Table of Contents
Introduction
As the countries across the globe started to succumb to the Coronavirus, the only thing that kept us going was the hope for the light at the end of the tunnel. This light is believed to be the vaccine that would help us win this battle. The goal is to achieve universal vaccination against the virus. But this is not as easy as it seems. There are hurdles in almost all the steps, from research and development (R&D) to manufacturing and logistics to side effects. A serious issue regarding R&D and vaccine manufacturing is related to the intellectual property rights over vaccines.
Recently, there have been proposals by public health experts, activists, and some countries to waive the intellectual property rights related to COVID-19 to ensure equitable access to health care among all the nations during the pandemic. The initiative has been criticized by some of the developed countries and by Big Pharma.
Pandemic and the rush for Vaccines
As the World Health Organization (WHO) announced COVID -19 as global pandemic, countries one by one went into lockdowns. Some countries had to declare national emergencies as the virus began to spread. From as early as March 2020, researchers, scientists, and healthcare experts began researching to develop vaccines crucial to curb the spread. As of May 10, 2021, there are 317 vaccine candidates, and 94 vaccines are in the clinical trial stage. India has administered doses of Covaxin and Covishield vaccines to more than 130 million citizens. On May 14, Russia’s Sputnik V too began its roll out in the country. The home to the world’s largest vaccine manufacturer is currently facing a vaccine shortage.
As the vaccines began to be developed, wealthy nations placed huge orders to secure vaccines for their citizens, while middle and low-income countries had to wait much longer to vaccinate their citizens. This disparity led countries like India and South Africa to move a proposal at the World Trade Organization’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council to waive the intellectual property rights on COVID-19 related products. This move has faced staunch opposition from some of the developed countries and the pharmaceutical industry.
Though waiving off the intellectual property rights may look like the obvious action to increase production and speed up the immunization process, it might not be the most productive step. The process from researching to administering the vaccine is a complicated process subject to various factors and considerations. Before analyzing the proposal and its possible outcomes, first, let us understand what intellectual property rights are and their implications in Big Pharma.
IP Rights and the Pharmaceutical Industry
Intellectual property refers to the ‘creations of the mind’. They can be anything from computer programs to art, to literature to logos and other commercial signs. Intellectual property rights are legal and institutional protection that grants an exclusive right to an individual to own his creation for some time. Just as laws protect our property, such as land, IPR protects intangible creations.
Intellectual property rights not only grant the creator recognition but also facilitate research and development (R&D). IPR acts as an additional source of revenue for innovators as they can license out their patents to others. Without proper safeguards for their ideas, researchers would not be ready to do so. They assure the creators that they will get credit for their hard work and provide a means of revenue.
Bringing a new drug or vaccine into the market is risky as well as expensive. A study published in 2020 estimated that the median cost of getting a new drug into the market to be $985 million and $1.3 billion on average. The pharmaceutical industry depends on IP to support its research activities. Robust IP systems facilitate funding, and this can promote the innovation of new drugs. Thus, in a way, pharmaceutical IP benefits society.
There are mainly four types of IPR: Patents, trademarks, copyright, and trade secrets. Different countries have different legislations and rules that concern intellectual property. The Patents Act, 1970 (amended in 2005), the Copyright Act, 1957, and the Trade Marks Act, 1999 are some of the legislations which deal with the protection of intellectual property in India.
Have IP Rights been excluded in the Past?
The WTO agreement on TRIPS is perhaps the world’s most comprehensive multilateral agreement on IP. It imposes a binding legal obligation on its member nations to ensure a global minimum standard of IP protection. The agreement plays a central role in facilitating the exchange of knowledge and resolving trade disputes related to IP.
The TRIPS agreement resulted from intense lobbying by a US-based Intellectual Property Committee (IPC) and its counterparts in Europe and Japan. IPC consisted of the CEOs of twelve pharmaceutical, software, and entertainment industry leaders. Before the agreement, many developing countries did not allow patents for pharmaceutical products, for they feared it would lead to rising in the prices of drugs and vaccines. India allowed only process patents and not product patents. But after TRIPS, it became mandatory for the nations to provide product patents to the creators.
Though the agreement helped the companies regain the money they had spent in developing the drugs, it led to an increase in the prices of the drugs and kept them out of the hands of the poor. The TRIPS agreement recognises the member countries’ right to protect public health and to promote access to medicines for all. The agreement contains provisions by which governments could grant compulsory licensing. The Doha Declaration on the TRIPS Agreement and Public Health adopted in 2001 affirmed this.
Compulsory licensing permits the government to license out a patent to a third party without the consent of the patent holder. Compulsory licensing permits the production of generic versions of patented medicines for the larger public good. With the provision, the agreement tries to balance promoting access to existing drugs and promoting research and development into new drugs. Under usual circumstances, the company or the person should have made an unsuccessful attempt to seek a voluntary license from the patent holder. However, under national emergencies, including public health crises, the member nation can grant compulsory licenses without prior attempt to obtain a voluntary license.
Over the years, most countries have initiated the process of granting compulsory licenses. Compulsory licenses were issued for antiretroviral drugs used in the treatment of AIDS/ HIV. Using this provision Thailand and Brazil were able to bring down the prices of ARV medicines to treat their HIV-affected patients. Brazil issued compulsory licensing for efavirenz and was able to negotiate the price for lopinavir/ritonavir. After a failed attempt to negotiate the prices, Thailand issued compulsory licensing for both the drugs and imported generic versions of them from India at a significantly lower cost.
But there were repercussions for the actions. Pharmaceutical companies threaten to withdraw new products from the Thai markets. Also, the Thai government’s actions were not well received by some of the western countries.
India’s first-ever case of compulsory licensing was in 2012. The Patent Office granted a compulsory license to Natco Pharma to produce generic versions of Bayer Corporation’s Nexavar. The drug which was used for treating liver and kidney cancer was sold at exorbitant rates. Natco Pharma offered to sell it for a much lower rate. After fulfilling all the conditions in the Indian Patents Act of, 1970the patent was granted.
In October 2020, Moderna had released a statement wherein it had clarified that it would not enforce its patents related to COVID-19 against those working to combat the virus. This will be in force till the pandemic is over, and once it is, the company is ready to license its IP on COVID19.
Why Should IP Rights be waived?
In October 2020 when India and South Africa asked the WTO to waive provisions of the TRIPS agreement they highlighted how the restrictions posed a problem. Patents and other intellectual property rights can hinder access to timely and affordable access to vaccines, medicines, and other crucial medical supplies necessary to tide over the crisis. There is an urgent need to show solidarity among all the countries worldwide for sharing knowledge necessary before the situation goes out of hand.
The proponents of waiving the IP rights over the vaccines claim that it would increase vaccines’ production, especially in middle-income countries. Till now, most of the production was concentrated in high-income countries, and the manufacturing developing countries were through licensing or technology transfers.
As the vaccines were in the final stages, wealthy countries began to place large orders. This caused the poor and the hard-hit countries to wait to immunize their large populations. According to a New York Times report, the US has around 30 million doses of the AstraZeneca vaccine that are kept idle as the country is waiting for the results from the clinical trials. Close to 70 countries have approved the vaccine and there have been talks to ship the vaccine in the US to Brazil, which is hard hit by the pandemic.
The key motive behind the move is that all the countries that can manufacture the vaccines should be allowed to. IP rights should not hinder access to public health. So it is essential to waive the rights.
Is IP Waiver the Solution?
The move to waive off the IP rights could be disastrous. IP rights are fundamental to innovation and R&D. Waiving off the IP framework will undermine the global effort, especially the works by scientists and researchers, to curb the spread of the virus. The development of the drugs, vaccines and other medical equipment used over one year is the outcome of persistent efforts. Developing, manufacturing, and getting them to the people was time-consuming and required vast capital and investments.
IP rights allow them to gain back the spending and investments. Through patenting and licensing the companies can get profits. These profits are necessary to fund future R&D.
The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) said in a December 2020 release that “diluting national and international IP frameworks during this pandemic is counterproductive.”
IP rights do cause some hindrances, but it is not the only restriction. There are other more serious barriers to vaccine production. Suppose that the IP barriers are lifted, and the developing and low-income countries decide to produce the vaccines. They will need specialized equipment, trained researchers and other personnel, raw materials, and satisfy other infrastructural requirements. The countries may not necessarily have these requirements. This technology transfer could take years before these are met, and they start functioning at total capacity.
On the bright side, IP has encouraged pharmaceutical companies to come together to find solutions for the vaccine problem. For instance, Comirnaty is the result of collaboration between Pfizer and BioNTech.
The Case of Hepatitis C Treatments
Before concluding, let’s look at an alternative for waiving off IP rights. For this, let us analyze how patents helped treat Hepatitis C in middle and lower-income countries. Companies that own the patents on medicines can license them out to generic manufacturers through voluntary licensing. These companies would then produce generic versions of those drugs to be sold in certain countries.
A study published in Lancet showed an increase in access to Hepatitis C virus (HCV) treatment due to voluntary licensing. Gilead and Bristol-Myers Squibb have been issuing non-exclusive voluntary licenses for key HCV drugs since 2014. This has helped in improving HCV treatment in eligible countries. The study showed an increase in the annual number of people accessing HCV treatment of 69.3 per 1000 diagnosed.
The WTO members can persuade the companies to give out voluntary licensing to generic companies to produce versions of their original vaccine. India, in April, had granted voluntary licensing for its Covaxin vaccine to Haffkine Biopharma, a pharmaceutical company owned by the Maharashtra government.
Conclusion
Waiving off intellectual property rights may not be the ideal way ahead. IP rights are too critical to the pharmaceutical industry. If implemented, the waiver could set a precedent that may hamper innovation. A patent waiver may not address all the issues related to technology transfer. Even if it is enforced, there could be a situation wherein some companies may be unwilling to transfer all the information needed to produce efficient vaccines. It could make waiving the rights counterproductive would be counterproductive.
Instead of waiving IP rights, WTO member nations can come together and create an environment that would foster partnerships between various pharmaceutical companies. They can also encourage voluntary licensing and introduce special incentives and tax concessions for companies that are willing to license their patents to other companies with the necessary infrastructure. In emergencies, governments can also enforce compulsory licensing. At times the patent companies are ready to negotiate when they see there are chances for compulsory licensing to be brought in.
The longer it takes, the more the trouble. As time goes, there is a threat for new mutations to evolve. The current vaccines may not be effective against future mutations. There is an urgent need for action. Countries and companies should come together to find an effective and practical solution as soon as possible.
This article is authored by Tania Das K, student at School of Legal Studies, Cochin University of Science and Technology.
