Why a waiver won’t work

Why a waiver won’t work

The World Trade Organization is considering waiving IP protections to promote the manufacture and distribution of COVID-19 vaccines. But undermining patent rights will be ineffective, diminish confidence in the IP system and set a dangerous precedent. IP professionals should speak out against it.
“Have you had your jab yet?” is the question everyone is asking. In the UK, the answer is increasingly likely to be “Yes”: more than 50% of adults are already fully vaccinated against COVID-19. In India, however, the proportion is less than 5%, and in many countries it is less than 1%.

This disparity has prompted discussions about how to accelerate vaccinations, particularly in low-income countries. At the end of 2020, India and South Africa proposed temporarily waiving IP protections set out in the TRIPs Agreement “in relation to health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components, and their methods and means of manufacture for the prevention, treatment or containment of COVID-19”. The proposal is now being discussed by the TRIPs Council.

Some 100 other countries have since backed the proposal, including the United States. In a statement on 3 June, President Biden said: “My administration supports efforts to temporarily waive intellectual property rights for COVID-19 vaccines because, over time, we need more companies producing life-saving doses of proven vaccines that are shared equitably.” On 7 June, the WTO received a petition from AVAAZ with over 2.7 million signatures which calls, among other things, for the suspension of patent rights.
The EU and UK do not support the waiver. In a communication to the TRIPs Council, the EU said initiatives to promote vaccine distribution should focus on (1) trade facilitation and disciplines on export restrictions; (2) expansion of production; and (3) clarification and facilitation of compulsory licensing. And, in a paper published in May, the Max Planck Institute set out reasons why a waiver is unlikely to be a necessary or suitable response.

Why the waiver doesn’t make sense

Nick Bassil, Partner in the life science and chemistry team at Kilburn & Strode, believes that the waiver proposal is unlikely to address the desired aim of increasing vaccinations: “The IP issues only scratch the surface of the problem. The bigger issues are knowledge transfer, the availability of raw materials and the education and training of staff.” COVID-19 vaccines are complex and require raw materials and manufacturing equipment that are not easily available, and there are no short cuts: every dose must be safe and effective. This requires skilled scientists and rigorous processes. (Some of the promising leads for vaccines, as well as treatments and diagnostics, were discussed in our previous article “The worldwide pharma response to coronavirus”.)

Tom Leonard, also a Partner in the team, agrees: “Patents are only half the story. Biologics in particular are very complicated to make - growing organisms and living things is inherently unpredictable.” Moreover, he says, the proposal does not specify which IP rights are to be waived: “Any part of the process could be subject to IP rights, so how do you identify which patents to waive? Any manufacturer taking advantage of the waiver would need reassurance that they are not infringing any IP rights.”
The problem is compounded because the technology behind COVID-19 vaccines could be applied in many different areas. For example, research into mRNA, which has led to successful COVID-19 vaccines such as those produced by BioNTech/Pfizer and Moderna, has been underway for years, and is directed towards many different diseases, including malaria and cancer. Waiving patent rights could put research into these diseases at risk.

Tom says the key to ramping up vaccine distribution is cooperation – between governments and businesses. And, contrary to what those supporting a waiver claim, IP rights are likely to facilitate rather than obstruct such cooperation. As Kilburn & Strode Partner Rike Dekker in Maastricht says: “Patents are a tool for licensing. Together with a company’s know how, they provide the information and instructions, which allow businesses to cooperate. You can’t just write the recipe for a vaccine on the back of a drinks coaster!” (Or on the back of a Bierviltje as Rike puts it).

As an article in Nature makes clear, pharmaceutical companies including Sanofi, Merck, GSK, Novartis and the Serum Institute are collaborating to manufacture vaccines as fast as possible: up to 12 billion doses are expected to be made by the end of 2021. ''The waiver proposal assumes there is significant manufacturing capacity going to waste, but how much capacity is there?'' says Tom.

Another argument made in support of the waiver is that private companies should not benefit from public funding. While it’s true that governments and public research organisations have contributed to the development of COVID-19 vaccines, the substantial costs of development, manufacture and testing have generally been borne by the private sector, as shown by the example of Oxford University and AstraZeneca. Moreover, this reflects the history of innovation in many different fields, from nuclear energy to the internet, where public funding has laid a technological platform that the private sector has built on.

Rike, who previously worked in the pharmaceutical sector, says the predictability of the patent system enables companies to absorb the significant risks of development, particularly the costs of clinical trials, which often lead to drug candidates being rejected. “Would governments spend billions of dollars on research with no reward guaranteed? And would taxpayers support it if they did?” she asks. “I don’t think so. But the market exclusivity provided by a patent enables pharmaceutical companies to get a return on successful drugs, which can then be invested in further research.” For every COVID-19 vaccine successfully developed so far, dozens are still in trials – many of which will never make it to the market.

Don’t duck the debate

It’s that economic incentive that the waiver threatens to undermine, says Kilburn & Strode Chair Gwilym Roberts: “Patents are the solution, not the problem. They provide an incentive for research, and a platform for collaboration. The question should be: how do we encourage the right use of patents, the sharing of knowledge, and greater technological diversity? That’s the challenge we all face, and one of the lessons learned from the debate about access to HIV drugs in the 1990s.” This means, he says, exploring and explaining all aspects of the patent system – including provisions on compulsory licensing and research exemptions as well as the sharing of patent data through tools such as the EPO’s Fighting Coronavirus platform.

By contrast, waiving patents (and other IP rights) may seem like an easy solution. But complex problems rarely have easy solutions. More often than not, such rushed responses have unintended consequences. Says Nick Bassil: “The waiver proposal sends a message that we can overrule IP rights, and also gives politicians the idea that they can say what is and isn’t allowed to be patented. Should we have a waiver every time there’s a health emergency?” Agreeing to waive patents for COVID-19 vaccines begs the question: what about treatments for malaria, cancer or Alzheimer’s? What about technologies that address the climate emergency? Should IP rights be waived for these as well?

“The risk that this proposal will set a precedent is real,” says Gwilym. For that reason, adds Rike, everyone who works in IP should be concerned, and engage in the discussion – something the IP community has not always been good at. “There’s an obligation on patent attorneys to talk about this,” she says. “We should not be scared of the debate.”

Please contact your usual Kilburn & Strode advisor, or one of the authors if you would like to carry on the conversation.

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