To waive or not to waive: that is the question

IP waivers alone are nowhere near enough to increase COVID-19 vaccine access for developing countries, but US support for such waivers will create enormous pressure on existing manufacturers to consider how they can do more to facilitate timely access to medicines.

Last week, US Trade Representative Katherine Tai released a statement announcing that the Biden-Harris Administration would support a proposal before the WTO for the waiver of intellectual property rights relating to COVID-19 vaccines (WTO Proposal).  The proposal was originally drafted by India and South Africa, and is co-sponsored by 60 WTO members, mostly developing countries.  Aside from the US however, the response has been lukewarm at best from most developed countries.

While the WTO Proposal is commonly referred to in the media as a ‘patent waiver’, in fact it extends beyond patents to other IP rights.  The proposal calls for the enforcement of four sections of the TRIPS Agreement to be ‘…waived in relation to prevention, containment or treatment of COVID-19, for [X] years...”  These sections cover four main IP rights; copyright, industrial designs, patents and undisclosed information (that is, confidential information, including confidential information in marketing applications submitted to regulatory agencies).  While advocates for the WTO Proposal believe that a waiver of such rights would improve the supply of vaccines globally, opponents point to domestic export bans and lack of production capacity as the reason developing countries do not have access to vaccines.

Both the WTO Proposal itself and the supporting announcement are surprisingly vague given the gravity of what is being discussed.  The Tai announcement seems to support the proposal in its entirety, however no further information has been released to date.  The Tai announcement discloses that the US Government will participate in text-based negotiations at the WTO, and warns that the negotiations ‘will take time given the consensus-based nature of the institution and the complexity of the issues involved’.

The goal of the WTO Proposal is to ensure the supply of COVID-19 vaccines to developing countries. It is unclear how effective the proposal will be in meeting its objectives.  There are now several countries, including Germany and France, opposing it, emphasising that export constraints such as those in place in the US and the UK, as well as manufacturing capacity and safety, are the reason for limited access to vaccines in certain parts of the world.  Raw materials shortages, sometimes due to national export bans as well, also contribute to the situation.  As the Indian media has reported, manufacturers have struggled to produce vaccines and other therapeutics without essential goods.  IP waivers cannot address these fundamental issues preventing access to vaccines. Moreover, IP waivers will not necessarily give manufacturers access to trade secrets, or provide the physical infrastructure required to produce vaccines.

The WTO Proposal leaves us with many outstanding questions:

• Will local manufacturers get the assistance they need from disincentivised pharma companies & patentees?
  

Companies hoping to manufacture vaccines will require assistance from authorised manufacturers to quickly scale up production to sufficient quality. It seems unlikely that the authorised manufacturers will be overjoyed by this concept, having lost significant IP protection.

• Does sufficient manufacturing capability exist?

Manufacturing vaccines is intensive in terms of infrastructure and materials. Will there be government and/or private investment into such infrastructure?

• Which rights will be waived? 

It is unclear how IP rights will be identified for the waiver. Patents to vaccine platform technologies, for example, have applications extending beyond COVID-19 to other diseases.  Similarly, IP rights don’t just exist in vaccines themselves, but may extend to other aspects of vaccination for example, storage and administration devices, suppliers’ materials and processes; and reach across multiple countries.  If vaccines are being manufactured for export to developing countries, the waivers will need to apply in the country of manufacture, transit countries, and the ultimate destination.

The position relating to unpublished applications is similarly uncertain.  Indeed, as unpublished applications are by their nature secret from public for generally 18 months, the true extent of the WTO Proposal – and its impact on future IP rights – cannot be established at present.

• When does the waiver expire?

The WTO Proposal states that the temporary waiver would ‘last for a specific number of years, to be agreed by the General Council, and until widespread vaccination is in place globally and the majority of the world’s population is immune.’  This is quite vague.  It is almost impossible to estimate when the majority of the world’s population could be considered immune, given the COVID-19’s ability to mutate.  This would be further complicated if boosters are required.

• Will IP owners be compensated?

The loss of IP rights and the technical assistance required would have a significant financial impact upon IP owners.  It is likely that this will impact international pricing not just for these vaccines, but also for other pharmaceuticals if companies seek to recoup lost profits.  Given that shortages of raw materials have already been identified, it is likely that the cost of these materials would increase with the increased demand for them.

• Will regulatory agencies fast track COVID-19 vaccine approvals?

Even if the production and export issues are resolved, questions as to regulatory approval remain.  In particular, who, g. the original vaccine developer or a third party manufacturer, would be responsible for gaining regulatory approval?  Will local regulatory agencies fast-track their evaluation of the vaccines?  Regulatory agencies would be required to balance speed of approval with safety risks associated with expedited regulatory approvals.

• Who will bear the liability if there is a problem with the local vaccine?

As part of the agreement to supply vaccines to a country, vaccine manufacturers are apparently requesting – and being granted – indemnification by the contracting governments.  The question remains what indemnification by the respective governments will be available for vaccines manufactured outside the control of the original developer.

Final comments

US support for a waiver of IP rights on this scale is a watershed moment and astonishing for the pharmaceutical industry.  If it is implemented, the precedential impact could be immense.  It remains to be seen whether any waiver – if adopted – would result in an immediate and sustained increase in access to vaccines in developing countries.

During this pandemic, many pharmaceutical companies have (voluntarily) made considerable efforts which address both IP and practical challenges to improve the supply of vaccines and other therapeutics around the world.  For example, in May 2020 Gilead voluntarily licensed its patent rights relating to remdesivir to 9 pharmaceutical companies in 127 countries.  Commitments to supporting equitable access to COVID-19 vaccines have been made by a number of pharmaceutical companies including AstraZeneca,  Moderna, Johnson & Johnson, Sanofi, Novavax, and the Serum Institute of India.  These commitments have been coordinated by the WTO’s COVAX initiative through which the WTO is working with industry and governments to provide equitable global access to COVID-19 vaccines.

These initiatives demonstrate that pharmaceutical companies are not blind to humanitarian crises unfolding, nor are they unwilling to work with governments and other industry bodies to improve the supply of COVID-19 vaccines.  If nothing else, the pressure of US support for the WTO Proposal may encourage authorised developers and patentees to throw more energy into such activities, at least to head off the prospect of the IP waiver coming to fruition.