COVID-19 and ‘Intellectual Property Rights’: why the Irish Government needs to get onside

“No one is safe until everyone is safe”, according to the Director-General of the World Health Organisation. To end the COVID-19 pandemic, we know that a substantial proportion of the world’s population needs to be vaccinated. Vaccination is now progressing in many countries, but there is a huge problem: limited production and pre-ordering by wealthy countries mean that more than 85 poor countries will probably not have widespread access to COVID vaccines until 2023[1]

You might think that the most powerful countries and pharmaceutical companies would be doing their utmost to solve this problem, if not to protect the most vulnerable in the poorer countries, at least out of self-interest. But you’d be wrong, to judge by what is happening at the World Trade Organisation (WTO).

In October 2020, India and South Africa brought a proposal to the WTO’s Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS), to allow for a limited waiver of WTO rules during the pandemic. The aim of the waiver proposal is to make Covid-19 medical products available at affordable prices all over the world.

WTO rules to protect the ‘intellectual property’ of pharmaceutical companies greatly limit where and by whom medical products can be made and sold. The waiver would allow manufacturing to take place in many more places than is currently the case, scaling up greatly the supply of items needed to deal with COVID-19: personal protection equipment, diagnostic kits, medicines, ventilators and – crucially – vaccines.

Despite overwhelming support among WTO member states, the big pharmaceutical companies, the EU and the richest countries, including Ireland, are opposing this waiver. They seem to be presenting three major justifications for blocking the proposal.

1. ‘Pharmaceutical companies need incentives for research to happen.’

The first claim is that the current Intellectual Property regime works: if the drug companies can’t patent drugs and make profits, they’ll have no incentive to produce vaccines for any future pandemic/epidemic.

There are two overwhelming counter-arguments to that position.

Firstly, it is public funding that has led research and development for the COVID-19 vaccines. Therefore, there is no real justification for intellectual property protection for the vaccines.

For example, BioNTech secured public funds of $546 million towards the development of the Pfizer-BioNTech vaccine, as well as more than $6 billion spent on supply deals. Moderna secured more than $1 billion for research and development for its vaccine[2], which emerged directly out of a partnership between the company and a laboratory in the National Institutes of Health in the USA.

Crucially, and taking a longer-term perspective, it was publicly-funded labs which developed the two key methods which underly these vaccines, the successful modification of messenger RNA and of the viral protein. As well as all of the public money which has been needed to design the vaccines, a huge role in their successful deployment has been taken on by members of the public, like the 30,000 volunteers who took part in Moderna’s ‘late stage’ vaccine trial.

Secondly, and for anyone who thinks that the current intellectual property regime ‘works’, the evidence from the HIV/AIDS pandemic shows the tragic results of prioritising companies’ profits over patients’ needs.

By the late 1990s, effective medicines to treat HIV were available in the developed world, but they could not be accessed in developing countries primarily due to the exorbitant prices. Antiretroviral prices in 1999 were roughly $10,000-12,000 per person per year. Neither governments nor people in the developing countries could afford such a price and it resulted in thousands of avoidable deaths.

In 2001, an Indian generic drugs company showed that these medicines could be produced and sold at $350 per person per year. The lack of product patent protection in India at that time allowed more Indian companies to enter the market and reduced the price to $168 by 2005.

2. ‘Intellectual property rules are not a block to vaccine production.’

The second argument of the pharmaceutical industry and the rich countries is that the blocks to manufacturing enough vaccines for the world’s population have nothing to do with patents and intellectual property rights: introducing the waiver will do nothing to increase the availability of the vaccines.

But, from the submission of South Africa to the WTO in November 2020, we already know of the problems that patents alone pose to the prevention and treatment of COVID-19. Looking at the patent situation of just five potential drugs for the treatment of COVID-19 that were under review by the therapeutics pillar of the World Health Organization (WHO)’s Access to COVID-19 Tools  Accelerator (ACT-A), South Africa pointed out that the patent-holders were in a position to prevent other competent manufacturers from producing and supplying the patented subject matter, and to charge exorbitant prices for the patented medicines, so hindering timely access to affordable treatment.

3. ‘There’s enough flexibility in the existing WTO rules’

Finally, opponents of the waiver claim that there is enough flexibility in the existing WTO rules to deal with the pandemic. In particular, they want governments to rely on voluntary licensing mechanisms. But, if these voluntary mechanism work, why do various licence agreements concluded by companies exclude so many of the world’s population from supply? Why do they include only a few very specific manufacturers? The target set by the WHO’s ‘Accelerator ACT-A’, which includes the COVAX scheme and relies on voluntary licensing, is to provide 2 billion vaccine doses (for 1 billion people) to the world by the end of 2021. But that will not yield vaccination for all of the world’s population of nearly 7.7 billion.

In the face of these facts, the Department of Enterprise, Trade and Employment recently informed Joan Collins that “the TRIPS agreement allows compulsory licensing, which is when a government permits someone else to produce the patented product or process without the consent of the patent owner.”

 But this answer is very misleading. It is true that Article 31 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement allows a country to issue a compulsory licence for the manufacture of items for domestic consumption. However, since many countries do not have the capacity to manufacture COVID-19 vaccines, this mechanism is of no help to them in securing vaccines for their populations. Instead, they must rely on an amendment to the Article, known as ‘Article 31bis’, which allows a country to grant a compulsory licence to manufacture for export, with the purchasing country granting a compulsory licence for import.

Article 31bis results from a decision of the WTO General Council in 2003 and came into force in January 2017. To implement Article 31bis has proved so difficult that it has been used successfully only once in the 15 years since the original WTO decision was made. Furthermore, a serious drawback for compulsory licences is that technical support from the original licence-holder is generally not available.

Why Ireland and its allies need to change their position

The most practical way to ensure availability of enough vaccines to meet the demand is through scaling up production. There are industries in many countries which can contribute. To do so they need access to patents. But they also need access to other resources which can be limited by WTO intellectual property rules. For example, they need to be provided with cell lines used in vaccine production, and they need the ‘know-how’, the detailed information on the manufacturing process. The purpose of the South African and Indian proposal is to introduce enough flexibility into the WTO’s intellectual property regime to ensure that every possible means of scaling up vaccine production can be utilised.

The waiver proposal has been considered at several WTO meetings since October, with more discussions scheduled for April. Another 57 countries have joined India and South Africa as co-sponsors. However, the opposition of the EU and the richest countries seems as strong as ever. Since decisions at the WTO’s TRIPS Council are usually taken by consensus, the proposal will not be successful unless the countries backing the pharmaceutical companies reverse their position.

 In its answer to Joan’s Parliamentary Question, the Department of Enterprise Trade and Employment stated that international trade negotiations are a matter for the EU, but that the EU consults with the Irish and other governments throughout such negotiations. The Department made it clear that the Irish Government fully supports the position of the EU in relation to the waiver proposal.

In blocking the India-South Africa waiver proposal, Ireland and the EU are standing against some notable organisations and individuals, including the Director-General of the World Health Organisation, the Joint United Nations Programme on HIV/AIDS (UNAIDS), and a list of UN human rights officials. Meanwhile, vaccination in countries like Ireland gathers pace, while some countries will just have to wait, and wait….

[1] According to The Economist Intelligence Unit

[2] These figures were cited by the Indian representative at the WTO TRIPS Council meeting, 10/12/2020.