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Fate of joint proposal of SA & India seeking waiver of patents for COVID-19 medical supplies hangs in balance

Laxmi Yadav, Mumbai
Friday, October 23, 2020, 08:00 Hrs  [IST]

The fate of joint proposal by India and South Africa at the World Trade Organization (WTO) seeking waiver of IP rights and patents under provisions of TRIPS Agreement for COVID-19 medical supplies hangs in balance following objections from developed countries.

Under the joint submission at TRIPS Council meeting on October 15-16, 2020, both nations sought waiver of Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement that pertain to copyright, industrial designs, patents and protection of undisclosed information or trade secrets, for drugs and vaccines aimed at COVID-19.

The proposal received staunch opposition from a bloc of developed countries including European Union, United States of America, Switzerland, Norway, Australia, Canada, Japan and the United Kingdom, joined by Brazil.

The US reiterated the importance of innovation during the COVID-19 pandemic for safe and affordable medical solutions, without looking into the issues raised by South Africa and India.

The EU stated that it doesn’t see intellectual property as a barrier. The TRIPS Agreement is fit for purpose and its flexibilities are usable without limitation or any problem. It provides an option to issue compulsory licenses where necessary.

“Factors such as health infrastructure and lack of materials need to be addressed,” says the EU while emphasising its medicines initiative for further liberalization of medical products in the face of the COVID-19 pandemic that has led to more than a million deaths across the world.

The EU along with other members of the Ottawa Group will soon launch a plurilateral initiative on trade and health.

“Suspending key protections of the TRIPS Agreement would send the wrong message to industry investors. Intellectual property has enabled collaboration between bio-pharmaceutical innovators and governments, universities and other research partners to speed up progress on our most pressing unmet medical needs,” stated developed countries.

Responding to concerns raised by developed countries, a South African delegate said, “Some countries also face limitations with respect to their national laws, pressures from their trading partners, or lack the practical and institutional capacity required to exercise TRIPS flexibilities during the pandemic quickly and effectively. Further, the existing mechanisms for compulsory licenses under Article 31 and Article 31bis of the TRIPS Agreement contain territorial and procedural restrictions that make the practice of issuing product-by-product compulsory licenses a complex process, making it difficult for countries to collaborate.”

Also, Article 31 of the TRIPS Agreement requires that compulsory licenses are issued on a case-by-case basis and used predominantly to supply domestic markets, thereby limiting the ability of manufacturing countries to export to countries in need, the delegate stated.

Moreover, the Article 31bis of the TRIPS Agreement requires that any product produced and exported under a compulsory license be identified with specific packaging and quantities, which can lead to unnecessary delays in the context of COVID-19 where countries need urgent access to medical tools, the delegate added.

The South Africa cited the EU IP enforcement report of 2020 issued before the COVID-19 pandemic that slammed several developing countries, including India, Indonesia, Turkey, Ecuador, for their laws allowing the use of compulsory license if patent holding companies do not fulfill the obligation of supporting production of medicines locally.

Similarly, the USTR’s Special 301 report issued during COVID-19 pandemic, condemning countries which improve their laws on compulsory license or make use of compulsory license.

Several countries – Chile, Indonesia, Colombia, Egypt, India, Malaysia, Russia, Turkey, Ukraine, El Salvador – came under pressure for their law or their use of compulsory license.

Refusing the claims of developed countries terming voluntary licenses as the solution for COVID-19, the South African delegate added “IP rights can be exercised by their owners to decide on whether to grant a license or withhold from licensing the technology, designs and knowhow required for manufacturing or for further developing the products required for COVID-19. Nine months into the pandemic, voluntary approaches have proven to be insufficient.”

The delegate pointed out that despite receiving significant public funding of at least US$ 70.5 million, Gilead has signed secretive bilateral licenses for Remdesivir (a therapeutic for COVID-19 treatment) with a few generic companies excluding nearly half of the world’s population from its licensed territories. Much of Gilead’s supply has also been reserved for very rich nations. As a result, to date, most developing countries have barely received any supply of remdesivir and the prices of remdesivir are also high, stated South Africa.

“On the other hand, to date not a single company has committed to the voluntary COVID-19 Technology Access Pool of WHO. If we are serious to address access issues, production cannot be concentrated in the hands of only a few manufacturers; in order to scale up production, governments have a critical role to play,” the South African official said.

Commenting on the claims made by the EU and other countries that voluntary cooperative approaches will solve the COVID-19 crisis through generous pledges to multi-stakeholder collaborative platforms, South Africa cited the example of COVAX facility which is insufficient to address the COVID-19 pandemic.

The COVAX facility seeks to accelerate the development and production of coronavirus vaccines through pooling in resources from the member countries.

The waiver proposal is designed to work synergistically with such initiatives by enabling the rapid scaling of production by multiple producers across many countries, enabling the sharing of knowledge and transfer of technology with the aim of addressing the pandemic, South Africa emphasized.

It acknowledged that COVAX at best provides very short-term, limited access to vaccines, suggesting that the underlying approach of the COVAX is not sustainable in the medium and long term.

Speaking at the TRIPS Council meeting, India which has supplied medical products and equipment needed in fighting the pandemic to more than 150 countries in last few months and resisted the attempts to corner the supplies by a few countries, stated, “In a global pandemic where every country is affected, we need a global solution. And our waiver proposal represents an open and expedited global solution to allow uninterrupted collaboration in development, production and supply of health products and technologies required for an effective COVID-19 response.”

While the TRIPS Council in the meeting could not reach upon a decision with regard to the proposal, the South African representative has requested the joint statement to be kept open for discussion. With uncertainty looming, only time will tell if this proposal will float any further or if this is the end of the story for it, said a participant on condition of anonymity.

 

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