Postmortem on a Pyrrhic Victory for IP Foes at the WTO
When the World Trade Organization (WTO) decided at its recent 12th ministerial conference to adopt a waiver of intellectual property (IP) rights for COVID-19 vaccines under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, advocacy groups decried the deal as “hollow” and a “disappointing failure for the people,” among other laments.
The premise of the advocacy groups’ argument was completely wrong for reasons ITIF has enumerated many times before, but they were absolutely right to characterize the decision as a disappointing failure: The WTO’s approval of a TRIPS waiver for IP related to COVID-19 vaccines is essentially a shotgun blast completely missing the broadside of a barn.
India and South Africa stopped producing vaccines months ago because there’s already a surplus global vaccine supply, indicating there’s absolutely no need for it. Indeed, one of the chief advocates for the waiver, Indian Minister of Commerce and Industry Shri Piyush Goyal, unwittingly admitted to the fundamental unnecessity of it in the first place, noting last week that “vaccines have already lost relevance.” And the reason why is because technology transfer enabled by IP licensing agreements had already enabled IP owners to responsibly partner with developing countries’ manufacturers to ramp up needed production in order to meet global demand, and then some.
The heroes of the pandemic, whose risky research and development (R&D) led to effective vaccines, are now being punished. This very much represents biting the hand that feeds you, and it sends a dangerous message to all industries. If governments can void the IP protections on technologies needed to fight a pandemic, there’s little to stop them from doing the same for those technologies needed to feed a hungry world, protect our environment, or develop reliable energy sources. For the U.S. government to endorse such forced divulsion of American IP is inconsistent, contradictory, and harmful to the Biden administration’s other initiatives to support U.S. competitiveness and innovation, let alone its efforts to champion IP rights as a force for innovation and economic growth in developing nations.
Likewise, waiving IP does nothing to solve the real problems that developed countries are facing in the fight against COVID-19, namely vaccine hesitancy, trade barriers, and a lack of adequate distributional infrastructure. IP is not now, nor has it ever been the problem, in addressing the health challenges raised by the COVID-19 pandemic; rather, IP has been a foundational part of the solution. Unfortunately, poor policy decisions like this imperil IP systems that underpin novel biomedical innovation and thus actually unwittingly place global health at risk over the longer term.
Lastly, by endorsing the waiver, the Biden administration is essentially compelling U.S. life-sciences companies to hand their IP to China. In fact, a prior version of the waiver would have excluded China as a potential beneficiary of the waiver, but the final text only meekly states that countries “with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision.” China certainly won’t try to exploit this loophole, just as it has faithfully lived up to all its other commitments over the past 20 years as a member of the World Trade Organization.
Endorsement of this waiver represents a tremendously disappointing action from the Biden administration. Going forward, the U.S. government needs to be absolutely certain to not endorse extending the waiver to COVID-19 therapeutics and testing diagnostics. It’s bad enough that it’s already indulged in the fantasy that a TRIPS waiver of COVID-19 vaccine IP rights was in any way necessary to deal with this global health crisis.
