Is the COVID-19 Patent Waiver the right tool to address vaccine scarcity?

With the ongoing pandemic and effective vaccines in place with the private companies, we can find the mention of a Patent Waiver being thrown across news headlines and trending media. It is important to understand how these patent waivers may be used as a tool to address vaccine scarcity and whether they make for an appropriate solution.

What brought about talk on the Patent Waiver?

In October 2020, India and South Africa submitted a patent waiver proposal for vaccines and medicines to the WTO’s Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS). This proposal asked for “a waiver from the implementation, application and enforcement” of certain sections under the TRIPS agreement which would effectively allow any pharmaceutical company to freely without any worry of patent infringement suits start mass producing vaccines or any other medicine that will provide for prevention, containment and treatment of COVID-19.

Just a few months after the proposal, many other nations have come forward to express their support to the proposal including Pakistan, China and also US, which endorsed the proposal in May 2021 with the Biden administration’s call for relaxing patents on the vaccine. Unsurprisingly, this was met with resistance from Big Pharma and other rich countries and especially Germany, which took strong objection against making patents free stating that it would harm Intellectual Property rights with German Chancellor Angela Merkel’s office openly stating that “the protection of intellectual property is a source of innovation and must remain so in the future.”

The process of waiving patents on vaccines starts and ends with the World Trade Organization, an international organisation of 164 member countries and for WTO to make vaccines patents free, all the member states shall support the proposal and even a single rejection would lead to rejection of the entire proposal. There is no account of history of any type of patent waiver being granted by the WTO except for one time when a temporary waiver agreement on the patents of drugs was entered into for treating diseases such as HIV, tuberculosis and malaria was passed amidst global health crises and later this temporary agreement became a permanent one.

Many countries which were originally against the idea of patent waivers are now in favour of the resolution for example Australia and Russia. There are concerns as to the implication of these patent waivers and whether they would be useful in developing countries like Brazil where the Health Minister Marcelo Queiroga said that he fears the country may not have the means to produce vaccines.

Why are Pharmaceutical Companies against the Patent Waivers?

Considering that the COVID-19 vaccines are covered in multiple layers of patent rights, even a plain patent waiver would not disclose the requisite information on the vaccines and its preparation. Since patents also cover information about the products as well as the process, with respect to vaccines, the product would include vaccine components and processes would involve information about the vaccine-making process. As vaccines have extremely specific components involved, merely a patent waiver may not disclose all the information required to recreate that vaccine. It is interesting to note that Companies like Pfizer, BioNTech and Moderna have not disclosed all their related technologies in patent documentation. It would be analogous to like giving all the ingredients without explaining the procedure.

Big pharmaceutical companies are reluctant to give up their IP rights and argue that production by more players may accelerate the shortage of raw materials which would then lead to a rise in prices in raw materials. George Nakayama, president of the Japan Pharmaceutical Manufacturers Association (JPMA) says that “waiving intellectual property rights cannot assure the production of comparable vaccines.” This brings up the issue of the quality of the vaccines produced by alternative companies not matching the original quality.

One of the purposes of Patents is to incentivise the innovators and drive investments into Research and Development (R and D) of areas that are otherwise underfunded or completely ignored.Testing drugs and developing medicines that are safe for public use involves heavy funding with unhedged risks and no assurance and intellectual property protection provide incentive to Big Pharma to participate in the development of medicines since they can charge companies to use their patents thereby can make money which can gain be spent in R and D but waiving of patents eliminates the prospect of them making money off the drugs for years to come and this inherently takes away sole incentive to invest in R and D.

Another aspect to be considered is that in an event of a future pandemic and a precedent of waiver of patents during pandemics being set, there will be no incentive to companies in the future to spend on R and D and we can reach a middle ground if a framework of mandatory licensing, and the amount of royalties given to patent holders post compulsory licensing of their patents shall be fixed equitable and shall be fixed by the government through policies or schemes to benefit the public as well as to avoid harming the Intellectual Property rights of the companies.

What is the argument in favour of the Patent Waiver?

India and South Africa put forth a vaccine patent waiver proposal before the World Trade Organisation with the idea that waiving patents on COVID-19 vaccines would address the issue of vaccine scarcity in poorer and developing countries by allowing them to produce their own vaccines and allowing for timely and large-scale production. Following US’ support, the Modi government made a statement in favour of the vaccine patent relaxation and said “waiver is an important step for enabling rapid scaling up of manufacture and timely availability of affordable COVID-19 vaccines and essential medical products.”

Indian Commerce and Industry Minister Piyush Goyal, speaking at the virtual World Economic Forum trade discussion in May discussed the need for a temporary and extremely focused waiver of the TRIPS agreement in order to tackle the pandemic. He highlighted how India is currently one of the global hot spots for the virus and is in dire need of vaccines in a large quantity to meet the needs of the population.

Sustainable vaccine manufacturing across the globe is also the need of the hour and Pharma companies such Astra Zeneca and Pfizer have shared their licenses so that vaccines can be manufactured at multiple countries and even agreed to transfer the technology.

An important aspect to be considered is that India is already regarded as a vaccine factory for the world with the number of vaccines that have been exported from the country, the DG of the WTO also praised India on this front which shows that unlike Brazil, India is able to produce vaccines and a relaxation on vaccine patents would allow the country to do so.

Talking about the death of innovation with patent waivers, companies like Tesla and Volvo are shining examples of capitalism with a conscience. Of course, for big businesses like these, one of the primary objectives would be expected as profitability but Tesla freeing their patents on their electric car technology and Volvo freeing the patent on the three-point seatbelt go on to show that waiving patents did not kill innovation in their field if anything it furled their success especially when we examine the reasons for their doing so.

Tesla freed patents on their technology because it recognises their biggest competitors are not other electric car companies but the companies churning out hundreds of millions of gasoline-fuelled cars every year. Their goal as a company is to reduce carbon emissions by offering the alternative of electric cars, they freed the patents with the intention that other companies may use this technology with good intention to work towards the same goal.

In similar fashion, back in the 1970s we can see Volvo which primarily funded the R and D of the three-point seatbelt design responsible for saving countless lives across the globe and instead of patenting this design and using it themselves they shared it with everyone in the wordwhich contributed to the greater good allowing vehicles to be designed keeping passenger safety in mind.

Now when we come back to the issue of innovation about COVID-19 vaccines, the goal of the patent waiver is crucial. Vaccines are necessary to the people in this dire time and the scarcity of vaccines is an issue that must be dealt with. Pharmaceutical companies should tend to favour public health and welfare over profitability and times of these, their willingness to share information and technology goes a long way without any possibility of them being disincentivized. Even considering the concern that vaccine prices may surge with a rise in demand in line with the low supply, in time of humanitarian crisis it is imperative that companies do not resort to such tactics and the Government interfere and impose a ceiling limit on the price of vaccines.

Which tools may be used instead of the Patent Waiver?

The major concern for relaxation of vaccine patents is a possibility of the pharmas not investing any R and D in the future and another remote reason is patent waiver would not achieve as much as it’s being purported to be attributing to the lack of proper infrastructure in place along with the lack of vailability of raw materials required to handle the production of vaccines while maintaining quality in high quantity.

In the past, while dealing with HIV/AIDS, the tool used to solve the issue of high-priced drugs for treating this disease was Compulsory Licensing as per the TRIPS agreement. We must note that compulsory licensing does not extinguish or suspend patent rights, but rather consists in the governmental granting of licenses to third parties against the wishes of the patent holder. This means that the persons with a license may use the patent-protected technology while paying royalties to the patent holders. For example, Malaysia issued a compulsory license in 2004 for HIV/AIDS drugs patented by the pharmaceutical companies GlaxoSmithKline and Bristol-Myers Squibb and Thailand issued a similar compulsory license in 2007 for a HIV/AIDS drug that was patented by Abbot.

Compulsory licensing was the right tool in these past situations because unlike the COVID-19 vaccines where the major problem was with exclusionary rights and not an infrastructural problem. From a contractual point of view, it is worth noting that the higher-income and developed countries do not have any legal obligation to share vaccine doses with lower-income countries. It is important that there is a re-examination of the existing legal framework and that leaders advocate for a more equitable distribution of vaccine doses. Higher-income countries like the US have an excess of vaccine supply which could have been equitably distributed among lower-income nations which then would have addressed the vaccine scarcity problem before turning to the idea of a patent waiver.

Conclusion

To sum it all up, in this article we explore both sides of the patent waiver discussion. On one hand, we have countries advocating before the WTO for the freeing of patents as soon as possible so that vaccines can be made available in countries like India where there is a huge population and the sharing of information protected by these patents would hopefully allow for timely manufacturing and distribution of vaccines and medicines needed to combat COVID-19 and aid in relief.

Many big pharma companies are against the idea of patent waivers because they fear it would rob them off the potential profits and disincentivize them from participating in future research and development, it may cause a shortage of raw materials when new players enter the market, the copied vaccines may differ in quality especially since all the necessary information to replicate the vaccines are not disclosed through a patent waiver and this would lead to a situation where companies have compromised on IP rights while the vaccine scarcity problem remains unaddressed.

Companies like Tesla and Volvo have proved that freeing of patents does not mean a death of innovation especially when there is a greater goal in the picture. At the time of a humanitarian crisis pharmaceutical companies cannot be expected to participate in profit-centred behaviour. It is crucial that the Government considers the implications of compulsory licensing and if it were to do so, brings in the necessary policies to regulate this process and offer fixed royalties to the companies. It is crucial to bring Pharma companies on board to share the vital information and technology required to replicate vaccines, a patent waiver would not immediately bring about a solution to the existing problems as the international legal framework surrounding intellectual property needs to be re-examined so as to move towards equitable distribution of resources from high-income to low-income countries especially in this global pandemic.