Public Health and Big Pharma Monopoly Protections: Why a WTO Waiver on IP Rules Is of the Essence

By Daniel Rangel

With growing momentum behind the global campaign for a temporary, emergency waiver of some of the World Trade Organization’s (WTO) intellectual property (IP) to boost production of COVID-19 vaccines, treatments and tests, the pharmaceutical industry is arguing the initiative is not necessary or helpful. These claims, while not original, are still worth debunking, given they distract from the mission at hand: removing legal and political obstacles to scale up manufacturing of the critical goods we need to combat a raging pandemic.

There are several accounts that thoroughly explain why waiving certain provisions of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is critical and how it could contribute, along with other efforts, to ramping up production of vaccines, treatments, diagnostic tests and equipment so that we can end the pandemic as quickly as possible. (You can see our contribution here.)

The IP-maximalists — the usual Pharma CEOs and various associations and spokespeople — started from the old hymnal: (i) IP is not really an obstacle, (ii) developing countries do not have the capacity to produce and (iii) TRIPS has incorporated flexibilities that allow countries to balance their public health needs with the IP protection.

This December 2020 brief from Doctors Without Borders does a nice job taking down these “myths.” However, as these claims have been disproved, some new arguments are rising.

One theme is that the TRIPS waiver would not be enough to make a difference, and thus countries would fare better if they focused their efforts elsewhere, such as on COVAX. (While COVAX is an important initiative, its reach should not be overstated. If it has the funds and vaccines supply to reach its most ambitious goal, COVAX would cover the 20% most at-risk portions of low- and middle-income countries’ populations. That is far below the percentage needed to achieve herd immunity and crush the virus.)

Why would the TRIPS waiver not be enough to make a difference? Because countries would need to make swift changes to their own laws, which would be difficult, if not impossible, this argument goes. It’s a rather odd argument, given that more than 100 countries are supporting the WTO proposal precisely because they want to adjust their domestic IP policies and practices in the face of the pandemic. A major point of the waiver is to gain policy space to act without the risk of facing a WTO challenge and legal defense expenses or other WTO nations’ sanctions.

Countries, faced with the COVID-19 disaster, have not hesitated to act swiftly and enact all sorts of measures to deal either with the public health crisis or the struggling states of their economies, as documented by COVID AMP, a project led by the Georgetown University Center for Global Health Science and Security, that tracks policies taken in response to the pandemic. Countries have enacted nearly 250 pieces of legislation, at the national level, to adjust their legal frameworks to make them more suited to the innumerable challenges posed by the pandemic.

Parliaments around the world have adopted legislation to approve unprecedent fiscal stimulus packages; compel health providers to serve everyone, without delay and free of charge; allow health authorities to restrict large gatherings, sport events and commercial activities; ban financial intermediaries from collecting debt; and impose national mask-wearing mandates. After all of that, making changes to intellectual property regimes so as to ensure the public has access to vaccines, treatments and tests to crush the pandemic hardly seems impossible, especially if the right message is sent from the WTO.

In fact, rich countries, such as Canada, Germany and France, already passed legislation streamlining and expediting the process for getting compulsory licenses for patented inventions. Notably, Canada — a country that has opposed the WTO TRIPS waiver — reformed its Patent Act in March 2020, as a part of its COVID-19 Emergency Response Act, to expand the federal government’s power to authorize a compulsory licensing system in the context of a national health emergency to facilitate production and sale of patented products without having to seek authorization from the patent holder and regardless of its capacity to satisfy the domestic demand.

Unlike many developing countries that are largely deprived from access to COVID medical goods, Canada has ample legal resources to battle out at the WTO whether this new policy complies with TRIPS requirements for compulsory licensing. But most low- and middle-income countries that support the waiver proposal and that now have no or very limited vaccine access have neither the legal capacity nor the political clout to do as Canada has. Indeed, when these very countries have tried to use the existing flexibilities in the WTO TRIPS Agreement, they are often bullied by the United States or the European Union to alter their plans or face trade disputes and sanctions. This is why a waiver that defangs the usual legal and power plays both is the necessary signal for developing countries and their manufacturers to invest and act.

Perhaps more importantly, as Doctors Without Borders noted, even with this new legislation, Canada was not able to convince or compel COVID-19 vaccine developers to manufacture doses in its territory while it was negotiating its purchasing agreements. This leads to a major point: even for a country like Canada that has the legal capacity and political clout to expand its legislation on compulsory licensing, the existing TRIPS flexibilities — which are expressed domestically in the form of compulsory licensing systems for patented inventions — are just not enough to overcome the myriad of challenges that countries are facing to kickstart COVID-19 vaccine production in their territories. Challenges go from the thicket of patents covering every step of vaccine development and manufacturing to the undeniable need of knowledge and technology transfer from vaccine developers to manufacturers around the world, to the sizable investments required to retool existing facilities and create new ones. Whereas the waiver, as opposed to the current flexibilities, would allow countries to undertake actions to get rid of the first challenge, there are clearly more steps required to deal with the second and third ones.

There is much that could be said about these issues, and they probably warrant a different entry on this blog. For the purposes of this piece, it is enough to clarify that the waiver would give every country, but particularly those in the developing world, the policy space needed to undertake bold legislative and administrative action, which could be crucial to expand vaccine production wherever it is technically feasible. 

The latest “novel” argument against the waiver is that many developing countries have entered into free trade agreements (FTAs) with TRIPS-plus obligations, i.e., terms that require governments to provide Pharma firms protections beyond those afforded by the TRIPS Agreement. This indeed is a problem, one that arises when — behind the façade of trade liberalization — countries enter into “trade” deals full of provisions that are not related to the exchange of goods and services across borders and instead are behind-the-doors concessions to corporate interests. For decades, civil society groups have warned of the risks that these kinds of agreements represent for the democratic debate both in developed and developing countries.

However, these FTA TRIPS-plus terms are not grounds for quashing a TRIPS waiver. Rather, the waiver would provide a foundation for FTA parties to issue démarches agreeing to equivalent temporary, emergency waivers or cease-fire agreements renouncing the use of trade-pact dispute settlement to enforce IP related to products necessary to fight the COVID-19 pandemic. Especially since a TRIPS waiver would be adopted by consensus at the WTO General Council, it’s highly unlikely that countries agreeing to waive IP rules at the multilateral level would do the opposite via bilateral deals. Attempts to do so would face global condemnation.

The truth is that South Africa and India, which initiated the waiver proposal, along with other governments, civil society groups and think tanks, have produced swaths of evidence that support the waiver. And, no one has claimed that if a WTO TRIPS waiver is approved, somehow, magically, production facilities will sprout in every country. However, the waiver is the critical first step towards boosting production. It would be pivotal to make other global initiatives work, such as the World Health Organization COVID-19 Technology Pool, and to empower countries worldwide in the colossal effort of bringing the COVID-19 pandemic to an end everywhere and for everyone.