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This article is written by Suvigya Buch, pursuing Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. The article has been edited by Zigishu Singh (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Introduction

It has been a little over a year since India and the rest of the world felt the devastation caused by the COVID-19 pandemic. What was reported to have started in China soon spread all across the globe, bringing entire nations to a standstill, economically and literally. Many COVID-19 patients, even in developed nations like the United States of America (“U.S.”), have struggled with the cost of care, especially those who have been diagnosed with severe COVID-19 and its consequent health complications. The population of developing and under-developed nations, especially low-income nations with underdeveloped healthcare systems have and will continue to face a larger number of challenges in being able to afford their citizens the necessary medical treatment and access to the same. During the initial days of the pandemic, there was a lot of discussion around a possible medication or vaccine and how said the vaccine would be made in such a short time and put up for supply to the remainder of the world. For developing and under-developed nations this was a serious concern.

For many decades the controversy on whether and to what degree Intellectual Property Rights (“IP Rights”), given their restrictive nature, contributed to the development of innovation especially in the medical field. This article tries to explore various points in this debate and deals with the Waiver of Patent Rights of the  COVID-19 vaccines by the WTO.

Innovations in the medical field and IP Rights

Allowing innovative companies to manage research and growth, as well as production and distribution, under the existing framework, according to the majority of advocates and public health researchers, leads to suboptimal results and, when aided by the monopoly power provided by patent rights, may lead to excessive pricing. Despite prior attempts to find a middle ground between affordable and accessible medical treatment and investment in advancements, the debate continues. As a result, drugs and/or vaccines created to tackle COVID-19 and other related health issues are protected by patents under the World Trade Organization’s (“W.T.O”) Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) and sold to various Governments by innovative  companies.

 Countries have to grant patent holders exclusive rights to produce, use and sell drugs and vaccines for twenty years from the date of the patent filing, according to Articles 28 and 33 of the TRIPS Agreement. As a consequence, IP Rights would likely help to reduce availability, intensify capacity shortages, and contribute to exorbitant pricing. What happens when two large and powerful nations of the world propose for such IP Rights to be waived off is the main question at hand. Thus, this pandemic coupled with the race to make vaccines as well as other useful innovations more widely available has yet again brought to light the existing friction between public health promotion, international trade laws, and IP Rights.

The proposal for waiver of IP Rights regarding COVID-19 treatments and vaccines

The World Health Organisation on the 11th of March, 2020, officially announced the COVID-19 virus or Coronavirus to have caused a pandemic. Despite a few bleak initial months, by November of 2020, vaccines had been prepared and approved for use in different nations around the globe. Some of these vaccines include Moderna, along with its collaborators, developing mRNA vaccines, whereas Johnson & Johnson, AstraZeneca, the University of Oxford, and Russia’s Gamelya Institute developed adenovirus candidates.

Medical treatments such as vaccines and other medications that have been developed to combat and curb the COVID-19 virus may be patent protected as per the TRIPS Agreement and thus sold to various governments all over the world by the original manufacturing company as opposed to simply allowing every pharmaceutical company to use the formula and make the vaccine themselves. This is allowed under Articles 28 and 33 of the TRIPS Agreement and as a result, a monopolistic environment is formed. In a pandemic that has not taken very long to bring the world to a standstill, it is not possible for under-developed nations with low-income levels to be able to access and distribute the required vaccination and medication with the necessary ease.

As a result, South Africa and India in October of 2020 put across a proposal at the World Trade Organization (WTO) asking its members to waive protections in WTO rules governing copyrights, patents, trade secrets, and industrial designs with special reference to “prevention, containment or treatment of COVID-19 until widespread vaccination is in place globally, and the majority of the world’s population has developed immunity.” For the duration of the pandemic, South Africa and India “wanted to give all WTO members the freedom to refuse to grant or impose patents and other IP rights relating to COVID-19 vaccines, medicines, diagnostics, and other technologies. Both nations reasoned that quick accessibility to inexpensive medical supplies such as diagnostic kits, ventilators, medical masks, vaccines, medicines, and other personal protective equipment as well for the deterrence and care of patients in desperate need, is essential to be able to combat the pandemic. Furthermore, they also questioned how new treatments and vaccines for COVID-19 that are developed with time will be made swiftly available at inexpensive rates to meet the global demand.

The proposal attracted the support of several developing nations and co-sponsorship from Pakistan, Bolivia, and Eswatini among others. However, it did not pass due to the lack of a consensus between the WTO member nations to go ahead with the said waiver. Countries with significant power such as the U.S. and the United Kingdom among other developed nations as well as the European Union opposed the proposal made by India and South Africa. Most of these nations believed it to be an extreme measure to cure an unproven problem. There is no indication that IP Rights are a sincere obstacle to access to COVID-19 related medicines and innovations, according to a spokesperson for the European Union. As a result, there was no consensus reached within the stipulated deadline as under Article IX(3) of the Marrakesh Agreement which was 90 days and therefore the members of the WTO agreed upon postponing any discussion on such a waiver of IP Rights till the TRIPS Council of 2021. However, the new President of the U.S., Joe Biden, on the 5th of May, 2021, reversed the stance of the U.S. and said that they backed the proposed waiver. While this comes as a welcome move for several under-developed and developing nations, it has enraged the pharmaceutical companies as well as ensuring  the engagement of the investors and inventors to come. Pharmaceutical industry trade unions and companies have also expectedly been vocal of “their opposition to the proposal in question. The International Federation of Pharmaceutical Manufacturers and Associations in December of 2020” released a statement according to which amidst the pandemic, weakening national and foreign IP systems would prove to be counterproductive as IP allows for research and development as well as ensures the engagement of the investors and inventors to come.

Viability of a waiver of IP Rights regarding COVID-19 treatments and vaccines

Article 7 of the TRIPS Agreement specifies that IP Rights must be secured and applied “in a manner conducive to social and economic welfare”. Hence, before considering such a broad waiver of IP Rights it must first be shown that the existing trade rules and compulsory licensing are not enough in ensuring accessibility to inexpensive medication. It can therefore be argued that the developed nations opposing the waiver are right at this stage as there is no indication of such a waiver being the need of the hour. It may be argued that a WTO waiver is the last resort that may only be used when current WTO commitments are found to be insufficient. This was the case with Article 31 of the TRIPS Agreement’s compulsory licensing provisions, which effectively prevented Members with no or insufficient manufacturing capabilities from taking advantage of the TRIPS Agreement’s versatility.

Given the lack of infrastructure and other such essential resources and requirements, it is important to keep in mind that while it may be considered one thing to temporarily reduce the applicability of IP Rights to urgent public needs during a pandemic or other global health emergency, it is another thing entirely to remove the consideration of profitability in all policy-making relating to access to vaccines, necessary testing and therapies, and all other medical products, facilities, and supplies. While there may be a moral aspect to this scenario, it is important to consider whether such a moral aspect will even matter if such an approach is unable to yield the desired results, i.e. easy access to cheap medication.

Conclusion

It can therefore be inferred that in the short term in cases where there is the existing knowledge of creating the medicines or other forms of treatment already exist, a waiver of IP Rights may help speed up the delivery of goods and services. However, in the long run not only will the waiving of IP Rights lead to a lack of incentives for those working to create said medication but also consequently prevent the invention and advancement of knowledge for new medication or vaccinations that the world requires.

Due to the capitalist nature of the economy, several developing nations had to suffer from the lack of infrastructure as well as access to vaccines that would help them in combatting the pandemic. However, the direct waiver of IP Rights relating to COVID-19 vaccines and medications may allow others to manufacture it in principle, but it cannot magically provide the developing nations with the required standard of manufacturing plants, technology, and know-how. Rather than fighting to waive the IP Rights of vaccines and treatments related to COVID-19, pharmaceutical companies must join forces to increase the speed of manufacturing as well as the capacity for the same.

However, the TRIPS Council of the WTO has recently agreed to discuss a revised proposal according to which the waiver should be valid for at least three years after the decision is made on the proposal. The decision taken by the TRIPS council in this matter will be important as it will not only impact the current pandemic but also act as a significant precedent in the future.

References

  1. Report on the United Nations Secretary-General’s High-Level Panel on Access to Medicines, UNSGaccessmeds (Sept. 2016), http://www.unsgaccessmeds.org/final-report (last visited on Apr. 6, 2021).
  2. Trade-Related Aspects of Intellectual Property Rights Agreement (1994), Art. 28, Art. 33.
  3. Allie Nawrat, Exploring the COVID-19 vaccine IP waiver proposal at the WTO, Pharmaceutical Technology (Mar. 15, 2021), https://www.pharmaceutical-technology.com/features/wto-ip-waiver-proposal-COVID19-vaccine/ (last accessed on Apr. 6, 2021).
  4. Waiver From Certain Provisions Of The Trips Agreement For The Prevention, Containment And Treatment Of COVID-19, World Trade Organisation (Oct. 2, 2020) https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669.pdf&Open=True (last accessed Apr. 6, 2021).
  5. Council for Trade-Related Aspects of Intellectual Property Rights, Waiver from Certain Provisions of the TRIPS Agreement, ¶. 5, 7.
  6. Helen Collis, WTO Members Reject IP Rules Waiver for Coronavirus Technologies, Politico Pro (Oct. 16, 2020).
  7. Marrakesh Agreement establishing the World Trade Organisation, 1994, Art. IX(3).
  8. Pharma delivers COVID-19 solutions, but calls for the dilution of intellectual property rights are counterproductive, IFPMA (Dec. 8, 2021), https://www.ifpma.org/resource-centre/pharma-innovation-delivers-COVID-19-solutions-beyond-expectations-but-calls-for-the-dilution-of-intellectual-property-rights-are-counteproductive/ (last accessed on Apr. 6, 2021).
  9. Pharma delivers COVID-19 solutions, but calls for the dilution of intellectual property rights are counterproductive, IFPMA (Dec. 8, 2021), https://www.ifpma.org/resource-centre/pharma-innovation-delivers-COVID-19-solutions-beyond-expectations-but-calls-for-the-dilution-of-intellectual-property-rights-are-counteproductive/ (last accessed on Apr. 6, 2021).
  10. Trade-Related Aspects of Intellectual Property Rights Agreement (1994), Art. 7.
  11. Statement by UN Human Rights Experts Universal access to vaccines is essential for prevention and containment of COVID-19 around the world, OHCHR (Nov. 9, 2020), https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=26484&LangID=E (last accessed on Apr. 6, 2021).

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