“What’s the point of a TRIPS waiver?" A reply

Murali Neelakantan and Siva Thambisetty respond to the post, "What’s the point of continuing a discussion on the unworkable TRIPs COVID-19 waiver proposal?", written by Prashant Reddy T. and Yogesh Pai, which was published on July 13th.

First, some introduction--On July 13th, a group of intellectual property academics and experts, including the authors, published an open letter to the governments of UK, Australia, Brazil, Japan, Norway, Switzerland and the EU. We hope the letter can move the debate amongst academics beyond ‘for’ and ‘against’ arguments towards engagement on how to make any suspension of rules under the TRIPS agreement work to enable increases in output of vaccines and other medical technologies.

In the face of existing and new scholarship, uncritical assumptions that proponents have not considered the operational challenges of a waiver is unhelpful. You will find nuance and detail to our plea here to see the waiver as a proportionate and necessary masthead from which a number of actions need to flow.

As Trebilcock and Poliwoda argue, here, even for those who take the view (as they do) that a sweeping waiver of IP rights, by itself, is unlikely to have any dramatic effect on expanding vaccine output, especially over the near term - it is important to explore alternative or complementary strategies. With this background, we respond to Reddy and Pai’s post and address those who ask “what’s the point of a TRIPS waiver?”

‘Simply put, there is no shortage of voluntary licensing agreements for COVID vaccines, for countries that have the capacity to manufacture vaccines’, say Reddy and Pai and from this deduce that IPRs are not barriers to production. Yes, licenses have been granted to Indian companies but it is also true that there is considerable underuse of capacity because other facilities do not have licenses. If IP restrictions were lifted and pharmaceutical companies were willing to share more of their know-how, how much more vaccine could be made worldwide? It is hard to know.

In India, Panacea, Vichrow and others signed up to the Sputnik vaccine in 2021. Zydus and Wockhardt also have plans to produce vaccines. All of them could have been licenced to manufacture vaccines while also trying to develop their own. Suhaib Siddiqi, former director of chemistry at Moderna, says here that with the blueprint and technical advice a modern factory should be able to produce vaccines in three to four months. Canada, India, Indonesia, and Bangladesh could all be producing vaccines today if technology had been shared. Moderna did not own a vaccine manufacturing facility at the beginning of 2020 and yet is now a leading manufacturer of Covid-19 vaccine.

Reddy and Pai argue that even if a waiver results in a suspension of certain rules, vaccines cannot be manufactured without technology transfer and by merely waiving patents. Yes, for the waiver to increase vaccine output perhaps requires more than refrain from action on the part of IP holders. Political leveraging must aid formulation of positive domestic measures needed to scale up production.

We have written here about the disclosure problem in the patent system that creates a gap between sufficiency of disclosure and enablement and manufacturing. Rai and Price II have argued that for biosimilars, where this problem is particularly acute, we ought to consider using regulatory levers to ‘top up’ the disclosure in patent applications with manufacturing and other details. It remains open whether some of the patents, when eventually published, ought to be granted if there is insufficient disclosure or indeed are valid if granted.

The know-how argument is a tired trope that was used to not share IP with the developing world during the HIV AIDS crisis. Indian pharma companies managed to not just manufacture the drugs at a fraction of the cost, but the cost of those drugs has fallen consistently over the years and Indian manufacturers dominate the global market for HIV AIDS drugs. The Indian company Shanta Biotechnics produced a reliable and safe recombinant hepatitis B vaccine in 2009 using yeast, instead of the traditional bacterial system, driving down the price of the vaccine enough to enable global low cost vaccinations through agencies such as UNICEF.

More recently, despite tens of patents on these drugs, there have been generics including Indian biosimilars for trastuzumab as soon as the patent barriers were removed. The ‘capacity to manufacture’ vaccines is not a static quantity that cannot be improved, or even underused. This both underestimates productive learning that can happen when IP barriers lift and overestimates the ability of the market to optimally use existing facilities. The latter faith in the market is unjustified when there are perverse reasons to maintain scarcity.

While Reddy and Pai admit that there is plenty of spare capacity in India, they do not know why these facilities have not been used. Ignorance of those reasons cannot be the basis to claim that IP is not a barrier. The fact that there are other bottlenecks does not make IP barriers less of one. Advance payments and financing via promises of bulk buying are likely to get easier if there is certainty and freedom to operate (FTO).

This is particularly true given how opaque the FTO process is for vaccines in India where there is no orange or purple book (because there is no patent linkage - communication between national regulatory authorities and patent office). There’s also reason to believe a patent thicket, or at least a very complex patent landscape, already exists in mRNA platform technology for vaccines.

There are few reasons to believe that IP barriers are not a factor for shortages of raw materials and consumables, preventing workarounds. For instance, single-use bioreactor bags are not only in short supply because of exceptionally high demand. In addition, as explained here, there has been a ‘classic monopoly rollup of the bioprocess supplies industry in recent years’, fortified by ‘extensive IP barriers that prevent new entrants from manufacturing these now crucial bioreactor bags and filers.’ Most importantly, the waiver will allow a limited, framed private ordering to emerge, which is critical in governance and resource-poor countries.

It has been suggested that to focus on the waiver is a play for moral attention that diverts resources from measures that can actually work. No informed proponent of the waiver has argued that it is a silver bullet, although opponents of the waiver sometimes claim it would be the death knell of the pharmaceutical industry. We need many voluntary measures to continue apace. Technology transfer is a function of complex conditions as explained here. These conditions will need addressing with and without the waiver. With the waiver, we save time and gain impetus.

The moral and political victory, if there is one to be had, is not a pyrrhic one. Activism has improved access to drugs for millions. The pandemic could well change how we look at IPR and its continuing conflict with public health. It was the UK’s Commission on Intellectual Property Rights (CIPR) chaired by the late Prof John Barton as far back as 2002 that first questioned the unassailability of global IPR standards in light of public health and socio-economic differences between countries.

As to their final point, that countries like India may have benefited from global trade treaties, this does not mean that such treaties are balanced or fair in all circumstances. If the pandemic has shown anything it is that lack of access to health technologies is a function of the lack of productive capacity. And that manifest lack is a failing of an agreement that was at least partly sold on the promise of making developing countries technologically proficient.

Governance and resource-poor countries have made mistakes (as have wealthy countries) that have nothing to do with the merits of the waiver. India deserves criticism for its poor handling of the pandemic, its ‘smart vaccination’ which saw it ordering a third of the vaccines it needed, and the incoherency of its positions in the Supreme Court of India and at the WTO.

An IP waiver is likely to bring global pressure to bear on India to make optimal use of its capacity. Equally, the fact that there is significant opposition to the waiver from the EU and some governments does not mean that they are right to put short-sighted self-interest over the comity of nations.

Picture on the lower left is by the U.S. Secretary of Defense and is licensed under the Creative Commons Attribution 2.0 Generic license.

“What’s the point of a TRIPS waiver?" A reply “What’s the point of a TRIPS waiver?"  A reply Reviewed by Neil Wilkof on Wednesday, July 14, 2021 Rating: 5

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