Info Service on Health Issues (Jan21/07)
(An earlier version of this article was first published in SUNS #9268 dated 21 January 2021.)
Geneva, 20 Jan (D. Ravi Kanth) – As the deaths worldwide from COVID-19 passed the 2 million mark due to enveloping shortages of vaccines, the proponents of a TRIPS waiver for temporarily suspending key provisions in the WTO’s TRIPS Agreement in combating the worsening pandemic have called for text-based negotiations at the WTO so as to ensure an early agreement on the waiver, negotiators told the SUNS.
The proponents led by South Africa and India, along with Pakistan, Zimbabwe, Chad on behalf of the least- developed countries, and Venezuela among others, made a strong case on the urgent need to accelerate the discussions at the World Trade Organization.
At an informal TRIPS Council meeting on 19 January, the proponents warned that any delay in agreeing to the waiver proposal will not only multiply deaths globally due to the IPR barriers, but will also protect tens of billions of dollars of monopoly profits of the international pharmaceutical behemoths which are currently virtually holding governments to ransom on the supply of vaccines, said a negotiator, who asked not to be quoted.
The continued opposition to the waiver from developed countries led by the United States will put profits and patents before saving people and lives, the negotiator said, suggesting that the new Biden Administration in Washington must demonstrate political will so as to ensure an early outcome on the waiver.
Despite a groundswell of support from international civil society organizations, governments, and even several multilateral organizations, the opponents to the waiver continued to turn a deaf ear to the concerns raised about IPR barriers, insisting that the TRIPS Agreement is sacred to them as it provides the flexibilities and protects innovation and balance between rights and obligations, said another negotiator, who asked not to be quoted.
The US went on to ask the same questions all over again about the waiver’s scope and the adverse effects on the TRIPS Agreement, despite the answers and clarifications provided by the proponents, the negotiator said.
The US said it will not support the waiver, as IP is not a barrier, the negotiator said, adding that pharmaceutical companies delivered the vaccines and that more vaccines are on the way.
The US continued to link IP protection and enforcement with quality of the product although the issues of safety, quality and efficacy are governed by national regulatory authorities and not by the IP system, as pointed out by proponents of the waiver proposal.
A negotiator who asked not to be quoted, pointed to the duplicity of Canada which stressed that it was not opposed to the waiver proposal, and yet has been obstructing it since its introduction in the TRIPS Council. Canada continued to insist that based on its experience Article 31bis of TRIPS was not cumbersome, although evidence to date suggest otherwise.
[The Article 31bis mechanism was set up to waive the requirement that compulsory license should predominantly be for the supply of the domestic market, to allow export to countries with insufficient manufacturing capacity. It has only been used once to export HIV medicines from Canada to Rwanda, however the involved parties such as Apotex, the Canadian manufacturer, as well as MSF have deemed the mechanism not fit for purpose.]
While seeking evidence from proponents on IP challenges, Canada refused to justify why it amended its national patent law to hasten the use of compulsory license, arguing that its act falls within the TRIPS framework, while ignoring that the waiver is also a valid legal option provided by Article IX of the WTO Agreement.
The European Union’s intervention was riddled with contradictory remarks, often divorced from reality, according to a negotiator. The EU remained bullish about the global collaboration and the implementation of the COVAX facility by the WHO and the Geneva-based GAVI (The Vaccine Alliance), seemingly unaware of the 18 January statement of the World Health Organization Director-General Dr Tedros Adhanom Ghebreyesus about the grotesque failure by Big Pharma and developed countries to provide vaccines for the developing and poorest countries (see https://twn.my/title2/wto.info/2021/ti210107.htm).
Dr Tedros said the world is on the brink of “moral failure” in the distribution of vaccines as “just 25 doses have been given in one lowest-income country. Not 25 million; not 25 thousand; just 25.”
“I need to be blunt: the world is on the brink of a catastrophic moral failure – and the price of this failure will be paid with lives and livelihoods in the world’s poorest countries,” Dr Tedros said.
The WHO DG said “some countries and companies continue to prioritize bilateral deals, going around COVAX, driving up prices and attempting to jump to the front of the queue. This is wrong.”
According to Dr Tedros, “44 bilateral deals were signed last year, and at least 12 have already been signed this year.”
Further, the pharmaceutical companies chose to bypass the WHO regulatory approval and “have prioritized regulatory approval in rich countries where the profits are highest, rather than submitting full dossiers to WHO,” he pointed out.
The EU claimed to have “never questioned the use of compulsory licenses, in the times of need”. However, the proponents in their submissions recalled the European Commission in its 2020 “Report on the protection and enforcement of intellectual property rights in third countries” complaining that “very broad, vague and arbitrary criteria are applied for granting compulsory licenses, which undermine the effective patent protection in Ecuador, India, Indonesia and Turkey, notably for pharmaceuticals and chemical …”
The EU also added that the best way of ramping up production is the dissemination of technology and know-how, through collaboration among companies, ignoring the reality that such sharing has not been forthcoming, and where voluntary licenses exists, they are limited, restrictive, non-transparent and work to artificially limit supply as the proponents have repeatedly pointed out.
The EU claimed that it had “many examples” of companies offering vaccine at cost or licensing production to manufacturers in developing countries but at the same time said that it could not respond to questions by the proponents on voluntary licensing as it “did not know the details of the terms of these agreements”.
[For questions put forward by the proponents, see “Proponents of TRIPS waiver issue documents to facilitate discussions” https://www.twn.my/title2/intellectual_property/info.service/2021/ip210106.htm]
TRIPS COUNCIL CHAIR’S INTRODUCTORY REMARKS
In her introductory remarks at the informal TRIPS Council meeting, the chair, Ambassador Xolelwa Mlumbi- Peter from South Africa, informed members about the high level of civil society interest in the waiver discussion reflecting societal expectations for finding a balanced outcome that is in the interest of all countries, according to negotiators present at the meeting.
Ambassador Xolelwa urged all sides to show flexibility in thinking about possible landing zones, emphasizing the need to work towards an outcome that delivers on the common objective as conveyed by all members, according to the negotiators present at the meeting.
She emphasized that the waiver issue has the “potential” to demonstrate that the WTO is capable of working towards a common good and in the interest of humanity, said negotiators, who were present at the meeting.
The chair underscored the need to shift gears so as to move towards a solution-oriented discussion as the world is “in desperate need for solutions.”
Ambassador Xolelwa said that members underscored the need to step up the engagement to finalize a balanced outcome. She said the high level of engagement demonstrated that members are ready to engage constructively, arguing that “these are positive developments and members should build on them towards finding the landing zone,” said participants, who asked not to be quoted.
The chair told the members to “keep working together to find a solution to ensure timely, affordable [and] equitable access to deal with the current pandemic but also find a sustainable solution for future pandemics.”
INTERVENTIONS BY THE PROPONENTS
South Africa, which has been spearheading the proponents along with India, said the proponents provided three written submissions contained in documents IP/C/W/672, IP/C/W/673 and IP/C/W/674 (see SUNS #9266 dated 19 January 2021).
The South African delegate said, “the objective of these documents is to answer questions raised by Members and to further demonstrate the arguments that co-sponsors have raised in their statements and submissions.”
Mr Mustaqeem Da Gama, South Africa’s leading TRIPS negotiator, said “the preliminary patent landscape offers a non-exhaustive snapshot of the patent filing and granting status on five selected therapeutics candidates that are under review by the WHO Access to COVID-19 Tools Accelerator (ACT-A) therapeutics pillar.”
Commenting on the questions raised by the opponents that include the US, the EU, Japan, Canada, Switzerland, Brazil, Australia, Mexico, and Chile among others, he drew attention to the following questions: (1) The waiver proposal is not needed since TRIPS flexibilities already provide various options for Members, including through Article 31 and Article 31bis; (2) The waiver proposal is not needed since global voluntary mechanisms will ensure that Members have access to vaccines, therapeutics and diagnostics; (3) The waiver proposal is not needed since pharmaceutical companies are already entering into licensing agreements to produce vaccines, that such companies have pledged not to enforce their IP rights or gave undertakings not to profit until COVID-19 comes to an end; (4) The waiver proposal will destroy innovation, research and investment in the pharmaceutical sector and will act as a disincentive for pharmaceutical companies; (5) Practical issues were also raised regarding how the waiver will be implemented as well as the scope of the waiver as currently formulated; (6) Some delegations have suggested that there is no evidence that IP is a barrier to accessing vaccines, treatments, or technologies in the global response to COVID-19; (7) Others have suggested that the waiver will facilitate trade in counterfeit medicines.
The South African delegate highlighted the answers provided to these questions by the co-sponsors in 30 pages that “explain many of the rationales for our proposal, including dealing in great detail with each of the areas of questions raised by Members.”
Mr Da Gama said pointedly that “many of the successes in recent times to address COVID-19 cannot be attributed to IP system as such, innovations and the development of vaccines, therapeutics and diagnostics were achieved through collaboration and generous support of states and ordinary people; in the end, the generosity of the human spirit delivered outcomes and solutions that now seem to narrowly favour those that have the means to pay up-front to the detriment of poorer nations.”
He said that the opponents to the waiver proposal spoke about COVAX as a mechanism that will provide timely equitable access to COVID-19 vaccines, arguing that the “co-sponsors have welcomed every effort towards achieving equitable access for COVID-19 products.”
The proponents have repeatedly stressed that the ACT-A (the Access to COVID-19 Tools Accelerator) as well as COVAX initiatives are insufficient to ensure timely and equitable access to COVID-19 products and technologies. These initiatives are simply inadequate to meet public health goals of immunity and the needs of the 7.8 billion people of this world of which about 6.4 billion are in low- and middle-income countries, he argued.
Mr Da Gama drew attention to the assessment provided by the WHO DG on 18 January about the problems faced by low- and most middle-income countries, who are not receiving the vaccine yet.
“At the outset, rich countries have bought up the majority of the supply of multiple vaccines” and that this is at the “expense of COVAX”, the WHO DG pointed out, suggesting that “countries engage in bilateral deals, potentially bumping up the price for everyone.”
According to the South African delegate, the WHO DG said, “No country is exceptional and should cut the queue and vaccinate all their population while some remain with no supply of the vaccine.”
Mr Da Gama said while the TRIPS flexibilities played a crucial role in promoting access to medicines, however, “the present COVID-19 global pandemic presents exceptional circumstances.”
“In our view, though the TRIPS flexibilities do allow limited policy space for public health, they were never designed to address a health crisis of this magnitude,” he emphasized, pointing to the lack of institutional capacities to utilize such flexibilities in many developing and least-developed countries.
The proponents, he said, will encourage members to “implement TRIPS flexibilities to fullest extent possible including under Article 31 and Article 31bis”, suggesting that they are “never designed to address the global access challenge of a pandemic as its primary focus is to empower individual countries to solve domestic problems with production and supply.”
Elaborating on the current pandemic, he said that countries “collectively experienced and witnessed to date, [that] supply of essential medicines, vaccines and diagnostics requires actions beyond national borders.”
Moreover, “using compulsory licensing under Article 31 and Article 31bis will not leverage uninterrupted collaboration for countries to share production and supply capacity and to walk out of this pandemic together,” the South African delegate cautioned.
He called for deploying “all tools to ensure governments and manufacturers all over the world have full freedom to operate, to do what is necessary to expand production and diversify supply.”
Citing the case of a new anti-viral drug called Molnupiravir, which is in Phase II/III trials, and is reportedly able to completely suppress the virus transmission within 24 hours, he said that the company has filed primary patent applications in at least 28 jurisdictions, including two regional patent offices, expiring between 2035-2038.
Mr Da Gama said, “two other drugs – tocilizumab and sarilumab, have reportedly been found to curb the mortality rate in people with severe COVID-19 and also accelerate patients’ recovery time but are not widely available especially in developing countries.”
These matters create significant uncertainty for manufacturers, he said, adding that “the current situation of restrictive, non-transparent and limited voluntary licenses cannot be relied on to deliver equitable access. And as has been discussed extensively, in a global crisis, current flexibilities are simply insufficient.”
The South African delegate said that while the co-sponsors provided answers to the all the questions raised by the opponents, they are yet to receive any answers to the questions they posed to the opponents in document IP/C/W/674.
“The challenge the world is facing currently has been anticipated,” he said, emphasizing that “at the core of this problem is limited production and supply options, caused by non-transparent, restrictive IP management and the lack of international solidarity in the sharing of technology, know-how and related IP. Instead, intellectual property related monopolies approaches have been allowed to prevail, limiting supply options and jeopardizing global public health.”
Given the massive global needs, Mr Da Gama said that they can only be addressed “with global sharing of technology, knowledge, and a clear and consistent direction for addressing any emerging IP barriers, which is what our waiver proposal seeks to achieve.”
Moreover, vaccinating “merely a small proportion of population i.e. 20% will be insufficient to bring this pandemic under control,” Mr Da Gama said, adding that “the level of immunity across the population needed to stop the virus spreading isn’t precisely known but it is thought to be between 60% and 80%, meaning billions around the world will need to be vaccinated to achieve herd immunity and break the cycle of transmission.”
Therefore, “we urgently need to expand and diversify supply options and therein addressing challenges posed by intellectual property is a crucial component,” he emphasized.
Further, the emergence of new variants and its rapid global spread reaffirms the need for global solidarity, he said.
“COVID-19 requires global cooperation and responses, individual countries acting alone are unlikely to address the common interest that all of us have to defeat COVID-19 and to save lives,” Mr Da Gama emphasized.
Against this grim backdrop, countries opposing “the waiver proposal are prioritizing intellectual property monopolies over the lives of many people around the world and even over their own interest,” the South African delegate warned.
Worse still, the “me-first approach”, as argued by the WHO’s director-general, “is also “self-defeating” as ultimately it will only prolong the pandemic.”
“With the emergence of at least three new variants (UK, South Africa, and Brazil) in the last few months, it is clear that so long as the virus is circulating among unprotected populations, no one is truly safe,” Mr Da Gama warned.
He said that “the IP monopolies have no basis given the extensive public funds poured into the development of these products and the significant profits that are being made.”
According to the South African delegate, the proponents “are of the view that the call for a waiver is justified” as the world is in “a truly unprecedented and an “exceptional circumstance” and this is the very basis for granting waiver under Art. IX of the WTO Agreement.”
“With the continued discussions held over the past three months, members need to move rapidly towards the adoption of the proposed waiver. Any delay in adopting the proposal merely serves to further prolong the pandemic,” he said, warning that “this is the moment for the World Trade Organization to urgently deliver concrete action.”
In its intervention, India expressed sharp concern over the ugly tide of rising deaths due to the COVID-19, saying that “it is very unfortunate that members who are opposing this proposal, members who are asking questions to show evidences regarding necessity of this proposal, have also suffered and number of deaths in most of such countries have also more than doubled during the last 3 months.”
Given the second and third waves of infections globally as well as the continued lockdown condition, India said the proponents have answered all the questions raised by the opponents.
Commenting on the suggestion made by the opponents that members “should work towards a solution within the multilateral framework,” India said that “a waiver is a legal instrument provided for exceptional circumstances under Article IX (3) of the Marrakesh Agreement establishing the WTO.”
“And there can be no denial to the fact that Covid-19 is an extremely exceptional crisis and the proposed limited, temporary and proportionate waiver is perfectly within the framework of MTS (multilateral trading system),” India said, suggesting that the waiver “does not, in any manner whatsoever, deviate from the commitments under rules-based multilateral framework.”
“In fact, it is the responsibility of the WTO Members to utilize such instruments and respond swiftly and effectively to once-in-a-lifetime crisis as the Covid-19 pandemic,” India said.
Arguing that global shortages of vaccines have emerged despite the emergency-use approval of several vaccines for treatment of Covid-19, India said “on one side, vaccine rollout programmes of almost all the countries in the world are suffering delays due to insufficient manufacturing and non-availability of required number of vaccine doses, while on the other side, large number of manufacturing facilities in many countries, with the proven capacity to produce safe and effective vaccines are unable to utilize those capacities due to IP barriers.”
Referring to the arguments advanced by the opponents about the sufficiency of licensing arrangements for ramping up manufacturing capacities, India said they have all “proven to be wishful thinking.”
India argued that “voluntary licenses, even where they exist, are shrouded in secrecy,” suggesting that “their terms and conditions are not transparent and their scope is limited to specific amounts or for a limited subset of countries, thereby encouraging nationalism rather than true international collaboration.”
Pointing out that its “fears regarding insufficiency of Covax and C-TAP mechanism have proven to be true,” India cautioned that “the pandemic has a huge social and economic cost and if unaddressed through swift and appropriate global action, will create negative externality for every country.”
Significantly, “all the Members have agreed on one account that there is an urgent need to scale-up the manufacturing capacity for vaccines and therapeutics to meet the massive global needs,” India said.
More important, the “TRIPS Waiver Proposal is an enabler and will be invoked to ensure that IP barriers do not come in the way of such scaling up of manufacturing capacity,” India said, urging members to “engage in a constructive spirit towards text-based discussions on the Waiver with a view to reach common ground at the earliest.”
Lamenting that “our economies are down, our people are dying,” India said “our response to the pandemic crisis today will shape our common future for years to come.”
Members “cannot afford to delay our collective and swift action in saving lives, livelihoods and economies,” India said, arguing that they “need to act now and re-establish WTO’s credibility and its relevance in times of crisis by arriving at a common landing zone on the text of Waiver Decision.”
The WTO must now deliver on timely, equitable and affordable access by agreeing to the Waiver, India said.
In its intervention, Pakistan said that “it is not IP protection but massive public funding, and government support that has triggered innovation generally throughout history, but most specifically in the case of vaccine development during the pandemic.”
“In fact,” said Pakistan, “exercise of IP rights has lent itself to monopolistic profiteering and has often impeded timely availability and accessibility of critical medical care to those who need it most.”
Quoting a report in the Forbes magazine, Pakistan said “the pharmaceutical industry enjoys some of the largest profit margins across the globe, and studies have shown that these profits are not spent on research but on marketing, investments in stocks, and payments of dividends and hefty pay to executives.”
Pakistan said that if the IP system were to work towards addressing the challenges of the pandemic, “companies would publish their licensing agreements, establish transparency and accountability, and openly share all technologies and IP to ensure global supply and diversified production”.
“Instead, we have found resistance to such actions, and deals with advanced countries where they still cannot deliver enough to meet the huge demand,” Pakistan argued.
“Millions of people are, therefore, at the risk of being left without COVID-19 vaccines and medicines for a very long time,” Pakistan said, emphasizing that the “time is now ripe for a more forthright, solution-finding approach.”
Pakistan said that “this will be the most significant contribution that the WTO could make towards fighting the pandemic and saving human lives.”
“To repeat what we have said several times, the (waiver) proposal is seeking a limited-time, and limited-scope waiver from certain obligations under the TRIPS agreement only to deal with the global pandemic,” Pakistan said.
The waiver proposal “promises to help large populations in developing countries, but would also allow export of medicines and medical equipment to developed countries where demand could remain unfulfilled otherwise,” Pakistan said.
Egypt, which joined as a co-sponsor of the waiver proposal, said “the business-as-usual approach to the current unprecedented health crisis does not work and cannot deliver.”
Citing the warning issued by the WHO DG “that the world is on the brink of a “catastrophic moral failure” on distributing vaccines,” Egypt said the waiver “proposal can play an important role in increasing the production capacities of the vaccines to meet the demand in all countries (at) the same time in order to help in putting an end to this global nightmare as soon as possible.”
Responding to the arguments raised by the opponents about the importance of ramping up “manufacturing, disseminating technology and know-how of vaccines and medicines in meeting the global demands,” Egypt said the same members stressed “the importance of relying primarily on companies’ voluntary measures on IP and licensing for such technology transfer.”
Egypt said these linkages “have little basis and we need to unpack the issues further in the context of the current discussion on the waiver proposal.” It argued that “a waiver can help to address global access needs given the limitations of signed voluntary agreements.”
It underscored the need for technology transfer, suggesting that the adoption of a waiver does not affect collaboration and technology transfers between companies.
Egypt reiterated that “time is not on our side, and we are facing an unprecedented international crisis that requires taking temporary emergency measures in order to save lives as well as to save the global economy from the devastating impact of dealing with this pandemic for a longer period of time.”
“We urge all members to consider positively this proposal to signal our organization’s ability to play a pivotal role in the fight against this pandemic,” Egypt argued.
Zimbabwe, which is also a co-sponsor of the TRIPS waiver proposal, offered an account of the TRIPS flexibilities, including the Doha TRIPS and public health agreement. Zimbabwe said that though there are flexibilities in the TRIPS Agreement for compulsory licensing, they are not adequate to address the current pandemic.
It argued that while “there has been some progress in the development of vaccines in the last few months, the proposed waiver will give the much needed boost, necessary to promote local production of, and accelerate the timely, equitable and affordable access to safe and effective life-saving vaccines.”
Indonesia said that the waiver proposal must move towards the conclusion of an agreement “in accordance with Article 9.3 of the Marrakesh agreement.” It thanked the co-sponsors for their written answers to the questions posed by several members that are contesting the proposal, circulated in document IP C/W/673 and IP/C/W/674.
It said the answers provided by the co-sponsors will “help to structure our discussions, and further clarify the limitations on TRIPS Agreement and market approach, especially through the voluntary licensing in handling the global pandemic in the Covid-19 magnitude.”
Indonesia said pointedly that it is “un-genuine that some members who have doubts on the potential barrier created by the intellectual property during this pandemic, are among the first members to revise their laws to fast-track compulsory licensing.”
It pointed out that “there is one emerging issue which probably has been experienced by other Developing Member countries, who are grappling with the access to vaccines at this moment.”
It suggested that “there are only a few producers or manufacturers … submitting their first test data to the national drug regulatory authorities for marker authorizations at this moment.”
Citing the assessment of the WHO, Indonesia said that “big pharmaceutical manufacturers like to push for (looser) IP standards to acquire and prolong market monopolies.” Indonesia cautioned that “market-driven pandemic response is at serious risk to the Global Solidarity and to the humanity itself.”
Indonesia underlined that “the global challenges need Global Solutions and Global Solidarity,” arguing that Indonesia is eager “to see how we can move forward with these proposals.”
Other supporters of the waiver proposal include Nepal, Afghanistan, Bangladesh, and many other developing countries.
China said the world has suffered from the COVID- 19 pandemic for over a year, adding that at this moment the majority of the WTO Members are experiencing another wave of the pandemic, even fiercer than the previous one.
China said the developing countries are “constrained by the limits of the medical resources and capacity and are confronted with more serious challenges,” emphasizing the importance of promoting the availability and affordability of the COVID-19 vaccines and medicines.
Commenting on the hopes raised due to the rapid development of 69 COVID-19 vaccines, China said that it is unfortunate that many developing and poorest countries are yet to secure the COVID-19 vaccines.
The joint TRIPS waiver proposal definitely “deepens our resource on our relationship between the pandemic and TRIPS,” China said, adding that “voluntary license may not be sufficient to address the challenge posed by the pandemic.”
China remained very positive about the waiver proposal, said a negotiator from a co-sponsoring country.
Several other developing and least developed countries spoke in support of the waiver proposal including Bangladesh, Nepal, Cambodia, Chad (on behalf of the LDC group), Sri Lanka and Afghanistan.