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November 4, 2005
I attended a House Government Reform Committee hearing today on avian flu pandemic preparedness. Among many points of discussion, the issue of Tamiflu stockpiling and production stood out. No one knows how effective Switzerland-based pharmaceutical giant Roche's Tamiflu antiviral drug will be if and when bird flu mutates and becomes a human-to-human transmissible virus, but it's widely agreed that it's the one of the most effective antiviral drugs in production that can help deal with a pandemic. The problem is that there isn't enough Tamiflu and, given Roche's production capacity, there won't be enough to cover 25-40% of the population for up to ten years if a pandemic hits. Currently the US only has enough Tamiflu to cover 1-2% of its population.
A main point of contention over Tamiflu was over whether the Secretary of Health and Human Services should compel Roche to license its drug to other companies to ramp up production. Rep. Dennis Kucinich (D-OH) railed against Roche and asked HHS Secretary Michael Leavitt if he would use his authority to force compulsory licensing. Leavitt said he did not think it was needed and believed if he compelled Roche to license its drug, that there would be "no new drugs" (implying that companies wouldn't engage in the risk of research and development if their intellectual property rights and thus profits were seen to be in danger; I'll address this in a bit).
Rep. Dan Burton (R-IN) continued this line of questioning, asking if Leavitt would use his authority in an emergency situation. Leavitt finally said, "We'll do whatever it takes." Burton asked if that meant a "yes," and again Leavitt ambiguously said "whatever it takes."
Regarding the intellectual property argument Leavitt invoked, it's pretty weak on several counts. First, compulsory licensing only should be used in the case of a public health or national security emergency. So such authority would rarely be used. Second, the company whose intellectual property rights are violated in the case of significant public interest would be compensated. As long as the compensation is fair (which is subject to interpretation depending on who's side you're on, the taxpayer or the company), the company won't "lose" out too much.
Yet the best reason for Leavitt to say that he would force licensing in an emergency situation, besides actually leaving open the option to increase production if need be, is that publicly stating that the United States government would consider that option will help push Roche to license its drug to other companies voluntarily without having to be forced to do so.
MORE: GoozNews has James Love of the Consumer Project on Technology's response to the government's position.
Nick Schwellenbach's areas of expertise include: Government Oversight, Wasteful Contractor Spending, Open Government, Financial Sector, Whistleblower Issues.
Authors: Nick Schwellenbach