Nonexcludable Innovations and COVID-19

By Lisa Larrimore Ouellette, Nicholson Price, Rachel Sachs, and Jacob S. Sherkow

Some of the most widely discussed COVID-19 interventions include vaccines, drugs, and medical devices—typical interventions for many diseases, whether the cause of a pandemic or not. These interventions share a further similarity—they’re all generally excludable. That is, the owner of a particular invention can generally exclude others from practicing it without permission. In a classic account of IP, it is this excludability that encourages their development in the first instance. But as Professors Amy Kapczynski and Talha Syed have explained, some knowledge goods are more excludable than others. In this post, we describe why many successful COVID-19 interventions—washing hands, wearing face masks, even the proning of patients in a hospital setting—are generally nonexcludable and thus likely to be underincentivized by IP-based market rewards. Policymakers tasked with encouraging COVID-19 innovation should attempt to correct for this asymmetry in excludability.

Remdesivir Part II: Allocating Access

By Jacob S. Sherkow, Lisa Larrimore Ouellette, Nicholson Price, and Rachel Sachs

Last week, we focused on incentives for developing clinical evidence supporting the use of remdesivir for COVID-19 and analyzed the FDA’s grant of an emergency use authorization (EUA) for the drug. This week, we consider mechanisms for allocating access to the drug, including distribution, payment, and patents. Importantly, many of these issues are relatively uncommon to encounter in the prescription drug space. The government does not usually control the allocation and distribution of new drugs after marketing authorization has been granted, although it is doing so for remdesivir. These novel issues raise opportunities, but also concerns, for law and policy.

Remdesivir Part I: Incentivizing Antiviral Innovation

By Rachel Sachs, Jacob S. Sherkow, Lisa Larrimore Ouellette, and Nicholson Price

The antiviral drug remdesivir, developed by California-based biopharmaceutical company Gilead Sciences in collaboration with government scientists, has emerged as the new standard of care for COVID-19 patients. The drug has also been beset by controversy, from Gilead’s withdrawn orphan drug application to conflicting reports of clinical trial results to an opaque and haphazard distribution process. We examine the role of legal institutions in the remdesivir rollout in two posts focused on the two (separable) parts of innovation policy. This week focuses on the innovation incentives for producing information about remdesivir and other COVID-19 treatments, including the FDA’s role in deciding whether and under what conditions a new drug can reach the market. Next week we will turn to pharmaceutical allocation mechanisms, including payment and distribution.

How is regulatory policy influencing the development and marketing of antibody testing for COVID-19?

By Nicholson Price, Rachel Sachs, Jacob Sherkow, and Lisa Larrimore Ouellette

Over the last few weeks, dozens of companies have begun marketing tests intended to determine whether someone has antibodies directed to SARS-CoV-2, the virus that causes COVID-19. These tests indicate likely immunity to COVID-19 and are different from diagnostic tests to determine whether someone is currently infected. However, recent evaluations have shown that these antibody tests are often failing to deliver accurate results. Last week, the House Oversight Committee called for more information from these companies about the accuracy of their tests, and the FDA has now responded by increasing its oversight over antibody tests. But why did the FDA’s initial stance toward these tests differ so strongly from its stance toward COVID-19 diagnostics, and what lessons should policymakers draw from these experiences going forward?