In 2004, when the world was reeling under avian influenza, developed countries reserved almost the entirety of the supply of vaccines and drugs, and talks by WHO to ensure supply for other countries failed. The same story replayed during the H1N1 pandemic of 2009 and is unfolding yet again. While developed countries have already reserved 6 billion doses of vaccines, COVAX, a collaboration led by WHO to act for developing countries, has been able to reserve merely 700,000 doses. Limited supply due to intellectual property rights (IPR) restrictions, and consequent higher prices, would mean that as the developed world returns to normalcy, a great majority of developing nations will continue to lose out to the virus.
As a result, developing countries, led by India and South Africa, have proposed the WTO TRIPS Council to relax certain IP rights related to Covid-19. This, they claim, will help start mass-scale manufacturing globally, and ensure that access is cheaper and quicker. However, the western countries have yet again blocked this request, citing the fact that IPRs are necessary to incentivise speedier R&D. However, a minor reduction in profits is neither justified when millions are dying nor will it create a disincentive for those investing in R&D.
Issues with the TRIPS waiver on compulsory licensing
During situations like Covid-19, when each day is taking away thousands of lives, any delay in access to vaccines is extremely costly. The question then is does the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement enable quicker access?
Article 31 of TRIPS provides countries with the right to invoke compulsory licensing. Thus, countries, with whom patent-holders are not willing to share their knowledge, can invoke compulsory licensing for use by government and authorised third-parties. While this appears to be a major relaxation which would ensure that every country can manufacture the vaccines, there is a problem. Manufacturing of vaccines is a complex process which few countries have the infrastructure to undertake. Apart from developed countries, only a few major developing countries like India and China have the necessary know-how and infrastructure to manufacture vaccines. According to a representative of the pharma company, Regeneron, “Manufacturing antibody medicines is incredibly complex and transferring the technology takes many months, as well as significant resources and skill.”
In an ideal scenario, manufacturing countries could export generic versions to other nations in need. However, TRIPS does not allow this. Article 31(f) specifies that a compulsory licence can be invoked “predominantly for the supply of the domestic market of the member state.”
This will directly impact a majority of lower and middle-income countries who cannot manufacture or access these vaccines. While a 2017 amendment permits WTO members to grant a ‘special’ compulsory license for export of generics, there are a multitude of conditions which must be complied with. There are over 13 conditions and procedures, requiring countries to undertake assessments to prove the need for such ‘special’ license, lack of availability, the urgency of access and affordability of the country. In practice, this cumbersome process takes anywhere between 2 to 3 years for the final delivery of the drug.
Thus, TRIPS hedges efficient usage of compulsory licensing, forcing countries to rely on supplies which come through voluntary licensing. However, voluntary licensing is influenced solely through profit-motive, which is best served when supplies are limited. The voluntary Covid-19 Technology Access Pool created by WHO has not received commitment from a single company. This raises the alarm for developing countries, who have been battered many times in the last few decades.
A flawed response from developed countries
Rejecting the proposal, Britain stated, “intellectual property rights provide incentives to create new inventions, such as life-changing vaccines, treatments, and technologies.'' While having an instant appeal, this argument needs to be investigated further. First, one must note that the demand being made by developing countries is a very limited one: To ease the restrictions for a limited set of Covid-19 related essentials for a limited period.
Second, we must contemplate whether this demand can cause a disincentive for R&D. It is pertinent to note that a majority of the funding for the development of vaccines came from the public sector, which neither seeks to benefit from the patents nor will be disincentivised due to its absence. The limited disincentive which will be caused would be for private patent-holders, whose profitability may reduce. Such reduction, if any, may come from an inability to create artificial shortages by restricting manufacturing and since the pandemic will be resolved faster, hence, limiting the need for such drugs and vaccines. The argument of ‘incentive’ is a euphemism for ‘incentive through prolongation of the deadly pandemic’. The world must then deliberate if such pathological profiteering out of deaths is justified.
(Binit Agarwal is a final year student at the National Law School of India University, Bengaluru)
Disclaimer: The views expressed above are the author’s own. They do not necessarily reflect the views of DH.