Covid-19, IPRs and Vaccination: The Unfinished Agenda

With only about one-third of citizens getting vaccinated, India needs many more vaccine doses to repress the crisis. At this juncture it is easy to preach ideals, there are always conflicts between a sovereign nation’s right to expropriate patents for the benefit of its citizens and the rights and interests of inventors and pharmaceutical companies. Intellectual property rights apart, higher sale price for Covid-19 vaccines, and dual pricing and procurement policy for States are recent controversies that need much attention.

THE VACCINE: WHO OWNS IT

Unlike the Serum Institute, which reportedly pays a royalty to the Swedish-British firm AstraZeneca from which it has obtained the license of its vaccine Covisheild, Covaxin is reportedly a product of publicly funded research, developed in collaboration with the Indian Council of Medical Research (ICMR) and National Institute of Virology(NIV). Rule 233 of General Financial Rules, 2017 states that whenever Ministries or Departments of Government sponsor projects and the results from which are expected to be in the national interest, a stipulation should be made in such cases that the ownership in the physical and intellectual assets created or acquired out of such funds shall vest in the sponsor. However, the terms of these contracts are not in the public domain so far, and the reasons for granting Bharat Biotech an exclusive licence for manufacturing the vaccine and whether ICMR will receive its share of profit for Covaxin are some riveting questions.

MUCH DEBATED COMPULSORY LICENCING:

While many advocated the Compulsory licensing (CL) route under Section 92 of the Patents Act, 1970 through which a third party can use a patent without having to obtain the consent or licence from the patent owner if the Central Government is satisfied that there is national emergency, extreme urgency or cases of public non-commercial use. If we look at the international scenario, the Russian government for the first time, invoked compulsory licensing to produce the antiviral drug Remdesivir. Other countries like Chile and Israel have also followed the same. Germany even went a step ahead by amending its laws to fast track this process. In India, the Supreme Court has been approached seeking direction to grant Compulsory Licenses for drugs like Remdesivir, Favipiravir and Tocilizumab.

But, since inventor companies like AstraZeneca, Gamaleya Research Institute, Novax, Johnson &amp Johnson are already willing to grant voluntary licencing to Indian companies, it is better to explore the voluntary licensing route than the CL route which could be explored if the voluntary licencing is denied. Invoking CL has its own repercussions which affect drug makers; R&D and innovations; causes trade friction and loss of foreign direct investments. Moreover, vaccine companies cannot be compelled to share their technical know-how with the manufactures through this.

VOLUNTARY LICENCING AND A VALID DEMAND:

In so far as foreign vaccines are concerned, Covishield and Sputnik V are patented and permitted to manufacture their doses in India, which leaves a general waiting period of three years for the application of compulsory licence. This scenario leaves us only with our own made in India vaccine. By sharing the know-how of Covaxin with the vaccine manufacturers as the vaccine has been co-developed as part of a public-private partnership between ICMR-NIV and Bharat Biotech, the government can have some influence on the IP and technical know-how. Through voluntary licencing, economics can be managed through fair licensing fee and efficiency through ramping up the production.

It may be recalled that in 2008, the Public Funded R&D (Protection, Utilization and Regulation of Intellectual Property) Bill was introduced in the Rajya Sabha seeking to protect and utilize intellectual property originating from public-funded research but later it was withdrawn in 2014. Such legislation is the present need of the hour, as there is a certain opacity regarding ownership in publicly funded Intellectual property and about the contractual terms between ICMR, NIV and Bharat Biotech.

SUPREME COURT IN ACTION:

Till recently, there was a dual-pricing policy according to which vaccines are sold to centre and States, there is also dual procurement which is an unfair burden on the states, as vaccines for the category 18-45 years who are most affected in the second wave shall be procured by the states from the open market and mobilized through their logistics. Now it appears that the centre has realized that the post and pre 45 age group classification is arbitrary and against the ruling of SC in Gujarat Mazdoor Sabha v. State of Gujarat [AIR 2020 SC 4601] which held that policies to counteract a pandemic shall have a rational connection to the object to be achieved. Moreover, all states are not economically on equal footing to compete with each other. It is gratifying to note that, after much harsh criticism from SC in In Re Distribution of Essential Supplies and Services during Pandemic, Union Government has ultimately decided on 7^th June 2021 to procure vaccines for state governments. This showcases the impact of judicial review on arbitrary executive action. Though there’s discretion to the executive in these matters, the new liberalized vaccination policy which is all-inclusive shall be appreciated. At the same time, the delay in proper policy planning is an example of lacking vision.

THE UNFINISHED AGENDA:

The agenda is still incomplete as different manufacturers of vaccine/drugs are quoting high and different prices. The imperative is to make the vaccination accessible and affordable by amending the Drug Price Control Order (DPCO), and with the involvement of the National Pharmaceutical Pricing Authority (NPPA) pricing of essential drugs can be regulated through Section 3 of the Essential Commodities Act, 1955. Yet another possibility is to use Section 26B in the Drugs and Cosmetics Act, 1940 where the union government can regulate drug prices in the public interest.

Hence, whatever is necessary for the health security of the people shall be done swiftly by the Government by isolating itself from vaccine nationalism and corporate self-interest. With uncertainty looming, rather than focusing on the IP path, various other ways to scale up vaccine production should also be explored. After all, the welfare of the people shall be the supreme law (Salus populi suprema lex esto). The sooner the Union and State governments realize this cardinal principle, the better for all.

About the Authors:

~Prof. Dr. G.B Reddy is a Lawyer turned academician, columnist and administrator. He is Specialized in Constitutional Law and IPRs. Holds doctorate on “Supreme Court and Judicial activism” from Osmania University in 1999. Triple Gold Medalist in LL.B & University Topper. Gold Medalist in LL.M. He’s the First UGC-JRF Awardee in Law from OU in 1993. He has been teaching law since 1991.

~Pavan Kasturi is a 4th Year student at the University College of Law, Osmania University.