Licenses, Vaccines and Ebola: the Delay, Explained

Posted By Chris Laliberté

The process of researching and developing a new product, weaving it through government approval procedures, and finally bringing it to market demands a substantial investment of both money and time. This long, convoluted process affects all regulated industries, including the pharmaceutical industry. Arguably, these hurdles stand as an accepted cost that accompanies innovation in Canadian business. Pharmaceutical development differs from most other industries, however, in that millions of lives depend on the products “Big Pharma” delivers.

Given this dependency on access to effective medical materials, one would hope that, in the event of a crisis, governments and corporations would have provisions in place to cooperate and serve the best interests of the people. Unfortunately, this does not seem to be the case. Despite the urgent need to contain Ebola, experimental materials necessary to combat the spread of the disease through West Africa have been held captive by a commercial contract.

NewLink Genetics

Iowa-based company NewLink Genetics is a small pharmaceutical company that specializes in cancer immunotherapy treatment. It has “no experience bringing a product through the regulatory process and […] no vaccine production capacity of its own.” And yet, for the past 4 years, it has owned the rights to the Winnipeg-developed VSV-EBOV vaccine – an experimental vaccine that treats Ebola – under a licensing agreement with the Canadian government.

At the time the license was granted in 2010, the urgency for a vaccine seemed low. Still, given the high threat that Ebola poses to the lives of those infected by the disease, the Canadian government expected that NewLink would complete clinical trials, take the vaccine through the regulatory approval procedure, and bring VSV to market. It has not.

Little has been done in the four years since NewLink acquired the license. In fact, NewLink only began human clinical trials in the third quarter of this year. Instead, NewLink has been focused on its more profitable cancer-treatment research, as evidenced by their deal with Genentech, potentially worth over $1 Billion USD. Increasingly, it has become clear that the Ebola vaccine is simply an “afterthought” for NewLink.

At issue is a stockpile of prepared VSV doses as well as confidential details regarding the manufacturing process required for the regulatory approval process. Of 1500 doses owned by the Canadian government, 800 have already been donated to the WHO for clinical trials in Switzerland, and trials are ongoing. Those owned by NewLink would bolster the available resources to help accelerate development, if other organizations could access them and assist NewLink. The recent Ebola outbreak calls for immediate action.

Why does such a small company hold the VSV license in the first place?

The main issue seems to lie with the low commercial value of the vaccine. Prior to this outbreak, fewer than 3000 confirmed Ebola cases emerged over the past four decades; pharmaceutical giants with the tools and the bankroll to complete VSV testing in a quick and efficient manner would not risk the substantial cost for such a low return.

The sudden demand for VSV could prove in the best interest of NewLink, who think it “not unreasonable” that they should retain control over development. However, with 13,268 total cases confirmed this year, the public need for such a vaccine far outweighs any commercial interest. In this case, NewLink’s potential for financial gain seems at odds with the best interest of the affected nations and healthcare professionals whose lives are at risk.

Law professor Amir Attaran of the University of Ottawa has spoken out against the apparent idleness of the Canadian government in exercising possible options to transfer rights to the vaccine. Certain provisions in the agreement allow Canada to terminate the license if NewLink proves incapable of developing the vaccine in a satisfactory manner. Even with the license in effect, however, Canada could issue a non-commercial license to another company, or allow other manufacturers to produce VSV in response to emergencies such as the current one in West Africa. Why the government has failed to exercise any of these options remains unclear, and the source of Attaran’s frustrations.

Despite calls for action to transfer the rights into more capable hands, NewLink has retained their license and begun human trials in Maryland. A recent statement by CEO Charles Link offered some cause for optimism when he relayed NewLink’s intent to collaborate with a larger company that could “complement and enhance” VSV development.

NewLink proved true to their word Monday with the announcement of a partnership with pharmaceutical giant Merck. Merck’s international presence and wealth of experience should see the vaccine made available sooner than if NewLink had proceeded alone; critics argue, however, that earlier government intervention would have allowed the vaccine to come to market even sooner.

Policy Considerations

The NewLink situation raises concerns as to how governing bodies ought to structure agreements with private organizations while keeping public interest the primary concern. In this instance, those with the most resources—the big pharmaceutical companies—take no interest in developing a commercially unviable product, despite the necessity of this vaccine as the most effective means to contain a health crisis; on the other hand, smaller companies willing to take on the financial risk lack the resources and experience to develop the vaccine in a timely and efficient manner.

Even if the Canadian government had revoked NewLink’s license, they would still have faced the obstacle of finding a large company willing to incur the licensing fee as well as associated development costs without substantial return. While Merck’s involvement should now accelerate the development process, the cost of weeks of idleness remains to be fully understood.

If it is the government’s duty to ensure public health and safety through quick and decisive action in the event of a crisis, then perhaps in the future the government should take care that preexisting agreements do not prevent the most capable candidate from delivering the required medical materials to those in need in the most efficient manner. Commercial contracts for medical research and development should serve to hasten, not halt, the process of saving lives.

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