Debate Continues on Patent Waivers for the COVID-19 Vaccine

Photo by Towfiqu barbhuiya on Unsplash

Maddie Blesi, Associate Member, University of Cincinnati Law Review

I. Introduction

In October 2020, India and South Africa submitted a proposal to the World Trade Organization (“WTO”) requesting a patent waiver for COVID-19 vaccines.[1] More than 100 developing countries backed the proposal.[2] In May 2021, the proposal was revised to reflect concern over emerging variants and the need for greater access to technology to address new variants.[3] The revised proposal clarified the request to include a waiver on “health products and technologies” and included a request for a flexible duration of the vaccine waiver.[4]  After more than a year since the original proposal, world leaders are no closer to a decision. Proponents of the vaccine waiver argue the waiver would increase global access to COVID-19 vaccines and combat the pandemic. Critics argue vaccine waivers would seriously harm pharmaceutical companies and would do little to end the pandemic.  

II. Background

The Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) Agreement (the “Agreement”) of the WTO is “the most comprehensive multilateral agreement on intellectual property” (“IP”).[5] The TRIPS was prepared at the end of the Uruguay Round and went into effect on January 1, 1995.[6] The Agreement created standards for IP rights and standardized IP law, defining patentable subject matter as “any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step, and are capable of industrial application.”[7] Article 27 of the TRIPS Agreement further states members may exclude “diagnostic, therapeutic and surgical methods for the treatment of humans…” from patentability.[8] While the Agreement provided avenues for countries to seize patents and issue compulsory licenses to a domestic firm, the United States and the European Union circumvent the process through IP provisions in free trade agreements (“FTAs”).[9] Research has shown developed countries seek stronger IP protections than developing countries.[10]

The issue of patent waivers is not new to the WTO. In 2003 and 2005, the WTO issued a patent waiver per the Agreement for HIV/AIDS treatments.[11] However, the WTO does not issue a patent waiver lightly. In 2003, the WTO “agreed on legal changes” that made it easier “to import cheaper generics made under compulsory licensing.”[12] A compulsory license allows “certain use of a patented invention without the consent of the patent holder.”[13]  Compulsory licenses were originally limited to serve the domestic market but expanded to include exports of medicine to countries in need.[14] In 2005, the WTO published the Doha Declaration (the “Declaration”) on TRIPS and Public Health at the 2005 Ministerial Conference.[15] From the Declaration, Article 31 incorporated compulsory licensing into the TRIPS Agreement.[16] Under certain conditions, such as a national emergency, Article 31 allows member states to grant compulsory licenses to third parties.[17] Under Article 31(f) of the Agreement, “production under compulsory licensing must be predominantly for the domestic market.”[18] The WTO amended Article 31(f) to include exports to countries in need as a response to the HIV/AIDS crisis.[19]

III. Discussion

The debate about patent waivers remains hotly contested as countries negotiate at the WTO whether to allow a patent waiver for vaccines. Critics mainly voice concerns over the effectiveness of a vaccine waiver for ending the pandemic. Proponents of the waiver argue the waiver would increase access to the vaccine and combat the COVID-19 pandemic. Countries like the United Kingdom and European Union, with widespread access to the vaccine already, oppose the patent waiver that would increase vaccine availability globally.[20]

Patents on high demand vaccines, such as the COVID-19 vaccine, create limits on the number of vaccines that can be manufactured.[21] A patent holder has the exclusive right to manufacture the vaccine.[22] Waiving the patent requirement would allow other parties to manufacture patentable goods, such as the COVID-19 vaccine.[23] In theory, an increase in the number of potential manufacturers would increase the availability of the vaccine worldwide.[24] A higher manufacturing capability can then lead to artificially high prices for the vaccines that may preclude low-income countries from getting the vaccine.[25] However, waiving the patent requirement to increase manufacturing assumes countries have the infrastructure to manufacture the vaccine on a large scale, both safely and effectively.[26]

Critics of the vaccine waivers argue pharmaceutical companies would be disincentivized from creating new treatments for COVID-19 and would lose market share to competitors.[27] Losing patent protection may force companies to forgo the research and development necessary for developing COVID-19 treatments.[28] Further, critics are skeptical over the effectiveness of patent waivers for ending the pandemic.[29] Because much of the world is struggling with developing the necessary infrastructure to administer vaccines, critics argue a vaccine waiver may not solve the primary issue.[30] The WTO also offers other avenues for countries to circumvent some of the IP laws through its compulsory licensing program.[31] The European Union prepared an alternative plan to “lift export restrictions on vaccines and their raw materials, expand manufacturing capacity around the world, and make it easier for countries to use existing rules to override patents” through compulsory licensing.[32] Further, vaccine initiatives such as COVAX could be strengthened and countries can be encouraged to export extra doses of the vaccine.[33]

Proponents for the vaccine waiver rebut critics’ main arguments by arguing the patent waiver encourages innovation by increasing the number of countries with access to technology.[34] Proponents cite the WTO’s response to the HIV/AIDS epidemic and the shift in patient outcomes once research facilities shared information and developed more effective treatments.[35] Further, the vaccine development process involved many pharmaceutical companies working with academic research facilities globally to develop initial vaccines.[36] Patent protections on vaccines result in legal barriers that prevent other counties from producing their own treatments and vaccines for COVID-19.[37]

IV. Conclusion

The patent waiver debate exists in the background of a larger debate in the United States about the current state of the medical industry. With many people calling for cheaper healthcare, amid soaring inflation, the ethos of the US medical system is called into question. In a country where “Big Pharma” reigns supreme, alongside stringent intellectual property protection of medical treatments, the call for a brief hiatus of patent requirements for COVID-19 vaccines may fall on deaf ears. However, even countries with free healthcare criticized the proposed vaccine waiver. The United Kingdom, Norway, Switzerland, and the European Union opposed waiving patent requirements for vaccines.[38] With Germany as one of the most vocal opponents, the future of the vaccine mandate proposal hangs in the balance despite support from over 100 WTO member-countries. United States Trade Representative Katherine Tai supported waiving IP protections for COVID-19 vaccines, citing her concern for ending the pandemic.[39] The Biden Administration has been vocal about supporting the patent waiver for vaccines since May 2021.

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[1] WTO, Waiver from Certain Provisions of the TRIPS Agreement for the Prevention, Containment, and Treatment of COVID-19, Case No: IP/C/W/669, ¶12 (Oct. 2, 2020), https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669.pdf&Open=True.

[2] Emma Farge, A Year After COVID Vaccine Waiver Proposal, WTO Talks are Deadlocked, Reuters (Oct. 4, 2021), https://www.reuters.com/business/healthcare-pharmaceuticals/year-after-covid-vaccine-waiver-proposal-wto-talks-are-deadlocked-2021-10-04/.

[3] World Trade Organization, Waiver from Certain Provisions of the TRIPS Agreement for the Prevention, Containment, and Treatment of COVID-19, Case No: IP/C/W/669/Rev.1, ¶ 3 (May 25, 2021), https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669R1.pdf.

[4] Id. at ¶¶ 4-5.

[5] Overview: the TRIPS Agreement, World Trade Organization, https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm (last visited Jan. 28, 2022).

[6] Id; The Uruguay Round, World Trade Organization (last visited Feb. 1, 2022),https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm.  The Uruguay round refers to a seven year round of negotiations of the GATT. The end of the Uruguay Round marked the creation of the WTO and the TRIPS Agreement. The Post-Uruguay agenda addressed a wide variety of topics, including intellectual property, government procurement, and textiles.

[7] Part II – Standards Concerning the Availability, Scope, and Use of Intellectual Property Rights, World Trade Organization, Art. 27 ¶ 1 (last visited Feb. 1, 2022).

[8] Id. at ¶3(a).

[9] Taleb Awad Warrad, The Economic Impact of the TRIPS-PLUS Provision in the Jordan-United States Free Trade Agreement, World Trade Organization, 45 (2013).

[10] Id. at 55.

[11] Decision Removes Final Patent Obstacle to Cheap Drug Imports, World Trade Organization (Aug. 30, 2003), https://www.wto.org/english/news_e/pres03_e/pr350_e.htm.

[12] Id.

[13] TRIPS and Public Health, World Trade Organization (last visited Feb. 1, 2022).

[14] Id. The Doha Declaration introduced the change to allow countries with insufficient or no pharmaceutical manufacturing capabilities to have access to affordable health treatments.

[15] The Doha Declaration Explained, World Trade Organization (last visited Feb. 1, 2022), https://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm#:~:text=The%20Doha%20Declaration%20explained,implementation%20of%20the%20present%20agreements. The November 2001 declaration of the Fourth Ministerial Conference in Doha, Qatar (Doha Declaration) was created at the end of the Doha Round of WTO Negotiations.

[16] Obligations and Exceptions, World Trade Organization (last visited Feb. 1, 2022), https://www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm.

[17] Christoph J. Crützen & Maximilian Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021), https://www.mayerbrown.com/en/perspectives-events/publications/2021/07/ger-the-waiver-of-patent-protection.

[18] Decision Removes Final Patent Obstacle to Cheap Drug Imports, World Trade Organization, (Aug. 30, 2003).

[19] Declaration on the TRIPS Agreement and Public Health, World Trade Organization (last visited Feb. 1, 2022), https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm.

[20] Seed Shah & Gabriele Steinhauser, Europe Pushes Alternative to Waiving Patents on COVID-19 Vaccines, Wall St. J. (Jun. 3, 2021), https://www.wsj.com/articles/europe-pushes-alternative-to-u-s-backed-covid-19-vaccine-patent-waiver-plan-11622732952.

[21] Nathaniel Lee, Experts Seriously Doubt Whether Patent Waivers on Covid-19 Vaccines Will Ever Come To Be, CNBC (Jan. 22, 2022), https://www.cnbc.com/2022/01/22/why-moderna-pfizer-and-the-nih-debate-who-owns-the-covid-vaccine.html.

[22] Crützen & Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021).

[23] Id.

[24] Id.

[25] Lee, Experts Seriously Doubt Whether Patent Waivers on COVID-19 Vaccines Will Ever Come to be, CNBC (Jan. 22, 2022).

[26] Crützen & Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021).

[27] Harvey Rubin & Nicholas Saidel, Innovation Beyond Patent Waivers: Achieving Global Vaccination Goals Through Public-Private Partnerships, Brookings (Aug. 31, 2021). https://www.brookings.edu/blog/up-front/2021/08/31/innovation-beyond-patent-waivers-achieving-global-vaccination-goals-through-public-private-partnerships/.

[28] Crützen & Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021).

[29] Shah & Steinhauser, Europe Pushes Alternative to Waiving Patents on COVID-19 Vaccines, Wall St. J. (Jun. 3, 2021).

[30] Crützen & Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021).

[31] Id.

[32] Shah & Steinhauser, Europe Pushes Alternative to Waiving Patents on COVID-19 Vaccines, Wall St. J. (Jun. 3, 2021).

[33] Crützen & Kücking, The Waiver of Patent Protection for COVID-19 Vaccines – on Practicability and Purpose of Such Measure, Mayer Brown (Jul. 7, 2021).

[34] Laurie Garrett, Stopping Drug Patents Has Stopped Pandemics Before, Foreign Policy (May 7, 2021), https://foreignpolicy.com/2021/05/07/stopping-drug-patents-pandemics-coronavirus-hiv-aids/.

[35] Id.

[36] Id.

[37] Sam Meredith, Rich Countries are Refusing to Waive the Rights on Covid Vaccines as Global Cases Hit Record Levels, CNBC (Apr. 22, 2021), https://www.cnbc.com/2021/04/22/covid-rich-countries-are-refusing-to-waive-ip-rights-on-vaccines.html.

[38] Jared S. Hopkins & Peter Loftus, Covid-19 Vaccine Makers Press Countries to Oppose Waiver, Wall St, J. (May 26, 2021), https://www.wsj.com/articles/covid-19-vaccine-makers-press-countries-to-oppose-patent-waiver-11622021402.

[39] Statement from Ambassador Katherine Tai on the Covid-19 Trips Waiver, U.S. Trade Rep. (May 5, 2021), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/may/statement-ambassador-katherine-tai-covid-19-trips-waiver.