TRIPS waiver proposal held hostage on ideological grounds

Washington DC, 23 Apr (D. Ravi Kanth) – Despite the worsening COVID-19 pandemic that has already claimed more than 3 million lives, a handful of industrialized countries led by the European Union, Switzerland and the United Kingdom have held hostage on “ideological” grounds the proposal to suspend certain provisions of the WTO’s TRIPS Agreement to combat the pandemic, said people familiar with the development. The TRIPS waiver proposal, first tabled by South Africa and India at the WTO on 2 October last year and later co-sponsored by 60 countries with support from most of the other developing countries, seeks to temporarily suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information for ramping up production of diagnostics, medicines, and vaccines across countries in order to address the huge COVID-19 health crisis that is currently ravaging the world.
At an informal TRIPS Council meeting held on a virtual platform on 22 April, the chair, Ambassador Dagfinn Sorli from Norway, informed members about his ongoing consultations held in small groups.
Ambassador Sorli suggested that he is exploring in concrete terms whether a possible landing zone could be found for the TRIPS waiver proposal.
Apparently, members had stuck to their positions in the small-group consultations he held on 12-13 April, and thereby made little progress, the chair maintained.
According to the chair, the TRIPS Council will therefore continue its consideration of the waiver request.
Ambassador Sorli said that he will report to the General Council at its meeting on 5-6 May, arguing that he had submitted a draft oral status report to the General Council which will be further discussed at a formal TRIPS Council meeting on 30 April.
He suggested that there are differences among some members and the proponents of the waiver.
For the umpteenth time in the past six-and-a-half months, the co-sponsors of the TRIPS waiver proposal made a robust case as to why the temporary TRIPS waiver has become a life-and-death choice before the members of the WTO.
They provided concrete and convincing evidence at the meeting, rebutting point-by-point, as to how Intellectual Property (IP) rights have become the major barrier for ramping up production of diagnostics, medicines, and vaccines across countries, especially in those developing countries where there is un-utilized production capacity.
South Africa’s TRIPS negotiator Mr Mustaqeem De Gama gave a glimpse of the recent turn of events in support of the TRIPS waiver.
The waiver, he said, was recently endorsed by 175 former world leaders and Nobel Laureates.
He recalled the grand promises made by the European Commission President Ms Ursula Von der Leyen, French President Emmanuel Macron, and the United Nations Secretary-General Antonio Guterres about treating the COVID-19 vaccine as a “public good” to make it available to all countries.
Yet, the huge disparity in access to the vaccine has widened exponentially, with 3 million deaths after COVID-19 was declared a pandemic last year, the South African delegate said.
More disturbingly, “the technology and knowledge for the development, and production of vaccine is monopolized through the (current) intellectual property system, with only select manufacturers allowed to manufacture by way of a license, and even then on terms that restrict production and supply,” he observed.
“There are a handful of developed countries blocking the progress on discussion of our proposal that has received massive global support,” Mr De Gama argued.
Ironically, these same handful of developed countries repeatedly “call(ed) for international solidarity and yet at the same time have purchased most of the vaccine supply sufficient to vaccinate their population several times over with the result of denying developing countries access to vaccines.”
Even as these members are resorting to circular discussions, “the virus is running rampant, evading vaccines, with a strong likelihood that the lack of vaccines in many parts of the world will come back to bite hard, with many more lockdowns and illnesses,” he warned.
He disagreed with the contention that the co-sponsors failed to demonstrate that IPRs are a barrier for scaling-up production, pointing “to the detailed explanations provided by the co-sponsors in IP/C/W/670, IP/C/W/672 and IP/C/W/673, a total of 49 pages.”
During the small-group consultations last week, Switzerland asked the co-sponsors “how the waiver would ensure uninterrupted collaboration of existing partnerships if it suspends large part of the TRIPS Agreement, which is, in our view, a basis for these partnerships?”.
According to the South African TRIPS negotiator, “Switzerland also suggested that a waiver would globally lift the contractual and voluntary potential of manufacturing and scaling up of manufacturing.”
Mr De Gama said the co-sponsors had already answered the Swiss query, saying that “the waiver is about lifting the legal barrier, it does not preclude the possibility of companies agreeing to voluntary licenses”.
He said some delegations may not understand the legal nature of VLs (voluntary licenses), suggesting that “they are governed by contract law, and each agreement would contain clear clauses on the governing law, and how it may be terminated.”
He said that “the majority of the current manufacturing agreements are contract manufacturing agreements, or fill- and-finish agreements,” suggesting that “even with the waiver technology, holding companies can continue to contractually engage contract manufacturers to manufacture on their behalf as well as companies only interested in fill-and-finish with the technology holding company supplying the bulk drug.”
He explained that the “technology holding companies may also offer licensing deals in relation to their expertise and knowledge of the technology they hold.”
Mr De Gama assured members that the “adoption of a waiver does not end such collaborations.”
He said that the co-sponsors reckon that “free from the shackles of monopolies, there is likely to be greater sharing of knowledge and greater collaboration.”
Further, “without the Waiver, while several developing countries have the capacity to manufacture vaccines, intellectual property (IP) rights and limited technology transfer remain barriers to build local production capacity, as stated in a recent OECD (Paris-based Organization for Economic Cooperation and Development) report,” he argued.
The OECD report, according to Mr De Gama, “further states that R&D of vaccines, as well as production capacity, is concentrated in just a few countries in the world, thereby requiring most low- and middle-income countries to import vaccines.”
Therefore, “sustainable policy options to respond to the virus should include encouraging the transfer of technical know-how to manufacturers in developing countries.”
Replying to questions raised during the small-group meetings on “how (the TRIPS waiver) proponents envisage that the R&D incentive is maintained, arguing that the IP system is an enabler of R&D,” Mr De Gama said the question was addressed in graphic detail in document IP/C/W/672 on pages 4, 11, 27, and 28.
He cited the Boston University policy brief which argues presciently that “much of this innovation has been predicated on decades of public support for research and development.”
The policy brief said “with respect to the COVID-19 vaccines, governments around the world have invested an estimated $100 billion through different means in COVID-19 vaccine development so far. These vaccines would not exist without support from governments who have the resources available to contribute. Even where vaccine creators did not rely on public funds for the initial research and development stage, they had significant pre-orders and guaranteed global demand, ensuring massive profits”.
Even the funds for the Oxford/AstraZeneca Covid-19 vaccine has been identified as coming from taxpayers or charitable trusts, of up to 98%, with less than 2% of the identified funding coming from private industry.
“This confirms once again what the co-sponsors have said on pg 28 of IP/C/W/672 that AstraZeneca has gone so far as to state that the development of the vaccine will have no financial implications for the company since expenses to progress the vaccine are anticipated to be offset by funding by governments and international organizations,” the South African negotiator argued.
According to a Guardian newspaper report of 6 March 2021, titled “From Pfizer to Moderna: who’s making billions from Covid-19 vaccines?”, expected sales for Pfizer in 2021 is between $15 billion to $30 billion; for Moderna, expected sales in 2021: $18-$20 billion; for Johnson & Johnson, expected sales in 2021: up to $10 billion; for AstraZeneca, expected sales in 2021: $2-$3 billion; with the remaining vaccines also likely to earn billions of dollars.
Mr De Gama argued that “as we have pointed out in IP/C/W/672 and further reinforced by latest news reports, firstly, public funding has played the main role in incentivizing innovation, and secondly, pharma companies are making billions and will continue to make money from advance purchase agreements.”
He pointedly asked the opponents of the TRIPS waiver “whether Pfizer and BioNTech, Moderna, AstraZeneca etc have not made sufficient billions, while in the current Covid situation, the world economy is losing in its trillions, with SMEs globally collapsing, specific industries and economies collapsing and millions of lives and livelihoods around the world at stake.”
If the opposition to the waiver “is just to protect the few more billions these companies will make, then the opposition is self-defeating and short-sighted,” he argued.
The co-sponsors of the TRIPS waiver proposal stressed that “the proposed waiver is limited to Covid-19 and does not extend to other sectors or disease areas,” he said.
He said he hopes that “the opponents are not opposing the proposed TRIPS waiver proposal based on ideological reasoning, even at the cost of many industries, economies and lives globally.”
Commenting on questions from the opponents to the waiver “on how the waiver would facilitate technology transfer, sharing of know-how leading to vaccine manufacturing,” Mr De Gama offered a summary account.
He said that the proposed waiver extends to vaccines and other medical products such as therapeutics, suggesting that several therapeutics which are off-patent are now being re-purposed for fresh patents.
He gave the example of Remdesivir that was considered to be useful for the recovery of COVID-19 patients (but now considered ineffective by WHO for COVID-19).
He said that “the primary patent on the base compound of Remdesivir has been granted to Gilead in more than 70 low- and middle-income countries,” and civil society calls for non-enforcement of Gilead’s patents went unheeded.
Mr De Gama pointed out that “Gilead signed a voluntary agreement with a few manufacturers of its choice, side- lining other manufacturers and with nearly half of the world’s population prevented from being supplied by the licensees and hence denied from accessing more affordable generics,” adding that “the freedom to operate where patent has not been a barrier, has led to manufacturing and diversification of supply beyond the limited few licensees of Gilead”.
Similarly, in the case of vaccines, the waiver will offer freedom to operate to manufacturers with capacity and the confidence to enter the market, he said.
“This freedom to operate is absolutely crucial in view of the complex patenting around vaccine technology and the uncertainty with respect to patent landscape,” the South African negotiator argued.
Therefore, he urged that discussions must move into text-based mode without further delay.
In the face of continued COVID-19 waves across countries with new variants emerging rapidly, India said that a global pandemic will be around for years, as epidemiologists predict the emergence of new variants and poor access to vaccines in large parts of the world.
India added that, “History has taught us that to completely eradicate deadly viruses, we need coordinated global action”, pointing out that “even countries that have managed to bring down their average daily case counts have also experienced the virus slip past their strict travel restrictions”.
India stressed that “it is high time that we realize that even after vaccinating their entire population with two vaccine doses, countries simply cannot win over the virus,” adding that “we have to reach a point where we’re in control of the virus, and the virus is not in control of us”.
Given the demand for 10 billion doses annually, India said the existing approach of voluntary licenses could deliver only 4% of the projected output in 2020, that is, 31 million doses.
India asked the opponents of the waiver about their hyperbolic claims on how voluntary licenses can address the global vaccine shortages.
India drew attention to the response by the Director-General of the WTO to civil society dated 20 April 2021, which states: “Our vaccine equity event did demonstrate there is untapped production potential in the developing world. Getting the intellectual property and technology transfer dimension right is clearly critical to unlocking this potential, along with a range of other practical, logistical, financial and regulatory challenges”.
It urged the WTO Secretariat to compile data as part of monitoring exercise as to how many Voluntary Licensing agreements have been achieved as an outcome of those events, how many vaccine doses have been added to the overall capacity, how many are likely to be added in three months from the first event and how much of additional doses have been actually delivered to countries since then.
This transparency exercise will be useful to gauge the extent to which VLs (voluntary licenses) are delivering, India added.
In concluding, India said, “What the WTO can contribute to pandemic response is the removal of these uncertainties for a limited period of time, hence enabling and incentivizing the entry of other manufacturers,” stressing that “there is no substitute for text-based negotiations.”
Despite clinical and convincing evidence provided by the co-sponsors of the TRIPS waiver proposal as to why an exceptional measure such as the TRIPS waiver is the need of the hour for ramping up production of diagnostics, medicines, and vaccines across countries, the EU and Switzerland apparently chose to “cock a snook” at the evidence provided on the waiver proposal, said several participants.
While the European Union, Switzerland, and the United Kingdom maintained that they are ready to engage in further discussions, they stuck to their “diversionary” tactics at each meeting by opposing the TRIPS waiver on “ideological grounds”.
The European Union, the UK and Switzerland also showed readiness to engage in further discussions but reiterated that undermining or upending intellectual property rights is a “no-go” as they represent a major contribution to expanding production of COVID-19 vaccines.
The United States highlighted the Doha Declaration, and its trading partners’ right to protect public health.
In a shift in US position (from when under the Trump Administration), it recognized that the “TRIPS agreement provides the right to grant compulsory licenses,” and it “respects its trading partners’ rights to grant these licenses in a manner consistent with the provisions of the TRIPS agreement”.
It stressed that “in cases of national emergency or extreme urgency, when cases of public non-commercial use, members may waive the requirement to seek prior authorization from the patent holder,” adding that it looked forward to hearing about hurdles in using TRIPS flexibilities.
Historically, the US is known for its notorious undermining of the use of compulsory licenses (CL) especially through use of its Section 301 process.
On the TRIPS waiver proposal, it raised several questions, and said that it is “evaluating the Proposal from the perspective of its true potential to saving lives”.
In response, Mr De Gama from South Africa thanked the US for its intervention and further questions raised by the US delegate, suggesting that “a more granular discussion of issues raised could best be addressed in text-based discussion, since we can also deal with some of the implementation issues.”
South Africa also added that, “After many years of discouraging WTO members especially developing countries to take steps to improve their patent law so that compulsory licenses may be issued in the interest of public health, how could it be expected that all WTO members to be ready to use CL, especially now during a time of global pandemic? Exceptional situations created by COVID-19 require global solutions where any one country would not be able to solve access or manufacturing problems by acting alone.”
To illustrate some of the challenges in using CL, South Africa referred to the recent example of Biolyse Pharma, a Canadian company that has sought to obtain a compulsory license for the Johnson & Johnson/Janssen vaccine through Canada’s Access to Medicines Regime for manufacture and export of vaccines.
It is on record saying that it could be producing as many as 20 million doses of COVID-19 vaccine for export annually, but it’s waiting for action from the Canadian government.
Mr De Gama noted that at the WHO Fair Pricing event on 21 April, the company indicated that it is anticipating a lengthy process despite the urgency the pandemic poses, questioning how expeditious the use of compulsory license under Art. 31bis is as a remedy for supply.
The South African delegate said “we do not see VLs (voluntary licenses) as the most appropriate means to address COVID-19 given the inherent contractual bias and unequal bargaining positions of parties to such contracts.”
“The proposed waiver is part of the WTO toolbox and remains firmly within the multilateral framework,” Mr De Gama asserted.
He said that for tens of billions of dollars of profits pocketed by Big Pharma, the world economy and countries are going to lose trillions of dollars due to the failure to accept the TRIPS waiver, he suggested.
Around 20 delegations took the floor at the meeting, with the majority of the members supporting the demand for text-based negotiations on the TRIPS waiver, said people familiar with the development.
(With inputs from Sangeeta Shashikant from Third World Network.) – Third World Network
(Published in SUNS #9333 dated 26 April 2021)