This would be to everyone’s advantage; accelerating the pace of innovation by preventing scenarios in which a patent-holder refuses to license others to modify their product (as occurred with the Watt steam engine[xxvi] and with Microsoft programs).[xxvii]

The biggest beneficiaries of a HIF, though, would be the global poor who would gain access to an affordable, effective coronavirus vaccine in a timely manner. This would likely save millions of lives: both directly, by preventing COVID-19 cases, and indirectly, as reopening the economy would also have positive health impacts. Compared to some schemes which exclusively reward the creation of a vaccine, the HIF also has the potential to overcome the ‘last mile problem’ (wherein the impact of otherwise successful vaccines suffers due to inadequate administrative, health and transportation infrastructure in impoverished rural areas) because it directly incentivises the innovator to reduce morbidity and mortality.[xxviii] By thereby decoupling incentives from prices, the HIF relieves the tension at the heart of the utilitarian justification of intellectual property rights; namely, that between wanting to foster innovation for the common good, yet achieving this by limiting access to those same innovations through patents.[xxix] From a non-utilitarian perspective, too; the HIF succeeds for the global poor in that it protects their right to life, as well as the more controversial right to science and the benefits of technological progress enshrined within the Universal Declaration of Human Rights.[xxx]

Unsurprisingly, the HIF is not without its critics. The most obvious concern here highlights the implausibility of accurately assessing and quantifying the health impacts of a single innovation in an intricately complex world ill-suited to counterfactual comparisons between scenarios with and without a vaccine.[xxxi] While I agree that this such a task is indeed challenging, it should be pointed out that think tanks, public servants, and academics routinely engage in this sort of speculative analysis—be it to predict the safety impact of new seat-belt legislation, or to assess the economic ramifications of a new tariff.  Although there will always be a degree of uncertainty when it comes to assessing health impacts, it seems clear to me that a panel of leading experts in epidemiology, economics, sociology, public policy, and mathematical modelling, with sufficient resources and data, could at least roughly estimate the total health benefits of an innovation.[xxxii] I argue that this should be seen as sufficient: provided that the methodology used is publicly available beforehand, companies in this instance could invest in research and development knowing that, if they are successful, their innovation will be assessed fairly and thoroughly, even if a precise health impact can never be entirely determined.

Some natural rights theorists question the legitimacy of the HIF’s forcible acquisition of intellectual property, even though the innovators are handsomely compensated. They argue that the fruits of intellectual labour, including vaccines, are the sole property of the creator, and that for any agent to appropriate the intellectual object without consent amounts to theft.[xxxiii] This objection can be countered at several levels. The natural rights defence of intellectual property struggles to bridge the gulf between the oft-accepted right to our person and our labour, and the far broader notion of a right to the socially-constructed economic valuation of that labour through a patent.[xxxiv] Moreover, because of the inability to make intellectual objects truly ‘exclusive’, strong property rights are difficult to establish,[xxxv] as even under a HIF, the innovating company would be free to produce and use their vaccine as they like, and would have a head start in so doing.[xxxvi] Indeed, intellectual property ‘rights’ have been aptly recast as ‘monopoly privileges’ conferred by the state.[xxxvii] Thus, rather than being an intrinsic property of intellectual labour that the government either protects or overrides, monopoly privileges constitute just one mechanism for rewarding inventiveness. The HIF constitutes another. Furthermore, it would be difficult for a pharmaceutical company to argue that their intellectual property ‘rights’ are violated by the act of transferring the intellectual object to the public domain, given that the company could have, for example, simply avoided coronavirus research and instead worked towards a traditional patent for some other ailment. Even if we granted natural rights to intellectual property, there exist significant tensions concerning other researchers’ right to work on intellectual property protected ideas, particularly if multiple people were simultaneously yet independently working on the topic prior to any patent.[xxxviii] If natural rights concerns are actually stronger than they appear, a less coercive model of the HIF could always be instituted, whereby companies choose whether to register their innovation as a patent or under the HIF.[xxxix] Given a sufficiently well-endowed HIF and rational company behaviour, companies would almost inevitably choose the HIF anyway,[xl] particularly when enormous public pressure is brought to bear against selling a vaccine at exorbitant monopolistic prices. In this sense, the coercive and non-coercive HIF variants would likely amount to much the same thing.

A more practical critique is that, while the HIF may be the best scheme in an ideal world of international cooperation, nation states may be too selfish and short-sighted to invest heavily in a fund whose benefits are diffused around the globe and are concentrated in poorer countries. Indeed, this is a well founded concern—as evidenced by collective action problems like climate change and existential risk, where strong global action has been lacking. The ‘free rider’ problem could also lead to some countries refusing to contribute to the HIF but still hoping to reap its rewards. When appealing to moral duty proves ineffective, creating conditions for the HIF which render it clearly in each country’s narrow self-interest to participate would be essential. This could be ensured by, for example, restricting the benefits of the HIF to countries that contributed sufficiently (0.1% of GDP for instance). This could be achieved by mandating that a vaccine first be provided to HIF member states at competitive prices, and then allowing the innovator to patent and sell the vaccine at monopoly prices in non-member countries.[xli] While this could lead to very bad outcomes for rogue states which refused to participate, such a motivational force may become necessary for the HIF to succeed. Other, less drastic measures, such as exerting diplomatic and trade pressure on non-compliant countries, would also need to play a role, and may in time prove sufficient to foster broad buy-in to the HIF.

Existing intellectual property systems succeed in creating strong motivators to research drugs for wealthy markets, but they ultimately struggle to generate cheap and effective vaccines or treatments for developing countries. The Health Impact Fund, which also has more broad applications, provides a promising solution to the incentivisation and distribution challenges regarding coronavirus intellectual property which would benefit governments, corporations, and individuals. Challenges do remain regarding the implementation of accurate health impact assessments, the safeguarding of innovator interests, and the means of ensuring a just distribution of global benefits and burdens—however, as I have demonstrated, these difficulties are far from insurmountable.

Oscar Delaney studies biology, maths, and philosophy in a Science/Arts dual degree and is a spokesperson for Youth Verdict.  His involvement in Effective Altruism and climate activism has been shaped in the abstract by ethical and political theory, and in the personal by growing up in India where his parents were community and development workers.


[i]    Michael Ravvin, “Incentivizing Access and Innovation for Essential Medicines: A Survey of the Problem and Proposed Solutions,” Public Health Ethics 1, no. 2 (2008): 110.

[ii]   For simplicity’s sake, only vaccines will be discussed in this paper, but it should be noted that similar dynamics apply to therapeutic drugs.

[iii]   World Health Organisation, “Public Health Innovation and Intellectual Property Rights: Report of the Commission on Intellectual Property Rights, Innovation and Public Health,” (Geneva: World Health Organisation Press, 2006), 16-17; Jorn Sonderholm, “Ethical Issues Surrounding Intellectual Property Rights,” in New Frontiers in the Philosophy of Intellectual Property, ed. Annabelle Lever, Cambridge Intellectual Property and Information Law (Cambridge: Cambridge University Press, 2012), 111.

[iv]   Ravvin, “Innovation for Essential Medicines,” 111.

[v]   Ibid., 112; Amitava Banerjee, Aidan Hollis, and Thomas Pogge, “The Health Impact Fund: Incentives for Improving Access to Medicines,” The Lancet 375, no. 9709 (2010): 167.

[vi]  World Health Organisation, “Public Health Innovation,” 13; Felicitas Holzer, Thomas Pogge and Aidan Hollis, “Covid-19 and Beyond: How to Pay for New Pharmaceuticals,” Journal of Medical Ethics Blog (2020), ed. Hazem Zohny and Mike King, online:

[vii] Natalie Stoianoff, “Whoever Invents a Coronavirus Vaccine Will Control the Patent – and, Importantly, Who Gets to Use It,” The Conversation(2020), online:; Maija Palmer and Donato Paolo Mancini, “Coronavirus Puts Big Pharma’s IP Regime to the Test,” Financial Times (2020), online:

[viii] Ravvin, “Innovation for Essential Medicines,” 114; World Health Organisation, “Public Health Innovation,” 54-55. For Australia specifically, see Australian Government, Patents Act 1990: No. 83, 1990 (Canberra: Office of Parliamentary Counsel, 2020),  s163A; Australian Law Reform Commission, “Crown Use,” Australian Government (2010), online:

[ix] Ravvin, “Innovation for Essential Medicines,” 114.

[x] Sonderholm, “IP Ethics,” 113-14.

[xi] Palmer and Mancini, “Coronavirus and Big Pharma.”; Stoianoff, “Coronavirus Vaccine Patent,” online.

[xii] Michael Kremer, Encouraging the Development and Manufacturing of Vaccines and Diagnostics (Princeton: Bendheim Centre for Finance, 2020), webinar video online:; Stoianoff, “Coronavirus Vaccine Patent,” online.

[xiii] Michael Kremer, “Patent Buyouts: A Mechanism for Encouraging Innovation,” 113, no. 4 (1998): 1138-39; Adam D. Moore, “Intellectual Property, Innovation, and Social Progress: The Case against Incentive Based Arguments,” Hamline Law Review 26 (2003): 614-15.  J.S. Mill thought the government was unlikely to have the necessary discretion, as quoted in: Steven Shavell and Tanguy Ypersele, “Rewards Versus Intellectual Property Rights,” Journal of law and economics xliv, no. 2 (2001): 527.

[xiv] Ravvin, “Innovation for Essential Medicines,” 115.

[xv] Ibid., 114; Sonderholm, “IP Ethics,” 113.

[xvi] Ravvin, “Innovation for Essential Medicines,” 119-21; Banerjee, Hollis, and Pogge, “The Health Impact Fund,” 166-67.  Applied specifically to coronavirus: Holzer, Pogge, and Hollis, “Covid-19 and Beyond,” online.

[xvii] The original proposal had rewards as a percentage of some fixed pool: Banerjee, Hollis, and Pogge, “The Health Impact Fund,” 166-67.

[xviii] Ibid., 167; Ravvin, “Innovation for Essential Medicines,” 120.

[xix] Ravvin, “Innovation for Essential Medicines,” 120.

[xx] Alex Rosenberg, “Designing a Successor to the Patent,” in New Frontiers in the Philosophy of Intellectual Property, ed. Annabelle Lever, Cambridge Intellectual Property and Information Law (Cambridge: Cambridge University Press, 2012): 104-05, proposes this scheme.

[xxi] For proposals of such mechanisms, see: Kremer, “Patent Buyouts,” 1146-48; Shavell and Ypersele, “Rewards vs IPR,” 525-31; Moore, “Against Incentive IP Arguments,” 615.  These proposals are criticised in: World Health Organisation, “Public Health Innovation,” 88.

[xxii] Susan Athey, Michael Kremer, Christopher Snyder and Alex Tabarrok, “In the Race for a Coronavirus Vaccine, We Must Go Big. Really, Really Big,” New York Times (2020). Online:

[xxiii] Kremer, Kremer, Encouraging the Development and Manufacturing of Vaccines and Diagnostics, online.

[xxiv] Ravvin, “Innovation for Essential Medicines,” 120-21.

[xxv] Ravvin, “Innovation for Essential Medicines,” 120-21.

[xxvi] Kremer, “Patent Buyouts,” 1142.

[xxvii] Moore, “Against Incentive IP Arguments,” 615-16.

[xxviii] Ravvin, “Innovation for Essential Medicines,” 113,120; Banerjee, Hollis, and Pogge, “The Health Impact Fund,” 167.

[xxix] For an exploration of this tension, see: Moore, “Against Incentive IP Arguments,” 607.

[xxx] Aurora Plomer, “The Human Rights Paradox: Intellectual Property Rights and Rights of Access to Science,” Human Rights Quarterly 35, no. 1 (2013): 144-45.

[xxxi] Jorn Sonderholm, “A Reform Proposal in Need of Reform: A Critique of Thomas Pogge’s Proposal for How to Incentivize Research and Development of Essential Drugs,” Public Health Ethics 3, no. 2 (2010): 173-74.

[xxxii] Banerjee, Hollis, and Pogge, “The Health Impact Fund,” 167.

[xxxiii] This position is defended in: Ayn Rand, “Patents and Copyrights,” in Capitalism: The Unknown Ideal (New York: New American Library, 1967), 130-31. Explained neutrally in: B. Andersen, “Intellectual Property Rights,” in Encyclopedia of Applied Ethics (Elsevier Inc., 2012), 737.

[xxxiv] Peter Drahos, A Philosophy of Intellectual Property (Canberra, ACT: ANU eText, 1996), 62. Edwin C. Hettinger, “Justifying Intellectual Property,” Philosophy & Public Affairs 18, no. 1 (1989): 37-39.

[xxxv] Hettinger, “Justifying Intellectual Property,” 34-35.

[xxxvi] Rosenberg, “Patent’s Successor,” 106, proposes that this head start might be incentive enough, in some cases.

[xxxvii] Brian Martin, “Against Intellectual Property,” in Information Liberation (London: Freedom Press, 1998), 51. For a defence of traditionally conceived property rights, see: Rand, “Patents and Copyrights,” 131.

[xxxviii] Theodoros Papaioannou, “Towards a Critique of the Moral Foundations of Intellectual Property Rights,” Journal of Global Ethics 2, no. 1 (2006): 81; Sonderholm, “IP Ethics,” 117. For a critique, see: Rand, “Patents and Copyrights,” 133.

[xxxix]  Indeed, this was the original proposal by Banerjee, Hollis, and Pogge, “The Health Impact Fund,” 166-68.

[xl]  Kremer, “Patent Buyouts,” 1140-48, provides an analogous argument.

[xli] A similar idea is expressed in: Kremer, Encouraging the Development and Manufacturing of Vaccines and Diagnostics, online.


Andersen, B. “Intellectual Property Rights.” In Encyclopedia of Applied Ethics, 737-43. Netherlands: Elsevier Inc., 2012.

Athey, Susan, Michael Kremer, Christopher Snyder, and Alex Tabarrok. “In the Race for a Coronavirus Vaccine, We Must Go Big. Really, Really Big.” New York Times (2020). Online:

Australian Law Reform Commission. “Crown Use.” Australian Government (2010). Online:

Banerjee, Amitava, Aidan Hollis, and Thomas Pogge. “The Health Impact Fund: Incentives for Improving Access to Medicines.” The Lancet 375, no. 9709 (2010): 166-69.

Australian Government. Patents Act 1990: No. 83, 1990. Canberra: Office of Parliamentary Counsel, 2020.

Drahos, Peter. A Philosophy of Intellectual Property. Canberra, ACT: Australian National University eText, 1996. 

Hettinger, Edwin C. “Justifying Intellectual Property.” Philosophy & Public Affairs 18, no. 1 (1989): 31-52.

Holzer, Felicitas, Thomas Pogge, and Aidan Hollis. “Covid-19 and Beyond: How to Pay for New Pharmaceuticals.”Journal of Medical Ethics Blog (2020). Edited by Hazem Zohny and Mike King. Online:

Kremer, Michael. “Patent Buyouts: A Mechanism for Encouraging Innovation.” The Quarterly Journal of Economics 113, no. 4 (1998): 1137-1167.

———. Encouraging the Development and Manufacturing of Vaccines and Diagnostics. Princeton: Bendheim Centre for Finance, 2020. Webinar video, online:

Martin, Brian. “Against Intellectual Property.” In Information Liberation, 29-56. London: Freedom Press, 1998.

Moore, Adam D. “Intellectual Property, Innovation, and Social Progress: The Case against Incentive Based Arguments.” Hamline Law Review 26 (2003): 601-713.

Palmer, Maija, and Donato Paolo Mancini. “Coronavirus Puts Big Pharma’s IP Regime to the Test.” Financial Times(2020). Online:

Papaioannou, Theodoros. “Towards a Critique of the Moral Foundations of Intellectual Property Rights.” Journal of Global Ethics 2, no. 1 (2006): 67-90.

Plomer, Aurora. “The Human Rights Paradox: Intellectual Property Rights and Rights of Access to Science.” Human Rights Quarterly 35, no. 1 (2013): 143-175.

Rand, Ayn. “Patents and Copyrights.” In Capitalism: The Unknown Ideal, 130-34. New York: New American Library, 1967.

Ravvin, Michael. “Incentivizing Access and Innovation for Essential Medicines: A Survey of the Problem and Proposed Solutions.” Public Health Ethics 1, no. 2 (2008): 110-123.

Rosenberg, Alex. “Designing a Successor to the Patent.” In New Frontiers in the Philosophy of Intellectual Property, edited by Annabelle Lever, 88-109. Cambridge: Cambridge University Press, 2012.

Shavell, Steven and Tanguy Ypersele. “Rewards Versus Intellectual Property Rights.” Journal of law and economics xliv, no. 2 (2001): 525-548.

Sonderholm, Jorn. “Ethical Issues Surrounding Intellectual Property Rights.” In New Frontiers in the Philosophy of Intellectual Property, edited by Annabelle Lever, 110-21. Cambridge: Cambridge University Press, 2012.

———. “A Reform Proposal in Need of Reform: A Critique of Thomas Pogge’s Proposal for How to Incentivize Research and Development of Essential Drugs.” Public Health Ethics 3, no. 2 (2010): 167-177.

Stoianoff, Natalie. “Whoever Invents a Coronavirus Vaccine Will Control the Patent – and, Importantly, Who Gets to Use It.” The Conversation (2020). Online:

World Health Organisation. “Public Health Innovation and Intellectual Property Rights: Report of the Commission on Intellectual Property Rights, Innovation and Public Health. ” Geneva: World Health Organisation Press, 2006. Accessible at:

Featured image ‘Coronavirus’ by Alachua County via Flickr.


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