This article has been written by Avilash Kumbhar pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. This article has been edited by Prashant Baviskar (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).
The Agreement on Trade Related Aspects of Intellectual Property Rights informally referred to as TRIPS, which came into effect in 1995, is to date the most comprehensive multilateral legal agreement on intellectual property amongst the member nations of the World Trade Organization (WTO). The areas of intellectual property that it covers are: copyright, trademarks, geographical indications and patents amongst others and also lays down binding minimum standards for the protection and enforcement of such intellectual properties. Through such standards, TRIPS effectively and adequately promotes protection of intellectual property with a view to reduce impediments to international trade. However, with the onset of the recent outbreak of the COVID 19 pandemic, certain poor countries have expressed concerns and difficulty in keeping up with such expected standards of TRIPS especially in the context of the set international rules governing medicines. In this article, the author attempts to analyze the cause of such concerns in developing countries, their proposed solutions and determine in the background of a pandemic while the pharmaceutical giants are rushing to patent medication and vaccines, whether public health finds only a bleak mention?
Recently, India and South Africa, proposed a waiver in order to relax certain provisions of the TRIPS agreement to help prevent, contain and treat Covid-19 cases through unobstructed and timely access to affordable medical products. This included diagnostic kits, vaccines, medicines, personal protective equipment and ventilators among others to battle the pandemic. In the joint proposal dated 2nd October 2020, the countries sought an exemption from the obligation of members of World Trade Organization under TRIPS in domestically implementing provisions related to various forms of intellectual property rights such as utility & design patents, trade secrets, copyrights and protection of undisclosed information. They also attempted to push for exemption from a provision in the Agreement on TRIPS that accorded a legal basis to member states in stipulating special compulsory licenses exclusively for the production and export of generic drugs to other members that don’t domestically produce the drugs or produce in inadequate quantities.
The waiver & its significance
The joint proposal highlighted the concern of developing countries whose inadequate manufacturing capacities prolonged the tedious procedure involved in the import and export of pharmaceutical products among member states. Citing reports wherein IPRs had actively obstructed the rationing of inexpensive medical drugs, the proposal also drew attention to some WTO members attempting to expedite the process of issuing compulsory use licenses. The proposal in its conclusion asserted that the waiver should at least continue until widespread vaccination is available worldwide and the majority of the world’s population can be said to have developed to some extent immunity. The World Health Organization (WHO) also supported the Indian and South African proposal to the World Trade Organization and called for the relaxation of intellectual property agreements for the common goal of unobstructed access to Covid-19 vaccines.
The joint proposal is considered imperative for more than one reason; not only does it embolden concerns regarding equitable access to medicines and vaccines during a pandemic and its need, it also brings to light the clash between incentivizing intellectual property and the protection of public health in situations like the ongoing pandemic. In the context of Covid-19, intellectual property could be used adversely to cut off easy access to treatments and vaccines in developing countries and one is forced to ask whether higher prices for vaccines due to patents on pharmaceuticals are appropriate in the context of a global pandemic? The next section sheds light on this concern and how such patents maintain a surge in prices on pharmaceuticals when the rest of the economy is in a state of recession.
Pharmaceutical patent monopoly
In the situation wherein the majority of the world’s population, developed and developing have lost their sources of income with even multinational corporations declaring bankruptcy, pharmaceutical giants are in fact, witnessing an escalation on their stocks. These companies are the ones who have invested time and capital in developing a potential vaccine and medication to combat corona which once developed, being intellectual properties involving research and development, the same would be entitled to patents. This fairly runs the risk of future time-bound monopolies that prevent holistic exploitation and others from using their vaccine without authorized consent. The consequences of these monopolies, already harmful in the pharmaceutical industry by its very nature, have been exacerbated by COVID 19. This has resulted in unaffordable prices, and manipulation of trade in vital products like life saving drugs, thereby depriving the masses of the potential cure.
Patents escalate the valuation of pharmaceutical drugs to the consumers as long as pharmaceutical companies set rates. The constant tug of war between incentivizing lifesaving pharmaceutical patent inventors maintaining the public’s access to these drugs is remarkably complex. Impeding access to new drugs along with the existing lack of adequate substitutes can have profound health ramifications. There is an insufficient degree of competition in the market; patents have raised prices and reduced accessibility as well as affordability. In this regard, for a consumer, it’s Hobson’s choice; with having to shell out huge amounts for life-saving pharmaceutical drugs in these conditions. Such a scenario is naturally less than perfect, and opposed to the general public welfare ideals espoused by all major international conventions, TRIPS and WTO included. Hence notably, on public health and social welfare policy grounds, countries should be allowed to restrict the use of exclusive patent rights for pharmaceutical corporations in relation to public health and social welfare policy reasons. This idea has also been codified in a special Ministerial Declaration in the Doha Declaration on the TRIPS Agreement approved by WTO Members at Qatar in 2001.
As expected, the waiver proposed by India and South Africa which rests on the grounds of public health and social welfare policy has its fair share of opposition. The rationale of this opposition stems from the idea that a detour from the TRIPS Agreement is not necessary and the ultimate goal of catering to the pandemic conditions can be sufficiently achieved through provisions already readily available within the agreement. They argue that the absolute waiver or exemption of developing countries even in the background of Covid 19 are extreme and take away from the intellectual property incentive system that has been enshrined, been built on and safeguarded to its members. The debate on the waiver has been discussed in the next section.
The TRIPS debate
Opposition to the waiver argues that TRIPS explicitly guarantees monopoly over inventions for the fixed tenure and it also fuels continuous innovation. Developed countries opposing the waiver contend that the TRIPS agreement already contains within itself sufficient flexibilities under Article 31. This provision is reliant on the assurance of limitations wherein the patent owner is indemnified a reasonable value predetermined by the government. Further, the drugs used for domestic purpose should only be for a restricted course of time as incessant exploitation of the medication shall infringe upon the rights of the patent holder.
However, other than the fact that a second flexibility would allow member states lacking in manufacturing capacity making up in importation from fellow members, the existing flexibilities cited by the waiver opposition aren’t adequate. The proposed TRIPS waiver would be applicable only to pharma inventions and is time-limited, ending when a sufficient majority of the public have been vaccinated to build universal herd immunity to the virus. The waiver would not allow any other provisions of TRIPS rules to be affected, which wouldn’t impinge upon the member states research and manufacture of COVID 19 tools.
Further, parallel importation, already a complex procedure, would be further complicated with requirements of approvals and formal contracts with exporting countries in the face of urgency posed by the pandemic. Additionally, voluntary licensing, frequently touted as a remedy by waiver opponents, represents only a short-term, second-best solution since it is the patent holder who has the first and foremost right to agree on a voluntary license before any application for compulsory license can be made to the state.
All these measures advanced by the waiver are less far-reaching and have partial requirements for the issue of compulsory licensing, than what has been proposed by India and South Africa in the joint waiver proposal which was floated in early October of 2020. The illusion of the importance of protecting intellectual property rights as a “necessity” in a pandemic has been disproven time and again.
The international community is accountable for guaranteeing the right to adequate and accessible medical care as mandated under Article 25 of the Universal Declaration of Human Rights and that this right is upheld universally, equitably and uniformly amongst the world population. In times of crisis, as we are now witnessing the most devastating pandemic in over a century, public and social welfare as a value must take precedence over financial and monetary considerations. Heath must not be perceived as a privilege for some, but rather as a human right for all.
In the current scenario, questions of judiciousness and ethics should arise to decrease the death toll to further public health and social welfare goals. Moreover, it is a huge opportunity to relocate intellectual property in the dominion and within the agenda of human rights in a way that both can effectively coexist by including the safeguards that the current patent regime secures as essential public rights and interests. It is therefore understandable that developing countries have proposed provisional relinquishments from specific provisions of the TRIPS Agreement in order to prevent, contain and treat COVID-19 keeping in mind the basic principle that no one should profit from a pandemic.
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