This article is written by Akhil Gupta. This article has been edited by Ojuswi (Associate, Lawsikho).
This article has been published by Sneha Mahawar.
Table of Contents
“The pandemic is a portal,”
Through the pandemic, the world has witnessed the malpractices carried out by pharma industries regarding the production & distribution of medicines that are essential for survival. These Drug companies make a lot of profit from their medicines. With the COVID-19 pandemic, the companies embarked on a race to earn even more profits because there was a huge demand for vaccines. While millions suffered, these companies focused on creating strategies to earn revenue.
When the pandemic hit the world in March 2020, most countries first weaponized themselves with N95 masks. However, soon they witnessed that these masks were in scarcity because of their limited supply and limited accessibility. Further, the companies started to fight over patent rights. Along with this began the demand and supply tussle which just made the medicines essential for treating COVID-19, even more, costlier because world trade was not happening according to the principles of equity. Basic economics states that the demand and supply must be in equilibrium for better market conditions, But due to drug companies trying to have monopoly rights and curtailing competition in the market, this was not possible.
Abuse of patent rights
It is a fact that 80% of the revenue of Pharmaceutical companies happens due to patenting. A patent is sought because it provides a security shield to Drug manufacturing companies against infringement disputes in the future by competitors. Further, another reason for drug companies to avail patents is to “raise venture capital,” which accelerates the overall economic growth of the company. According to an analysis, there are 250,000 patents on a smartphone. It has been observed that the major beneficiaries of the TRIPS agreement would be the developed countries and major losers would be the developing countries which have been the case as also observed from the pandemic wherein the big pharma companies were situated in developed countries and were more prone to giving access to developed countries than developing countries. There are lots of examples to understand the issue here but let us understand some of the prime ones for better understanding.
One of the world’s largest academic centres dedicated to non-profit vaccine research is the University of Oxford’s Jenner Institute located in the United Kingdom. They were able to hastily develop a candidate against COVID-19 and with the help of the Bill and Melinda Gates Foundation, they looked for a partner for manufacturing and distributing globally wherein they struck a deal with Astra-Zeneca, the Anglo-Swedish Pharma giant. Despite receiving more than 1 billion US dollars in funding for the promising vaccine the deal just provided AstraZeneca with the sole right to choose which producer to work with. However, AstraZeneca soon said it would sell the vaccines at no profit. Yet as per the contract with a Brazilian public health institution, Fiocruz, it can be highlighted that the decision as to whether the pandemic is over or not would rely solely on AstraZeneca. The Oxford-produced vaccine showed antibodies and T-cells in roughly 1000 patients as per the Lancet data. In early 2021, AstraZeneca, the pharmaceutical company was licensed to produce the vaccine which included the agreement to produce 1 billion doses with the help of Serum Institute of India for middle-income countries, however, it is an undisputed fact that to vaccinate everyone in the world, it needs as many as 7.8 billion doses which alone few organisations cannot produce.
Case of Roche
In the Netherlands in March 2020 the diagnostic tests were not happening at mass levels because they were dependent heavily on Roche test kits, the Swiss Pharma giant, which held most of the market, however, the country was only able to supply 30% of the outstanding orders. This could have been prevented if Roche had shared their formula but it had denied sharing its process. Only after the European Union led an investigation into its monopoly due to its dominant position did Roche finally release its procedure of test kits.
BioNTech and Pfizer’s BNT162 vaccine case
To deliver the mRNA to cells the Germany Company BioTech with its partner Pfizer of the United States have used their vaccine candidate BNT162 SARS CoV-2 which employs the use of lipid nanoparticle technology. To produce the SARS-CoV-2 Spike protein the lipid nanoparticle is injected into the patient. Then it travels to the cells after which this coronavirus protein triggers an immune response which leads to the production of the antibodies. It was in phase 3 of the clinical trials. BioNTech claimed several patents relating to the pertinent vaccine technologies wherein it included the claims “over mRNA structure, formulations and manufacturing and relies on trade secrets and confidential know-how to protect the aspect of MRNA manufacturing technologies.”
In 2020, Remedesivir was one of the several drugs which were leading in the treatment of COVID-19. In March 2020, the pharmaceutical giant Gilead received the “orphan drug” status which allotted it unfair monopoly power as it means it has the special rights granted a patent on treatments for a disease that affects fewer than 200,000 people in the U.S. But soon this number changed and the public outcry was the only reason that the company asked for a waiver of its status.
Recently Modera has been sued over COVID-19 vas patent misuse. A lawsuit was filed by Arbutus Biopharma & Genevant Sciences which was around 51 pages,.i.e., in which it alleged that it was Moderna that had “misused the patented technology to create a COVID-19 vaccine in record time,” and used their technology to refuse to “engage meaningfully in licensing negotiations.” However, the company defended itself by claiming that it had taken years of research and hard work for the company’s scientists to formulate the Spike Vax, the COVID-19 vaccine that they had created using their own LNP technology. Moderna has been sued in the U.S. federal court alleging that they infringed on six patents that they held, “that describe technology important to the delivery of messenger RNA shorts into the body.”
Response of regimes for a better patent system
India & South Africa on 02nd October 2020 went ahead with a proposal for waiver of “certain provisions of the TRIPS agreement for the prevention, containment and treatment of COVID-19.” This was done primarily to address the issue of shortage of production of essential items during the virus and to reduce the high costs & also to consider the uncertainty for the scale of manufacturing and the supply that would be ultimately needed by the countries around the world to contain the virus. The main idea behind such a proposal was that each country must have the right to produce and try to make vaccines during the pandemic. But the opposing pharma companies argue that this is a shortcut for their competitors to get their hands on the expensive technologies for which they would have normally had to wait or ask for permission as per governing laws of the particular countries & this would not be feasible because the materials used were still in short supply and it takes years to build the resources need to develop the vaccines. It is shocking to understand that out of 8.6 billion doses of vaccines there have already been 6 billion doses purchased by pre-ordering by high and middle-income countries which leaves out the low-income countries. However, in the context of wavering the IPR rights, the decision of the members was to waive off Sections 1, 4, 5, and 7 of Part II of the TRIPS agreement for at least three years from the decision date i.e. from 2021.
Even the European Union in June 2021 had called for the “temporary waiver of intellectual property rights for COVID-19 health products,” and had supported the need to cooperate with the private sector to ensure more production and more reach to other countries. The EU opined that the world should ensure three things: firstly, to make sure that there is discipline in the export restrictions, secondly, there is an increase in production levels and thirdly there is clarity towards the TRIPS agreement concerning compulsory licensing. It was said that “the role of intellectual property is not limited to incentivizing the development of vaccines and treatments. Intellectual property should also play an important role in enabling equitable access to COVID-19 vaccines and therapeutics.”
According to the Doha Declaration of 2001 on the TRIPS agreement, it had been mentioned that the Member states shall be entitled to take certain steps to make sure public health is protected at every cost which includes flexibilities towards compulsory licensing as well
However, things were not easy for the developing countries which had backed India & South Africa regarding the patent waiver because for six months the developed economies around the world were reluctant to agree on this aspect. The countries were the United States, United Kingdom, Switzerland, Japan, Norway, Canada, Australia and Brazil and this was also acknowledged by the European Media Director of Human Rights when Andrew Stroehlein contended, “throttling vaccine production globally by blocking TRIPS waiver… is a scandal that affects us all.”
The term ‘Compulsory licensing’ means when the regime without taking the consent of the patent holder allows someone else to produce the patented product or process or allow to use of such patented product for invention. Therefore, it allows the regimes of developing countries to go for “generic versions of the patented treatments either through domestic production or foreign imports.” Hence, the regimes need not negotiate with the patent holders before they grant compulsory licensing.
Biosimilar drugs are those drugs that are a copy of similar drugs that have been available in the market. On the other hand, Biological products/drugs are those which are produced by “genetic engineering techniques and claimed to be similar in terms of safety, efficacy and quality to a reference biologics.” Recently the European Countries during the conference in Spain, called for “off-patent medications such as biosimilar and generics as a way to ensure medicines remain available,” learning lessons from the COVID-19 pandemic. They acknowledged that off-patent medicines were the key during the pandemic for patients worldwide and the European Union population. At the conference, the members pledged to support the off-patent medicines industry for ensuring they are committed to emergency response plans and to address the abuse issues which the big pharma companies might attempt again or access how they have performed during the crisis. This not only stayed there but now even the United States learnt its lesson and support for biosimilar patents which means there is an increasing shift towards making easy access for “generic drug makers.”
For years pharma companies were not looked at with scrutiny. However, it was soon observed that they were indulging in malpractices by using “evergreening and thicketing” techniques to get patents on their products and create monopoly rights. This led to a sharp incline in the price of its products, limited its supply and didn’t promote competition in the market. During the COVID-19 pandemic, the entire world was shaken but it was the pharma companies that were still relatively better off because they were able to make more profits. The WTO had even tried to encourage the big companies to transfer technologies to the other small firms in different countries but the big pharma companies were very reluctant towards this idea and refused to respond. The question one should ask is whether we will ever witness large corporations to be human-friendly rather than just profit friendly?
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