As vaccine rollout in the United States and other Western-developed countries ramps up, developing countries are mostly still waiting and likely will continue to be further back in the queue for shots. That disparity is fueling a bitter new front in a quarter-century long fight between developed and developing countries over the World Trade Organization’s (WTO) intellectual property rules.
When the WTO was created, it came with the Trade-Related Intellectual Property Rights (TRIPs) Agreement, a set of rules that aimed to help IP-intensive firms like pharmaceutical companies enforce their IP rights globally. This was one of the Global North’s core asks in the negotiations that created the WTO. In exchange, the Global South got liberalization in agriculture and textiles. The TRIPs agreement made all states enforce patents on drugs but made certain exceptions for states dealing with public health emergencies. In such an emergency, a state could issue a compulsory license (CL) for a patented drug, which would amount to a patent revocation, thus allowing generic drug manufacturers to supply the drug which would lower its costs and in turn increase access to that drug.
TRIPs did help pharmaceutical companies but was perceived to contribute possibly to high drug costs, especially for the Global South, and thus to be a hindrance in the fight against the AIDS epidemic. That led to the Doha Declaration in 2001 which strengthened states’ ability to issue CLs. The Doha Declaration Paragraph 5c clarified  Articles 30 and 31 of TRIPs. Importantly, it said that states could define for themselves what constituted a national emergency that justified a CL. Paragraph 5c specifically includes epidemics.
Fast forward to COVID-19. It’s obviously an epidemic. Vaccines are coming on-line. If a developing country wants to issue a CL for one of these vaccines, that’s pretty clearly within the rules laid down by TRIPs and the Doha Declaration. Developing countries, led by India and South Africa, are asking for a more explicit waiver from TRIPs rules for the duration of the COVID-19 pandemic.
They argue that even if a CL would be inside TRIPs rules on patent, they need a broader exemption from other TRIPs rules that they say are or could be still in the way. So far, civil society proponents of the waiver have provided some anecdotes of IP rules that are impeding the fight against COVID-19 but those anecdotes are all pretty thin, do not amount to anything systemic and are not particularly persuasive to many observers.
Meanwhile, opponents of this waiver argue, I think more persuasively, that it is not really necessary. Developing countries can already issue a CL for a COVID-19 vaccine. Furthermore, IP doesn’t seem to be a major barrier to vaccine access. The Pfizer and Moderna vaccines are messenger RNA (mRNA), a new form of vaccine that has never been produced before, much less at huge scale, and the manufacturing process for mRNA vaccines appears to be very sensitive and challenging. Distribution for those is also challenging. The European Union’s (EU) export ban on vaccines is clearly unhelpful too. There are a lot of hurdles to a global COVID-19 vaccine rollout that are totally unrelated to IP. Given all of this, opponents of the waiver see the waiver request as political posturing. To them, this is just states who don’t like TRIPs throwing rocks at TRIPs because they can. They worry that granting this waiver will unravel the whole IP system.
I understand those objections and I think there is considerable merit to them. Still, I contend that granting a modified form of the waiver makes some sense. First, I think the people saying TRIPS is hurtful here are probably wrong, but they might be right, and if there is even a 10 percent chance that TRIPs impede the global COVID-19 recovery, that’s a disaster that must be avoided. Second, because developing countries could just use a CL and because the major thing limiting supply isn’t IP, and because there will be a number of vaccines coming on-line soon, the waiver is mostly symbolic anyway.
Some observers are worried that granting the waiver will meaningfully unravel TRIPs rules for non-COVID-19 products. I don’t see why that has to be the case, but I do take this concern seriously. Moreover, if the United States is willing to grant the waiver in exchange for some kind of language in it very clearly limiting the scope so as to assuage the concerns of drug firms and IP proponents, that seems to me to be the sweet spot for compromise on this.
Therefore, I’ve written an amended compromise text that I think trade experts and the U.S. Trade Representative (USTR) should consider. I’ve attached it below. As you’ll see, instead of a blanket waiver on TRIPS chapters 1, 4, 5 and 7, I’ve substituted in a two-year moratorium on enforcement of COVID-19-related patents. Chapters 1, 4 and 7 of TRIPs are on copyright, industrial design and undisclosed information. There is little to no evidence that these have or even could impede the coronavirus response. COVID-19-related patents could be CL’ed anyway.
What the Global South really wants out of this is a political commitment from the Global North not to constrain their policy space to deal with the virus. This compromise moratorium gives them that political commitment and does it in a way the Global North may find acceptable. To me, the bigger risk to the IP system than this moratorium comes from the potential perception that TRIPS is in the way of responding to COVID-19, even if that’s an unfair or inaccurate perception. This moratorium will be good for the WTO’s perceived legitimacy.
The global trading system is under assault from populist nationalists. The Doha round collapsed. The dispute settlement system needs to be stood back up again. The last thing the trading system needs is another body blow, especially if such a blow is avoidable and dodging it is cheap. More centrally, the WTO exists to marry the efficiency and wealth creation of capitalism with the idealist ambition and internationalist instincts of liberalism. It exists to promote trade and allow states to pursue important noneconomic goals simultaneously. Granting this moratorium, which probably won’t undercut pharma profits anyway and doesn’t do much a CL wouldn’t, is consistent with that mission. It could even make the WTO more popular, which would be fabulous and sorely needed.
Granting the moratorium would also be good for the Biden administration. It would show that under its leadership the United States is fully turning away from Trump’s hostility to multilateralism and its non-stop chauvinist truculence toward other countries. Finally, granting the waiver may actually be good for pharmaceutical companies. Those firms have arguably never recovered from the PR beating they took around the AIDS epidemic and their disastrous decision to sue South Africa. This could change that. If there is anything a company should be able to get very rich doing right now, it’s making a COVID-19 vaccine. The benefit to humanity of doing that work right now is truly incalculable. This is pharma’s moment to become heroes. They should support this moratorium too. Commerce and compassion are not enemies, or at least they don’t have to be. We can have an international IP system that incentivizes innovation in medicine while also being thoughtful about creating flexibilities in that system for emergencies like the coronavirus pandemic.
Read the amended compromise text here .
Image credit: Lightspring
- “clarified”: https://www.who.int/medicines/areas/policy/tripshealth.pdf
- “here”: https://www.rstreet.org/wp-content/uploads/2021/03/DRAFT-Compromise-TEXT-TRIPs-and-COVID-Winslett.pdf