Going against its avowed policy of protection of intellectual property (IP) rights, the USA has partially supported the pleas of India and South Africa before the WTO for waiving the patent only on Covid vaccines for a limited period, citing the extraordinary situation that “calls for extraordinary measures”. This is no cause for jubilation as yet. So far, the rich world has reaped most of the benefits from vaccines, while the poor nations have been left high and dry.
Africa and low-income countries in Asia and Latin America have barely received any vaccine, and only a handful of countries have appropriated most of the one billion vaccine doses that have so far been administered bringing infection rates under control, while infections are still rising in 36 countries. Untold miseries and human tragedies are unfolding in India with daily cases soaring above 350,000 in a deadly surge of the virus since April. As expected, the vaccine manufacturers who have made a windfall profit last year from their vaccines ~ Pfizer’s profit alone is expected to be above $7 billion ~ are reacting strongly against it, forgetting that given the scale of the pandemic and the mounting death tolls in poor countries, this is not the time for calculating profit.
The pharma companies’ views are well-known, as articulated by Ms Michelle McMurryHeath, CEO of “Biotechnology Innovation OrganiSation”, the trade association for the biotech sector. “Patents are the reason that Covid-19 vaccines exist”, she wrote. “Waiving them would undermine our response to this pandemic and future health emergencies.” It is true that pharma companies spend a large amount on R&D and success rate is low ~ she asserts that only 10 out of some 200 Covid-vaccine development programmes are available today and that the costs of both failures and successes must be recovered by the companies.
That is why, she says, “the proposal to waive IP is so shockingly misguided: it tells the successful firms and their investors that the results of their effort can be appropriated by anyone.” It’s another matter that most of these companies received substantial government grants and regulatory support for clinical trials and approval. In the USA, six vaccine companies had received public funds worth $12bn. Development of AstraZeneca/Oxford vaccine was almost entirely financed by public funds. Public investment in R&D of the pharma companies are always underplayed while offering platitudes like, “IP is the invisible filament that turns ideas into products… The result is a win for investors, economies ~ and patients ~ everywhere.”
A warning then follows such inanity, “One must also consider the possibility that the nations pushing hardest for the patent suspension are self-interested ~ exploiting the pandemic to acquire innovative technology invented in America and Europe. This could have national security implications: mRNA platform technology has bioweapon potential.” These arguments are clichéd and poor nations with large populations that provide markets and profit for the rich countries’ firms have heard such homilies all too often. The argument ignores that fact that no nation is an island in an intricately interconnected world, and ‘no one is safe until everyone is safe’.
The virus recognises no borders, and is mutating with astonishing speed to become more transmissible. As long as it continues its deadly progression, its potential to mutate to even more virulent strains threatens to undermine the efficiency of vaccines already developed. The only solution, as Mariana Mazzucato, Jayati Ghosh and Els Torreele pointed out, is a people’s vaccine “available to all, affordable by all” to “resolve the “vaccine apartheid” that is creating moral, health and economic catastrophes.” Without the patents, they argued, the global production capacity can be augmented to inoculate everyone ~ 60 per cent of the world population this year, and the rest by 2022.
So far, vaccine distribution has been extremely inequitable ~ Moderna and Pfizer have supplied primarily to the USA, and AstraZeneca and Johnson & Johnson to Europe. Only India has utilised its vaccine manufacturing capacity ~ the largest in the world ~ to supply to poor countries not only in its neighbourhood but across the world till the second wave struck it so ferociously that it was forced to impose a ban on vaccine exports. Russian and Chinese vaccines have mostly catered to their own populations, though other countries are now procuring them. Some rich countries have also hoarded vaccines ~ the USA is sitting on a huge stockpile of more than 300 million doses it does not need while the vast majority of the world still remains un-inoculated and will take years at the current rate of production.
Issues like IP rights, risks, costs and competition are inconsequential when the world is reeling under a crisis never seen before. Pharma companies are arguing that poorer countries will not be able to ramp up production quickly and will also compete for scarce supplies, hitting production. As Albert Bourla, CEO of Pfizer, said, “It will unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine. Entities with little or no experience in manufacturing vaccines are likely to chase the very raw materials we require to scale our production, putting the safety and security of all at risk.”
This is another cliché. Several developing countries like India, Brazil, Cuba and Southeast Asian nations have the capacity and experience to produce vaccines. Vaccine production needs international cooperation, in terms of raw materials which are scattered across the world as well as technology and production capacity. A waiver enables transfer of technology which will attract investment, thereby helping create an ecosystem in countries which have the requisite capacity to manufacture and supply vaccines at affordable cost. Presently the EU pays less for AstraZeneca vaccines than Bangladesh, Uganda and South Africa.
India and South Africa were backed by some 100 of 186 countries at the WTO last October in arguing that the only way to ensure “fair, equitable and affordable access” to Covid-19 vaccines and drugs was patent waiver. The WHO attempt in May 2020 to create a “Covid-19 Technology Access Pool” to encourage pooling of IP rights has practically remained a non-starter, and its April 2020 COVAX initiative to pool international resources for equitable access to vaccines has also remained ineffective. The pharma companies favour licensing agreements to boost production, like Serum Institute of India which is manufacturing the Oxford-AstraZeneca vaccine under a licensing agreement with the company, of course by making royalty payments.
Indeed, WTO has a longstanding agreement designed to protect IP, known as the Trade-Related Aspects of IP Rights (TRIPS) which also provides access to essential drugs in cases of national health emergency by granting compulsory license (CL) of patented drugs. A CL is granted by a country where patients are unable to access such medicine. A recent case is of the rheumatoid arthritis drug Baricitinib made by the US drug giant Eli Lilly, which charges Rs 45,000 per-patient treatment, an amount unaffordable to most Indians. After it was found useful for treatment of Covid, the Hyderabad-based Natco Pharma has filed for and been granted CL, under which it will manufacture and supply the 4 mg drug as a generic medicine at only Rs 30 per tablet, at one-hundredth of El Lily’s price of Rs 3230.
But CL cannot be used liberally, it may attract trade sanctions by developed countries. Raw materials may need to be imported and besides there are other issues. Only in a handful of cases has CL been actually invoked. Of course, there are many bottlenecks, like shortages in supply chains and seamless movement of raw materials across borders, that need to be addressed before making the patentwaiver actually work. Vaccine technology is complex, with highperforming messenger RNA (mRNA) vaccines requiring highly sophisticated infrastructure and quality control that require huge investment and time.
Whether a patent-waiver can boost production and ensure equitable distribution will depend on how the developed and developing countries collaborate to combat Covid. At the WTO which works on consensus, negotiations and the process of waiver could be so lengthy that the virus will get ample time to mutate and become even more lethal; besides, the rich world ~ the EU, Britain and Switzerland who are united in their opposition to IP waiver ~ has to come on board. If there is any time for poor countries to unite to make multinationals see sense and reason, it is now. Pending resolution at the WTO, Governments must directly open negotiations with vaccine makers.
This is certainly not the time for business as usual ~ the companies must be made to realise that this is the payback time for them for all the profits they have earned from developing countries. Human lives are much more precious than their profits. Developing countries must together force them to relax their stranglehold on vaccines which is creating a major hurdle to boost production, and they should not shy away from using coercive power if necessary, of course only as a last resort. As the respected scientific journal Nature commented, “A pandemic is not a competition between companies, but a race between humanity and a virus”, and humane considerations must prevail over everything else.
(The writer is a commentator, author and academic)