ANALYSING THE POSSIBILITY OF A WTO IPR-WAIVER VIS-A-VIS COVID-19 VACCINES
As countries around the world have started vaccinating their residents against COVID-19, the disparity in distribution of vaccines between rich and poor countries has become obvious and alarming. Since October, the World Trade Organization has been debating a proposal which was initiated by India and South Africa to waive obligations under the Trade-Related Aspects of Intellectual Property Rights or TRIPS Agreement, to increase the accessibility of COVID-19 technologies, including vaccines. Both, India and South Africa, while requesting the waiver, have argued that “an effective response to the COVID-19 pandemic requires rapid access to affordable medical products including diagnostic kits, medical masks, other personal protective equipment and ventilators, as well as vaccines and medicines for the prevention and treatment of patients in dire need.” They also conveyed their concerns about how new diagnostics, therapeutics and COVID-19 vaccines, will be made available promptly, in sufficient quantity and at affordable prices to meet the global demand. The European Union, the United Kingdom, the United States, and other developed countries have however strongly opposed this waiver request.
This article discusses why a WTO waiver of Intellectual Property Rights is the need of the hour, and will help in the eradication of COVID-19, globally. The article also provides possible IP related alternative solutions in case the developed countries do not change their stance on the waiver request.
Past Efforts made by WTO
The TRIPS Agreement, which was primarily driven by the trade and commercial interests of the industrialized countries, was a part of the set of treaties that established WTO in 1994. The Agreement required all WTO Member states to provide a minimum standard of intellectual property protection, and helped in harmonizing the diverse global standards for intellectual property protection, pharmaceutical patent policies and practices. Previously, many countries did not consider patents on products such as medicines and food to be in the public interest. Half of the member states of the 1883 Paris Convention on the Protection of Industrial Property (a major international patent treaty prior to TRIPS, now administered by WIPO) had actively excluded pharmaceutical patenting altogether. Some countries only made patent available for the manufacturing processes but not for the final end product. Even some of the wealthier nations did not grant product patents on medicines until relatively recently: for example, Italy and Sweden began granting pharmaceutical patents only in 1978 and Spain in 1992. Proponents had argued that TRIPS would increase foreign direct investment, technology transfer and research in the developing countries, while critics argued that it would tarry industrialization, hamper technology transfer and increase the prices of essential goods, such asmedicines and agricultural inputs.
The much-awaited results of the TRIPS Agreement were prominent by the turn of the century, when the world found itself in a similar waiver dispute during the HIV/AIDS crisis. When the HIV/AIDS crisis was at its peak, numerous developing and underdeveloped countries found it difficult to afford high-priced drugs patented by pharmaceutical companies based in developed countries. Having spent billions on the development of such drugs, the patent holders opposed to lowering their prices. This meant that the WTO had to decide whether patent rights should take precedence over providing affordable medicines to people afflicted by a lethal disease.
Jennifer Hillman from the Council on Foreign Relations observed that licensing, which allows a patent holder to permit others to make or trade the protected product—usually at a price and with some supervision from the patent holder to ensure control, could resolve the inherent tension between the protection of intellectual property and the need to make and distribute affordable medicines. He also added that in case of a public health emergencies, it may become impossible to obtain a license. In such cases, “compulsory licenses” could be issued to the local manufacturers. Compulsory licenses would authorize and enable the local manufacturers to make patented products or use patented processes even though they do not have the permission of the patent holders.
In the Doha Ministerial Declaration in 2001, WTO members clarified that each member shall have the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted. Later in 2003, the WTO members adopted a waiver that allowed poorer countries incapable of making pharmaceutical products to import cheaper generic drugs from countries where those drugs are protected by patent. Both importing and exporting countries were excused from their obligations under the TRIPS Agreement. The waiver later transformed into an amendment in the WTO IP rules in 2017. This shows that the WTO has not allowed patent rights to take precedence over affordable medicines, and efforts have been made to improve poor countries’ access to affordable medicines.
The Current Scenario
While WHO keeps advocating for vaccination of at least 70% of the entire world population to stall the pandemic, we find that around ten countries (namely, the US, China, the EU, the UK, Israel and the United Arab Emirates) account for 95 percent of the total 40 million doses administered globally. Statistics show that the current vaccine requirement is 10.92 billion doses, that is, two doses per person. The current availability is running at a deficit as it lags way behind by 7.2 billion doses. Developed and high-income countries have already hoarded majority of the available doses by making commercial deals with manufacturers. The share of vaccines bought by lower-middle income and low-income countries account for only six and four percent of the entire vaccine distribution. If such trend continues, then the poorer countries can achieve mass vaccination only by 2024 which could lead to a catastrophic outcome considering the various COVID-19 mutations.
What difference would the waiver make?
The waiver would enable WTO member states to collaborate on manufacturing, supplying and scaling COVID-19 medical tools equitably by overriding patent rules of WTO’s TRIPS Agreement, thereby breaking the medical hegemony of all the developed nations, which make vaccines and other drugs inaccessible to poorer countries through rigorous pricing regimes and patent policies. The waiver would temporarily remain until global herd immunity is declared by WHO, and would be optional, i.e. countries may choose to not abide by it. WTO member states, who oppose this current waiver proposal brought by India and South Africa, have maintained that the existing TRIPS flexibilities allow countries experiencing a public health emergency to issue compulsory licenses to domestic pharmaceutical companies to produce less-costly generic equivalents. Despite that, the process remains cumbersome and does not apply trade secret know-how (cell lines) which is important during imitation of biologic medicines and vaccines.
However, challenges will still remain as approving the waiver would only solve one part of the issue related to accessibility. It is true that in developing and least-developed countries, health systems operate in limited capacities and are underfunded which means that developed countries will have to share technologies related to manufacturing prowess in order to ensure utilization of the waiver.
Challenges in hand
The most insurmountable challenge right now is to reach a consensus with the developed countries, who are not ready to give up their pharmaceutical monopoly, more so, because these vaccines were funded by the government using their taxpayer’s money. This has led to a situation called vaccine nationalism, whereby developed countries prioritize their own vaccine needs. Vaccine nationalism could have a massive impact on not just the global health recovery but the world economy too, with one report estimating its impact at more than $1 trillion per year.
Moreover, compulsory licensing itself does not guarantee success as the related rules are so complex that it has been used only once till date. Countries like United States, Canada, United Kingdom and the European Union, have previously asserted trade pressure on countries which attempted to invoke TRIPS flexibilities. Pharmaceutical companies around the world have also warned that allowing their COVID-19 vaccines to be copied through recourse to compulsory licensing “would undermine innovation and raise the risk of unsafe viruses.”
The waiver thus has a long road ahead before it gets accepted. It is evident that the proposal has continued to face stiff challenges from the developed nations and is bound to face an uphill battle owing to the consensus-based decision-making process of the WTO.
In no event should IP rights act as a legal obstacle to ensuring access to medicine which is affordable, especially, in the middle of an unprecedented pandemic. At the same time, the sanctity and integrity of patent systems must be preserved and protected by respecting innovation, and it must be ensured that anti-IP sentiments are not generated globally. A patent pool could ensure aggregation, administration and dissemination of licenses for a common purpose for a limited amount of monopoly. Patent pools have been used in the past, and have played an important role in shaping the face of various industries by allowing companies to use the technology by pooling rather than running out of profits. For example, in 1998, Sony, Phillips and Pioneerformed a patent pool for inventions that were essential to comply with certain DVD-Video and DVD-ROM specifications. In this regard, creating a pool of COVID-19 related innovations would ensure immediate licensing to hundreds of manufacturers around the world and increase the availability and accessibility of vaccines and other medical equipment.
Another possible solution could be a collaborative effort by all the developing and least-developed countries to justifiably invoke Article 73 of the TRIPS Agreement (Security Exceptions) which can override other IP protections under TRIPS Agreement. The COVID-19 pandemic qualifies as an emergency in international relations within the meaning of Article 73(b)(iii), and a member’s act of overriding IP rights could be justified as absolutely “necessary” to protect its essential security interests within the meaning of the introductory clause of Article 73(b). Since it is a fundamental responsibility of sovereign governments to protect the health and safety of their citizens, provisions addressing public health emergencies should not constitute an obstacle to a justifiable invocation of Article 73.
The WTO remains famous for its prolonged multilateral impasse solutions. A delayed response to this dispute can lead to cataclysmic outcome in developing and least-developed countries. The slow paced and uncertain success in international institutions and international endeavors is what led to these developing countries to seek waiver, and simultaneously start manufacturing in their own country. It is true that such endeavors lie outside the gamut of WTO, and thus calls for a combined multilateral action to be taken by developed countries. However, the WTO’s work remains to ensure that a right balance is struck between flexible protection of IP rights while also promoting access and affordability of life-saving medicines. This balance must be the aim of the WTO and every endeavor of multilateral cooperation in the fight to end this pandemic, and must be maintained throughout to ensure such disputes do not occur in the future.
Title Image source: Business Today
This article has been written by Mainak Mukherjee, a second year law student at National Law University and Judicial Academy, Assam.