On 2nd October, 2020 India and South Africa made a joint submission to the TRIPS Council with a request that it recommend to the WTO General Council a waiver of certain provisions of TRIPS, specifically Sections 1, 4, 5 and 7 of Part II. The request was made keeping in view the need to accelerate the development and manufacturing of medicines, vaccines and medical equipment used in the prevention, containment, and treatment of COVID-19.
TRIPS offers 20 years of protection to patents. Patents enable pharmaceutical companies to keep competition at bay by granting them exclusive rights to manufacture and market their products, and any third party who wishes to do the same will have to do so only under a license from the patent holder themselves. Furthermore, TRIPS also requires member States to protect undisclosed information submitted by the rights holder, and ensure that the same is not used for unfair commercial exploitation (like approving a generic product on the basis of the data).
The submitted document contends that existing patent protection if not suspended would make COVID-19 related medicines inaccessible to a large population of the world, especially in developing and least developed countries. Patent laws function to afford patentees monopoly of rights in order to incentivise them to innovate on various fronts. This is done by creating barriers for other companies, to prevent them from manufacturing generic versions of available drugs in the market and carrying out research for the same.
The waiver would allow member countries to change laws in a manner that local companies can manufacture generic version of the drugs and vaccines without being penalised for infringement of IP rights.
The submission also drew attention to the fact that that the existing provisions for flexibilities, contained within the TRIPS framework is inadequate since institutional and legal difficulties will continue to slacken the process. The waiver is also the most effective solution in countries with insufficient or no manufacturing capacity, since the export-import procedure under TRIPS are cumbersome for countries without huge resources at their disposal. The proposal was that the waiver would continue until widespread vaccination is carried out and the majority of the population has developed her immunity. Consistent with the existing waiver provisions in TRIPS, the waiver shall be reviewed by the General Council not later than one year from implementation and thereafter annually until the waiver is terminated.
The submission has received support and criticism from several quarters. Organisations such as the Medcins Sans Frontieres (MSF) have vociferously expressed support for the proposal to grant a waiver. A briefing published by them on 18th November, 2020 contains three case studies carried out for the examination of IP barriers vis-à-vis COVID-19. In the cases of ventilators, N95 respirator masks and testing kits, it was noticed that patent holders were reluctant to share their knowledge despite an obvious urgent demand for the same. Pharmaceutical companies have not shown any enthusiasm in participating in knowledge sharing activities initiated by the World Health Organisation (WHO). Several of them have instead, signed contracts with a select few manufacturers of generic drugs to disperse their trade secrets in solely commercial ventures. MSF opines that this behaviour of the pharma companies shows the need for governments to take the driver’s seat and bring in laws and policies that would make the COVID-19 related medical paraphernalia accessible to all of mankind.
Incidentally, 16 global pharmaceutical and medical device makers and the philanthropy Bill and Melinda Gates Foundation have recently come out with a joint commitment to fight COVID-19 and address the access issues. The signatories of the partnership are AstraZeneca, Bayer, bioMerieux, Boehringer Ingelheim, Bristol Myers Squibb, Eisai, Eli Lilly, Gilead, GSK, Johnson & Johnson, Merck & Co (SD), Merck KGaA, Novartis, Pfizer, Roche, Sanofi and Bill & Melinda Gates Foundation. The industry attempt is seen as an effort to dissuade WTO members from taking the TRIPS waiver route as it can impact their business interests in COVID-19 care.
Another argument that could be made in favour of the waiver is that these medical tools were developed through research substantially funded by tax payers’ money. Even on a domestic level, those in the upper echelons of the class hierarchy would be more likely to have access to these medicines and equipment as compared to the less privileged. The common paid for the development of this vaccine, but would now be forced to run in circles to obtain the benefit of his contribution, which is not an egalitarian feature of democracy. We have seen in the case of diabetes medicines in the US that extensive protection of IP is detrimental to the establishment of healthcare for all.
However, in a recent article by the New York Times, the US trade representative was quoted saying that “protecting intellectual property rights and otherwise facilitating incentives for innovation and competition was the best way to ensure the swift delivery of any vaccines and treatments.” While the proposal initiated by India and South Africa received support from as many as 100 countries it was strongly opposed by some, the most notable opponents being the US, Britain, Canada and Australia. The EU has expressed its doubts stating that there is no proof that IPR is a genuine obstacle, while Britain has dismissed the proposal as a set of extreme measures to address an unproven problem.
Moderna has pledged to not enforce any patents related to its COVID-19 vaccines. However, this does not seem like a very generous offer since the technical knowledge and know how have to be divulged if the drugs are to be replicated. Nonetheless, since the effects of this declaration remain unclear doubts have been expressed over the effectiveness of the waiver as a tool to ensure accessibility. Patent protection invokes in the patentees a feeling of being rewarded which incentivises them to explore not for profit schemes, differential pricing in poor countries and trying to sell the products at near cost levels.
This argument for continuing protection of IPR can be successfully challenged, given the real dangers of “vaccine nationalism” — as per Oxfam’s report, a small group of rich countries has already purchased more than 50% of the future supply of Covid-19 vaccines. This shows that the benevolent voluntary efforts made by pharmaceutical companies are not going to be enough. Coordinated state action at a global level is required and in present circumstances temporary suspension of relevant treaties and laws seem to be warranted.
It is also pertinent to mention at this point that the legal obstacles do not end with TRIPS but are also found in the form of Bilateral Investment Treaties (BITs). It is not uncommon for BITs to recognise IPR as part of foreign investment. Consequently, State regulatory measures that impact the investments of transnational pharmaceutical corporations may attract legal scrutiny for being in breach of BITs. This could have a chilling effect on State regulation aimed at ensuring accessibility of Covid-19 drugs and vaccines. Globally, pharma companies have, in the past, used BITs to challenge State regulations on IP rights. Thus, India and other countries must also secure a waiver from the application of BITs to Covid-19 vaccines, drugs, and diagnostics. Countries can do this by adopting a binding declaration to that effect either bilaterally or multilaterally.