Moderna vaccine patent dispute: 'It’s a political story. It’s a financial story. It’s a legal story’

Research director at Public Citizen Zain Rizvi speaks with Yahoo Finance Live Reporter Anjalee Khemlani about the legal battle regarding Moderna vaccine patent.

Video Transcript

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- Welcome back. US National Institutes of Health scientists played a major role in developing the Moderna vaccine, but they're not getting credit. "The New York Times" is reporting that Moderna excluded three NIH scientists as co-inventors of a central patent for the company's multibillion-dollar COVID-19 vaccine in its application. And here to discuss the details is Zain Rizvi, research director at Public Citizen, along with "Yahoo Finance's" Anjalee Khemlani.

And Zain, let me just begin. Can you outline the situation with here? We know the Pfizer vaccine as the Pfizer/BioNTech vaccine. Should there be another name attached to the Moderna vaccine?

ZAIN RIZVI: Yeah, so we know from the beginning of the pandemic that Moderna did not work on this vaccine alone. It was supported in large part by the National Institutes of Health, among other US government agencies. So right from the beginning of the pandemic, the NIH called it the NIH/Moderna vaccine. The US government, for example, helped invent the vaccine, develop the vaccine, run the clinical trials, and even paid for some of the manufacturing.

And so most recently, it turns out we were digging through Moderna's patent filings, and we found that the US government actually asked Moderna to be named on a key patent application. And this patent application, Moderna decided, it invented by itself.

ANJALEE KHEMLANI: So Zain, let's dig into that. Of course, we know that we've been hearing about this issue since last June, really, when the questions started coming up about the NIH's input. We're gonna get back to, specifically, the situation for a second. But broadly speaking, is this any different than typically, when the government does fund research that pharma companies then take off into commercialization?

ZAIN RIZVI: It is part of a larger trend in which the public sector, of course, contributes to a lot of pharmaceutical development. But what makes this situation particularly unique is the fact that the National Institutes of Health actually had scientists working hand in hand with Moderna. And so there is really a federal intellectual contribution as well as a financial contribution for this vaccine.

ANJALEE KHEMLANI: So then let's talk--

- And let me ask you about the-- go ahead, Anjalee. Sorry.

ANJALEE KHEMLANI: No worries. Thanks, Jared. So then let's go back to NIH and Moderna and just what specifically here is the solution and what is its relevance as we talk about-- I know that part of this issue is global vaccine equity. What is the significance here that we're looking at in order to resolve this for the US?

ZAIN RIZVI: Look, there's many layers to this issue. But I think one of the most important factors here is that right now, Moderna has unilateral authority over how the vaccine is priced, how it's produced, where it's produced, how it's produced, and effectively, who can get access. And so if the US were named as a co-inventor, then it would create a presumption of co-ownership.

And this is, of course, just one patent application. There are multiple patent applications. But what it really gets to is about US control, about the idea that Moderna alone cannot exclusively control decisions about some of this vaccine technology.

- So is this really about these political considerations? It seems to be political to me. I'm just also wondering, is there any potential financial fallout? Could there be, I don't know, fees, back penalties-- I don't know, some kind of dues owed to Moderna-- or excuse me, owed by Moderna-- to the NIH in this instance?

ZAIN RIZVI: Look, it's a political story. It's a financial story. It's a legal story. And it's a confusing mix of all three.

So I would say, in terms of the financial situation, if the US government had this patent, then the US government could license this patent out unilaterally. It would not need to ask Moderna for permission. And so you could imagine some royalties on that end.

There is separately an ongoing dispute between the US government and Moderna over another patent that Moderna has yet to license from the US government. This is the 2P patent, the 070 patent, about a particular piece of the vaccine technology. And then, finally, there is potentially some legal issues here as well in terms of the NIH could conceivably ask a court to, you know, adjudicate on this dispute and whether the US government should be named on this patent application.

ANJALEE KHEMLANI: It looks like, Zain, looking at how this has, you know, really taken the time, we've heard some pretty strong language from NIH director Dr. Francis Collins only really recently. But it seems like they might be at least entertaining the idea of going to court. Do we have any idea, based on history, what the likelihood of that is and whether or not the courts might get involved here?

ZAIN RIZVI: You know, it is pretty notable that Francis Collins put out a pretty strong statement recently, saying that he considered it a serious mistake that NIH scientists were not named on a key patent application. And he did reference some legal authorities. But then the NIH clarified that by legal authorities, he meant government patent lawyers.

In the past, the US government has taken some companies to court over some of these issues. The closest historical analogy is about a different patent situation. It wasn't an inventorship issue. But the US government is currently in court with Gilead for Gilead's use of a CDC patent over PrEP, the HIV medicine.

ANJALEE KHEMLANI: Right. So let's talk about the vaccines again, broadly speaking. I know that if you take a look at all the different ones that the US has authorized, Johnson & Johnson has agreed to provide doses, we just learned, to conflict zones. We know that Pfizer and BioNTech have been fighting the idea of sharing their technology, except for to those partners that they deem viable, like they did in South Africa.

So similarly, we've seen that while Moderna did voluntarily agree to not enforce its patent early on, they are still putting up this fight right now for this. I think there's a theme here where we're seeing sort of these vaccine companies look to keeping some level of control on the products themselves. Do you see this as any different to, say, the Pfizer issue?

ZAIN RIZVI: They're related, but I would say that Moderna stands out for some of the choices the company has made. Look, there's only one company right now, you know, that has US FDA authorization that is selling-- that is reportedly selling a vaccine to a sub-Saharan African state for $29 per dose. And that is Moderna. And this is despite the fact that US taxpayers have given nearly $10 billion in purchase commitments, in R&D money, and manufacturing money.

So you have this kind of paradox where the company that has taken the most public support has acted least consistently with the public interest. And now we're seeing the Biden administration expressing frustration with Moderna for not supplying enough vaccines to low- and middle-income countries.

We need the pandemic to end. And so that means vaccinating the world. If we want the economy to restart, if we want the threats of variants to go down, if we want to get life back to normal, then these companies have to step up. And if they don't, then the Biden administration has to step up and require the companies to really help vaccinate the world.

- And we're gonna leave it there. Zain Rizvi, research director at Public Citizen, along with "Yahoo Finance's" Anjalee Khemlani.