The need for accessible and affordable healthcare has never been more crucial. Millions are getting infected and thousands are dying every day from the coronavirus. The healthcare system is teetering on the brink. The pandemic-stricken world is facing an inevitable shortage of medical supplies. This situation may not get under control until the majority of the population is vaccinated against the novel coronavirus to develop herd immunity. It is heartening that the advancement in science has enabled the development of vaccines in a record span of just a few months. Under one year of the Covid-19 pandemic outbreak, about eight vaccine candidates from around the world have made it to the market.
But the development of vaccines doesn’t mean the battle is won. There are several challenges in making these vaccines accessible to the world population, one of them being Intellectual Property Rights (IPRs). India and South Africa’s proposal to the World Trade Organization (WTO) to waive patent rights on Covid-19 vaccines, as mentioned in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, is still under discussion since October 2020. Observing the World Intellectual Property Day today, we must resolve to provide full and unhindered access to Covid-19 vaccines. The IPR regimes all over the world would have a major role to play.
Patents invaluable to R&D but world needs vaccine
The well-established economic theory of patent protection suggests that patents foster innovation by giving a temporary monopoly to the innovator over their innovation, which allows them to recoup their investment as well as protect their innovation from imitation. For life-saving medicines and vaccines, billions of dollars go into research and development (R&D) and clinical trials. If the pharmaceutical companies are not able to appropriate the returns on their investment, they will have no incentive to invest in the development of new medicines in the future.
In most countries, patent protection is given for about 20 years, post which generic companies can enter the market to produce cheaper biosimilars of those drugs. While the provision of monopoly rights over innovation is essential to advance the science, it is often also misused by big pharma companies to charge exorbitant prices. This restricts access to these medicines at affordable prices by low- and middle-income countries.
In the current scenario, there is a global health emergency. About 70 per cent of the world population needs to be inoculated to tide over the pandemic. This means, more than 5 billion people need vaccines. With two doses each, this amounts to 10 billion doses of vaccines. Ngozi Okonjo-Iweala, the WTO director general, said the world has the capacity to produce 3.5 billion doses of vaccines in a year, though capacity-enhancement plans are currently underway. Developed countries have already secured all of these. Most low- and middle-income countries have not had any access to vaccines until now and going by the current capacity, it does not seem like they will anytime soon.
Anticipating the situation, India and South Africa had proposed to the WTO in October last year to suspend the Covid-19 vaccine IPRs from four provisions of the TRIPS Agreement to facilitate prevention, containment and treatment of Covid-19 — Section 1 on copyright and related rights, Section 4 on industrial designs, Section 5 on patents, and Section 7 on the protection of undisclosed information. The waiver is requested until the majority of the world’s population has been made immune post-vaccination. The IPR waiver may allow faster technology transfer and production of vaccines in the countries that have the production capacity. This may help in vaccinating masses in a shorter time.
Developed nations must come on board too
The major developed countries like the United States, the European Union, Canada, etc. are opposing the proposal, arguing that this move will de-incentivise pharma companies from investing in developing medicines and vaccines in future pandemics. That is a credible argument in ordinary times. However, the current situation is radically different. A lot of funding from public bodies has also gone into the development of some Covid-19 vaccines and with governments underwriting sales fully, the incentive argument may not play out. Moreover, these companies can sell the vaccine at a higher price in the developed countries that can afford it. Pfizer and BioNTech’s vaccine costs $19.50 per dose and Moderna $15 a shot. The sales in low- and middle-income countries at cheaper rates may not pose a major threat to future R&D.
Unless the world population is vaccinated, the developed countries will remain under threat of virus mutation, as well as, rendering the current set of vaccines ineffective. With the limited production capacity of vaccine developers and their licensees, it will take several years to cater to the entire world population. Given the state of healthcare facilities and the devastating impact Covid-19 is having on the world economy, we cannot afford to prolong the vaccination by years. The world should take lessons from the past when millions succumbed to HIV/AIDS due to non-access to antiretrovirals in low- and middle-income countries. Ultimately, several countries had to resort to compulsory licensing under TRIPS provisions to save people’s lives.
The Covid-19 vaccine IPR waiver proposal has gained support from the majority of the countries and several leaders in developed countries too. We hope the WTO discussions now break the impasse to reach a consensus on the waiver. Although the IPR is not the only challenge to vaccine access, it certainly is a major one. May the force be with us.
Arvind Mayaram is former Union finance secretary and chairman, CUTS Institute for Regulation & Competition. Garima Sodhi is Senior Fellow, CUTS Institute for Regulation & Competition. Views are personal.
(Edited by Prashant Dixit)