License to Pill: China, Coronavirus, and the International IP Regime

Neil Chitrao is a J.D. candidate, 2021 at NYU School of Law.

As Chinese authorities scramble to respond to the domestic public health crisis associated with Coronavirus Disease (COVID-19), international pharmaceutical manufacturers are using China’s response as a bellwether for what to expect out of further efforts to conduct business in the country. Of particular note is the recent decision by the Wuhan Institute of Virology (a prominent Chinese research laboratory located at the epicenter of the epidemic) to pursue a patent on Remdesivir, a drug developed by Silicon Valley-based Gilead Sciences, Inc. Remdesivir has demonstrated clinical efficacy against COVID-19, and was used successfully for the treatment of the first U.S. patient with the disease. The decision by the Wuhan Institute has sparked opprobrium, with critics decrying the patent application as yet another demonstration of China’s open disregard towards the intellectual property rights of foreign entities. Given the current international perception of the Chinese government regarding intellectual property, it is pivotal that the Chinese Patent Office rejects the Wuhan Institute’s claim, in the interests of both equity in the international drug market and the accessibility of cutting edge medical care for the people of China.  

The epidemic of COVID-19 has severely compromised China’s economic stability. As such, the country is well justified in exploring all possible avenues for the provision of effective chemotherapeutic agents for its citizenry. However, there are legal mechanisms that exist through which China could obtain foreign drugs without flouting the rights of their patentees. Article 31 of the Agreement of Trade-Related Aspects of Intellectual Property Rights (TRIPS), allows for countries to obtain and enforce compulsory licenses on foreign drug products in certain extenuating circumstances. China, as a party to the TRIPS agreement, could legally acquire a license for Remdesivir and, given its robust pharmaceutical infrastructure, could produce sufficient quantities of the drug for its population. Some analysts have suggested that China’s current reluctance to invoke Article 31 of the agreement stems from a desire to ameliorate China’s reputation among foreign patentees. This is a laudable goal, but the pressing nature of the COVID-19 epidemic necessitates aggressive efforts to limit the spread of the virus.

The compulsory license provision was designed to prevent intellectual property law from hindering a country’s efforts to respond to national health emergencies. Given the human and economic toll that COVID-19 has taken on both China and the world at large, it would be a platitude to say that the outbreak constitutes a national emergency of “extreme urgency,” as envisioned by the drafters of Article 31. Chinese exercise of this provision to obtain and produce Remdesivir would thus be in keeping with the policy goals associated with Article 31; China’s acquisition of a compulsory license in this case should not be interpreted by private companies as a rejection of an American patent, but rather as a lawful exercise of a power granted by treaty in extenuating circumstances. Article 31 further stipulates that a state availing itself of the option of a compulsory license must provide the patent holder with appropriate remuneration for the use of the patent. Given that China has the infrastructure to properly exploit the proprietary information in the Remdesivir patent, and given that China has the financial resources to adequately compensate Gilead, the country is a prime candidate for use of the Article 31 provision.

In addition to securing a compulsory license, China should be quick to reject the Wuhan Institute patent application. Granting such a patent, when Gilead’s own domestic patent application is pending, would be closer to intellectual property theft than the compulsory license. While Gilead itself has publicly stated that it will not take any measures to counter the Wuhan Institute’s patent application during the epidemic, China should be mindful of the chilling effects on pharmaceutical licensing that granting the lab’s application could carry. If pharmaceutical companies abroad are unsure of the security of their intellectual property in China, then the allure of a lucrative domestic market might well be insufficient incentive to market their products in the country. The resulting loss of licensing privileges would have detrimental effects on the well being of the people of China, depriving them of access to novel therapies. Furthermore, China stands to lose out on opportunities to collaborate with and learn from foreign researchers, thereby stifling the growth of indigenous pharmaceutical capabilities.

China’s response to the epidemic of COVID-19 has been informed by the government’s desire to reverse its cavalier approach towards foreign intellectual property interests, an attitude that analysts argue helped precipitate the country’s trade war with the United States. However, the magnitude of the health crisis makes drastic action imperative. As a signatory to TRIPS, China has a means of ensuring that potentially life-saving medication can be manufactured and disseminated among its people. While a compulsory license may seem like an excessive and heavy-handed approach, China’s lawful exercise of this option, combined with a rejection of the Wuhan Institute’s patent application, would show the world that even in times of dire emergency, China is willing to play by the rules.