WTO Global Health: Shifting away from a Punishment Mindset

By Sapna Kumar, Law Foundation Professor of Law at the University of Houston Law Center

While COVID-19 cases continue to drop in the United States, many countries are fighting resurgences of the virus and struggling to obtain vaccines and medical supplies. Back in October, India and South Africa petitioned the World Trade Organization (WTO) to waive all IP protection surrounding drugs and medical products needed to combat the pandemic. The petition also called for “the unhindered global sharing of technology and know-how.”

Existing safeguards regarding IP rights during public health emergencies have some issues. TRIPS Article 31 permits countries to issue compulsory licenses of patented technology, but the process for importing patented drugs is cumbersome under Article 31bis. Countries must also pay “adequate remuneration in the circumstances of each case” to the patent holder. Moreover, the U.S. government has a lengthy history of punishing countries that utilize compulsory licensing with trade-related sanctions.

It was therefore significant that President Biden announced on Wednesday that he will support waving IP protections for COVID-19 vaccines. U.S. Trade Representative Katherine Tai released a statement noting that “the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” and pledging to help expand vaccine manufacturing and distribution. This reversal in the Biden Administration’s position may be in response to increasing pressure from various groups and the unfolding crisis in India.

However, many questions still remain. First, will a waiver pass in the WTO? Although the European Union has stated that it is willing to reconsider the proposal, Germany remains staunchly opposed. Germany helped fund the Pfizer/Bio-N-Tech vaccine and has expressed concern that a broad waiver could undermine innovation. Chancellor Angela Merkel’s government has also noted that the real obstacle to widespread vaccination is production capacities.

Another issue relates to the know-how surrounding the COVID-19 vaccines. As I and others have written, vaccines are notoriously difficult to reverse-engineer because they are derived from living organisms and are structurally complex. One of the keys to rapid production is for the manufacturers to share proprietary knowledge regarding manufacturing processes that are typically protected as trade secrets. However, neither TRIPS nor U.S. law appear to provide mechanisms for compelling unwilling companies to do so. Nor are there any contractual provisions in the funding agreements under Operation Warp Speed that require such a disclosure.

It is also unclear whether a waiver of IP rights will make a difference. Take, for example, India, which has underinvested in health care for decades. Just a few months ago, India was giving away millions of vaccine doses in an attempt to compete with China in vaccine diplomacy, falsely believing that India had achieved herd immunity. In April, Prime Minister Narendra Modi was speaking unmasked before packed crowds at political rallies. An argument can be made that complacency is playing a far greater role than IP rights in India’s second wave.

Furthermore, as others have pointed out, IP rights are only a piece of what is needed to produce vaccines. There is currently a global shortage of raw materials and proper manufacturing facilities. The spoiled vaccines from Emergent BioSolutions’ plant in Baltimore furthermore illustrate the difficulties of bringing new manufacturing facilities online. Because the Moderna and Pfizer vaccines both require storage at low temperatures and utilize novel mRNA technology, they pose further challenges in countries that lack necessary infrastructure for manufacturing and for distribution of vaccine doses.

Ultimately, any waiver of TRIPS obligations that passes is likely to be modest in reach, perhaps reducing the procedural burdens currently surrounding the use of compulsory licensing. It is unlikely that Biden will somehow force U.S.-based vaccine manufacturers to turn over know-how. Overall, the greatest benefit of the Biden Administration’s support for the waiver is that it signals a departure from the prior approach of punishing countries facing health crises and that it might spur pharmaceutical companies to voluntarily increase out-licensing and donations of vaccines.

* Image above comes from the plague of Ashdod, 1630, Artist Nicolas Poussin

 

 

Guest Post: Pandemic drug shortages: Is compulsory licensing the answer?

 

12 thoughts on “WTO Global Health: Shifting away from a Punishment Mindset

  1. 5

    “However, neither TRIPS nor U.S. law appear to provide mechanisms for compelling unwilling companies to do so.”

    Those pesky individual rights and that darned constitution.
    All the guns, but no teeth… wait… not even all the guns! that danged second amendment!

  2. 4

    Note the patent watch comment in the prior blog that no COVID-19 vaccine patent has even issued yet.

  3. 3

    Your article gives many reasons why the waiver will not work, why India does not deserve the waiver and the complexities of making it work within the existing system, what is does not do is provide the counter arguments that arrival of the Indian variant of Covid19 to the US could devastate us. And whilst the rate of infection is high in India it continues to potentially generate more variants that could be even more deadly, transmissible and unaffected by present vaccines. Now is the time to help India as much as we can for our own safety

    1. 3.1

      I don’t think anyone doubts the need to help India; it doesn’t matter that they underinvested in the past, and doesn’t matter that their leaders made galactically stupid policy decisions in the past couple of months regarding COVID-19 and vaccine distribution. Those mistakes were not the mistakes of the people of India, yet they are the ones who are paying the human price for them.

      The bigger point here is that the Biden administration’s move is, let’s call it what it is, empty virtue signaling. A feel good gesture that won’t get a single vaccine dose to the people of India even one day sooner (esp. since a compulsory license isn’t even on the table and would be even less likely to pass). The root issue is manufacturing capacity, not IP protections, and the pointlessness of the IP waiver is why countries like Germany oppose it; they don’t want to support a measure that will undermine systemic incentives for future innovation but have no practical impact on the current problem the waiver is supposed to address.

      1. 3.1.1

        Well, LR, it IS either empty virtue signaling or it is giving the milk away (and having no chance of selling the cow).

        The Devil will be in any particular details of waiver (and especially in view of NON-patent IP waiver).

        You say compulsory license is not on the table — and you are much too premature to make that statement.

        they don’t want to support a measure that will undermine systemic incentives for future innovation” – you have more than a little of the “where there is smoke, there is fire” with that statement. IF (as you assert that this can only amount to an empty virtue signal, then this rationale of yours that you assert on Germany’s behalf would not exist.

        Empty signals can carry no such undermining.

      2. 3.1.2

        On a related thread, Ron Katznelson just supplied a comment that illuminates an immediate path to confiscations – even as negotiations and the “Devil of the details” are unfolding.

        It pays to keep in mind that the land grab is more than merely a patent waiver.

  4. 2

    What information is available, about bans on the export of vaccine in dosage form? I mean, now that the USA and Europe are making progress in vaccinating their own populations, will they soon be permitting export of vaccine doses in meaningful and effective numbers to countries where there is currently high mortality? Or even, say, Canada?

    Or, otherwise, will China be consolidating its position as the dominant supplier of life-saving medication to the southern hemisphere?

  5. 1

    And yet another visitor to the great river of Egypt:

    Ultimately, any waiver of TRIPS obligations that passes is likely to be modest in reach, perhaps reducing the procedural burdens currently surrounding the use of compulsory licensing. It is unlikely that Biden will somehow force U.S.-based vaccine manufacturers to turn over know-how.

    It really seems odd how adamant people are to consider that THAT is the endgame.

    1. 1.1

      It really seems odd how adamant people are to consider that THAT is the endgame.
      Your comment is not accurate. Many (including both the writer and myself) have considered the endgame of compulsory licensing and/or some kind of tech transfer. However, we do not find it to be a likely end result.

      The US can handwave about not enforcing IP regarding COVID 19 vaccines all it wants, but the sophisticated know that this is more about PR than it is about solving the problem. As nearly everyone acknowledges, the real problem lies in the manufacturing capability.

      Pharma knows this about the proposal, which is why they aren’t pushing back as nearly as hard as one would expect had this proposal had real teeth.

      The reason I’m not particularly worried about this is because those that are pushing for compulsory licensing and/or tech transfer don’t have nearly as much influence/power as pharma. Moreover, the amount of positive PR this administration gets is not going to differ significantly than if they give them the waiver versus acquiescing to some compulsory licensing/tech transfer.

      The real solution will ultimately come from the current manufacturers making more vaccine doses. I doubt the administration is going to back themselves into a corner regarding compulsory licensing/tech transfer when they don’t need to. All they need to do is agree to waive (mostly non-existent) IP rights and slow-play the entire process. By the time the bureaucracy at the WTO gets to processing the petition, the urgency will be considerably less, which will provide less impetus for drastic changes.

      1. 1.1.1

        >the sophisticated know that this is more about PR than it is about solving the problem.

        Alternatively, it’s the same-old story about interested parties / activists seizing on current events to push their preexisting agendas.

        1. 1.1.1.1

          Absolutely there are elements of such on multiple fronts.

      2. 1.1.2

        The “sophisticated” like PatentDocs’ Dr. Noonan – who is at least recognizing that which you are playing the ostrich and sand game with?

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