With the second wave of the Covid-19 pandemic wreaking havoc on the lives of people across the world, but more so in India, there is a growing urgency to vaccinate the entire population at the earliest. The current challenge lies in the demand-supply mismatch, mainly due to limited production capacity of vaccines. For India to achieve universal vaccination, the requirement is of 1,878 million doses — two doses each for 939 million adults. As there are only two manufacturers — Bharat Biotech and Serum Institute of India — with their current production capacity at 80-90 million doses per month, which could expand to 160 million doses by July 2021, there is a demand-supply gap that needs to be bridged on a war footing.
To bridge this gap, there is a growing clamour to invoke the provision of ‘compulsory licensing’ under the Patents Act, 1970 as was done a decade ago for the treatment of cancer.
Special case for licensing
In case of a patented product, the compulsory licence provision allows the Indian government to grant manufacturing rights to other producers without the consent of the owner, especially during national emergencies. India’s first compulsory license was granted by the Indian Patent Office under the amended 2005 Act to the Hyderabad-based drug manufacturer Natco in 2017. It allowed the company to manufacture and sell a similar version of Bayer’s drug Nexavar for treatment of kidney cancer. The compulsory licence was granted on the grounds that the life-saving medicine was not available at an affordable price and Bayer had not manufactured the drug to a reasonable extent in India.
In October 2020, India and South Africa had submitted a proposal to the World Trade Organization (WTO) to relax provisions in the international agreements that regulate Intellectual Property Rights (IPR) for medicines and vaccines required for treatment and prevention of Covid-19. Fortunately, some developed countries like the United States and Russia have announced their support for waiving intellectual property provisions while the European Union is opposed, and the United Kingdom, Canada, Japan and Australia have not yet made up their minds. Over 120 countries have backed the proposal, while all 164 member nations of the WTO are yet to begin the negotiations. Under the prevailing circumstances, with the pandemic devastating both lives and livelihoods in major parts of the world economy, it might not be a problem in getting the approval of WTO through majority voting.
As far as India is concerned, medical experts are suggesting that through open licence method, vaccine technology could be transferred from Bharat Biotech to other manufacturers because the vaccine was invented with the support of Indian Council of Medical Research (ICMR). However, it is important to understand that the ICMR’s support can be compared to banks providing fund support to startups. Thus, this does not mean that one can take away the IPR of the vaccine manufacturer because Bharat Biotech is a separate entity, not a part of the government. Even among different PSUs or government departments, often legal disputes crop up because they are all individual entities.
However, in the prevailing pandemic condition, a humanitarian approach is needed and there might not be any complaints or opposition if traditional norms are violated, whether at the level of WTO or at the domestic front. On the flip side, would it not be better that a balanced approach is adopted keeping in view not just immediate vaccine supply but also future requirements?
Tackling waiver opposition
To begin with, exceptions adopted today to ensure universal vaccination is purely a temporary measure to cushion people at the most for ten months. As per medical experts, another dose or two of an improved version of the vaccine will be subsequently needed to be followed by a vaccine for life. Also, a vaccine for children below 18 years is still to be developed. The fact is that today, the entire world is looking towards scientists for their help and efforts. Thus, is it right to discourage scientific talent whether at the WTO level or domestically? After all, medicine inventions involve talent, time and energy of scientists apart from the promoters’ money.
It is equally important to understand and not negate the fact that the issue of intellectual property rights was integrated into the trade agenda. In the pre-WTO era, developing countries including India allowed for manufacturing of the patented product by other manufacturers through a change in the manufacturing process. Subsequently, these companies also started exporting cheap medicines thus making profits. The TRIPS Agreement thereby became critical in resolving trade disputes over intellectual property rights at an international level. Hence, countries like those in the European Union, which have reservations for relaxing IPRs, may be convinced with the assurance at WTO that the medicines for cure and prevention of the coronavirus would be used only for domestic use and not for exports. Additionally, there should be a provision for appropriate recognition for the original patent holder.
Thus, with regards to relaxing of IPR provisions for Covid-19 vaccines, or for that matter all crucial medicines, it is high time that nations acted with a humanitarian angle at the WTO, but it is equally important not to disincentivise research and development efforts. Also, the patented companies should be encouraged to explore technology transfer to facilitate manufacturing of vaccines and medicines within a shorter time span and with some kind of royalty paid to them.
On the domestic front, attempts should be made for transfer of technology from companies like Bharat Biotech to manufacturers with the potential and required know-how. However, brand equity should be with Bharat Biotech with a sort of franchise arrangement. The company’s R&D expenditure should be compensated through an appropriate pricing policy.
Dr Jagdish Shettigar is Professor, Economics, Birla Institute of Management Technology, Greater Noida, and former member of the Prime Minister’s Economic Advisory Council.
Dr Pooja Misra is Associate Professor, Economics, Birla Institute of Management Technology, Greater Noida. Views are personal.
(Edited by Prashant Dixit)