The case for a temporary waiver on IP for Covid-19 vaccines

The West has hoarded vaccines and blocked developing nations from making their own, citing intellectual property protections. WTO and President Biden can put a stop to that.

Employees at a Pfizer vaccine plant in Belgium last month. A temporary suspension of intellectual property provisions, which prevent developing nations’ access to the technology needed to make their own versions of Western-made Covid-19 vaccines, would hardly hit drug firms’ bottom lines, says the writer. PHOTO: REUTERS

(NYTIMES) - I've had my first Covid-19 vaccine jab, drawn from the limited supply of the AstraZeneca doses that has made its way to the developing world. As a senior, I'm part of a so-called priority sector eligible to receive it in the Philippines, a country where less than 0.3 per cent of the population has been fully vaccinated - versus 32 per cent in the United States. I'm one of the lucky ones.

Globally, more than 1.16 billion doses of Covid-19 vaccine have been administered as of Monday. Over 80 per cent have gone to people in high- or upper-middle-income countries and only 0.2 per cent to those in low-income countries like the Philippines. At present, India is suffering from a devastating surge of the virus, with over 350,000 infections and 3,000 deaths recorded daily over the past few days. (These figures most likely undercount the full extent of the horror.) Only 2 per cent of its people have been fully vaccinated. While US President Joe Biden's recent deployment of aid to India is commendable, fresh supplies and 60 million potentially spoilt doses of the AstraZeneca vaccine will not solve the problem.

On April 23, a group of 24 non-governmental organisations, including the Citizens Trade Campaign and the Association of Flight Attendants-CWA, issued a petition calling on Mr Biden to embrace one potential solution: to back the temporary suspension of a set of intellectual property provisions that prevent developing nations' access to the technology needed to make their own versions of Western-made Covid-19 vaccines available as quickly as possible.

These provisions make up the World Trade Organisation's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights, known as Trips, which strictly enforces patent monopolies for a minimum of 20 years.

This change may sound like technocratic legalese. But its impact would be straightforward: A short-term Trips waiver would allow developing nations to quickly ramp up vaccine production and save lives at an affordable cost, as Public Citizen explains.

While the petition has garnered two million signatures, including those of Democratic Senators Bernie Sanders and Tammy Baldwin, the Trips waiver's opponents are formidable. The big pharmaceutical companies are at the forefront, with the support of industry groups like the US Chamber of Commerce and the Telecommunications Industry Association. They fear that even a brief loosening of intellectual property rules could establish a precedent for future emergencies. A threat to Trips is a threat to future riches, it seems.

When the WTO General Council meets today, Mr Biden should not be deterred by its wishes. Instead, he must use his considerable sway over the organisation to persuade other rich nations to support a Trips waiver.

Since India and South Africa first proposed the idea of a Trips waiver last October, the drug industry has protested. In March, 31 pharmaceutical industry executives, including Dr Albert Bourla of Pfizer and Mr Pascal Soriot of AstraZeneca, sent a letter to Mr Biden urging him to uphold the Trump administration's opposition to the Trips waiver. They claimed that under current estimates, manufacturers will produce 10 billion doses of the Covid-19 vaccine by the end of the year, "enough to vaccinate the entire current global vaccine eligible population".

Yet notable critics like Dr Joseph Stiglitz and Dr Jayati Ghosh, an economist at the University of Massachusetts Amherst, see woefully insufficient production by Western drug companies as a major roadblock to universal vaccination. Even now, AstraZeneca, Pfizer, Moderna and others are struggling to meet their commitments to rich countries like the US, which seeks to maintain an excess stock of the vaccine. At current rates, the bulk of the population of developing countries might not be inoculated until the end of 2024. Such a protracted process would add millions more to the ranks of the 152 million who, as of Monday, have already been infected and the 3.2 million who have died of the virus.

That Trips has become a battleground between Big Pharma and global public health advocates is no surprise. During the WTO's creation in 1995, the industry took the leading role in formulating the agreement. Since countries could not join the WTO without signing on to 60 separate agreements, developing countries with misgivings about Trips had little choice but to agree to it. Without the protection afforded by the WTO's international legal trade regime, countries like Rwanda or Indonesia could have been subjected to arbitrary tariffs, trade boycotts and other punitive measures imposed by trading partners in the event of trade disputes.

Decades before the WTO and Trips came into being, companies like Pfizer and Johnson & Johnson enjoyed the protection of restrictive intellectual property rules. Via Trips, they sought to impose the same rules on developing countries, whose more liberal laws had allowed for the production of more affordable, duplicate versions of their drugs. Trips reversed the situation, slowing the diffusion of pharmaceutical know-how in developing countries, grounding innovation to a halt and elevating drug prices.

With the WTO meeting approaching, the industry has stiffened its resolve against the Trips waiver. In The Economist, Dr Michelle McMurry-Heath, the president and chief executive of the Biotechnology Innovation Organisation, a prominent trade association, wrote that it could undercut the industry's incentives to develop solutions for future health emergencies. She accused "self-interested" countries pushing the initiative of "exploiting the pandemic to acquire innovative technology invented in America and Europe", and suggested countries could exploit the "bioweapon potential" of mRNA-based vaccines like those made by Pfizer and Moderna - a spurious claim, experts have said.

These arguments, misleading as they are, clarify the industry's position. Prolonged patent protection - extracting profit from the marketing and pricing of a product over a lengthy interval - has gifted it with a formidable monopoly, one that stifles innovation rather than encourages it.

Drug companies also seem reluctant to acknowledge that a temporary suspension like this one, affecting only one product, would hardly affect their bottom lines. This year, Pfizer is expected to generate US$15 billion (S$20 billion) in sales from its vaccine, with profit margins between 25 per cent and 30 per cent. Profits from the Covid-19 vaccine alone could be about US$4 billion. While the industry surely deserves credit for rapidly developing the vaccines, it could not have done so without generous government subsidies: The US alone has given over US$12 billion to six major vaccine companies for this purpose.

In the event of a lack of consensus at the WTO, granting a Trips waiver would require the support of a large majority of its 164 members. Some 100 WTO member-governments now support the move; 60 of them are official sponsors. Given Washington's effective veto power over the institution, Mr Biden's support could push it over the top.

Mr Biden need not fear political blowback. A recent survey by Data for Progress and Progressive International found that 60 per cent of American voters support the Trips waiver; only 28 per cent oppose it. He should also bear in mind that drug companies, with their penchant for high prices, are among the least-trusted sectors of US industry.

The choice for Mr Biden then is clear: Protect a patent regime that safeguards the interests of powerful multinational corporations, or empower developing nations to defend themselves. Today, the world will know whether he has the courage to do the right thing.

Walden Bello is a co-founder of Focus on the Global South and an adjunct professor of sociology at the State University of New York at Binghamton.