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To improve access for developing economies, in 2020 India and South Africa made a proposal to the World Trade Organization to free COVID-19 vaccines from the encumbrance of several forms of IP rights

IP hinders access to affordable drugs for all

By Biswajit Dhar, Jawaharlal Nehru University in New Delhi


Changes to a global agreement allowing compulsory licensing of COVID-19 vaccines do nothing to improve access in developing economies. Cost is still a barrier.

The World Health Organization (WHO) has called it “vaccine apartheid”: developed economies who can pay for COVID-19 vaccines have much higher rates of vaccination than developing economies. Only 21 percent of people in low-income countries have received at least one COVID-19 vaccine dose, partly because pharmaceutical companies have refused to temporarily waive their IP rights over the vaccines.

To end the unjust divide, in 2020 South Africa and India submitted a proposal to the WTO seeking temporary waivers of the enforcement and implementation of intellectual property (IP) rights to improve access and affordability of vaccines and other treatment products for COVID-19.

Two years later, a severely watered-down version of what might have been leaves cost as a major barrier to vaccine uptake. Developed economies did not join a consensus of more than 60 developing-economy WTO members supportive of waivers. Instead, rules were amended so WTO members can issue a compulsory licence of a patented vaccine. This means all WTO members will be able to manufacture and distribute the vaccines if they so wish – but they must pay the patent holders before they can do so.

The pandemic has made it evident that IP rights can limit access to affordable medicines. Several intergovernmental organisations, including the WHO, have consistently reminded us that “no-one is safe until everyone is safe”.

But access to vaccines and therapeutics at prices patients can afford has been a recurrent concern for the global community since the Agreement on Trade Related Aspects of Intellectual Property (TRIPS Agreement) was adopted by the WTO in 1994. The TRIPS Agreement strengthened protection and enforcement of IP rights, which means holders of IP have enhanced opportunities to extract rents from the users of proprietary products.

IP holders claimed rents were vital to incentivise their research and development efforts. Over the years, though, evidence of excessive rent-seeking by IP holders has only grown, and patent monopolies have strengthened without a commensurate mechanism for protecting the interests of the users of IP.

The first major global initiative to counter pharmaceutical companies’ unfair practices came during the 1990s, against the backdrop of the HIV/AIDS pandemic. The exceptionally high prices charged for antiretroviral therapy by several large pharmaceutical companies in South Africa was one of the most glaring examples of how patients’ interests can easily be cast aside, even during a pandemic.

In South Africa at the time the per-capita GDP was US$3550, but the cost of a year’s supply of the antiretroviral medicines marketed by these companies to the South African health service was US$10,000 per person — well beyond the financial capacity of the average patient.

The South African government amended its law to include provisions ensuring medicines were available at affordable prices. Another provision enabled compulsory licences to produce medicines in South Africa. A total of 40 major pharmaceutical companies challenged the amendments, arguing they violated South Africa’s constitution and its commitment to the TRIPS Agreement. In 1998 the companies contended before South Africa’s High Court that the rights granted to patent owners by the agreement would be severely limited if the amendments were implemented.

Developing countries, led by India, South Africa and Brazil, responded by suggesting additional flexibilities for the TRIPS Agreement to enable WTO member countries to address public health concerns. They proposed the TRIPS Agreement and Public Health, which was backed by 60 developing countries, including 41 belonging to the African Group. The proposal was adopted at the Doha Ministerial Conference in 2001.

The Doha declaration was important on several counts.

It recognised the “gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics”. It also recognised that IP protection is important for the development of new medicines, but it acknowledged concerns about the effects of the agreement on medicine prices.

Finally, WTO members emphasised that the “TRIPS Agreement does not and should not prevent Members from taking measures to protect public health … and that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all”.

In recent years, the WHO has systematically provided evidence of high prices undermining access to critical drugs, including those for cancer treatment. Pricing policies, or their absence, have resulted in significant variability in the prices of cancer medicines, both within particular countries and in several regions. According to the WHO, when prices of cancer medicines are beyond a country’s ability to pay, coverage of essential cancer medicines is impaired, patient access to medicines is delayed and the system’s ability to achieve the best patient outcomes is limited.

IP rights also impede consumers’ access to new medicines. They keep generic substitutes or biosimilars out of the market for varying periods, particularly through patents on new molecules, new combinations and variations of existing molecules, and protection of trade secrets. Several advanced countries have allowed an originator company to protect its data on clinical trials as well as other data submitted for obtaining regulatory approvals. In this way, pharmaceutical companies enjoy periods of market exclusivity in addition to those granted by patents. This all delays the entry of generic firms and the resulting competition that can lower prices.

These various considerations fed into India and South Africa’s proposal in October 2020 to free COVID-19 vaccines and medicines from the encumbrance of several forms of IP rights.

The proposal’s premature end and the WTO’s limited amendments to vaccine licensing rules show yet again how the interests of pharmaceutical companies can triumph over the lives of ordinary citizens in many countries who are yet to be fully vaccinated.

Biswajit Dhar is a Professor at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University.

He has declared no conflict of interest in relation to this article.

Main image published under Creative Commons.

Originally published under Creative Commons by 360info™.

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