CSOs challenge DG’s third way as USTR discusses TRIPS waiver

Washington DC, 14 Apr (D. Ravi Kanth) — The United States Trade Representative (USTR) Ambassador Katherine Tai on 13 April discussed with representatives of labour unions, advocacy groups and pharmaceutical lobbies about the temporary TRIPS waiver at the World Trade Organization. The temporary TRIPS waiver seeks to suspend the implementation of several provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for ramping up global production of diagnostics, medicines and vaccines in order to fight the worsening COVID-19 pandemic.
So far, the SARS-CoV-2 virus has claimed more than 2.9 million lives globally, with over 138 million registered cases.
The USTR’s meetings on the temporary TRIPS waiver came a day before the closed-door meeting on 14 April convened by the WTO Director-General Ms Ngozi Okonjo-Iweala with four trade ministers, representatives of Big Pharma, and a few other stakeholders ostensibly on issues concerning the “shortage of vaccines” (see SUNS #9324 dated 13 April 2021).
Significantly, 243 civil society organizations (CSOs) issued a powerful missive to the WTO DG on 13 April challenging her “third way” approach that emphasizes “on industry-controlled bilateral agreements (with Big Pharma) as the primary approach to address global production constraints and supply shortages.”
According to TRIPS negotiators, the DG seems determined to push the temporary TRIPS waiver under the carpet by pursuing the industry-controlled bilateral and voluntary agreements, which have failed to deliver the much-anticipated results and that they tried to conceal the root cause for the current global shortage of vaccines.
Even a strong advocate of the international IPR system like the former WTO TRIPS division official Ms Jayashree Watal has argued that it is “unfortunate that she has spoken publicly of a “third way” that would involve licensed manufacture in order to increase the supply of much-needed Covid vaccines in poorer countries.”
In her letter to the Financial Times on 18 March, Ms Watal said “it does not matter that her idea makes eminent sense; what matters is how many members now believe she is an honest broker.”
Ms Watal asked whether “is it really the role of the WTO to convene meetings with vaccine developers and manufacturers to examine the adequacy of vaccine manufacturing capacity, as is apparently being suggested by Australia, Canada and others, taking a cue from her own words?”
Ms Watal said that “one can only hope that she is not led astray, that she can take a page from the book of past directors-general, win the trust of all sides and begin the arduous task of building consensus for issues within her remit, leaving it to other organizations like the World Health Organization to look into the issue of global expansion of vaccine manufacturing capacity.”
Amidst growing pressures from civil society groups and US Congressmen, Ambassador Tai held meetings on 13 April separately with the representatives of the American labour unions, advocacy groups, and pharmaceutical lobbies about “increasing vaccine production and global health issues.”
In her meeting with the leaders from American labour unions, Ms Tai discussed “the proposed waiver to the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for Covid-19 vaccines.”
According to the USTR press release, Ambassador Tai reiterated that “the Biden-Harris Administration’s top priority is saving lives and ending the pandemic in the United States and around the world.”
The USTR conveyed “the administration’s commitment to increasing Covid-19 vaccine production and distribution, both at home and worldwide.”
Ambassador Tai “emphasized her commitment to improving global health preparedness and worker-centered trade policy.”
As regards her virtual meeting with the advocacy groups, Ambassador Tai said she discussed “the proposed waiver of certain provisions of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for the COVID-19 pandemic.”
The organizations – which included Public Citizen, Oxfam America, and Partners of Health among others – “shared their view of the waiver proposal.”
The USTR said she “conveyed the Biden Administration’s commitment to saving lives and ending the pandemic in the United States and around the world by increasing COVID-19 vaccine production and distribution, including investing in COVAX and working with global partners.”
“The Ambassador also emphasized USTR’s goal of using trade agreements to fight for better public health outcomes,” according to the press release issued on 13 April.
Finally, the USTR also held a meeting with representatives of pharmaceutical lobbies such as the Biotechnology Innovation Organization (BIO) and the Pharmaceutical Research and Manufacturers of America (PhRMA) to discuss “increasing vaccine production, global health issues and the proposed waiver to certain provisions of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for the COVID-19 pandemic.”
According to the press release, Ambassador Tai “emphasized her commitment to working with other WTO members on a global response to the COVID-19 pandemic, including the role of developing countries in any solution.”
In short, the USTR did not quite reveal her mind on the waiver, while touting the Biden-Harris administration’s goal to increase the production and distribution of vaccines in the US as well as worldwide.
Despite the TRIPS waiver being co-sponsored by 58 countries with support from 61 other countries at the WTO, the DG seems to have embraced the notion of bilateral and voluntary licenses as preferred by Big Pharma.
In contrast, the WHO director-general Dr Tedros Adhanom Ghebreyesus, who is expected to participate in the meeting on 14 April, has strongly supported the TRIPS waiver among other options for ramping up production of diagnostics, therapeutics and vaccines across countries.
Meanwhile, according to the re-revised agenda, the DG has now invited South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter as well as the South African pharmaceutical company Aspen to the meeting.
In a related development, 243 civil society groups which include global, regional and national CSOs, delivered the strongest statement yet to Ms Okonjo-Iweala on 13 April.
The CSO letter is available at https://www.twn.my/title2/intellectual_property/trips_waiver_proposal/CSOLetter_Dr.%20Ngozi.pdf
The signatories to the CSO letter, which include Amnesty International, Medecins Sans Frontieres (MSF), and the Third World Network among others, challenged the DG on her “third way” approach as well as those members – Australia, Brazil, Canada, Chile, Colombia, Ecuador, New Zealand, Norway and Turkey – that are spearheading her cause.
In what appears to be a calculated attempt to undermine the proposed TRIPS wavier, the nine countries adopted an unusual and somewhat WTO-inconsistent approach in their proposal WT/GC/230 issued on 12 April.
The nine countries “earnestly encourage(ed) the Director-General to promptly convene and hold discussions with both vaccine developers and vaccine manufacturers, as well as developers and manufacturers of other COVID-19- related medical products, in coordination with the World Health Organization and other relevant organizations, toward:
* helping to ensure that any unused or under-utilized capacity for the production of affordable, safe and effective vaccines, at any stage in the process, is promptly identified and used as fully as it is technically possible, with a view to a net increase in global production of COVID-19 vaccines, and provided that this is not to the detriment of the production of other essential vaccines;
* promptly facilitating and promoting the creation of mutually beneficial licensing partnerships between vaccine developers and vaccine manufacturers, including for the collaborative and prompt transfer of expertise, know-how and technology;
* promptly identifying and addressing, in a consensus-based manner, any trade-related impediments to the utilization of production capacity and the scaling up of vaccine production, as well as to the production and distribution of other COVID-19-related medical products, recalling the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility to protect public health and, in particular, to promote access to medicines for all; and
* promoting, through similar approaches, the broad availability of other essential COVID-19-related medical products, such as diagnostics, therapeutics, equipment and devices.”
In the face of what appears to be a DG-orchestrated move to hold direct negotiations with Big Pharma, the CSOs said that “while the objective of this proposal may be well-intended, the proposed approach is also mainly centred on bilateral agreements controlled by corporate rights-holders.”
The CSOs drew attention to the recent arrangements between AstraZeneca and the Serum Institute of India.
“There is considerable experience on the constraints such agreements put on local production and equitable worldwide access to life-saving pharmaceuticals,” the CSOs argued.
Moreover, “bilateral agreements that have been signed to date contain restrictive terms and conditions that reinforce vertical control of technology-holding companies, artificially limit production and supply to constrain global supply options and are mostly un-transparent with governments and the public learning about the limits imposed post- facto, if ever,” the CSOs said.
Commenting on AstraZeneca’s agreement with the Serum Institute, the CSOs said AstraZeneca “entirely relies on one manufacturer in India, which it has licensed, for the supply of its vaccine to low and middle income countries including the COVAX Facility (administered by WHO-GAVI), and consequently billions of people are now primarily dependent upon the vaccine supplies from one company in India.”
Unlike the nine countries that are propagating the DG’s “third way” approach, the CSOs offered evidence on the nature and structure of bilateral agreements that contain opaque and monopoly profit-driven provisions.
According to the CSOs, “most of the existing bilateral agreements to produce COVID-19 vaccines are contract manufacturing agreements through which the contracted entity manufactures on behalf of a licensor that maintains full control over the use of its technology, the volume of production and where and at what prices vaccines may be supplied.”
Worse still, while the contract-based agreements may provide a short-term solution, such a “model cannot guarantee sustainability because contractors have no legal rights to independently produce and supply the concerned technologies worldwide.”
“In some agreements, the technology holder maintains control over the vaccine component and prevents the licensee from manufacturing the vaccine component, hence creating dependency on the technology holder for the supply of the vaccine component, while others contain territorial restrictions,” the CSOs argued.
Further, these contract-type of agreements also critically “depend on the “willingness” of the technology holder to license at all and as such are failing to mobilize global manufacturing capacity and diversifying supply options, on transparent terms that prioritize boosting global supply of the vaccine components and the final product.”
The CSOs pointed out that Moderna and Pfizer have not yet entered “into license agreements with developing country manufacturers allowing for technology transfer and manufacture to supply developing countries.”
The so-called COVID-19 Technology Access Pool (C-TAP) initiative launched by the WHO focused “on pharmaceutical companies to commit to transparent non-exclusive global voluntary licensing.”
However, the C-TAP initiative has failed to take off due to rejection by global bio-pharmaceutical companies.
In a similar vein, according to the CSOs, “the voluntary bilateral contracting approach is the preferred choice of pharmaceutical corporations holding the technology, for it allows them to control production and supply to markets, which they consider lucrative for their future profits.”
Driven by monopoly profits, Pfizer, which is manufacturing the m-RNA vaccine, stated its intention “to shift some production to manufacturing booster doses for rich countries even while some low and middle income countries have not had an initial vaccine, and to raise its vaccine price to an estimated $150-175 per dose in what it considers the post-acute-pandemic phase.”
The CSOs told Ms Okonjo-Iweala that there are serious limitations in her “Third Way” approach “that entails once again appealing to pharmaceutical corporations to take voluntary actions.”
The CSOs drew her attention “to the inherent limitations of being dependent on corporations’ voluntary measures that have been proven to be insufficient in this pandemic.”
Given the magnitude of the COVID-19 health crisis across countries which are in dire straits amidst enveloping inequalities, it is somewhat an ugly situation to watch most pharmaceutical companies raking up huge benefits “from large amount of public funds invested in R&D, trials and spent on procurement, with little to no accountability and conditions attached to guarantee access.”
The CSOs cited the example of “Pfizer and Moderna (which) are expecting vaccine revenue of between $15-30 billion in 2021.”
Therefore, “it is time to realize governments’ core and collective responsibility to collaborate and address monopolies on technologies concretely.”
According to the CSOs, “the way forward should be to remove barriers towards the development, production and approval of vaccines, therapeutics and other medical technologies necessary for the prevention, containment and treatment of the COVID-19 pandemic, so that more manufacturers, especially from developing countries, may independently contribute to the global supply.”
The CSOs persuasively argued that “global supply should not be dependent on the purely commercial prerogatives and exclusive rights of pharmaceutical companies holding the technology. There is simply too much at stake.”
“In the context of WTO, temporarily waiving relevant intellectual property rules that reinforce monopolies, is an important contribution that the WTO as a rules-based multilateral institution can make on this matter in the pandemic, alongside reaffirming and supporting the full use of existing public-health-safeguarding flexibilities of the TRIPS agreement,” the CSOs argued.
Lastly, “voluntary licensing, if pursued, should treat vaccine as a global public good, be open and allow for transparent global non-exclusive licenses with worldwide coverage of supply, and left to the WHO that has established C-TAP for this purpose,” the CSOs told the DG. – Third World Network
Published in SUNS #9326 dated 15 April 2021