USG Remains Misguided in Endorsing COVID-19 TRIPS IPR Waiver

Former Obama administration chief of staff Rahm Emmanuel famously stated in response to the financial meltdown of 2008-09 that “a crisis is a terrible thing to waste.” In other words, take advantage of a crisis to advance long-standing goals. Today, anti-intellectual property, anti-drug company, and anti-“North” advocates have taken Emmanuel’s words to heart, using the COVID-19 crisis as an opportunity to advance their long-standing goal of eliminating intellectual property rights (IPRs) on drugs. For them, COVID presented a once-in-a-generation opportunity to manipulate public and elite opinion for a camel’s nose effort to waive IP rights on COVID vaccines. If they can do that, waiving patent protections on other medicines becomes a matter of course.

That brings us to today. The World Trade Organization (WTO) will hold its 12th Ministerial Conference (MC12) next week in Geneva, Switzerland, from June 12 to 15. One of the items on the agenda will be a proposed waiver of IPRs associated with COVID-19 vaccines that a group of delegates from the United States, the European Union, India, and South Africa appear to have reached consensus on to present before the full WTO body. But, as ITIF has written in multiple venues, including here and here, from the very beginning, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) COVID-19 IPR waiver petition has been an unnecessary, unwarranted, counterproductive solution in search of a chimerical problem. Indeed, it’s extremely disappointing that the U.S. government has fallen for the fundamentally fallacious and specious notion that IPRs have ever posed a challenge to getting needed COVID-19 vaccines, therapeutics, and diagnostics to the global public. Accordingly, the U.S. government (USG) should withdraw its support for this waiver at MC12.

The proposed waiver stipulates that “an eligible Member may authorize the use of patented subject matter under Article 31 without the right holder’s consent through any instrument available in the law of the Member such as executive orders, emergency decrees, government use authorizations, and judicial or administrative orders, whether or not a Member has a compulsory licensing regime in place.” The proposed waiver further stipulates that its terms will persist from [3] to [5] years (TBD) from its enactment, and notes that within six months a decision will be taken on whether to extend the waiver “to cover the production and distribution of COVID-19 diagnostics and therapeutics,” and avers that “Members shall not challenge any measures in conformity with this Decision.”

Yet as ITIF has explained, the very validity of the call for a moratorium on COVID-19 IPRs was vitiated from the first moment the petition was submitted to the TRIPS Council in October 2020 by India and South Africa. As the petition itself acknowledged, “To date, there is no vaccine or medicine to effectively prevent or treat COVID-19.” In other words, from the very outset, the petition was already seeking to invalidate IP rights for technologies and innovations that didn’t even exist yet. This fact alone illustrates that from the very start this entire exercise has represented more an effort to assail the role IPRs play in stimulating biomedical innovation than a serious endeavor to help get shots into the arms of citizens everywhere desperately needing them.

Indeed, if intellectual property was ever an issue during the course of the COVID-19 pandemic, it was that initially humanity didn’t have the knowledge and IP it required in order to develop the innovative vaccines, diagnostics, and therapeutics needed to combat the novel coronavirus. But as the excellent report “Unprecedented: The Rapid Innovation Response to COVID-19 and the Role of Intellectual Property” (and many others like it) conclude, “COVID-19 vaccines and treatments are the product of great science, public-private partnerships, and many years of hard work and investments, supported by the intellectual property (IP) system. Without IP, the investment, cooperation, and innovation that led to the development and manufacturing of COVID-19 vaccines and treatments would not have happened as it did.”

Moreover, once the needed IP existed, companies responsibly engaged in voluntary licensing to dramatically scale global production. For instance, Johnson & Johnson contracted with Indian generics maker Biological E to produce 600 million doses a year of the company’s single-dose COVID-19 vaccine (part of J&J’s plan to produce three billion vaccine doses in 2022). Pfizer and BioNTech entered into an agreement with the Cape Town, South Africa-based Biovac Institute, known as “Biovac,” to manufacture their COVID-19 vaccine for distribution within the African Union. And by April 2021, Gilead Sciences had already signed non-exclusive voluntary licensing agreements with nine generic pharmaceutical manufacturers based in Egypt, India, and Pakistan to expand supply of its COVID-19 therapeutic, remdesivir, to 127 nations.

Thanks in part to these agreements, both innovator and licensee manufacturing of COVID-19 vaccines has scaled rapidly, with 12 billion produced by year-end 2021, and a total of 24 billion expected to have been produced by mid-2022. That’s why, in a June 2, 2022 editorial in the New England Journal of Medicine, Dr. Hanna Nohynek and Dr. Annelies Wilder-Smith wrote, “though there was a global shortage of Covid-19 vaccines in 2021, by mid-2022, the vaccine supply will no longer be a limiting factor in efforts to provide more equitable coverage.” This point as well further fatally undermines the merit of the COVID-19 IPR waiver proposal, predicated as it was on the contention that, “As new diagnostics, therapeutics and vaccines for COVID-19 are developed, there are significant concerns, how these will be made available promptly, in sufficient quantities and at affordable price to meet global demand.” {See Article 7 in the original text.} In other words, now that COVID-19 vaccines are available in sufficient quantities and affordable price to meet global demand, the need for such a waiver has been wholly obviated.

Moreover, as ITIF has noted, it’s become increasingly apparent that the real challenge presently lies in underdeveloped public health infrastructure in many nations, making logistical distribution of the vaccines difficult. For instance, in December 2020, developing countries turned away 100 million COVID-19 vaccines because they were reaching their expiration date. More recently, with 200 million unused doses, AstraZeneca's COVID vaccine partner Serum Institute halted production in April 2022. As the Serum Institute’s CEO Adam Poonawalla noted at the time, “I have even offered to give free donations to whoever wanted to take it.” Similarly, Aspen’s South Africa Covid-19 vaccine plant now faces closure over a lack of sufficient orders for COVID-19 vaccines.

Once again, this illustrates that intellectual property simply does not represent a serious barrier to the world having access to the COVID-19 vaccines it requires. Rather, as Dennis Shea has written, “What is hindering global access to Covid vaccines is not IP protection, but rather such factors as trade barriers and customs bottlenecks; lack of storage capability; last-mile distribution challenges, particularly in rural areas; a shortage of well-trained front-line health care workers; and, above all, high levels of vaccine hesitancy in both the developed and developing world.”

Simply put, the WTO TRIPS COVID-19 IPR waiver was and remains without merit. Unfortunately, civil society advocates are now trying to advance the abrogation of IP rights as a principle in future World Health Organization pandemic preparedness treaties. However, as a coalition of global think tanks recently wrote, “Removing or weakening IP rights for pandemic vaccines and therapeutics would be highly counterproductive. It would undermine the incentive to invest in research and development (R&D) into new technologies and treatments. Equally as important, it would destroy the international manufacturing collaborations and partnerships that have proved indispensable to saving millions of lives in the current pandemic.” In other words, an IP waiver, or limitations on IP in a pandemic preparedness instrument, would require innovators to reveal their know-how under threat of legal force, with very different consequences than voluntary cooperation.

Finally, it's extremely concerning that the U.S. government is entertaining support for a waiver which would compel the divulsion of intellectual property that U.S. companies have invested billions in developing and which, especially in the case of mRNA technology, represents a platform for biomedical innovation that will hopefully yield advances in other fields from oncology to metabolic diseases and beyond. One reason that’s so is because it would hand these technologies on a platter to strategic competitors like China. Indeed, throughout the pandemic, it’s been clear that a number of countries—including China, Russia, Iran, and North Korea—have engaged in state-sanctioned cyberespionage in concerted attempts to steal coronavirus vaccine secrets. Why would the United States now embrace a petition that compels U.S. enterprises to forcibly 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?

It's also concerning that this episode reveals an administration with an inchoate approach to advancing America’s technological and innovation leadership. For instance, in June 2021 the Department of Energy issued a “Determinations of Exceptional Circumstances Under the Bayh-Dole Act to Further Promote Domestic Manufacturing of DOE Science and Energy Technologies.” So concerned with U.S. technology falling into adversarial hands was this determination that it specified that, “should a contractor or other entity receiving invention rights undergo a change in ownership amounting to a controlling interest or sell, assign, or otherwise transfer title or exclusive rights in the invention(s), then the assignment, license, or other transfer of rights in the subject invention(s) is/are suspended until approved in writing by DOE.” The justification for the policy was to “increase domestic manufacturing to promote commercialization of DOE Science and Energy Technologies by U.S. industry and labor.”

And while bolstering U.S. manufacturing is certainly a laudable goal that the Biden administration is to be lauded for advancing—although one best achieved by other means—what this illustrates is that on one hand we have a policy in which the U.S. government wants a final right of review over every single transfer or sell of U.S. IP (whose provenance can be traced to federal R&D funding), lest it might theoretically get commercialized or manufactured elsewhere, and on the other hand a policy that’s actively compelling American firms to divulge their intellectual property to foreign entities. Instead of such conflicting mandates, the Biden administration should articulate a coherent set of policies recognizing that IP represents a fundamental and distinguishing driver of American innovation and technological competitiveness. Support for the TRIPS COVID-19 IPR waiver cannot be consonant with such an agenda.

Several countries, including Switzerland and the United Kingdom, appear ready to stand firm in opposition to the TRIPS COVID-19 IPR waiver as the 12th Ministerial begins Sunday, it’s not too late for the United States to stand alongside them.