Intellectual property waiver for Covid-19 vaccines

  • Category
    Economy
  • Published
    10th May, 2021

Context

The United States government announced support for waiving intellectual property protection for Covid-19 vaccines, saying extraordinary circumstances call for extraordinary measures. United States Trade Representative said the US will pursue “text-based negotiations” on the waiver at the World Trade Organization (WTO).

Background

  • In October 2020, India and South Africa had asked the WTO to waive certain conditions of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement that could impede timely access to affordable medical products to combat Covid-19.
  • The countries had asked the TRIPS Council to recommend, “as early as possible”, a waiver on the implementation, application and enforcement of four sections in the second part of the agreement.
  • These sections — 1, 4, 5, and 7 — pertain to copyright and related rights, industrial designs, patents, and the protection of undisclosed information.
  • The proposal had said that developing countries “especially”, may face institutional and legal difficulties when using flexibilities available in the TRIPS agreement.

TRIPS Agreement

  • The 1995 agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a key legal instrument that harmonises intellectual property (IP) protection by imposing binding obligations on member countries to ensure a minimum level of protection and enforcement of IP rights in their territories.
  • As a part of the World Trade Organization (WTO)’s legal regime, the TRIPS agreement also polices the enforcement of IP rights through a compulsory and enforceable dispute settlement mechanism.
  • It is well-known that in the Uruguay Round of negotiations, held from 1986-1994 that led to the formation of the WTO in 1995, the discussions on the TRIPS agreement were contentious.
  •  Developed countries, especially the United States (US), backed by its pharmaceutical transnational corporations, aggressively pushed for the TRIPS agreement.
  • These countries considered that higher cross-border IP protection—which could be effectively monitored through a multilateral agreement—would bring in greater rents for their pharmaceutical corporations.
  • On the other hand, developing countries were not keen on an agreement on IP in the WTO. The developed countries won: using both threats of trade sanctions and allurements in the form of concessions in trade in agriculture and textiles, they compelled developing countries to agree to include IP in the Uruguay round of negotiations.

Analysis

The concept of intellectual property waiver for Covid-19 vaccines

  • The IP waiver might open up space for production of Covid vaccines with emergency use authorisations (EUA) — such as those developed by Pfizer, Moderna, AstraZeneca, Novavax, Johnson & Johnson and Bharat Biotech — on a larger scale in middle-income countries.
  • Most production is currently concentrated in high-income countries; production by middle-income countries has been happening through licensing or technology transfer agreements.
  • Ramping up production capacities will be a lengthy process — a reason being cited by pharmaceutical companies against the move.
  • Most analysts expect this to take at least a few months; it is likely the agreement will be targeted by the WTO’s next ministerial conference in end-November
  • The US support for an IP waiver stems from a proposal by India and South Africa in the WTO last year. That proposal had, however, called for a waiver on all Covid interventions, including testing diagnostics and novel therapeutics.
  • IP waiver proposal should include other interventions going forward. Amid the pandemic, the “widest possible” access to these interventions is limited by production capacity as well as the propensity of high-income countries to acquire “most of the supplies”.
  • Countries including Canada, South Korea, and Bangladesh have shown interest in making Covid vaccines if they can get a patent waiver.

What are the deterrents for the waiver?

  • Pharma companies including Pfizer and AstraZeneca had opposed the proposed waiver — saying eliminating IP protections would “undermine the global response to the pandemic”, including the ongoing efforts to tackle new variants.
  • It could also create confusion that could potentially undermine public confidence in vaccine safety and create a barrier to information sharing.
  • Most importantly, eliminating protections would not speed up production.
  • Many Expert have expressed reservations against tweaking IP rules and sharing Covid-19 vaccine technologies.
  • The thing that’s holding things back, in this case, is not intellectual property. It’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines.
  • Expert’s justification for not sharing vaccine tech with developing countries is “that it would not be feasible for a company to move vaccines to a developing nation”.
  • The argument that these countries do not have the capacity to speedily produce vaccines goes against earlier moves towards a patents regime for generic drugs.
  • Experts said the same reasoning can be used now for the production of vaccines. “They will question the capacity and quality.
  • But a number of companies from different countries have said they are ready to produce, and quality can always be assessed.
  • Between 1972 and 2005, India had adopted process patenting rather than product patenting, and built up a huge generic industry.

Patents and IP Rights

  • A patent – It represents a powerful intellectual property right, and is an exclusive monopoly granted by a government to an inventor for a limited, pre-specified time.
  • It provides an enforceable legal right to prevent others from copying the invention. Patents can be either process patents or product patents.
  • A product patent – It ensures that the rights to the final product is protected, and anyone other than the patent holder can be restrained from manufacturing it during a specified period, even if they were to use a different process.
  • A process patent – It enables any person other than the patent holder to manufacture the patented product by modifying certain processes in the manufacturing exercise.

Background of India’s Patent Right

  • India moved from product patenting to process patenting in the 1970s, which enabled India to become a significant producer of generic drugs at global scale, and allowed companies like Cipla to provide Africa with anti-HIV drugs in the 1990s.
  • But due to obligations arising out of the TRIPS Agreement, India had to amend the Patents Act in 2005, and switch to a product patents regime across the pharma, chemicals, and biotech sectors.

Other roadblocks to scaling up production besides patents

  • The International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) has pointed to other “real challenges” in scaling up production and distribution of Covid-19 vaccines.
  • These include trade barriers, bottlenecks in supply chains, scarcity of raw materials and ingredients in the supply chain, and the unwillingness of rich countries to share doses with poorer nations.
  • The scarcity of raw materials has been a growing issue for ramping up production; several manufacturers have been relying on specific suppliers, and alternatives are limited.
  • Also, countries like the US had blocked exports of critical raw materials used in the production of some Covid-19 vaccines using regulations like the American Defence Production Act.

US-backed vaccine patent waiver: pros and cons –

  • Patent protection leading to high prices and reduced output as monopolies tend to set prices well above the marginal cost of production to maximise profits.
  • Vaccines are priced far more reasonably even if all countries do not pay the same pricefor them. So even if companies like Pfizer are making profits, would removing the IP protection increase production and distribution in the developing world.
  • If IP protection is waived, perhaps some immediate relief in terms of production and distribution could follow if more manufacturers in emerging economies can join in and allocate resources to vaccine production immediately.
  • If intellectual property protection is waived in the face of a public emergency, even as a one-off, will firms invest next time there is a similar emergency.

Conclusion

The global community began this year with the singular aim of ending the Covid-19 pandemic. This would only be possible if more and more people all over the world are vaccinated, and as quickly as possible. Given the enormous demand, the production of vaccines has to be increased manifold and followed by ensuring wider and equitable distribution. An IP waiver alone cannot accomplish such task. Increasing the production of vaccines and ensuring their equitable access would also require building the institutional capacity in several countries, overcoming systemic bottlenecks, and undertaking the necessary reforms in the administrative machinery and the legal framework. Nonetheless, a TRIPS waiver could be an important step in scaling up the production of the vaccines..

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