In October 2020, South Africa and India called for the World Trade Organization (WTO) to temporarily waive some provisions of the Trade Related Aspects of the Intellectual Property Rights (TRIP) agreement. This was proposed to ensure that it is not just the wealthiest countries that can access and afford the necessary materials to control the Covid-19 pandemic, such as vaccines, medicines and other new technologies. Amid opposition by pharmaceutical companies and some high-income countries, the WTO delayed a decision on the proposal in early December. The issue highlights the trade-off between protecting intellectual property (IP) rights and providing affordable drugs for the developing world.
What is IP and IP law?
Intellectual property law governs the ownership and accessibility of creations made by businesses or individuals for both tangible and intangible assets. The ownership of ideas, products and concepts can be protected in various ways, such as through patents, trademarks and copyrights.
IP is fundamental to ensure the growth of pharmaceutical companies. There are huge up-front costs in developing pharmaceutical products: the entire process from discovering, developing and delivering products is long, complex and risky. IP rights generate incentives to drive R&D investment in crucial areas. For example, patents provided by national law in all EU Member States enable innovators to prevent third parties from using their invention for a period of 20 years. If effective, they give innovators increased legal certainty that if a medicine makes it to market, it will be protected from unfair competition for a limited time.
What is the TRIPs agreement and how does it relate to India and South Africa’s proposal?
The TRIPS agreement is a treaty between 164 countries that governs the minimum standards for intellectual property in its member states. It currently contains several provisions giving member nations the option to circumvent intellectual property rights in case of an emergency. For example, one provision permits compulsory licensing, which would allow a government to use a patented process or product without the patent owner’s consent under specific conditions. However, this measure requires that the member nation first attempts to negotiate with the patent owner for a license, and if unable to get one in this way, the government must still remunerate the patent owner for its use of the patent. India and South Africa’s proposal questions Sections 1, 4, 5, and 7 of Part II of TRIPS, which cover IP rights, including designs and patents. The proposal would effectively allow member nations to freely use Covid-19 related patents without obtaining a compulsory license or ever paying the patent owner.
What are the arguments in favour of the patent waiver?
There is a concern that the pharmaceutical giants will prioritise profit, and higher-income countries will prioritise their own populations, with regards to a Covid-19 vaccine, resulting in low-income countries with smaller budgets finding it harder to access production. Indeed, a group of United Nations human rights experts have noted that the existing TRIPS framework “may have an adverse impact on prices and availability of medicines”. Instead of manufacturing being concentrated in the hands of a small number of patent holders, a temporary waiver could allow multiple actors to start production sooner.
The South African government has pointed to examples of IP creating barriers to access in the past. The legal battle in India between Médecins Sans Frontières (MSF) and Pfizer revolved around Pfizer’s pneumococcal vaccine, where a patent has blocked alternative versions of the vaccine from being developed. Pfizer’s patent prevents vaccine manufacturers in India from developing the vaccine until 2026. It highlights the significance of a lack of competition in the pharmaceuticals business: just two companies (Pfizer and GlaxoSmithKline) make a pneumonia vaccine, and each has already made over $40bn by producing it. Patent laws and the lack of competition have resulted in expensive pneumonia vaccines, which has contributed to approximately 1/3 of countries not being able to introduce pneumonia vaccines in their standard vaccination package.
Are there alternative solutions?
High-income countries such as the UK, the USA, Canada, Norway and the EU have rejected India and South Africa’s proposal, suggesting that the IP system is necessary to incentivise innovation. For example, Wendy Morton, minister at the Foreign, Commonwealth & Development office has stated that “intellectual property rights provide incentives to create and commercialize new inventions, such as life-changing vaccines. They keep innovators innovating, creators creating, and investors investing”.
Moreover, they have argued that equitable access can instead be achieved through voluntary licensing, technology transfer arrangements, and the donor-funded COVAX facility. COVAX is intended to help lower-income countries access vaccine candidates. The UK has contributed £548m to it. John-Arne Røttingen, chair of the WHO Solidarity Trial of Covid-19 treatments, has suggested that voluntary mechanisms are a better method (compared with a patent waiver) to achieve technology transfer because the main barriers are production facilities, infrastructure and know-how, and not IP. Some pharmaceutical companies, such as AstraZeneca, have pledged not to profit from the vaccines they develop whilst the Covid-19 pandemic is ongoing. Meanwhile, Moderna has said that it will not enforce its patents for the duration of the pandemic.
The proposal has been supported by around 100 countries (most of them low- or middle-income) and over 375 civil society organisations. Yet WTO decisions are normally reached through consensus, and the decision was delayed in December. At the time of writing, vaccination programmes have already started being rolled out (e.g. in the UK) and other variants of the virus have been discovered across the world, raising the question of the efficacy and achievability of vaccinating everyone in the world. The importance of this issue on multiple fronts (such as politics, economics, human rights, international development and law) highlights its complexity and the significance of any decision that the WTO makes.