Covid-19 and the hurdles associated with patent waiver

Introduction

• The decision of the President of the United States, Joe Biden, to support the India-South Africa proposal, seeking a waiver of patent protection for technologies needed to combat and contain COVID-19, comes as a shot in the arm for global health.
• The proposal that was placed before the World Trade Organisation (WTO) had been facing resistance from several high income countries including the U.S. administration.
• A change in the American position supporting a temporary waiver could act as a catalyst for building consensus in favour of that proposal when it comes up for fresh consideration at the WTO in June.
• While France and Russia have declared support, Germany has voiced its opposition.

Predictable responses

• While many low and middle-income countries supported it, resistance came from the U.S., the United Kingdom, the European Union, Switzerland, Australia and Japan.
• A strange addition to this group was Norway, which usually supports initiatives that promote global health equity.
  • On this occasion, it chose to shield patent rights.
• Since the WTO operates on consensus rather than by voting, the proposal did not advance despite drawing the support from over 60 countries.
• Predictably, the pharmaceutical industry fiercely opposed it and vigorously lobbied many governments.
• Right-wing political groups in high-income countries sided with the industry.
• Microsoft co-founder and billionaire Bill Gates were strident in his opposition to patent waivers for vaccines, justifiably drawing ire from the public health community.

Hollow reasons

• It was argued that the capacity for producing vaccines of assured quality and safety was limited to some laboratories and that it would be hazardous to permit manufacturers in low and middle-income countries to play with technologies they cannot handle.
• The low labour costs in those countries are obviously so attractive that confidence in the quality and the safety of their products is high, so long as patents and profits are protected.
• This amazing duplicity has been seen for years when multinational firms have subcontracted the manufacture of patented products to industries with low production costs in developing countries.
• This has been true of pharmaceutical products, as it has been of branded consumer products and luxury goods.

Failure of the COVAX Facility

• It was also stated that developing countries could be supplied vaccines through the COVAX facility, set up by several international agencies and donors.
• While well intended, it has fallen far short of promised delivery. Some U.S. States have received more vaccines than entire Africa has from COVAX.
• The trickle-down theory does not work well in the global vaccine supply, just like its dubious application in economics.

Is a patent waiver useless?

• Patent waivers are also dismissed as useless on the grounds that the time taken for their utilisation by new firms will be too long to help combat the present pandemic.
• The efficacy and safety of their products can be assessed by credible regulatory agencies and the World Health Organization.
• Patent waivers will benefit by increasing access not just to vaccines but also to essential drugs and diagnostics. Surely, that will not take much time.

Accusation of China- hollow accusation

• An argument put forth by multinational pharmaceutical firms is that a breach in the patent barricade will allow China to steal their technologies, now and in the future.
• The original genomic sequence was openly shared by China, which gave these firms a head start in developing vaccines.
• Much of the foundational science that built the path for vaccine production came from public-funded universities and research institutes.
• The perennial argument, offered for defending patent protection, is that innovation and investment by industry need to be financially rewarded to incentivise them to develop new products.

Building on Biden’s gesture

• The World Trade Organization resolves debates by consensus and not by voting.
• The process may drag on, despite U.S. intervention.
• If Mr. Biden succeeds in driving consensus to provide a global thrust to combat a global threat, he will match Franklin D. Roosevelt’s leadership in the Second World War.
• He does not have such an alliance in place now.

Alternative to patent rights - Solutions

1. Licensing Regime:

• The counter to patent waiver is an offer to license manufacturers in developing countries while retaining patent rights.

2. Royalties:

• Even if compulsory licences are issued bypassing patent restrictions, royalties are paid to the original innovators and patent holders.
  • They will continue to gain revenue, though not super profits.
  • Pfizer’s vaccine generated $3.5 billion in revenue in the first quarter of 2021, while mostly reaching the arms of the world’s rich.
  • It expects $15 billion sales this year.

3. Compulsory Licensing:

• Developing countries must take heart from his gesture and start issuing compulsory licences.
  • The Doha declaration on TRIPS flexibilities permits their use in a public health emergency.

4. Promotion of Credible Companies:

• National governments must be trusted to promote credible companies and not permit fly-by-night operators.

5. Financial and Technical support:

• High-income countries and multilateral agencies should provide financial and technical support to enable the expansion of global production capacity.