Donald Trump May Have Deprived Vivek Ramaswamy of a COVID Vaccine Fortune
The untold story of how President Donald Trump's drive to expedite coronavirus vaccines may have violated patents owned by Ramaswamy's company.
Vivek Ramaswamy, the entrepreneur running for the 2024 GOP presidential nomination, was asked by Iowa-based talk radio host Steve Deace recently about Operation Warp Speed, the public-private partnership to speed up the research and delivery of COVID-19 medications.
Ramaswamy disputed the success of the vaccine initiative – created by then-President Donald Trump in 2020 at a cost of over $18 billion – and called it “an example of crony capitalism.”
“I think we need to divorce the private sector from government,” Ramaswamy added, “because that’s where a lot of cronyism festers.”
Left unmentioned in the interview was the direct role the initiative may have played in depriving Ramaswamy of the unprecedented fortune unleashed by the dominance of American vaccines.
In the rush to develop a treatment for COVID-19, the Trump administration invoked a World War I-era law that gave companies like Moderna the right to infringe on third-party patents in order to develop products for the government during a national emergency.
Moderna’s messenger RNA vaccine, known as mRNA, works by delivering genetic instructions to a patient’s cells. The novel approach, which allows the company to rapidly develop new vaccines using genetic sequencing remade the company overnight. Moderna, using the mRNA technology, was one of the first pharmaceutical companies in the world to receive emergency authorization for its COVID-19 vaccine.
The innovation fueled skyrocketing growth for the Massachusetts-based company. Moderna which had never brought a drug to market in the past, soared to a valuation of over $180 billion in 2021 as it rolled out the vaccine, minting several new billionaires in the process.
But a case in federal court contends that Moderna improperly used patented technology owned by a subsidiary of Ramaswamy’s Roivant Sciences, the biotechnology firm he founded.
Moderna, in order to produce its COVID-19 vaccine, allegedly used the patented lipid nanoparticle technology developed by Arbutus Biopharma and licensed only to a sister company called Genevant Sciences without authorization.
The two companies are close to Ramaswamy. Ramaswamy previously served as chairman of Arbutus, and Genevant is a subsidiary of Roivant, the firm Ramaswamy founded in 2014 and left last year. He still owns shares of Roivant worth upwards of $50 million.
It’s hard to overstate the importance of lipid nanoparticles in the rapid creation of the coronavirus mRNA vaccines. The mRNA molecule is fragile and if injected directly, would rapidly degrade and fail to penetrate the membrane of the human body’s cells. The lipid nanoparticles are essentially little oily bubbles used to encase the mRNA molecule so the vaccine can make it to the cells, delivering instructions on how to build spike proteins.
Arbutus and Genevant, in court filings, claim that Moderna had previously licensed their lipid nanoparticles for other products and appeared to have copied the technique without authorization for its COVID-19 vaccine. “Moderna,” the plaintiffs claimed, “simply used the patented technology without paying for it or even asking for a license.”
Moderna, in response, noted that even if the infringement had taken place, the company had every right to take any patent it needed for the vaccine, pointing to the Trump administration’s invocation of 28 USC § 1948, a little-used law that grants corporations with extraordinary powers during an emergency to use the patented inventions without the permission of patent holders.
The law, though technically enacted in 1910, was expanded in the wake of the First World War, during which the U.S. military struggled to mobilize cutting-edge armaments from private firms. In particular, the nascent aircraft industry was beset at the time by monopolistic forces, including the Wright brothers and the airplane manufacturer Glenn Curtiss, which used "almost confiscatory" patent licensing to restrict competition. Franklin Roosevelt, then serving as Secretary of the Navy under President Woodrow Wilson, called for Congress to expand existing compulsory licensing law to allow the military to acquire aviation patents and other patents in the case of a national emergency.
Trump made no public mention of invoking Section 1498 in his administration’s contracts for vaccine development. The administration cited the law in many major COVID-19 related contracts, including funds for respirators and coronavirus therapeutics.
In recent years, progressive lawmakers, including Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, I-Vt., have called on the federal government to make more use of Section 1498 to seize patents and force the production of generic drugs for certain high-cost medications. Despite the partisan rancor in Washington, D.C., that makes bipartisan healthcare reform nearly impossible, Trump’s use of the law places him well to the left of most business-friendly Republicans on pharmaceutical policy.
Moderna, in its initial contracts to research and deliver vaccines, received Section 1498 authorization, a fact its attorneys have forcefully reminded the court in its dispute with Arbutus-Genavant.
“Short of war, it is difficult to conceive of a situation more within the heart of Section 1498 than the COVID-19 crisis,” wrote Moderna’s attorneys, who argued that the plaintiffs should instead file suit against the U.S. government in federal claims court.