A Defining Moment: Standing on the moral side in COVID-19

UK Parliament has been considering whether to waive Intellectual Property (IP) patents for COVID-19 vaccines invented by pharmaceutical companies such as British-originated AstraZeneca. [1] This comes amidst pleas from many academics, charities, ministers, human rights movements, and COVID-19 survivors to combat the shortage of vaccines in numerous developing countries around the world such as Brazil and Kenya.

The UK considers a dilemma about IP patents for COVID-19 vaccines

The UK considers a dilemma about IP patents for COVID-19 vaccines

What has happened?

UK Parliament has been considering whether to waive Intellectual Property (IP) patents for COVID-19 vaccines invented by pharmaceutical companies such as British-originated AstraZeneca. [1] This comes amidst pleas from many academics, charities, ministers, human rights movements, and COVID-19 survivors to combat the shortage of vaccines in numerous developing countries around the world such as Brazil and Kenya. [2]

There was also a communication made from India and South Africa to the World Trade Organisation (WTO) in October 2020 requesting for a waiver of patents on vaccines to allow for increased production of vaccines worldwide. [3]

What Does This Mean?

If there is to be a waiver on IP patents for vaccines, this would mean that the inventor of a certain COVID-19 vaccine (e.g., AstraZeneca, Pfizer) will be unable to prevent other countries from manufacturing their vaccines. This arguably increases the global quantity of vaccines being distributed to various countries in the world, allowing for more people to be rapidly vaccinated in these pressing times.

What is the Impact on the Legal Sector?

It can be argued that preventing vaccines from being patented will prevent the monopolisation of the market, encouraging research and development into newer enhanced vaccines. The allowance for free competition amongst pharmaceutical companies allows for more COVID-19 vaccines to be invented. [4]

Nevertheless, waiving patents may be problematic as this compromises the huge investments that pharmaceutical companies and their investors make over the years to research and develop vaccines for mankind. While difficult to hear, the key stakeholders in these companies are involved primarily for the financial benefits of selling cutting edge treatment. Furthermore, there are alternatives available for countries that are facing a shortage of vaccines.

The TRIPS Agreement governs aspects of IP law relating to international trade and protects various IP rights including patents. TRIPS obliges States that have ratified the agreement to enforce patent protection.

Article 30 TRIPS provides for compulsory licensing for local production of a patented invention. [5] This states that parties to TRIPS can grant compulsory licensing for their own domestic market, permitting local manufacturers to produce and distribute patented vaccines without the patent-holder’s consent. [6] This has previously been done by Brazil in 2007 where it issued a compulsory license under TRIPS to allow for local generic production of an HIV drug patented by a foreign company from the USA, Merck. [7] However, licensing can only be done on grounds of addressing a public need, but this option is viable given that COVID-19 is a public health emergency of international concern. [8]

Article 31bis TRIPS allows a developed country to issue a compulsory license to export medicines to another developing country to support developing countries in receiving medicines. In 2007, Canada allowed for a Canadian pharmaceutical company to produce a generic version of an HIV drug (the patent was owned by another Canadian pharmaceutical company) and commercialise this in Rwanda. [9]

Nevertheless, there are drawbacks to these provisions under TRIPS. For Article 30, a patent-holder needs to be adequately compensated for the compulsory license issued, which is expected to be proportional to the economic benefit accruing from the patent. [10] Developing countries may also face trade retaliations, as shown in 2001 where the USA brought a claim against Brazil for producing US-patented HIV drugs. [11] In addition, the compulsory license holder is expected to provide their own technical capabilities for production. [12] However, in most developing countries, technical capacity and production expertise is either lacking or absent. This may result in the production of low-quality vaccines in developing countries which in turn poses a significant health risk to the populations of those countries.

As for Article 31bis, the importing country (developing country) will bear the compensation for the original patent holder and the profit margin of the compulsory licensee that is built into the purchase price of the vaccine. [13] In a way, Article 31bis appears to be a lucrative financial opportunity for developed countries as they only stand to gain from this deal given their production abilities, expertise, and resources. Conversely, developing countries are vulnerable and need to bear a financial burden despite being financially poorer. This results in a skewed outcome where rich countries become wealthier and poor countries become more impoverished.

Zoltan Novak of the law firm Taylor Wessing suggests that instead of waiving patents, it would be beneficial if governments and international organisations promoted licensing agreements between patent holders and drug manufacturers in developing countries. [14] Although this is beneficial, this may be an issue for lesser developed countries (e.g., Cambodia, Zambia) as they may not be able to bear the financial burden that comes with compulsory licensing.

Therefore, it is suggested for low-income, lesser developed countries to not turn to compulsory licensing, but instead continue to be supported through a worldwide fund like COVAX, which is a global initiative aimed at working with vaccine manufacturers to provide countries worldwide with equitable access to safe and effective vaccines once they are licensed and approved. [15]

 

The Legists Content Team

By Nickolaus Ng

Assessing Firms:

#TaylorWessing #CliffordChance #Fieldfisher #Bird&Bird #NortonRoseFullbright #OsborneClarke

References:

[1] Sharon Marris, ‘COVID-19 experts call on UK to back intellectual property waiver on coronavirus vaccines’ <https://news.sky.com/story/covid-19-experts-call-on-uk-to-back-intellectual-property-waiver-on-coronavirus-vaccines-12302294>

[2] Hannah Summers, ‘Britain in talks to waive covid vaccine patents to improve global access to jabs’ <https://www.theguardian.com/global-development/2021/may/20/britain-in-talks-to-waive-covid-vaccine-patents-to-improve-global-access-to-jabs>

[3] WAIVER FROM CERTAIN PROVISIONS OF THE TRIPS AGREEMENT FOR THE PREVENTION, CONTAINMENT AND TREATMENT OF COVID-19

[4] Danielle Gorman, ‘Protecting Single Color Trademarks in Fashion After Louboutin’ (2012)

[5] Part II — Standards concerning the availability, scope and use of Intellectual Property Rights, <https://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.htm>

[6] ibid

[7] Vera Zolotaryova , ‘Are We There Yet? Taking "TRIPS" to Brazil and Expanding Access to HIV/AIDS Medication’ 33(3) Brooklyn Journal of International Law SYMPOSIUM: Corporate Liability for Grave Breaches of International Law, Article 10

[8] n3

[9] Holger Hestermeyer, ‘Canadian-made drugs for Rwanda: The First Application of the WTO Waiver on Patents and Medicines’ <https://www.asil.org/insights/volume/11/issue/28/canadian-made-drugs-rwanda-first-application-wto-waiver-patents-and>

[10] n5

[11] Peter Capella, ‘Brazil wins HIV drug concession from US’ <https://www.theguardian.com/business/2001/jun/26/internationaleducationnews.medicalscience>

[12] n5

[13] ibid

[14] Taylor Wessing, ‘Will the patent waiver proposal really help third world countries?’

<https://www.taylorwessing.com/en/insights-and-events/insights/2021/05/will-the-patent-waiver-proposal-really-help-third-world-countries>

[15] WHO, ‘172 countries and multiple candidate vaccines engaged in COVID-19 vaccine Global Access Facility’ <https://www.who.int/news/item/24-08-2020-172-countries-and-multiple-candidate-vaccines-engaged-in-covid-19-vaccine-global-access-facility>

banner

Articles

  • Notice (8): Undefined variable: blog [APP/View/Blogs/detail.ctp, line 191]
    Notice (8): Trying to access array offset on value of type null [APP/View/Blogs/detail.ctp, line 191]
    Notice (8): Trying to access array offset on value of type null [APP/View/Blogs/detail.ctp, line 191]
    " alt="Travel Turmoil" width="460" height="205">

    Travel Turmoil

    Issues affecting the Legal Profession 28.06.2021

    Ryanair and Manchester Airports Group bring proceedings for judicial review over “traffic light” travel system

  • Notice (8): Undefined variable: blog [APP/View/Blogs/detail.ctp, line 191]
    Notice (8): Trying to access array offset on value of type null [APP/View/Blogs/detail.ctp, line 191]
    Notice (8): Trying to access array offset on value of type null [APP/View/Blogs/detail.ctp, line 191]
    " alt="Long-awaited ‘whiplash reforms’ came into force from 31 May 2021" width="460" height="205">

    Long-awaited ‘whiplash reforms’ came into force from 31 May 2021

    Issues affecting the Legal Profession 18.06.2021

    Reforms to the whiplash claims process for road traffic accidents have come into force from the 31 May 2021

  • Notice (8): Undefined variable: blog [APP/View/Blogs/detail.ctp, line 191]
    Notice (8): Trying to access array offset on value of type null [APP/View/Blogs/detail.ctp, line 191]