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Ten Reasons Why a COVID-19 TRIPS IP Waiver Is Unwarranted

Ten Reasons Why a COVID-19 TRIPS IP Waiver Is Unwarranted

April 9, 2021

India and South Africa last fall petitioned the World Trade Organization’s (WTO’s) Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) asking for a waiver to suspend all intellectual property (IP) rights associated with COVID-19 technologies and innovations. They have since been joined by some 80 more nations, which have joined the call for a waiver arguing it would boost supply and expand access to COVID-19 vaccines.

To be sure, the United States, alongside other developed, democratic societies, has a moral obligation to ensure the world’s citizens receive these therapeutics. But there is absolutely no need to abrogate IP rights to fulfill that objective. The Biden administration, like the Trump administration before it, should continue to stand with other nations, including European Union countries, Japan, Norway, Switzerland, and the United Kingdom, among others, in resisting the waiver petition.

As ITIF has written, the TRIPS COVID-19 IP waiver petition is unwarranted and misguided. Here are 10 reasons why:

1. Access to Medicines Depends Upon the Existence of Medicines

The only way IP has ever been a barrier in the COVID-19 crisis was that the global community initially did not have the knowledge and IP required to create the vaccines and therapeutics needed to combat the novel coronavirus. Scientists had to innovate to create it. And that is what the global biomedical community did: As of April 8, 2021, 859 unique active compounds were under development, including 397 treatments, 247 antivirals, and 215 vaccines. About half of these projects have originated from the United States, a testament to the world-leading life-sciences innovation ecosystem the United States has created over the past quarter-century, which is enabled by IP rights that give innovators large and small alike (about three-quarters of U.S. COVID-19 treatments under development come from small- to medium-sized companies) the incentive to undertake the risky, complex, time-consuming, and expensive process of creating new-to-the-world drugs.

It is no coincidence that countries like the United States and Germany, which recognize that robust IP rights are an essential enabler of life-sciences innovation, have tremendous bench strength. That is why Gilead Sciences could provide an effective COVID-19 therapeutic, Remdesivir, which received Emergency Use Approval (EUA) from U.S. Food and Drug Administration (FDA) a mere 123 days after the virus was first detected in a patient sample; Eli Lilly’s antibody treatment, bamlanivimab, could receive its EUA within 315 days; and the Pfizer-BioNTech vaccine arrived 347 days after the virus was first detected. To put the speed of this process in context, a GlaxoSmithKline representative noted in 2017 that, “It can take up to $1 billion and 20-50 years to create and fully distribute a vaccine at scale.” Indeed, before the pandemic, it took an average of 14 years to develop a new-to-the-world vaccine. Thus, as is so often the case, from innovative cancer biologics to innovative COVD-19 therapeutics, IP is a key enabler, not a barrier, to access to these medicines.

2. How Could IP Be A Barrier When COVID-19 Therapeutics Scarcely Existed?

India and South Africa submitted their petition to the TRIPS Council in October 2020. As the petition itself acknowledged, “To date, there is no vaccine or medicine to effectively prevent or treat COVID-19.” Why then, was there need to waive IP rights for technologies and innovations? It shows that IP rights were not and never have been a barrier to the world getting access to needed COVID-19 vaccines and therapeutics.

3. The Waiver Petition Provided No Credible Evidence That IP Constitutes a Barrier to Access

The waiver petition vaguely referenced “several reports about IP rights hindering or potentially hindering timely provisioning of affordable medical products to the patients.” The first of two cited instances pertained to Labrador Diagnostic LLC, a patent-licensing firm which has actually committed to offering its patents royalty-free to any company developing coronavirus tests—although it did file a suit against a French firm developing coronavirus tests, bioMerieux SA, order to ensure that its IP was not infringed. The second instance simply referenced Kentucky Gov. Andy Beshear’s call for 3M to release a patent on N95 respirators. Of course, just like with COVID-19 vaccines or therapeutics, IP rights were never the issue with N-95 respirator masks. As Kaitlin Wowak, a supply chain expert and assistant professor at the University of Notre Dame, notes, “how fast products like N95s [can be] made is determined by three primary factors: the complexity of the equipment used to make the product, the availability of raw materials, and the availability of trained workers.”

But that was it; on those two incredibly thin reeds, with nary any serious evidence whatsoever that IP rights were inhibiting access to COVID-19 treatments—let alone the fact that no COVID-19 vaccines existed at the time—the petitioners took the radical step to call for a suspension of all IP rights pertinent to COVID-19 technologies throughout the duration of the pandemic.

4. Scaling Manufacturing of the Needed Medicines Is the Central Challenge—and Strong Progress Is Being Made

As noted, at the start of the pandemic, the central challenge was innovating to create the needed and effective vaccines and therapeutics to combat the novel coronavirus. We have them now. Thus, just like with the 3M N-95 respirator example, the problem isn’t IP rights; it’s the challenge of dramatically scaling up manufacturing capacity. For instance, it takes 60 to 110 days to produce one batch of COVID-19 vaccine. Manufacturing these incredibly complex, new-to-the-world biologic products represents an extremely complicated process, as evidenced by the recent case where a Baltimore, Maryland manufacturing plant run by Emergent BioSolutions conflated key ingredients, leading to the contamination of up to 15 million doses of Johnson & Johnson’s vaccine.

Similarly, the mRNA-based vaccines developed by Moderna and Pfizer require specialized experience, expertise, and equipment to manufacture. For example, mRNA vaccines require a complicated technique known as “bioprocess” that requires specialty bioreactors to first manufacture DNA that codes for the desired mRNA sequence, and then uses a second bioprocess to create billions of identical mRNA segments. These are then wrapped in a nanolipid wrapper using yet another very specialized fluidics and mixing process, and for which there are only three facilities in the world that can execute the step of creating the liquid capsule around the RNA.

All this explains why Adam Poonawalla, CEO of the Serum Institute, the world’s largest generics facility, when asked if vaccine rollout was slowed because vaccine patent holders were licensing too few manufacturers to make them, responded, “No. There are enough manufacturers, it just takes time to scale up. And by the way, I have been blown away by the cooperation between the public and private sectors in the last year, in developing these vaccines.” Poonawalla cited the lack of global regulatory harmonization as a far greater cause of delays in the vaccine rollout. Even Médecins Sans Frontières’ Roz Scourse acknowledged in a recent BBC interview that suspending patent rights “wouldn’t produce millions of more vaccines.”

And substantial progress is being made. COVID-19 vaccines have come from all quarters, including China, Russia, and India. In fact, India has two companies producing and exporting vaccines which they developed domestically. For these reasons, Duke’s Global Health Innovation Center estimates that global production of COVID-19 vaccines will reach more than 12 billion doses in 2021. Duke further notes that assuming most of these are two-dose vaccines (J&J and CanSino’s are the only one-dose vaccines currently available), about 11 billion doses will be needed to vaccinate 70 percent of the world’s population, frequently seen as the threshold to approach herd immunity.

5. Life-Sciences Companies Are Voluntarily Licensing the Needed IP

Innovative life-sciences companies have entered into a number of licensing agreements to facilitate significantly expanded manufacturing of COVID-19 vaccines and therapeutics. For instance, Gilead Sciences has signed non-exclusive voluntary licensing agreements with nine generic pharmaceutical manufacturers based in Egypt, India, and Pakistan to expand supply of remdesivir. The agreements allow the companies—including Cipla Ltd.; Dr. Reddy's Laboratories Ltd.; Eva Pharma; Ferozsons Laboratories; Hetero Labs Ltd.; Jubilant Lifesciences; Mylan; Syngene, a Biocon company; and Zydus Cadila Healthcare Ltd.—to manufacture Remdesivir for distribution in 127 countries, including nearly all low-income and lower-middle-income countries, as well as several upper-middle- and high-income countries that face significant obstacles to healthcare access. Gilead has provided the licensees royalty free for the duration of the pandemic (or until competing therapeutics enter the market). The licensing agreements give licensors a right to receive a technology transfer of the Gilead manufacturing process for Remdesivir in order to enable them to scale up production more quickly as well as the right to set their own prices for the generic product they produce.

Elsewhere, AstraZeneca reached a licensing and technology transfer agreement enabling India’s Serum Institute to manufacture one billion vaccine doses for low- and middle-income countries. The Serum Institute has further entered into manufacturing licenses with a number of developers of yet to be approved COVID-19 vaccines, as have several other Indian vaccine manufacturers. Johnson & Johnson is contracting with Indian generics maker Biological E to produce 600 million doses of the company’s single-dose COVID-19 vaccine a year (part of J&J’s plan to produce three billion vaccine doses in 2022). Johnson & Johnson is making these vaccine doses available on a not-for-profit basis. Pfizer, which plans to manufacture 2 billion COVID-19 vaccine doses in 2021, has committed to reserving 36 percent of its vaccine production for low- and middle-income countries and has said that it will provide the vaccine at a “not-for-profit price” to COVAX, short for COVID-19 Vaccines Global Access, a global initiative aimed at securing access to COVID-19 vaccines for developing countries.

For its part, Moderna has committed both not to enforce its COVID-19-related patents against those making vaccines intended to combat the pandemic and to confirm that it’s willing, upon request, to license its IP for COVID-19 vaccines to others for the post pandemic period. However, the company rightly views the mRNA vaccine delivery system—which the company has been developing since its founding in 2010 and has invested billions of dollars refining—as a proprietary platform for additional drugs and vaccines it wants to create in the future. In fact, Moderna has spent the past decade working to master the combination of mRNA and lipid nanoparticles (LNPs) to make vaccines, and has demonstrated the potential in human clinical trials for eleven different infectious disease vaccines since 2015, putting the company in a position to rapidly respond to the coronavirus outbreak. Moderna, and others, simply should not be compelled to give these technologies away.

Instead of being forced to divulge their IP or enter into compulsory license agreements with other manufacturers, companies should have the right to evaluate potential partners to ensure they are sophisticated enough to handle the extreme complexity of manufacturing COVID-19 vaccines or treatments can meet the production standards required to do it safely and reliably. Indeed, this is critical for it would be disastrous if defective vaccines or therapeutics were produced at facilities not properly equipped to produce such complex treatments. As Phil Stevens and Mark Schultz have convincingly written, there’s simply no evidence that invalidating IP rights would achieve more than the licensing agreements currently being forged between innovators and reputable vaccine manufacturers in countries such as India and Brazil.

6. Even If IP Rights Were the Challenge (Which They’re Not) There’s Already a Mechanism to Address Such an Issue

The Doha Declaration on TRIPS and Public Health, adopted in 2001, indicates that countries have latitude to determine the grounds upon which compulsory licenses (CLs) can be granted, pursuant to the procedures in Article 31 of TRIPS, as follows:

  1. The proposed applicant for the license tried to apply for a voluntary license first, but this was not successful within a reasonable amount of time.
  2. Applying for a voluntary license can by bypassed if there is a national emergency, other circumstances of extreme urgency, or the patent is intended for public non-commercial use.

In either case, however, the patent holder still has to be paid with “adequate remuneration taking into account the economic value of the authorization.”

But neither compulsory licenses nor the broader TRIPS IP waiver are required in the context of the COVID-19 pandemic, as noted previously, because life-sciences companies are working to provide the voluntary licensing needed to enable other enterprises to contribute to the manufacturing of the needed vaccines and therapeutics. Even if the second condition should be viewed as valid—that the COVID-19 pandemic should be viewed be as a national emergency that validates compulsory licensing—then the mechanisms described regarding CL rights under the Doha Declaration solve the problem; the full waiver of COVID-19 IP rights being sought by the petitioners is wholly unnecessary.

All this speaks to the broader fallacy of the petitioners’ argument. As suggested in the second point in this list, it’s as ineffectual to seek compulsory licenses against IP that never existed as it is to seek a blanket waiver of IP rights for IP that never existed (because it fundamentally hadn’t been invented yet). It shows again that scaling manufacturing of the needed medicines is the central challenge the global community should be focused on, not invalidating IP rights.

7. If Access to Critical Medicines Were the Essential Concern, Why Seek to Invalidate All Forms of IP Rights?

If advocates were centrally and genuinely concerned with ensuring global access to needed COVID-19 therapeutics and vaccines, then why is it necessary to seek a waiver of all forms of IP rights including “patents, industrial designs, copyright, and protection of undisclosed information”? For instance, as ITIF writes, a group of nonprofit and civil society organizations issued a statement on March 22 in support of the waiver’s broader assault on copyright, seeking to use the petition as a sweeping gambit toward global copyright reform. The statement’s authors claim differences in copyright laws across countries and regionss are barriers to accessing information they need to prevent, contain, and treat the disease. As proof, they cite a so-called “limited” interpretation of what constitutes educational use of digitally accessed copyrighted works, which they claim is a barrier to making use of knowledge that is necessary in the fight against COVID-19. They also cite the example of the Canadian artificial intelligence platform BlueDot, which used text and data mining to track and model the spread of COVID-19 before almost anyone else was even aware there was a pandemic—something advocates say isn’t possible in most countries due to strict interpretations of copyright laws. But the truth is neither of those cases directly addresses the purpose set forth in the original petition: “the timely access to affordable medical products including vaccines and medicines or to scaling-up of research, development, manufacturing and supply of medical products essential to combat COVID-19.” (Emphasis added.) In short, the TRIPS COVID-19 waiver petition is now being used as cover for a land grab toward invalidating a wide swathe of IP rights, and thus in the process vitiating the very validity of the petition in the first place.

8. Endorsing the COVID-19 TRIPS Waiver Embraces the Broader Fallacy That IP Rights Constitute a Barrier to Access to Medicines

The COVID-19 TRIPS waiver petition arrives against the backdrop of a continuing campaign by civil society advocates peddling the false narrative that IP rights constitute a barrier to global access to innovative medicines. As noted, the first fallacy in this narrative is that, in the vast majority of cases, IP rights are instrumental to the very existence of medicines in the first place. Indeed, it is not an accident that some 57 percent of new medicines come originally from a country with some of the most-robust IP rights, the United States, with U.S. innovators responsible for at least 4,500 of the 8,000 new medicines currently in development globally.

Yet, as ITIF and the Geneva Network write in “Delinkage Debunked: Why Replacing Patents With Prizes for Drug Development Won’t Work,” opponents of market-based drug development have longed worked with intergovernmental organizations to replace IP rights with government-managed prizes as the main incentive to drive biopharmaceutical innovation. Such advocates would delink the cost of research and development (R&D) from the final price paid for a medicine, while making governments the planners and funders of drug development, despite the fact that the global track record of governments as drug developers is rather uninspiring.

Further, the notion that patents constitute a barrier to access to innovative medicines is belied by the fact that approximately 90 percent of medicines identified by the World Health Organization (WHO) as Essential Medicines, that is drugs and biologics “deemed essential for addressing the most important public health needs globally,” are off patent. Indeed, only 47 out of the 458 total items (10.3 percent) listed on the 21st edition of the WHO’s Essential Medicines List could be considered under patent as of January 2020. The problem far more often is with infrastructure in public health systems. For instance, a 2009 survey of 36 countries found that 15 common generic medicines listed on the WHO Essential Medicines list were frequently unavailable in either the public or private sectors, with regionsal availability ranging from 29 percent in Africa to 54 percent in the Americas.

In short, if the Biden administration were to drop U.S. opposition to the waiver petition, it would give succor to a broader false narrative that IP constitutes a barrier to access to innovative medicines.

9. Why Reward the Nation Responsible for the COVID-19 Pandemic?

The Chinese government deserves blame for the staggering extent of the global COVID-19 pandemic. Whether it arose from natural origins or was incubated in a laboratory and accidently escaped, the fact is that China has worked from the very beginning to obfuscate the origins, transmissibility, and lethality of the virus from the global community. And with nearly 3 million global citizens dead from COVID-19, including 550,000 Americans, making this fact clear before the international community should be an essential and continuing priority for the Biden administration.

Moreover, the United States has invested billions to become a global leader in life-sciences innovation, including with regard to the novel mRNA technologies underpinning many of the innovative vaccines and therapeutics now at the heart of responding to this crisis. Indeed, as Josh Rogin notes, “The mRNA technology that underpins the Pfizer and Moderna vaccines was funded initially by the Defense Advanced Research Projects Agency and has national security implications.” Endorsing the TRIPS waiver may well result in the forced transfer of national security-sensitive technology to China or other adversarial nations, like Russia. As Mark Cohen, distinguished senior fellow at the University of California at Berkeley, explains, “We would be delivering a competitive advantage to countries that are increasingly viewed as our adversaries, at taxpayer expense, when there are other ways of doing this.”

Throughout the pandemic, it’s been clear that state-sponsored hackers from a number of countries—including China, Russia, Iran, and North Korea—have been engaging in concerted attempts to steal coronavirus vaccine secrets. Why would the United States now embrace a petition that compels U.S. enterprises to freely and unconditionally divulge that IP, especially when they are already working to do so in a responsible, structured way through voluntary licensing which ensures that selected partners have the necessary capacity and expertise to manufacture the needed vaccines and therapeutics?

10. A TRIPS Waiver Is The Wrong Way To Pursue Vaccine Diplomacy

The economic, trade, and foreign policymaking of the previous administration was, to put it kindly, chaotic. Assertions that Canadian steel or European cars constituted national security risks, alongside withdrawing the United States from the Trans-Pacific Partnership, which was poised to anchor U.S. trade relations with friendly nations throughout the Pacific regions, to name just two instances, constituted grave and unforced geostrategic errors. It is perfectly appropriate that the Biden administration is seeking to restore America’s image as a reliable, dependable, supportive, and empowering partner in international affairs. And it is absolutely right to recognize the COVID-19 pandemic as an opportunity to restore America’s positive image on the global stage. (In fact, properly conceived, the situation provides a world-historical moment to shift the global narrative against a repressive regime whose behavior was complicit in making this a far worse global crisis than it ever should have been.)

However, the way to seize the moment is by solving the problem, not by signing on to abrogating IP rights. The U.S. government should recognize its challenge not as producing enough COVID-19 vaccines and therapeutics to meet U.S. needs, but as supporting the manufacturing of enough to meet global demand. In February 2021, the Biden administration provided an initial $2 billion contribution to COVAX, with a commitment to release an additional $2 billion through 2021 and 2022, of which the first $500 million will be made available when existing donor pledges are fulfilled and initial doses are delivered to advanced-market commitment (AMC) countries. Thus far, COVAX has been able to secure at least 2 billion doses, The Economist notes, enough to protect health-care workers and the oldest and most vulnerable in all 192 of its members.

To be sure, more will be needed. The United States should immediately double its already generous funding for COVAX, and it should invest billions more domestically to dramatically scale up U.S. biopharmaceutical manufacturing to produce these medicines (with a clear eye to leaving U.S. industry stronger after the encounter, as in WWII) and then export them to developing nations around the world. The United States undoubtedly has a moral obligation to lead the world in solving this challenge, but the way to do so is by helping developing nations cover the cost of procuring the needed vaccines and therapeutics—and/or by covering the cost of dramatically increasing American enterprises’ own capacity to manufacture those medicine. But absolutely none of that needs to entail a blanket sacrifice of IP rights.

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