The unprecedented Covid-19 pandemic has wreaked havoc by not only taking countless lives but also by robbing the families of their means to livelihood. Countries across the world are grappling with both economic and social breakdown. While vaccinations have started in most countries, there is a glaring difference in accessibility and affordability of vaccines, drugs and other resources required to combat Covid-19 pandemic between the developed, developing and least developed countries. Also, if trends are any indicator, the poorest countries may not get vaccinated until at least the year 2024 and some countries may not even get there. The situation of shortage of drugs and other resources is also worrying in many countries including India.
Considering the above scenario, a TRIPS waiver was jointly requested by India and South Africa. This has been applauded and supported by countries and various sections of the global community. The underlying presumption is that sooner or later the Intellectual Property Rights on these vaccines, drugs and other necessities may pose a barrier to public availability and affordability to the aforesaid tools required in the fight against Covid-19 pandemic. It needs to be examined if such a presumption is reasonable at all.
TRIPS waiver: What is it?
Covid-19 was declared as a global pandemic by WHO on 11 March 2020. In this scenario of global emergency, termed as a revolutionary step, on 2 October 2020, India and South Africa made a joint submission, requesting the Council of TRIPS to recommend the General Council of WTO a limited temporary waiver from the implementation, application and enforcement of Sections 1 (Copyrights & Related Rights), 4 (Industrial Designs), 5 (Patents) and 7 (Protection of Undisclosed Information) of Part II of TRIPS Agreement in relation to prevention, containment or treatment of Covid-19, until vaccination is in place globally and majority of world’s population develops immunity.
What it seeks to achieve?
The request for waiver advocates that besides patents, other intellectual property may hinder access to affordable medical products and that many countries, primarily developing countries may face institutional or legal difficulties when using flexibilities provided under TRIPS Agreement. The waiver proponents argue that it would give an option to all the TRIPS members irrespective of being a developed, developing or least developed country to neither grant nor enforce any patent or any other related IP pertaining to all Covid-19 drugs, vaccines, diagnostics, and other technologies, including masks and ventilators, for the duration as decided to combat this pandemic. This, it is argued, will provide space to all the countries to collaborate with all interested players, and not just IP holders, for research as well as scaling up and supplying necessary Covid-19 medicines, vaccines and other relief.
Contradicting views related to waiver
Primary reason for seeking such a waiver has been the lack of access to vaccines and medicines to low-income countries. This is largely for the reason that manufacturers are unable to meet the demand and it is obvious that a handful of companies owning the technologies may not be able to amply provide vaccines for the entire global population. Therefore, it has been advocated that such a waiver is needed, and exclusive rights and monopolies concentrated in the hands of a few is not an approach which can help us get through this pandemic. Numerous examples on IP acting as a barrier to access has been cited in the field of therapeutics, vaccines and other medicinal products.
On the other hand, opponents of the waiver have argued that voluntary license agreements between innovator companies and other players are the way to ramp up the production, which these companies are already engaging into for scaling up the production. To counter the same, it has been argued that pharmaceutical companies, like Gilead which owns patent for the API of Remdesivir in various jurisdictions, have entered into voluntary license agreements, albeit royalty free, with only a few of the manufacturers excluding half the world’s population who might have to pay for the drugs at Gilead’s own discretion. Therefore, such restrictive license agreements can have an impact on the access and affordability to Covid-19 resources.
Opponents of the waiver further argue that there are ample TRIPS flexibilities which are sufficient to combat the IP barriers during the Covid-19 pandemic. They advocate that voluntary efforts like COVAX with the objective to accelerate the development and manufacturing of Covid-19 vaccines, and to guarantee fair and equitable access for every country in the world have already been initiated.
Contrarily, proponents of the waiver argue that the existing TRIPS flexibilities are not sufficient to counter this pandemic. The flexibilities are on a case to case basis and based on a country-specific approach whereas ‘a global approach’ is the need of the hour. Moreover, on using TRIPS flexibilities, the countries face lot of limitations such as pressure from trading partners, lack of institutional capacities to scale up production of medical facilities and pharmaceutical products. One such example is that India has been put on watch-list by the US, for its section 3(d) and compulsory license schemes. Further, it has been argued that this waiver will scale up global production without any threat of national or international IP disputes. Further, parallel importation has its own limitations such as arduous contract negotiations, rigorous regulatory requirements and approval being restricted to certain time and purpose only.
Another important point which has been argued by the proponents of TRIPS waiver is that none of the companies owning the patents have themselves made any big investments as most of them were funded by various governments and therefore, there cannot be any monopoly on such innovations. Therefore, the TRIPS incentive is not required in this case. Moreover, it has been also stated that there is enough competition between various governments to secure supply of vaccines, therefore the demand is huge and hence there is no such market failure that inhibits returns for these companies. Moreover, this waiver is not for existing or the continuing IP regime but a limited temporary waiver pertaining to Covid-19.
Present scenario of vaccines in India
Most experts believe that if India has to avoid a future carnage similar to the current wave, vaccination of population is critical. While the largest vaccination drive had been initiated in the country, reality is that there is a huge deficit of vaccines. As per Co-Win statistics, a total of more than 170 million doses have been administered and out of which a bit more than 36 million second doses have been administered. At this rate, vaccination of more than 1.36 billion by next year would seems nearly impossible. While India is home to the largest manufacturer of vaccines in the world and was admired for its vaccination efforts for other countries, however, it is now being widely criticized for not being able to sufficiently provide vaccination to its own population. However, owing to the licensing arrangements with various vaccine manufacturers it is expected that the scarcity of vaccines might be overcome soon. Moreover, as per the CEO of Serum institute of India, scaling up the production is the formidable task which requires huge funding to the tune of 3000 crores.
Is an IP waiver the answer to India’s Covid-19 woes?
None of the arguments in favour of the waiver counter that the TRIPS protection is the very incentive which led to such rapid breakthroughs in the vaccine development for Covid-19. So, robbing these innovator or originator companies of their exclusivity incentive will not leave any impetus for these companies, researchers or scientists to provide such early breakthroughs.
As far as vaccines are concerned, it is not the IP which is acting as the sole barrier. There are problems relating to lack of raw materials, know-how transfer requirements and limited production capabilities because of the complexity of vaccines, that are the major hurdles for ramping up the production of vaccines. Moreover, even without the waiver in place, almost all the vaccine companies have entered into voluntary licensing arrangements across the globe to facilitate the access of vaccines. These voluntary licensing arrangements ensure that the quality or standard of the product is maintained and the IP of the companies are also protected. Therefore, there is no necessity for enforcing such a blanket waiver for vaccines. Moreover, enforcing the waiver will not facilitate removal of hurdles like lack of institutional capacities and expertise and lead to ramping up of production of vaccines instantaneously. The major problems which are being encountered at least for vaccines are lack of raw materials and adequate production facilities. Various cumbersome regulatory regimes also act as an obstacle to availability of the pharmaceutical drugs or vaccines or any other medical resources. Therefore, a TRIPS waiver cannot be the magic wand for increasing access and affordability of vaccines pertaining to Covid-19.
Many critical drugs being used in treatment of Covid-19 are biologics, which actually require a lot of exchange of additional information pertaining to the microbe being used, particular strain of that microbe, cell line being used, the standardized media and multiple other complexities in manufacturing. In such a scenario, patents alone may not be enough to obtain the final product. The know-how generated over a period of time to perfect the end result would also be equally important to arrive at the end product. Even if it is assumed that replicating the biologics by a competitor of an IP holder may not be difficult, the challenge of a regulatory approval for such an ‘alternative/replica’ within a short span of time would not be easy in addition to quality issues. So, in case of lack of biologics also, one cannot assume IP rights to be the sole culprit.
Lastly, considering purely chemical drugs, chemical reagents for test kits other tools including masks, PPE kits, tools used for oxygen cylinder, etc. which were in the market before Covid-19 pandemic and are now found to be effective for Covid-19, it can still be argued that know-how may not play such an important role and the same can be reverse-engineered or developed, if an IP waiver were in place covering the above items. However, it cannot still be completely denied that without the related know-how, it may be extremely difficult to arrive at the desired quality in the end products within a very short span of time. Therefore, even if it is assumed that TRIPS waiver may lead to easy access and affordable rates for these products, in absence of voluntary licensing arrangements, it seems to be a daunting task to successfully facilitate exchange of know-how to increase the production of such medicines and tools.
While Section 7 of Part II of the TRIPS Agreement relates to Protection of Undisclosed Information, and a waiver of the said Section may lead to forceful disclosure of know-how and confidential information which these companies have amassed over several of years to develop vaccines, biologics, therapeutics and other tools which are being used to put up a fight against this eerie pandemic. Know-how or trade secrets may be generally granted to the licensee along with the patent through execution of a Non-disclosure Agreement in addition to patent license agreement. Any forceful surrendering of these rights on account of waiver would be extremely disproportionate, may be counter-productive and can erode substantial value from these innovator companies which are part of a critical industry. Lastly, any such coercive measures will act as a deterrent to the companies to come up with inventions in the pharma space in addition to causing debilitating losses.
Even after getting an IP waiver, there are stringent regulatory laws in every country which pose a big challenge to such global production and supply approach, being claimed to be attainable through TRIPS waiver. In addition, most of the developing, and least developed countries suffer from infrastructure infirmities like effective storage and distribution facilities. As an example, the destruction caused by the second wave of Covid-19 in India cannot be solely attributed to lack of vaccines or medicines, but a major reason was lack of sufficient facilities, oxygen, ventilators etc. It was also admitted by the Government that there was adequate Oxygen in the country clearly showing that the centralized distribution was the issue.
It is imperative to vaccinate the larger share of world population at the earliest to limit the chances of mutation for the virus. Also, all countries need to have adequate supply of all tools required to put up a strong fight against any surge caused by Covid-19. Considering the current global scenario, it is not that the countries will be able to scale up the production rapidly as soon as a waiver is granted. Taking away the rights of the innovators or inventors would further deprive them of any incentive to keep up the scientific and technological breakthroughs.
Ripping off the IP rights may not create a harmony to attain this objective and on the contrary, it may lead to unwanted imbalances and adversely impact free transfer of technology across jurisdiction and international trade. These have the potential to do more harm than good in the long run. The governments must facilitate voluntary licensing arrangements and find ways to expedite the regulatory approvals or create certain efficient expedient regulatory regimes. Creation of joint ventures along with government funding can ensure that other challenges related to supply chains, industry infrastructure, storage and distribution channels are also tackled in a cohesive manner. Therefore, it is clear that mutual cooperation and collective efforts of various stakeholders including government, major pharma players, generics and scientific community is essential in combatting this pandemic and not the sole solution of TRIPS waiver.
[The authors are Principal Associate and Partner, respectively, in Intellectual Property Rights team at Lakshmikumaran & Sridharan Attorneys, New Delhi]
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