|
||
|
TWN
Info Service on Intellectual Property Issues (Nov23/06) Geneva, 2 Nov (TWN) — Many developing countries on 31 October upped the ante for an urgent and expeditious outcome on paragraph eight of the Ministerial Decision on the TRIPS Agreement reached at the World Trade Organization’s 12th Ministerial Conference (MC12) in Geneva last June, said people familiar with the discussions. According to paragraph eight of the “Ministerial Decision on the TRIPS Agreement,” as adopted on 17 June 2022, “no later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics.” The carve-out of COVID-19 diagnostics and therapeutics from the TRIPS Ministerial Decision was on the insistence of the United States, even though diagnostics and therapeutics are essential to address COVID-19. However, 16 months on, the prospects for any outcome on paragraph eight of the MC12 Ministerial Decision on the TRIPS Agreement seem bleak as major industrialized countries including the US continue to “stonewall” an extension decision. Since a decision became due in December 2022, there have been two developments: first, is the holding of an informal thematic session for external stakeholder input organized by the TRIPS Council on 28 September; and second, the release on 17 October of the United States International Trade Commission (USITC) Report on “COVID-19 Diagnostics and Therapeutics: Supply, Demand, and TRIPS Agreement Flexibilities”, initiated on the request of the US Trade Representative. However, despite these developments, both of which present ample arguments in favour of extending the TRIPS Decision to COVID-19 diagnostics and therapeutics, the US continues to drag its feet. On 16 October, US-based civil society groups released a letter urging the US to “please rectify part of this ongoing and avoidable tragedy by announcing the United States’ unconditional support” for developing countries’ proposal calling for the extension of the TRIPS Decision mutatis mutandis to COVID-19 diagnostics and therapeutics. And yet at the recent formal TRIPS Council meeting held on 30-31 October, no definite endorsement for an extension emerged from the US. It continued with its ambivalent position. INFORMAL THEMATIC SESSION ON PARAGRAPH 8 On 28 September, the TRIPS Council organized an informal thematic session for external stakeholder input, where 23 speakers representing different constituencies and interests (inter-governmental organizations and international initiatives, civil society organizations, business, and academics) participated in the session. Some speakers did not directly address the issue of extension, but rather focused on vaccines. At least six of the speakers directly represented the interests of multinational pharmaceutical companies and IP (intellectual property) holders, reiterating routine arguments opposing the extension, comprehensively rebutted by other speakers as well as in the USITC report. By the end of the session, the case for extending the TRIPS Decision was compelling, especially as the academics also supported the call for an extension. A summary of the interventions at the thematic session is presented in document IP/C/W/706. Dr Daria Kim, an academic with the Max Planck Institute for Innovation and Competition, argued that “concerns regarding the off-setting effect on innovation incentives, often raised in opposition to extending the Decision, might be misplaced. In general, the impact of the Decision on innovation incentives should not be greater than the impact of the existing TRIPS flexibilities”. “Overall, the extension of the Decision can be viewed as part of an effort to enhance and streamline the national implementation and application of TRIPS flexibilities. The motivation behind limiting the Decision to the production and supply of COVID-19 vaccines, while postponing its extension to therapeutics and diagnostics, was not clear from the outset. Ensuring access to therapeutics and diagnostics has been no less critical than ensuring access to vaccines. There is hardly any justification for not applying the same measures and flexibilities to all medicinal products in the context of the COVID-19 pandemic and public health protection more broadly”. Prof. William Fisher, Wilmer Hale Professor of Intellectual Property Law, Harvard University, argued that “the decision that the Council is considering is narrow. The existing waiver represents a modest extension, limited to COVID-19 vaccines, of the general compulsory-licensing flexibilities that already exist under TRIPS. At issue is a possible extension of those flexibilities to COVID-19 diagnostics and therapeutics. This should not be characterized as a general “weakening” of IP protection.” While access-oriented voluntary licenses (AVLs) have some advantages, “AVLs have thus far failed to address fully the health needs of LMICs”, Prof. Fisher said, pointing to “Moderna’s long-standing resistance to use of AVLs for its COVID-19 vaccine; the high prices and sharp field-of-use limitations that have thus far limited the benefit of AVLs with respect to COVID-19 therapeutics”. He added that “AVLs thus should not be considered a panacea”. “The extension of the existing waiver to COVID-19 Diagnostics and Therapeutics could help alleviate COVID- 19 and future pandemics by enabling LMIC governments to use compulsory licenses to fill the gaps when IP holders refuse to use AVLs” and “equally important, the power of LMIC governments to use compulsory licenses as a last resort would increase incentives for innovators to use AVLs,” he further said. The support for extension also came from representatives of the World Health Organization (WHO) as well as other speakers. Erika Duena from the WHO said the message from WHO is that “Pandemic is not over”, adding that a Review Committee is developing long-term, standing recommendations for countries on how to manage COVID-19 on an ongoing basis. She also highlighted that “WHO promotes an integrated approach for health: Prevention, detection and treatment are essential pillars”, stressing that none of these pillars should be left behind to find real solutions. “Access to diagnostics and therapeutics remain a challenge”, she said, referring to the WHO Living Guideline from 13 January 2023 that responds to emerging evidence on existing and new COVID-19 treatments, where in many cases the challenges related to availability and affordability remain. She also pointed out that countries with manufacturing capacities are excluded from the geographical scope of existing licenses and affordable prices. James Love from Knowledge Ecology International (KEI) pointed to the use of TRIPS flexibilities by developed countries. Love elaborated on how the US used compulsory licences, issuing dozens of contracts with FAR 52.227-1 authorization and consent clauses, giving Merck, Sanofi, Lilly, Moderna, Novavax, Siemens, Philips, Quidel, and others freedom to use any US patents, to make and sell a very diverse set of countermeasures. Meanwhile, the European Commission has proposed legislation for exceptions to intellectual property rights that include multi-country compulsory licenses, exceptions to rights in test data, a cap on royalties of four percent of the generic price and the ability to compel the sharing of manufacturing know-how or other complementary measures, he added. USITC REPORT The USITC report found a significant gap in access and availability of COVID-19 diagnostics and therapeutics among countries of varying income levels. It notes that approximately 80% of government procurements were made by high-income countries. The report emphasizes that high price is a significant barrier for many countries seeking access. It elaborates on the vast patenting concerning COVID-19 diagnostics and therapeutics. The report goes on to state that cross-country studies “have provided evidence that patent protection supports innovation in the health sector in more developed countries but has little to no positive effect for innovation in developing countries and negative effects for access and affordability”. The USITC underscored the inadequacy of existing measures, such as voluntary licenses, tier-pricing, and international organizations’ access schemes, in promptly providing access to COVID-19 diagnostics and therapeutics in developing countries. A key observation in the report on voluntary licenses is that “the substantial control maintained by the licensor can give rise to disadvantages in terms of access to medicine” in developing countries. In particular, it points to the limited geographical scope of voluntary licenses, wherein a substantial number of developing countries are excluded from supply under such licenses. The report also points to challenges due to a notable condition within voluntary licenses that requires regulatory approval by a stringent regulatory authority (SRA) or the World Health Organization (WHO), which delays access to generic supply as well as prejudices smaller manufacturers in LMICs that cannot afford the costs of meeting such regulatory requirements. The USITC report confirms that affordability of COVID-19 therapeutics poses a significant barrier to access for many developing countries. Even though the middle and lowest “best access” prices are lower than what high-income countries (HICs) pay, they can still be unaffordable for developing countries, including those categorised as upper middle-income developing countries. In some cases, the “best access price” exceeds the average annual healthcare expenditure per capita for LICs ($39) and constitutes over half of the average annual per capita healthcare expenditure for LMICs ($137). In the case of UMICs, the tiered price for certain COVID-19 therapeutics, like nirmatrelvir (+ ritonavir), is approximately $250 per treatment course, about half of the average per capita annual healthcare expenditure ($524) for UMICs. Many UMICs excluded from specific Medicines Patent Pool (MPP) agreements have even lower average annual per capita healthcare expenditures. For instance, a $250 treatment course price would consume almost 70% of the $354 annual per capita healthcare expenditure in the Dominican Republic. In its investigation, the USITC found that “[t]he primary, commonly cited benefit for countries utilizing CLs (compulsory licenses) is the reduced cost of the pharmaceutical product or products at issue and improved access”. The report further adds that “[w]hen prices of the patented product are unaffordable and VLs are not granted, CLs can provide an avenue of developing a local solution and then increasing access”. Responding to various claims especially by the multinational pharmaceutical industry about the negative effect of using CLs, the report notes that “[i]n the available literature on the impact of CLs on pharmaceutical products, researchers have generally found that CLs are associated with decreased pharmaceutical prices in the countries that used CLs”. “The available research also associates CLs with increases in the number of people with access to patented products. There is some evidence that CLs encouraged innovation, where the literature has generally focused on the broader chemical industry,” the report adds. Notably, the report acknowledges that “[c]ountries that use CLs often encounter political and economic pressure when granting a CL or attempting to issue a CL.” Hence, the USITC report highlights that “[i]mplementation of the 2022 Ministerial (TRIPS) Decision has been highlighted as a potential means of reducing both this political pressure and potentially limiting retaliation from the pharmaceutical sector, as it reaffirms the right to issue a CL in a similar way to the 2001 Doha Declaration on the TRIPS Agreement and Public Health”. These findings of USITC align with concerns expressed by developing nations and advocates who have been calling for an extension of the TRIPS Decision, to encompass diagnostics and therapeutics. For more details on the USITC report, see: https://www.twn.my/announcement/Key%20highlights%20in%20the%20USITC%20report.pdf SOUTH STRESSES NEED FOR EXTENSION DECISION Disappointed with the continued efforts at blocking a decision on paragraph eight of the MC12 TRIPS Decision, a large majority of developing countries led by South Africa, on behalf of the Africa Group, India, the ACP (African, Caribbean, and Pacific) Group, China, and the least-developed countries highlighted the urgent need to extend the Decision to COVID-19 diagnostics and therapeutics without further delay, due to the continued threat of COVID-19, a pathogen with pandemic potential. South Africa, on behalf of the Africa Group, commented on the insightful nature of the thematic session which aligned with the dynamics surrounding discussions on the extension. The delegate noted that the opposition of large pharmaceutical MNCs to extension is not based on the content of the Decision itself, as they did not engage with the content of the MC12 Decision during the session, adding that these corporations are supported by consultants that work for them and by a small handful of delegations whose positions are informed by Pharma talking points. South Africa added that most instructive during the thematic session was the view of the most neutral party in the discussion, the academics. The delegate highlighted the remarks of Prof Fisher of Harvard University that extension of the TRIPS Decision should not be characterized as a general “weakening” of IP protection, voluntary licenses have failed to address fully the health needs of LMICs and that extension of TRIPS Decision could help alleviate COVID-19 and future pandemics. South Africa stressed that the extension of the Decision is long overdue, and that by the December General Council meeting, the TRIPS Council would have missed the deadline by a full year. The delegate called for a Decision no later than the December GC. China encouraged continued exchange of information and dynamic discussions on waiver issues based on facts, data, and evidence from various perspectives. China further highlighted the significance of the USITC report in recognizing the disparity among countries in accessing COVID-19 diagnostic and therapeutic products due to IP barriers. Brazil emphasized that a WTO response to the COVID-19 pandemic is essential in order to meet the principles enshrined in the Doha Declaration on TRIPS and Public Health and in the preamble of the Marrakesh Treaty. “The waiver extension should be crafted to increase the availability of and affordable access to relevant COVID-19 pandemic therapeutics and diagnostics where they are most needed, in particular in developing countries. In this connection, intellectual property rights should not constitute barriers to access to diagnostics and therapeutics at affordable prices,” Brazil said. Brazil further said that sufficient data has been presented on both sides to allow members to take a decision without further delay. NORTH COUNTRIES CONTINUE TO “STONEWALL” The United States commented on the thematic session by stating that the panellists presented new facts which may lend itself to more focused discussions. The US also commented on the ITC’s expertise in studying markets, the scope of the report which was presented and their interest in hearing members’ reactions. The US said that it hoped that the facts in the ITC report and the record that the ITC meticulously gathered will help inform a thoughtful and constructive policy discussion and deliberative process around the world, and at the World Trade Organization. Switzerland was seemingly opposed to extending the TRIPS Decision on the grounds that the TRIPS Agreement and the International IP system worked as enablers for the hundreds of research and development partnerships that produced new effective vaccines and therapeutics, said participants, who asked not to be quoted. The European Union (EU) also adopted an ambivalent stance, continuing to stall any decision, even though the EU is considering reform of its pharmaceutical sector with revision of current regulations and the introduction of new and more effective legal tools with respect to compulsory licenses for managing emergencies and crises at the EU level. At the TRIPS Council, the EU highlighted the complexities of global access to COVID-19 therapeutics and diagnostics, emphasizing the need for diverse perspectives and ongoing engagement. In the face of continued divergences, the TRIPS chair suspended the discussions on this crucial issue, calling on members to engage more concretely with a view to finding agreement ahead of the WTO’s 13th Ministerial Conference (MC13) next February and expressed optimism about the high interest of members to continue engaging in dialogue. The chair also suspended discussions on the moratorium on TRIPS non-violation and situation complaints after Switzerland apparently opposed the continuation of the moratorium, said people who asked not to be quoted. Since there is not going to be any formal TRIPS Council meeting for the rest of this year as per the WTO’s meeting calendar, the chair may reconvene the Council at any time depending on the progress of the discussions, said people, who asked not to be quoted.+
|
||
