Guest Post

Chasing the Covid Vaccine: Tilting at the Patent Windmills (Part 1)

Dr. Pushpendra Rai, Former IAS officer*

The coronavirus has been one of the worst diseases in our lifetime. The world has seen 161 million infected cases till now with 3.3 million fatalities. Even now there is no letup with the world reporting 750,000 cases on May 12. While countries have tried measures like lockdowns, encouraging people to work remotely, and discouraging discretionary international travel, real salvation lies in vaccinating the world population.

However, it is not an easy task and till now only 1.3 billion doses have been administered – 4.2% of the world fully vaccinated with 8.6% receiving at least one dose.

The United States led with 262 million doses, with 35 % of the population fully vaccinated. India has been fortunate to have administered about 172 million doses, but given our population, only 2.65% had been fully vaccinated.

Therefore, the race now is towards speedy vaccinations, with every country desperately trying to acquire vaccines for inoculating their people.

Unfortunately, of late, the drive towards accelerating the vaccination programme has been distracted by straying into intellectual property issues. Specifically, discussing measures to override the patent protection accorded to new drugs.

In this regard, there are two solutions which are being discussed, one a global IP waiver on Covid related products,  and the other, issue of compulsory licenses by nation states. 

Both totally infructuous exercises given the context, current environment and imperatives of the immediate term.

It is reiterated that the war on fighting the pandemic seems to have been derailed with the time and effort expended on the patent issue, both at the World Trade Organization (WTO) and in national capitals.  

Let’s look at both these aspects separately. The waiver proposal first.

Since October 2020, WTO  member states have been discussing a proposal to provide an IP waiver on Covid related medicines and equipment. This is based on a proposal originally submitted by India and South Africa. Referring to reports about “intellectual property rights hindering or potentially hindering timely provisioning of affordable medical products to the patients”, the proposal seeks a waiver from the implementation, application, and enforcement of the copyright, industrial designs, patents, and trade secrets provisions of the TRIPS Agreement.” The waiver is sought to be in place till such time as a “majority of the world’s population has developed immunity from the disease”.

The waiver proposal is very well-intentioned and has already obtained support from a number of countries. Recently, the United States also agreed in principle while several European countries want further discussions.

If the process of obtaining a waiver is to go forward, the member states will have to authorize the WTO to initiate exercises to come up with an initial draft text after which “text-based negotiations” will commence at the Geneva-based trade body. All major decisions are made by the membership of the WTO as a whole, with each member having an equal voice.  Decisions are normally taken by consensus. In other words, a consensus is reached only if none of the 159 member states of the WTO formally object to a decision.

The principle of consensus is taken quite seriously by such multilateral bodies. For instance, once at the World Intellectual Property Organization, (WIPO), after a highly contentious debate, the conference chairman came to the conclusion that a ‘consensus’ had been reached and brought down the gavel on the discussions. However, one delegate kept persisting and said that as his country was still objecting, how could the decision be taken to conclude the meeting.

The principle of consensus is taken quite seriously by such multilateral bodies. For instance, once at the World Intellectual Property Organization, (WIPO), after a highly contentious debate, the conference chairman came to the conclusion that a ‘consensus’ had been reached and brought down the gavel on the discussions. However, one delegate kept persisting and said that as his country was still objecting, how could the decision be taken to conclude the meeting.

The chairman replied, “I think we almost have a consensus in the room”,  to which the delegate cheekily retorted, “Well, a lady is either pregnant or not pregnant, she cannot be almost pregnant; similarly, we cannot almost have a consensus”!

There was little the delegation could do as the gavel had already been brought down and exhausted member state delegations had started leaving the conference hall.

Therefore, due to the consensus principle, it will take an extremely long time before any kind of decision is reached by member states. It may be noted that some of the ‘accepting’ countries have merely agreed to ‘discuss the waiver’ adding that they would be able to provide extra support only after looking at the initial drafts of such texts.

In short, even if such a waiver has to be extended by the WTO, it will take months (if not years) before it actually takes effect. For instance, the current round of trade negotiations at the WTO, also known as the Doha round, started in November 2001, and has not reached any kind of conclusions yet. Even the smaller Para 6 Amendment,  as it is called, to liberalize the compulsory licensing regime, took two years (2001-2003) to come into effect.

Furthermore, it may be mentioned that some of the countries who are backing the proposal are only talking about a patent waiver on vaccines, whereas the original proposal talks about a wider IP waiver on all “medical products including diagnostic kits, medical masks, other personal protective equipment, and ventilators, as well as vaccines and medicines for the prevention and treatment of patients in dire need.”

However, even if such a waiver is granted, it’s not clear how exactly it will accelerate the global process of obtaining these products.

For instance, let’s talk about the availability of vaccines. Basically, vaccines that are patented are manufactured either by the original inventor or a licensed entity. At present only about five or six companies have come up with Covid vaccines, with some of them licensing manufacture in different parts of the globe. Moderna has manufacturing units in the United States, Switzerland, and Spain; Astra Zeneca has licensed units in India and South Korea; and Sputnik has licensed production in India, China, South Korea, and Brazil.

Presumably, after granting of the waiver, several member states of the WTO will be able to start manufacturing the vaccine which has been patented in a few countries. With the mushrooming of production facilities and ramping up of supplies, the understanding is that the globe will be flush with vaccines thereby enabling a mass vaccination program in all countries.

Unfortunately, that’s not how things work.

By giving a waiver on the intellectual property rights covering the vaccine, we are obviously not taking into account the concerns of the major manufacturers who would obviously adopt a confrontational attitude, and not enter into any cooperative arrangements with potential manufacturers to facilitate the production of the vaccine.

Manufacturers generally invest billions of dollars in R&D, and subsequent clinical work, and so would obviously be looking for some kind of compensation. Recently, Deloitte had done a study to determine the average cost of developing a drug of this nature and had come to the conclusion that it costs US dollars two billion to bring the drug into the market. Even if we reduce these costs owing to elements like access to publicly available research, tax breaks, etc., there is no doubt that significant amounts of resources are spent in developing these drugs.

Therefore in order to ensure that the major research-based pharmaceutical companies remain incentivized to do further research for possible mutant strains of the same disease, we have to ensure that they are able to make enough to continue their research programs.

Yes, big pharma is considered ‘evil’ for the kind of profits they make. As per reports, Pfizer has made the US $3.5 billion from the Covid vaccine in the first quarter of this year. While nobody would object to their making such profits in normal times, this is a pandemic situation and so obviously the world would expect them to be less concerned about exorbitant earnings.

But then again we are missing the point over here.

At this stage, the sticker is not the cost of the drug, as it was during the AIDS crisis, but its availability in the market. In any case, all the other major companies have already announced that they do not propose to make any money on the Covid vaccine, and so profits are not really much of an issue today.

Now tomorrow, if the WTO actually passes such an IP waiver, it’s not clear as to how it will facilitate the entire process of making the vaccine available to the world at a faster pace. Of course, technically, it will empower pharmaceutical companies all over the world to start manufacturing these vaccines without obtaining any kind of permission from the original inventors. That itself will pose challenges without a cooperative agreement with the inventors, involving sharing of processes and transfers of technology. While patent documents are public documents and can be accessed by any potential manufacturer, quite a few drug companies keep some of the know-how as trade secrets, which would not be available to a generic manufacturer without express communication from the inventor.

Even if we find some manufacturers going ahead and producing the patented vaccine, they would still be required to establish bio-equivalence, run Phase 2 and 3 trials to establish safety, immunity, and efficacy before approvals are given by the drugs controller.

The importance of bio-equivalence cannot be over-emphasized. These are life-saving products, and so the pharmaceutical quality and in vivo performance of the ‘generic’ drugs have to be carefully assessed and confirmed. As they will be sold in the market, with presumably the same properties as the innovator drug their safety and efficacy would have to be satisfactorily demonstrated, as comparable to the safety and efficacy of the original innovator drugs.

The assessment of “interchangeability” between the former and latter product is conducted by an analysis of “in vivo equivalence” or “bio-equivalence”. As we can see, it’s a very rigorous exercise, adhering to stringent requirements stipulated by national drug regulators.

In sum, while a patent waiver sounds remarkable and appears to unshackle potential manufacturers providing them with immunity from legal challenges, it would not really increase the availability of vaccines in the immediate or even medium term.

(to be continued…)

*Dr. Pushpendra Rai is a former IAS officer, with 25 years of experience in the field of Intellectual Property. For almost two decades, he worked with the World Intellectual Property Organization (WIPO), Geneva, a UN specialized agency, handling a diverse set of assignments. He advises countries/institutions on IP strategies; carries out assignments for WIPO; and lectures nationally and globally to academia, chambers of commerce, policymakers, judges, students, legislators, and diplomats. He is an Independent Director with the SBI. Dr. Rai has a master’s degree in Economics from Lucknow; another master’s from Harvard University; and a Ph.D. from IIT, Delhi.

 

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