Tripping over TRIPS

February 11, 2021

6-minute read

The new year brought with it a spate of new COVID-19 lockdowns across much of the world alongside worries of new and more contagious variants of the novel coronavirus. For Canada, at least, there is the hope of widespread vaccination by summer’s end. The same cannot be said for poorer countries that do not have the means to purchase sufficient quantities of the available vaccines directly from pharmaceutical companies or to produce generic versions at home. In January, the World Health Organization warned the world faced "catastrophic moral failure" if it could not find a way to close this gap in access to public health. 

Some countries are thinking creatively about how to achieve this feat. In a landmark move, India and South Africa have proposed to the members of the World Trade Organization (WTO) that governments have the right to temporarily suspend certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) until herd immunity to COVID-19 is achieved. If the measure passes, countries would no longer be obliged to grant or enforce intellectual property rights over COVID-19 vaccines, diagnostic kits and other related medical technologies. The proposal, initially submitted in early October, has since gathered new co-sponsors and the support of over 100 WTO member governments.

Drafted in 1994, the TRIPS agreement sets out the minimum standards of protection of intellectual property (IP) rights to be provided by all WTO members. These monopoly rights grant inventors a period of exclusivity to produce and market their creations. Public health advocates have long suggested the agreement has encouraged an increase in drug prices and restrained access to life-saving technologies. In view of the special circumstances in low- and middle-income countries, the proposal from India and South Africa would waive obligations to protect patents, copyrights and technical know-how, which, they argue, provide little incentive to private pharmaceutical companies to meet public health needs and less to make their innovations widely and affordably available.

During a TRIPS Council meeting on Dec. 10, the proposed waiver was met with great resistance from some member states. Canada, the European Union (EU), the United States and Switzerland are among a small group of WTO members withholding their support for the waiver. Most are home to global leaders in the pharmaceutical industry and all have reached private deals with vaccine manufacturers, claiming the lion’s share of doses for themselves. 

Since decisions in the WTO are normally taken by consensus, these “vaccine nationalists” have stalled global efforts to equitably distribute medical tools to those in need. Nonetheless, in the absence of a consensus, the WTO agreement allows for a vote to be held. The TRIPS waiver could still be passed with a three-fourths majority vote, that is, with support from 123 of the WTO’s 164 member countries. 

Do the TRIPS flexibilities suffice? 

A number of rich countries, and the brand-name pharmaceutical industry, argue that the TRIPS framework offers governments sufficient latitude and flexibility over IP rights to effectively respond to public health emergencies. Article 31 of TRIPS, for instance, grants governments the power to issue compulsory licences, authorizing national manufacturing of low-cost generic equivalents of patented medicines. In effect, such licences suspend a patent holder’s right to exclusive production, especially during public health emergencies. In return, the patent holder gets a royalty. TRIPS rules also allow for parallel importing, where medicines manufactured in one country are exported under a compulsory licence to another country that typically lacks manufacturing capacity. 

Existing TRIPS flexibilities, while important, are inadequate given the scale and the urgency of the COVID-19 crisis. In order to issue compulsory licences or engage in parallel importing, countries must undergo a complex, cumbersome and time-consuming process. The “case-by-case” or “product-by-product” approach, required when using TRIPS flexibilities, is too limiting during the pandemic. Countries are forced to enter into a web of negotiations and bilateral deals with manufacturers for each essential part of a product, including raw materials, various components and packaging materials. When countries lack immediate manufacturing or institutional capacity, removing IP-related barriers on one product in one country alone will not be sufficient. 

In particular, compulsory licensing under TRIPS contains territorial and procedural restrictions, making it difficult for countries to truly collaborate and stand in solidarity. Article 31 is predominantly used to supply domestic markets, thereby limiting the issuing country’s ability to export generic equivalents to other countries in need. 

In addition to the procedural hurdles, countries face immense pressure from powerful trading partners. The EU and United States, two WTO delegations opposing the waiver proposal, published reports in 2020 condemning countries who continue to make use of compulsory licences. Therefore, the TRIPS agreement is a largely ineffective response to the unfair distribution of medical innovation. 

Is the COVAX Facility the answer to vaccine accessibility in Global South? 

Early last year, the World Health Organization (WHO) launched the COVAX Facility, an initiative pooling funding from nearly 180 governments to accelerate the development and distribution of COVID-19 vaccines. The facility, which promises to deliver two billion vaccine doses, 245 million courses of treatment and 500 million diagnostic tests to low- and middle-income countries by the end of 2021, is financed by wealthy economies. But according to internal WHO reports, COVAX faces a very high risk of failure due to “lack of funds, supply risks and complex contractual arrangements.” 

Waiver opponents such as the EU and Canada maintain that their contributions to the COVAX Facility and other voluntary measures preclude the need for a waiver. At most, however, these initiatives offer a short-term fix to the growing disparity in access between the Global North and South. While the COVAX alliance may multiply the supply provided by a small number of manufacturers, it does not increase nor diversify the number of suppliers, a core objective of the TRIPS waiver. 

Without a global scale-up of production in the Global South, the problem of global scarcity is far from resolved. Ensuring that multiple countries have the capacity and technical know-how is vital to building global immunity. As it stands, COVAX’s vaccine target only addresses 20% of the needs of Global South  countries. 

How can IP hinder public health initiatives? 

Opponents of the India–South Africa proposal attribute the progress in COVID-19 research to vigorous IP protections. In their view, the current patent system is robust and necessary for pharmaceutical innovation. Thomas Cueni, director-general of the International Federation of Pharmaceutical Manufacturers and Associations, claims that the inequitable distribution of COVID-19 vaccines has “nothing to do with intellectual property.” Rather, Cueni says, the challenge boils down to speedy manufacturing; once existing facilities are able to boost manufacturing capacity, doses of the vaccine will reach all corners of the world. 

Contrary to Cueni’s self-interested claims, there have been highly visible examples, throughout the pandemic, where the current IP system has failed to deliver medical supplies and treatment to the people who need it most. Thus far, Big Pharma’s “business-as-usual” exercise of IP rights has impeded mass testing for COVID-19, prevented local production of ventilator valves and delayed the crucial supply of N95 respirators for health care staff. These are only a few examples, compiled by the Médecins Sans Frontières (Doctors Without Borders), highlighting how IP persistently undermines and obstructs accessibility. 

For instance, engineers in Italy created a 3D-printed version of patented ventilator valves in response to growing pressures on the country’s health care system. The 3D-printed valves cost about USD$2-3USD to produce (compared to the USD$11,000USD price tag from the manufacturer) and can be rapidly produced factory-made in a fraction of the time. However, in using 3D-printing technologies, there is a great risk the production of these valves infringes on an existing patent, design or copyright. Fearing costly litigation, the engineers have not shared their digital print file and the technology is not widely used. These are only a few examples, compiled by the Médecins Sans Frontières (Doctors Without Borders), highlighting how IP persistently undermines and obstructs accessibility. 

The waiver has been endorsed by the WHO, several United Nations agencies, many public health experts and hundreds of civil society organizations, including the Canadian Centre for Policy Alternatives. The next formal meeting of the TRIPS Council is scheduled for early March. Informal discussions between members will continue throughout February to try and find a way forward for the waiver. Consensus seems to be out of reach following the informal TRIPs meeting in early February. Waiver opponents reiterated their positions and failed to acknowledge that IP rights have been a genuine barrier to accessing COVID-19 related technologies. These countries continue to stall progress on the issue, refusing to move to expediated text-based negotiations. The members will meet once again on February 25 to decide on a “neutral and factual” report for the General Council, according to the Geneva official. 

Growing public pressure on the small group of rich country governments blocking this vital public health initiative, which unfortunately includes Canada, will be critical during this time. 


More information on the TRIPS waiver proposal can be found on the CCPA website (www.policyalternatives.ca), on the Trade and Investment Research Project section under the Projects and Initiatives Tab.

Lucinda Chitapain (she/her) is an intern at the CCPA, working closely on the Trade and Investment Project. She is a second-year student at Osgoode Hall Law School, with a concentration in transnational and international law.

This article is forthcoming in the March/April 2021 issue of the Monitor. Click here to subscribe to the Monitor.

 

 

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