'Patent Battles Could Choke COVID-19 Drugs Pipeline'

New Delhi: India and South Africa are currently leading a call at the World Trade Organization (WTO) for intellectual property (IP) exemptions on items like diagnostic kits, vaccines, medicines, personal protective equipment and ventilators required to fight COVID-19. These exemptions from the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement would mean that WTO member countries would not necessarily need to grant or enforce intellectual property rights related to COVID-19 drugs, vaccines, diagnostics and other technologies.

According to the submission by the governments of India and South Africa, the waiver ought to continue until “the majority of the world's population has developed immunity” and until “widespread vaccination is in place globally”.

In the context of COVID-19, intellectual property could be used adversely to cut off easy access to treatments and vaccines in developing countries, said Carlos Correa, executive director, South Centre, an inter-governmental organisation which works on various issues affecting developing countries such as climate change, access to medicines, food security and underlying issues of intellectual property rights.

Correa was also a member of the World Health Organization’s Commission on Intellectual Property Rights, Innovation and Public Health in 2003 and a member of the Food and Agriculture Organization’s panel of eminent experts on ethics in food and agriculture. He worked on intellectual property rights with the government of Argentina in his early years.

According to this proposal by India and South Africa, the waiver on TRIPS would not extend to all items, but only to those needed to fight COVID-19. It would be applicable to all WTO members--both developing and developed countries alike. It would be a temporary measure, lasting until “widespread vaccination is in place globally, and the majority of the world's population has developed immunity”.

In October, WHO director-general Tedros Adhanom Ghebreyesus tweeted that the organisation welcomed the proposal as it would “ease international & intellectual property agreements on COVID-19 vaccines, treatments & tests in order to make the tools available to all who need them at an affordable cost”. Other international organisations have also thrown their support behind India and South Africa’s proposal. But the European Union has dismissed concerns that intellectual property rights stand in the way of access to COVID-19 treatments.

The least developed countries (LDCs) stand to benefit the most from this waiver because it would ensure that they would be able make COVID-19 diagnostics, vaccines, ventilators, etc. locally, thereby keeping the prices low.

In an interview with IndiaSpend, Correa explains what is at stake under the current circumstances: Why are developing countries asking the WTO for exemptions on Trade-Related Aspects of Intellectual Property Rights (TRIPS) enforcement during the pandemic? What might be the benefits and harms of such a move? Who is opposing the proposal and why?

Edited excerpts from the interview:

What are India and South Africa asking for at the WTO and how will it help?

These two countries are asking for a waiver which would allow WTO members not to grant or enforce patents or other rights that may limit access to technologies or products needed for the prevention, containment or treatment of COVID-19. This would permit countries to buy or produce things like diagnostic kits, medicines, vaccines or protective equipment without the threat of TRIPS. Importantly, the capacity to produce such products may be expanded. Thus, if a vaccine were available soon, the established production capacity would not permit making enough to supply the world’s population if intellectual property rights on the vaccine are held only by a few companies. But affordable access to this vaccine might be achievable if the waiver on the intellectual properties on these items was approved.

Who is unhappy with the TRIPS waiver and why? 

Developed countries, where the major pharmaceutical companies are located, oppose the waiver. They fear an immediate impact on pharma companies and they also want to set a precedent for other situations where poorer countries might ask for waivers on IP.

On the other hand, IP [rights] can certainly be an obstacle to get access to COVID-19 prevention and treatment. For instance, if a company gets a patent on a suitable medicine it may prevent other companies from producing and selling it at affordable prices. The counter view is that the demands of India and South Africa will hurt business interests of companies developing technologies on COVID-19.

We have seen that countries like the USA have put their interests first throughout this pandemic... as has been their president Donald Trump’s approach all along. One of the big signs that the US is not interested in international cooperation during this pandemic was its withdrawal from the WHO. Now, even with the new administration of Joe Biden as president, I do not think there will be any big change with regard to how the US looks out for the interests of big pharmaceutical companies in the developed world.

How will the TRIPS waiver impact big corporations in the developed world and the pharma companies in India? 

It is unlikely that these [big pharma] companies will incur any losses. For large companies that have made some technological developments in COVID-19… the fact is that most of these developments have been financed by public money and funding from various governments. So, there is no significant loss for them. And the products eventually developed by them should be available to all people [across the world], including in India.

Patents are deemed to address a market failure or to prevent a situation in which an inventor cannot recoup its investment in R&D (research and development) because others compete with him. But this is not likely to be the scenario for COVID-19 because companies here have received massive public and philanthropic funding and benefited from the anticipated purchase of large volumes of the vaccines under trial. In addition to this, demand for these items will be so huge that these companies may, in fact, make significant profits based on the large quantities of products which are being, and will be, sold.

Indian companies will benefit if this waiver is adopted because it will allow Indian companies to use that technology without being subjected to legal monopolies such as patents. Certainly the waiver will benefit Indian companies and, more broadly, the Indian public. Even people in developed countries will benefit by this waiver as their governments can involve more local manufacturers to make COVID-19 drugs and vaccines.

Ultimately, there is not sufficient manufacturing capacity to produce and distribute a vaccine to the entire world population with two doses of it. If there is no expansion of manufacturing capacity and sharing of technology with generic companies making this vaccine or drug for COVID-19, then there is no way the world’s population can access a COVID-19 vaccine.

What are the contentious TRIPS clauses that the Least Developed Countries are worried about? What is the high income countries’ stand on this?

Intellectual property rights, which need to be protected under the TRIPS Agreement, create legal monopolies that allow rights-holders to charge high prices and deny access to protected technologies by third parties. Patents remain the most contentious as they allow their owners to keep such monopolistic rights for at least 20 years. Currently, the least developed countries (LDCs) can choose not to grant patents. But other developing countries, including high-income countries, need to grant and enforce them; if not, they may be subjected to trade relations [pressures] by other members of the WTO.

By this I mean that WTO member countries are bound to comply with several obligations like granting and enforcing patents. But if they do not, another member of the WTO can file a complaint at the WTO’s tribunal and if they find a violation of TRIPS obligations by the member country in question, the complainant country can retaliate, for example, with higher tariffs on imports from the country found violating the TRIPS obligations.

In the context of COVID-19, the issue of intellectual property has gained prominence because treatments and vaccines to deal with it might become available but easy access to it could be denied to people in developing countries if such IP rights are exercised.

Does WHO’s support for the proposal carry any heft at the WTO?

It is important since WHO is the UN agency specialised in public health. Its support means that the waiver is legitimate and necessary to address the pandemic from the perspective of public health.

How have companies been using their IPs for big profits during this pandemic? How have access and affordability of treatments/drugs been impacted?

One example from this pandemic is the high prices of remdesivir made by Gilead. This is one of the treatments approved by the US Food and Drug Administration even though there has been no conclusive evidence of [its] efficacy yet. But Gilead has granted a small number of licenses with limited geographical scope. Which means, although we do not yet know if this drug is the panacea for COVID-19, if it does become more important, we would see a situation where Gilead decides which people in which countries can access it. They could choose to keep the more profitable markets to themselves.

There are very marginal examples of companies making available medical technology or medicines for people who cannot afford it. For example, the WHO organised a pool called ACT Accelerator to receive voluntary contributions on technologies related to COVID-19. But pharma companies have not participated generously. So, there is no indication that big companies will voluntarily part with their intellectual property [rights] to make COVID-19 treatment cheaper.

If India and South Africa have their way, how would people around the world benefit? What could be the possible fallout of the proposal for TRIPS exemption?

If the waiver is approved, governments from developed and developing countries can invoke it or not, as per their discretion. In fact, they can also rely on the national security exception contained in article 73(b) of the TRIPS Agreement: under this exception, any WTO member may not comply with its obligations under that agreement if it is to address an international emergency, and COVID-19 clearly is an international emergency.

I do not see any evident downside as the exemption would allow us to achieve global public health objectives but it will not deprive innovators from the possibility of getting a fair reward for their investment.

The TRIPS Council met in October to build a consensus on the waiver. What comes next? Is there a deadline by which a decision needs to be made? 

A session of the TRIPS Council may take place in November after consultations to be carried out by the chair of the council. In the meantime, a broader coalition of countries may be built up to support the adoption of the waiver. There is no deadline to arrive at a decision.

The WTO operates on the basis of a consensus rule. Hence, countries opposing the waiver may block a decision on this matter. The US and EU may, of course, use their economic and political power within the WTO to attempt to block the initiative.

(Bhuyan is a special correspondent at IndiaSpend.)

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