Tamiflu can combat avian flu, but the Swiss company Roche can’t get us more Tamiflu for well over a year. They won’t (can’t?) set up a U.S. manufacturing plant for almost two years. (Face it, in a pinch neither the Swiss nor anyone else will export much Tamiflu, no matter what the previous agreement.) Roche holds a patent on Tamiflu but India will go ahead and produce a generic version; Taiwan has been making similar noises. What should we do? Here is one argument for producing generic tamiflu. Andrew Sullivan concurs.
I suggest a different approach. Let’s offer Roche a large prize for speeding up the construction of the U.S. plant. This can include legal and regulatory waivers (Bush already has suggested this idea). We also make it clear upfront that if a pandemic comes, the U.S. government will purchase Tamiflu doses at a relatively high price. This latter round of payments can be made upfront, with a refund to the government if no pandemic arrives. Ex post, the government distributes the doses for free, with medical workers and key individuals in the supply chain (food, transportation, Typepad) given priority.
Note how avian flu differs from AIDS. AIDS is a relatively slow acting condition and the possibility of disease hangs around for decades. Avian flu, if it becomes a pandemic, will likely come and go in a few waves of a few months each, spread out over a year or two. That makes the case for abrogating property rights weaker. The key question is not price but whether you have a stockpile at all.
We should not focus on avian flu to the exclusion of other emergencies, including bioterrorism. Avian flu is just one possible pandemic of many. If we confiscate property rights this time around, there won’t be a Tamiflu, or its equivalent, next time. We also need to stop taxing our vaccine-producing infrastructure through liability law.
Respecting Tamiflu property rights would supply an international public good as well. Many other countries will confiscate Tamiflu property rights. If the U.S. holds the line, we are subsidizing global R&D and doing a greater service for the world than our critics are willing to admit.