COVID-19 Vaccines and Treatments: The proposal for a waiver of intellectual property rights during the pandemic
|Date:||13 July 2021|
Dean M. Harris, J.D., Associate Professor (Retired), Department of Health Policy and Management, Gillings School of Global Public Health, University of North Carolina at Chapel Hill, USA, Dean_Harris unc.edu
On 2 October 2020, India and South Africa submitted a request to the World Trade Organization (WTO) to approve a temporary waiver of intellectual property (IP) rights for COVID-19 vaccines and treatments. The purpose of the proposed waiver is to promote worldwide access to COVID-19 vaccines and other medical products in an affordable and timely manner.
The request for a waiver is supported by more than 100 countries, and more than 240 civil society organizations (including Amnesty International, MSF Access Campaign, and Oxfam International). Dozens of Nobel laureates and former heads of state support the waiver for the “people’s vaccine.”
The request for a waiver was also met with powerful opposition. Governments of some wealthy countries and industry organizations strongly oppose the waiver. However, on 5 May 2021, the US government under President Joe Bidenoe Biden changed its position to support a waiver of IP rights during the pandemic for COVID-19 vaccines.
The European Parliament approved a resolution to support negotiations for a temporary waiver. However, the European Commission (EC) submitted documents to the WTO, in which the EC did not support a waiver. The position taken by the EC has been strongly criticized by the MSF Access Campaign of Médecins Sans Frontières (Doctors Without Borders), as well as by more than 200 other organizations.
The pharmaceutical industry (and governments of some wealthy countries) argue that IP rights are necessary to support research and development for new drugs and vaccines. Public health advocates respond that IP rights should not be used to prevent access to vaccines and essential drugs, especially during a global pandemic. In addition, advocates dispute the industry’s claim that it needs the current high level of profits. According to a 2017 report, the average annual profit margin (from 2006 through 2015) for the 25 biggest drug companies worldwide was between 15 and 20% (compared to only 4 to 9% profit margin for the 500 biggest global non-drug companies).
Patent protection for pharmaceutical products is not merely a matter of national law, but also is affected by international trade agreements. For example, most countries have committed to accept patent rights under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). International trade agreements, such as TRIPS, reflect the tension between IP protection and access to medicines.
When it is necessary to protect public health, TRIPS allows a country to override a patent by granting a “compulsory license” without permission of the patent-holder. This exception to patent protection is set forth in the 2001 Doha Declaration (the “Declaration on the TRIPS Agreement and public health”). In 2003, compulsory licensing was expanded to permit a nation to export drugs to another nation which does not have manufacturing capacity. That became a formal amendment to TRIPS in 2017. However, compulsory licenses under the Doha Declaration have not been used often, in part because wealthy countries use political pressure to discourage the use of compulsory licenses.
The request for a waiver of IP rights by India and South Africa is not based on the Doha Declaration, and it does not involve a compulsory license. Rather, the request for a waiver is based on Article IX of the 1994 Marrakesh Agreement Establishing the WTO. Article IX (3) of the Marrakesh Agreement provides that “In exceptional circumstances, the Ministerial Conference may decide to waive an obligation imposed on a Member ….” ( Id . at Article IX (3)).
A waiver under Article IX of the Marrakesh Agreement is much broader than a compulsory license under the Doha Declaration. The Doha Declaration only allows a country to grant a compulsory license to produce, import, or export a specific patented drug. In contrast, a waiver under Article IX may suspend all intellectual property obligations (such as patents, copyrights, and trade secrets) for all products and technologies which are related to the “exceptional circumstances.”
Some opponents of the proposed waiver argue that a waiver is not necessary, on the ground that compulsory licenses under Doha would be sufficient to provide access to COVID-19 vaccines. In response, supporters of the waiver argue that compulsory licenses would not be sufficient in the COVID-19 pandemic. A compulsory license might be limited to one country, one patent, and one product. This “product-by-product” approach is not sufficient, because one COVID-19 vaccine might be covered by multiple patents and other barriers (a “thicket”), including IP rights to processes, trade secrets, copyrights, and data. (Stiglitz, J, and L Wallach, 2021, at 3).
Opponents of the proposed waiver also argue in favor of using voluntary licensing agreements between patent-holders and manufacturers in other countries. However, supporters of the waiver respond that voluntary agreements are too restrictive and too dependent on the decisions of drug companies.
Is it fair to use a company’s private property for the public good, even in a time of crisis? Drug companies could argue that the global need for COVID-19 vaccines should be funded by public spending, using money from all taxpayers, rather than essentially confiscating the private property of drug companies. However, a reduction in IP protection could be justified to the extent that drug companies received financial support from governments to develop their vaccines. According to US Senator Bernie Sanders and others, “The American public paid pharmaceutical and medical device industry giants billions of taxpayer dollars to expedite research and development of COVID-19 vaccines and therapeutics.”
In addition, it is arguable that a temporary waiver of IP rights would not be a confiscation or taking of private property. A drug company’s property right was always subject to a potential loss of exclusivity or monopoly power, in the unlikely event of a global pandemic of this magnitude. That was an inherent limitation on a drug company’s property right, like the temporal limitation on a life estate or a lease for a limited number of years. Drug companies always knew, or should have known, about the possibility that their IP rights could be waived under international trade agreements in an emergency. Therefore, a waiver of IP rights would merely trigger a limitation which had always existed, and would not take away anything that drug companies ever had.
Another important question is whether a waiver of IP rights would be effective in making more COVID-19 vaccines available in a timely manner. A waiver of IP rights would prevent drug companies from suing to enforce their patents, but potential manufacturers of COVID-19 vaccines might also need a transfer of technology to be able to efficiently produce those vaccines. In other words, a waiver would require drug companies to refrain from taking any action to interfere with other companies, but a waiver would not require drug companies to take any action to help other companies. According to an editorial published in Nature, “Even if patents did not apply, securing all the vaccine components, setting up factories, training people and passing relevant laws — all essential to vaccine delivery — could take more than a year.” (Nature, 2021). In contrast to the situation with COVID-19 vaccines, one commentator explained that a waiver of IP rights could be more useful in the short-term for COVID-19 treatments.
As of this writing, it is unclear whether the WTO will approve the proposed waiver of IP rights. Nations that co-sponsor the request for a waiver submitted a revised proposal on 21 May 2021. The revised proposal provides more detail about the duration of the waiver, and clarifies the scope of the waiver because of concerns that the original wording was overly broad. Meanwhile, US President Biden’s support for the waiver is an important step, and at least it might pressure drug companies to produce and share more vaccine. As stated by Nobel laureates and former heads of state, “let this moment be remembered in history as the time we chose to put the collective right to safety for all ahead of the commercial monopolies of the few.”
Nature, Editorial, “It’s time to consider a patent reprieve for COVID vaccines,” vol. 592, issue 7852, p. 7 (April 1, 2021).
Stiglitz, J, and L Wallach, “Preserving intellectual property barriers to covid-19 vaccines is morally wrong and foolish,” Washington Post, (April 26, 2021).