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Upper Middle-Income Countries Left Out by New Merck/Ridgeback COVID-19 Antiviral Licensing Deal

Biopharmaceutical Report II

Issue25_December 2021

As Merck (NYSE:MRK) and Ridgeback Biotherapeutics sign on to a licensing deal to expand global use of their COVID-19 capsule molnupiravir, many upper middle-income countries could fall through the cracks.

Merck and the Medicine Patent Pool (MPP) announced a voluntary license for the generic manufacturing and sale of molnupiravir that covers 105 countries on Wednesday (27 October). Under the agreement, generic manufacturers can receive nonexclusive sublicenses to produce the antiviral. While many experts lauded the deal, some noted upper middle-income countries not covered in the agreement are left in a difficult position.

The agreement covers all low-income, most lower middle-income, and some upper middle-income countries, according to the MPP. But almost half of the world’s population falls outside the deal, noted Dr Reshma Ramachandran, veterans affairs scholar, Yale University, New Haven, Connecticut. Specifically, this is where 70% of all COVID-19 infections in the first half of 2021 occurred, she added.

In Latin America and the Caribbean, over 80% of the population falls outside the agreement, according to an analysis from the Knowledge Ecology International (KEI). “Leaving out countries like Argentina or the Dominican Republic is the negative side of an overall positive agreement,” added Luis Gil Abinader, senior researcher, KEI. Colombia, Costa Rica, Ecuador, Mexico, Panama, and Peru are among excluded upper middle-income countries from this region. Brazil is in separate negotiations with Merck.

For countries outside the deal, there is concern that wealthier countries with more purchasing power will corner the molnupiravir supply, said Rachel Cohen, North America Regional Executive Director, Drugs for Neglected Diseases Initiative. High- income countries like the US and UK have already entered molnupiravir prepurchasing agreements, raising concerns of “dose hoarding” seen with mRNA COVID-19 vaccines, she noted. The EMA has started a rolling review for molnupiravir and the FDA is holding an Advisory Committee meeting to discuss its data on 30 November.

However, the licensed area is large enough to induce generic entry, and the countries that were left out of Merck’s deal can benefit from that, Abinader said. But the deal’s fine print—specifically a clause that could curtail patent challenges from sublicensed manufacturers—had other experts more wary. Merck did not respond to a comment request.

High-income countries may set price benchmarks

Without a sublicense to produce molnupiravir, many upper middle-income countries (UMICs) will have to directly compete with high-income countries for supply, Ramachandran said. Similar to the case with mRNA vaccines, high-income countries with more purchasing power could buy excess doses of molnupiravir, Cohen added.

Expensive price points in high-income countries can set benchmarks for pricing in UMICs, Cohen said. In its initial molnupiravir prepurchasing agreement, the US will pay USD 712 per five-day treatment course. This is despite KEI estimating the drug costs less than USD 20 to produce. The Institute for Clinical Effectiveness Research declined to comment to this news service on molnupiravir’s cost effectiveness until its draft evidence report is published in early February.

There is the risk of UMICs paying more than high-income countries. Drug makers can try to set a product’s price as high as possible, as there are UMICs that could meet an even higher price. As an example, South Africa paid more for the AstraZeneca (LON:AZN) COVID-19 vaccine than the UK because the latter had a purchasing agreement with the company, explained Dr Mariana Socal, associate scientist Health Policy and Management, Johns Hopkins University, Baltimore, Maryland.

Once initial purchasing agreements are fulfilled, molnupiravir’s price would be determined by the clinical experience, available evidence, and public opinion at that time, experts noted. Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) secured a higher price for their COVID-19 vaccine once they had efficacy data in millions of people.

Patent provisions draw some concerns

The agreement provides a pathway for supplying molnupiravir to countries outside the licensed territory, where patents have not been granted, Abinader said. Under international law, individual countries can reject patents and grant compulsory licenses, he explained.

But Merck and MPP’s agreement includes a clause that could prevent sublicensed generic companies from contesting molnupiravir patents, Cohen noted. This would preclude manufacturers who sign on to the terms of the sublicensing deal from challenging patents to facilitate generic production, she said.

Molnupiravir inventor Emory University pushed for allowing the MPP to terminate sublicensing agreements with any manufacturer that contests the patent, Ramachandran said. There’s some reassurance from the MPP that it won’t exercise this right as it runs contrary to their core principles, Ramachandran said. “But it’s disappointing to see a university who received significant amounts of taxpayer money to discover and develop this drug promoting anti-access provisions in this license,” she added.

Still, while such an agreement does not address global access completely, every bit counts, said Jacob Sherkow, professor of Law, University of Illinois, Urbana- Champaign College of Law. Work needs to be continued to develop solutions for the remaining countries, he added.

Experts interviewed by this publication commended the transparency of Merck’s agreement as it is publicly accessible. But the lack of detailed clinical trial data— including the drug’s ideal patient population—makes it difficult for countries to plan molnupiravir’s eventual rollout, they added.

On 21 September, this news service reported it was critical to test and identify eligibility for molnupiravir early in disease progression. Healthcare providers’ interpretations of severe COVID-19 risk factors will also prove key in determining the drug’s use.

William Newton

Reporter, Texas

William Newton is a healthcare reporter for GlobalData focusing on central nervous system diseases and ophthalmology. Previously, he worked at the healthcare information firm Close Concerns, where he covered breaking news in diabetes therapeutics and technology for the company’s industry-facing publication, and at the digital health startup Fitscript, where he assisted in researching digital health

and lifestyle intervention approaches to treating diabetes. He graduated Williams College with a BA in Economics and Spanish and worked as a News Editor, Executive Editor, and Managing Editor of the Williams Record.

Manasi Vaidya

Associate Editor, New York

Manasi Vaidya has a Masters degree in biotechnology. After a stint in a research lab, she spent two years as correspondent in India for BioSpectrum, a publication focused on the Asian biotechnology industry. She then moved to the United States to pursue a Masters degree in Science, Health and Environmental

Reporting at New York University. Manasi has reported primarily on topics that combine health and policy, and her work has appeared in Nature Medicine, Nautilus and Scienceline. Her coverage at BioPharm Insight focuses on cancer.

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