U.S. Trade Representative Katherine Tai announced recently that although the Biden administration continues to stand by intellectual property protections, it “supports the waiver of those protections for COVID-19 vaccines” in order to support the global fight against the pandemic. The U.S. will actively participate in text-based negotiations at the World Trade Organization (WTO) to help push the waiver through.
The U.S. decision to support waiving intellectual property (IP) on vaccines comes after prolonged negotiations at the WTO to waive IP on technologies needed to combat the COVID-19 pandemic. Under the current system, the multilateral Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), developed and developing countries are obligated to grant IP protection, including patents and other IP protections related to vaccines and pharmaceuticals.
However, in October 2020, India and South Africa proposed a waiver at the WTO from implementation, application and enforcement of Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement in relation to prevention, containment or treatment of COVID-19 for a certain period of time. As per the waiver, members would be restricted from challenging “any measures taken in conformity with the provisions of the waivers contained in this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994, or through the WTO’s Dispute Settlement Mechanism.” Proponents of the waiver say that temporarily waiving TRIPS obligations would help countries address IP hurdles, including those relating to industrial design, copyrights, and patents, while meeting the healthcare needs of their population during the pandemic.
Since the introduction of the waiver proposal, 60 countries, including Kenya, Eswatini, Mozambique, Pakistan, Bolivia, Venezuela, Mongolia, Zimbabwe, Egypt, the African Group, and the Least Developed Countries (LDC) Group, have joined as co-sponsors. However, WTO members, especially developed countries, have remained divided on this issue and many remain opponents of the waiver. The U.S. had questioned the effectiveness of such a waiver and argued that existing flexibilities in the TRIPS Agreement would be sufficient to combat the pandemic. The recent support from Washington for the waiver, albeit limited, translates to one less opponent of the proposal at the WTO.
No Boost To Generic Vaccine Production, Yet
Despite increasing support for the waiver, generic companies will still remain unable to manufacture COVID-19 vaccines. There is still a need to reach a multilateral consensus to waive IP rights at the WTO. Many opposing views concerning the waiver proposal remain. For example, Germany’s Angela Merkel responded to the U.S. announcement of support, by “casting doubt on whether the idea has enough international support to become a reality.” A German government spokeswoman added that “the protection of intellectual property is a source of innovation and this has to remain so in the future.” Reaching a wider consensus may still be a significant hurdle.
After such a consensus is reached, countries will move to text-based negotiations to finalize the exact contours of the waiver. These negotiations, as was also mentioned in Tai’s statement, may be lengthy and time consuming. It is important to note that the recent U.S. statement expresses support for waiving IP rights only in the context of vaccines, and not for all COVID-related technologies or other pharmaceuticals like medicines. India and South Africa’s waiver proposal at the WTO covers a wider range of technologies and IP rights “in relation to prevention, containment or treatment of COVID-19.” These negotiations on the final text of the waiver will most likely be contested. However, in a move welcomed by WTO’s new director-general, proponents of the waiver have indicated that they are planning to submit a revision “in a bid to reconcile positions.” It is therefore entirely possible that countries arrive at a mutually agreed text in a shorter span of time than anticipated and allow for certain IP rights to be waived in the near future.
The last hurdle then for generic companies manufacturing vaccines would be access to technical know-how. After waiving IP rights, innovator pharmaceutical companies would have to transfer technical know-how relating to the manufacture of the vaccine to other manufacturers. For example, Serum Institute of India (SII) has a voluntary license agreement with AstraZeneca (AZ). Under this agreement, AZ voluntarily licenses its IP and shares technical knowledge concerning vaccine manufacturing with SII. The manufacturer, SII, is thus able to mass-produce AZ vaccines. Similarly, for generic companies to manufacture COVID-vaccines, they would need to have access to technical information, especially in the case of new technologies such as m-RNA vaccines. It is only upon access to such information, and building of capacity to implement it, can generic manufacturers enter the market and mass produce vaccines.
International Relations: A House Divided?
The debate over IP protections for vaccines and pharmaceutical companies represents an age-old “class” divide in world politics between developed and developing countries. It is undeniable that the entry of generics would allow mass production of vaccines, thus reducing prices and allowing for more equitable distribution — including much-needed exports to low and middle income countries. However, it is also true that this may be to the detriment of vaccine and pharmaceutical companies and the economic interests of developed nations. In particular, the transfer of technical know-how to enable generic manufacturing may have costs that outlive the pandemic.
Many have suggested that the pandemic has unraveled the rules of globalization and we are now heading toward a world of supply chain resilience and economic decoupling. This may be true. But for now, in an integrated world — where sources of raw materials, manufacturing capacities, and technical know-how are geographically varied — there can be no national solutions to a global pandemic. In agreement with countries such as India, who are proponents of the IP waiver proposal, the Biden administration has decided that profiteering and other economic considerations can be deferred until the COVID-19 pandemic is behind us. But, while the U.S. trade representative’s statement is indicative of increasing support for the waiver proposal, it still remains to be seen whether argument and persuasion at the WTO can overcome the difficulties that remain, and more equitable access to COVID-19 vaccines and other necessary drugs can be ensured through multilateralism.