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Explained: Intellectual property waiver for Covid-19 vaccines

The United States will pursue negotiations at WTO to waive intellectual property for Covid-19 vaccines. This can allow large-scale production in middle-income countries, but there are arguments against the move.

Written by Aanchal Magazine , Prabha Raghavan | New Delhi |
Updated: May 11, 2021 8:43:46 am
A dose of Covishield, one of India's two vaccines, is administered amid the Covid-19 pandemic. (Express Photo: Partha Paul)

The United States on Wednesday announced support for waiving intellectual property protection for Covid-19 vaccines, saying extraordinary circumstances call for extraordinary measures. United States Trade Representative Katherine Tai said the US will pursue “text-based negotiations” on the waiver at the World Trade Organization (WTO).

Text-based negotiations involve negotiators exchanging texts with their preferred wording and then thrashing out a consensus on the working — a fairly long-drawn affair. Negotiations are expected in a mix of virtual and in-person meetings. They “will take time given the consensus-based nature of the institution and the complexity of the issues involved”, Tai said.

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All 164 WTO members must agree on the draft, and any one member can veto it. The European Union, which had earlier opposed the waiver, has now stated its intent to discuss the US-backed proposal.

What does the intellectual property waiver for Covid-19 vaccines mean?

The IP waiver might open up space for production of Covid vaccines with emergency use authorisations (EUA) — such as those developed by Pfizer, Moderna, AstraZeneca, Novavax, Johnson & Johnson and Bharat Biotech — on a larger scale in middle-income countries. Most production is currently concentrated in high-income countries; production by middle-income countries has been happening through licensing or technology transfer agreements. Ramping up production capacities will be a lengthy process — a reason being cited by pharmaceutical companies against the move. Most analysts expect this to take at least a few months; it is likely the agreement will be targeted by the WTO’s next ministerial conference in end-November.

The US support for an IP waiver stems from a proposal by India and South Africa in the WTO last year. That proposal had, however, called for a waiver on all Covid interventions, including testing diagnostics and novel therapeutics.

Experts said the IP waiver proposal should include other interventions going forward. Amid the pandemic, the “widest possible” access to these interventions is limited by production capacity as well as the propensity of high-income countries to acquire “most of the supplies”, Public Health Foundation of India president Prof K Srinath Reddy said. Countries including Canada, South Korea, and Bangladesh have shown interest in making Covid vaccines if they can get a patent waiver, Prof Reddy said.

What are the deterrents for the waiver?

In a joint letter to US President Joe Biden in March, pharma companies including Pfizer and AstraZeneca had opposed the proposed waiver — saying eliminating IP protections would “undermine the global response to the pandemic”, including the ongoing efforts to tackle new variants. It could also create confusion that could potentially undermine public confidence in vaccine safety and create a barrier to information sharing, they had said. And, “most importantly, eliminating protections would not speed up production.”

Microsoft founder Bill Gates has expressed reservations against tweaking IP rules and sharing Covid-19 vaccine technologies. “The thing that’s holding things back, in this case, is not intellectual property. It’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines,” Gates said in a recent interview to Sky News. His justification for not sharing vaccine tech with developing countries is “that it would not be feasible for a company to move vaccines to a developing nation”. Gates mentioned India, and said that even if the transfer were to happen, it is because of “our grants and expertise”.

The argument that these countries do not have the capacity to speedily produce vaccines goes against earlier moves towards a patents regime for generic drugs. Experts said the same reasoning can be used now for the production of vaccines. “They will question the capacity and quality. But a number of companies from different countries have said they are ready to produce, and quality can always be assessed. Between 1972 and 2005, India had adopted process patenting rather than product patenting, and built up a huge generic industry. If western companies are interested in contracting Indian companies for manufacturing their vaccines in India, then how can they say you do not have the quality to produce on your own?” Prof Reddy said.

What was the earlier proposal from India and South Africa?

In October 2020, India and South Africa had asked the WTO to waive certain conditions of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement that could impede timely access to affordable medical products to combat Covid-19. The countries had asked the TRIPS Council to recommend, “as early as possible”, a waiver on the implementation, application and enforcement of four sections in the second part of the agreement. These sections — 1, 4, 5, and 7 — pertain to copyright and related rights, industrial designs, patents, and the protection of undisclosed information. The proposal had said that developing countries “especially”, may face institutional and legal difficulties when using flexibilities available in the TRIPS Agreement.

What are patents and IP rights?

A patent represents a powerful intellectual property right, and is an exclusive monopoly granted by a government to an inventor for a limited, pre-specified time. It provides an enforceable legal right to prevent others from copying the invention. Patents can be either process patents or product patents.

A product patent ensures that the rights to the final product is protected, and anyone other than the patent holder can be restrained from manufacturing it during a specified period, even if they were to use a different process. A process patent enables any person other than the patent holder to manufacture the patented product by modifying certain processes in the manufacturing exercise.

India moved from product patenting to process patenting in the 1970s, which enabled India to become a significant producer of generic drugs at global scale, and allowed companies like Cipla to provide Africa with anti-HIV drugs in the 1990s. But due to obligations arising out of the TRIPS Agreement, India had to amend the Patents Act in 2005, and switch to a product patents regime across the pharma, chemicals, and biotech sectors.

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Besides patents, what are the other roadblocks to scaling up production?

The International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) has pointed to other “real challenges” in scaling up production and distribution of Covid-19 vaccines. These include trade barriers, bottlenecks in supply chains, scarcity of raw materials and ingredients in the supply chain, and the unwillingness of rich countries to share doses with poorer nations.

The scarcity of raw materials has been a growing issue for ramping up production; several manufacturers have been relying on specific suppliers, and alternatives are limited. Also, countries like the US had blocked exports of critical raw materials used in the production of some Covid-19 vaccines using regulations like the American Defence Production Act.

This led to a delay in the production of Covid vaccines by some companies in India. Mahima Datla, managing director of Biological E, which is making the J&J vaccine in India, had said US suppliers have told global clients they may not be able to fulfil their orders because of the Act, according to a report in the Financial Times.

Vaccine makers such as Adar Poonawalla of Serum Institute of India (SII) had said that the use of the DPA had blocked exports of plastic bags, filters, and certain media used in the production of its version of the Novavax vaccine. On April 25, the White House said the US had identified sources of “specific raw material” that were “urgently” required for the manufacture of Covishield, SII’s version of the AstraZeneca vaccine, and they would be “immediately” made available for India.

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