Info Service on UN Sustainable Development (Feb21/03)
KM Gopakumar and Chetali Rao
As countries around the world have started vaccinating their residents against COVID-19, the unequal distribution of vaccines between rich and poor countries has become obvious and alarming. Since October, the World Trade Organisation has been debating a proposal initiated by India and South Africa to waive obligations under the Trade-Related Aspects of Intellectual Property Rights or TRIPS agreement to make COVID-19 technologies, including vaccines, quickly accessible to across the world. During the TRIPS council meeting on 4 February, developed countries continued to oppose movement on the proposal.
Only ten countries account for 95 percent of the 40 million doses of COVID-19 vaccines administered globally. The World Health Organisation has been advocating for vaccinating at least 70 percent of the global population to stall the pandemic. We have estimated that the current vaccine requirement is around 10.92 billion doses, that is, two doses per person. Current availability lags far behind at 7.2 billion doses. In this scenario, a handful of countries have already hoarded a majority of the available doses. High-income countries with only 16 percent of the world’s population have booked 60 percent of available doses by making commercial deals with manufacturers. The share of vaccines bought by lower middle-income countries is just about six percent and that of low-income countries is about four percent. If the current trend continues, poor nations can achieve mass vaccination only by 2024.
The outrageous mismatch between the supply and demand and the intensification of manufacturing in the hands of a few private manufacturers, presents an urgent need to enhance the COVID-19 vaccine availability using the existing production facilities of diverse vaccine manufactures across the globe to ensure equitable access.
Vaccine manufactures have failed to meet their existing commitments so far. The Pfizer-BioNTech partnership cited upgradation of a manufacturing plant when it reduced the supply of its vaccine doses to the European Union. Astra-Zeneca scaled back supply to the EU from 80 million doses to 31 million during the first quarter of 2021. This supply shortage has decelerated the vaccination drive in the EU. The desperation for COVID-19 vaccines within and outside the EU was evident in the European Commission’s move to imposed export restrictions.
COVAX, the WHO’s global vaccine programme to ensue equitable distribution, is struggling to keep its promise of supplying two billion doses by the end of 2021. COVAX aims to provide low-income countries to enough doses to vaccinate 20 percent of their populations at no cost. These countries have to figure out how to vaccinate nearly 80 percent of their people. As a result, the African Union has entered a bilateral contract with vaccine manufactures to secure 270 million doses. When countries enter into bilateral deals they may be subjected to differential pricing. South Africa had to buy the COVID-19 vaccine from the Serum Institute of India at $5.25 per dose—almost 2.5 times higher than what Astra-Zeneca charged most European countries.
Unlike the drug market, there is limited competition in the vaccine market. The global vaccine market is controlled by a few companies. The intellectual property regime and regulatory framework limit competition in the vaccine market. Patents and trade secrets are used to prevent competition. A single vaccine can have multiple patents on various aspects such as the molecule, the adjuvants, the manufacturing process, the dosage, and the route of administration. Patent barriers can be overcome using the flexibility of patent law such as compulsory licencing. Compulsory licencing allows governments to suspend patent monopolies and generic manufacturing during emergencies. However, issuing compulsory licences in developing countries is not a smooth process and often subject to political pressure from developed countries.
Further, trade secrets play an important role in limiting the competition in the vaccine market. While on one hand, patent law insists that an invention be disclosed to enable replication and best mode of practice. On the other hand, trade secret laws allow the vaccine manufacturers to keep critical aspects of vaccine manufacturing closely guarded. As a result, various aspects of manufacturing such as cell lines, manufacturing processes, and the use of raw materials are often undisclosed. Trade secret laws have no bar for discovering trade practices using legal means. For example, a manufacturer can use his own technological capabilities to replicate an originator’s work. However, the regulatory framework that governs the marketing approval of the vaccine does not recognise such independently-acquired trade secret and insists that the safety and efficacy of non-originator vaccines must be proven separately.
In generic drug manufacturing, regulatory agencies follow an abbreviated pathway and neither insist that generic manufacturers follow the originator’s manufacturing process nor require them to prove the safety and efficacy through clinical trials. No such abbreviated regulatory pathway exists for vaccines. A non-originator or generic vaccine manufacturer is treated like an originator and has to prove the entire safety and efficacy of the vaccine through clinical trials. The only exception to the large-scale clinical trial is when the non-originator obtains the technology from an originator as in the case of the Serum Institute of India which got its Covidshield technology from AstraZeneca. Consequently, manufacturing a generic vaccine is a highly time-intensive and resource-intensive process. Therefore, access to trade secrets is critical to quickly scale up COVID-19 vaccines.
National vaccination rollouts, the lack of continuous supply and a widening accessibility gap presents an opportunity to craft an abbreviated regulatory pathway for COVID-19 vaccines. This will not only reduce the burden of onerous regulatory requirements but will ensure a seamless diversification of the manufacturing base for COVID-19 vaccines and facilitate access to critical information required for the non-originator producers. Regulatory and funding agencies in possession of this data can play a major role in disseminating it. However, obligations under the TRIPS agreement stand in the way. Article 39.3 of the agreement prohibits disclosure of data related to pharmaceutical products without taking measures against unfair commercial use. Though there is an exception to this rule to “protect the public”, there is no shared understanding of the scope of this exception. There is also lack of clarity with regard to term “unfair commercial use,” which can be interpreted to include non-originator production. These legal obstacles under Article 39.3 can be fixed by waving the obligation under TRIPS to scale up COVID-19 vaccine production.
India and South Africa submitted a proposal to the World Trade Organisation on 2 October 2020 to waive certain TRIPS obligations for the prevention, treatment and containment of COVID-19. Bolivia, Eswatini, Kenya, Mozambique, Mongolia, Pakistan, Venezuela and Zimbabwe have co-sponsored the proposal. A majority of WTO member countries have also supported it, as have global civil society organisations, scholars and international organisations such as UNAIDS and UNITAID. On 3 February, 14 EU parliamentarians wrote a letter asking the EU to support the waiver proposal. They also asked that the EU issue compulsory licences to facilitate the scaling up of COVID-19 vaccine production.
As expected, developed countries, particularly the United States, the EU, Japan, Canada and Switzerland, opposed the adoption of the proposal and stalled the efforts of the vast majority of WTO members to take measures to scale up production. The opposition predominantly centred on three grounds. First, the often-cited argument that such measures will act as a disincentive to innovation for the pharma industry. This argument does not hold merit, especially in the context of a pandemic of the scale of COVID-19 and to a greater context in case of vaccines. Both Moderna and Pfizer-BioNTech vaccines have received huge public funding for their research and production. The German government provided $375 million to BioNTech to develop the vaccine technology. Similarly, another frontrunner Moderna received 100 percent funding for vaccine development from the US government. A research report suggests that governments have spent $93 billion on COVID-19 vaccines mainly through advanced market commitments.
The second argument is that existing flexibilities in the TRIPS agreement are good enough to address vaccine accessibility and therefore there is no need to waive TRIPS obligations. However, this argument does not look into the fact that the existing flexibilities are primarily read in the context of patent law and domestic IP laws do not have such flexibilities in copyrights, industrial design or trade secret provisions. Moreover, the lack of clarity regarding the scope of flexibilities in relation to trade secret under Article 39.3 can have a chilling effect on the efforts to diversify the vaccine production.
Thirdly, developed countries argue that there is no shortage of COVID-19 medical products and existing arrangements like COVAX are good enough to facilitate access. This is a hypocritical stand. Like the European Commission imposing export restrictions on Covid-19 vaccines, the United States has used their Defence Production Act—a law which gives he government more control over industrial production during emergencies—to improve vaccine access within the country. While, on one the hand, the US and the EU have used all possible legal and policy measures to secure vaccines for their populations, they continue to block the adoption of the waiver proposal and deny the policy space to the majority of WTO members to ensure vaccine access to their people.
Developed countries continued to stall progress on the waiver proposal on 4 February despite the call from all the co-sponsors and African group for text-based negotiations. What happens from now until the WTO’s general council meeting on 1-2 March will be illuminating as to whether developed countries place peoples’ lives in developing countries above the profit of pharmaceutical corporations.
KM Gopakumar works as Legal Advisor for the Third World Network. Chetali Rao is a lawyer specialising in patents, access to medicines and health issues.