On 5 May, the World Trade Organization’s General Council agreed to continue the discussion on India and South Africa’s proposal to waive Intellectual Property Rights on Covid-related innovations. The two countries are going to present a revised proposal on this topic, which will be discussed by the Council on the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, in the second half of May. Notably, the United States has decided to support this proposal, reversing its earlier stance. This marks a significant shift in the narrative around the proposed waiver that had acquired a David vs Goliath-esque proportion, especially in light of the acute Covid-19 vaccine shortage in India.
In October last year, India and South Africa had approached the World Trade Organization (WTO) seeking a waiver on intellectual property rights on Covid-related innovations to enhance access to tests, drugs, and vaccines. Most developing countries, members of the European Parliament, and now the US government have sided with the two countries in their motion before the Council on the Agreement on TRIPS. Developed countries, including Japan and the UK oppose the move. In response, WTO General Secretary Ngozi Okonjo-Iweala has proposed a ‘third-way’ approach that would facilitate wider manufacturing of vaccines, without compromising on fundamental principles of intellectual property (IP) protection. In her latest statement on 5 May, she welcomed India and South Africa’s decision to revise the proposal and stressed on the need to find a pragmatic solution, acceptable to all sides. She reiterated that it is key to protect research and innovation while meeting demands raised by developing countries.
To understand how these developments will impact vaccine availability, it is important to unpack how the TRIPS mechanism works, understand the demands of India and South Africa, as well as evaluate mechanisms to address India’s Covid-19 vaccine shortage.
What is the TRIPS Agreement?
Negotiated in 1995 at the WTO, the TRIPS Agreement requires all its signatory countries to enact domestic law, which guarantees minimum standards of IP protection. Such legal consistency enables innovators to monetise their intellectual property in multiple countries. In 1998, American companies sued the South African government for using their antiretroviral drugs formula, to combat the AIDS epidemic in the country. In 2001, the WTO signed the Doha Declaration, which clarified that in a public health emergency, governments could compel companies to license their patents to manufacturers, even if they did not think the offered price was acceptable. This provision, commonly referred to as “compulsory licensing”, was already built into the TRIPS Agreement and the Doha declaration only clarified its usage.
Under Article 27(2) of the TRIPS Agreement, WTO member countries may exclude patentability of inventions that are necessary to protect public health. Article 30 allows members to place limited exceptions to the rights conferred by a patent. This, along with a set of other tools known as the “TRIPS flexibilities”, allow governments to waive IP rights in the interest of public health. Under Section 92 of the 1970 Indian Patents Act, the central government has the power to allow compulsory licenses to be issued at any time in case of a national emergency or circumstances of extreme urgency.
India and South Africa’s current proposal seeks greater flexibilities than those provided in the TRIPS Agreement. The vaccine manufacturing process is complex and exercising flexibilities on patents will be insufficient to enhance production. It will require relaxations on other forms of intellectual property as well – just like India has proposed at the WTO.
Patent waiver insufficient to ramp up vaccine production
The process of vaccine development and manufacturing has several steps, and involves a complex intellectual property mechanism. Different types of IP rights apply to different steps and there is no one kind of IP that could unlock the secret to manufacturing a vaccine. A patent protects the conceptual knowledge of key ingredients used for the vaccine and the process of triggering a biological reaction that builds immunity. The expertise to manufacture it may be protected as a trade secret, and the data from clinical trials to test vaccine safety and efficacy may be protected by copyright. Thus, a patent waiver alone does not empower manufacturers to start vaccine production immediately. It is a slow and uncertain process that requires manufacturers to jump through several hoops. They will need to design the process for manufacturing the vaccines, source necessary raw materials, build production facilities, and conduct clinical trials to get regulatory approvals. The manufacturing process itself has different steps, some of which may be subcontracted to other parties.
This is perhaps the reason that India and South Africa have sought a waiver of multiple IP rights on Covid-related innovations, instead of issuing compulsory licenses for patents on these vaccines. However, the process of negotiating a TRIPS waiver is also tedious, especially when high-income countries are opposed to it. The proposal was first circulated eight months ago and is still the topic of a fierce debate. It took the WTO approximately five years to issue the Doha Declaration in 2001, which was only a clarification of existing provisions in the Agreement. Even though the AIDS epidemic dwarfs in comparison to the urgency and severity of the current Covid-19 pandemic, a waiver of the TRIPS Agreement on a rather wide range of innovations is unlikely to be the topic of a swift multilateral negotiation. In her statement on 5 May, US Trade Representative Katherine Tai warned that negotiations will take time, indicating that her country’s decision t0 support the waiver will not have an immediate impact on vaccine availability.
Avenues for voluntary licensing
The Indian government can take two more proactive measures to help address the vaccine shortage: encourage patent holders to voluntarily license their patents to manufacturers, and reduce regulatory risks for vaccine suppliers to operate in India.
Across the world, governments must leverage their position as co-innovators and investors in vaccine development to encourage voluntary licensing. Encouraging the private sector to voluntarily license their innovations will ensure that the necessary information to manufacture vaccines is passed on to licensees, and regulatory approvals are expedient. India already has two exemplary arrangements. First, the Serum Institute of India is manufacturing a large share of India’s current vaccine supplies, based on an innovation licensed from the UK’s Oxford-AstraZeneca. Second, the Indian government has provided three public sector enterprises with the resources and permissions necessary to manufacture Bharat Biotech’s Covaxin. Instead of trying to obtain an IP waiver, the government must enable Indian vaccine manufacturers to expand production and reduce administrative inefficiencies in procurement and distribution.
Concomitantly, the Indian government must assure all vaccine manufacturers that they will face minimum regulatory risks, such as that of unexpectedly imposing price controls. According to a Reuters report, Pfizer is willing to manufacture its vaccine in India if it is assured freedom to price and export the vaccine. This is understandable as vaccine development is a risky process and requires significant investments. A commitment to supply vaccines to India requires trust in the country’s regulatory and institutional environment, which the government must strive to instil through dependable commitments. Such confidence, combined with the expedited process for vaccine approval, can help India quickly overcome its supply shortage – a peculiar position to be in for one of the world’s largest pharmaceutical manufacturers.
The authors work at the Koan Advisory Group, a technology policy consulting firm. Views are personal.
This article is part of ThePrint-Koan Advisory series that analyses emerging policies, laws and regulations in India’s technology sector. Read all the articles here.