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U.S. Buying Into Covid Patent Waiver ‘Delusion,’ Critics Say

March 17, 2022, 7:07 PM

A global plan to ignore drugmaker intellectual property rights over Covid-19 vaccine production may have severe consequences on drug investments for pandemic purposes and beyond, according to critics of a pitch backed by the U.S. and other major players before the World Trade Organization.

Since late 2020, South Africa and India have pushed WTO nations to allow third-party manufacturers to replicate IP-protected Covid-19 vaccines and treatments for global use. The U.S. and European Union this week agreed to a trimmed down version of the plan, setting the stage for a WTO vote that industry groups and IP advocates say sets disastrous precedent.

“It signals that the United States is willing to play footsie with India and South Africa on this essential sort of lie, that pulling back on patent protections globally will somehow solve more problems than it creates, and that’s a delusion. And we’re buying into it,” said James Pooley, a former deputy director general at the World Intellectual Property Organization. “That itself will have a dampening effect on the willingness of companies to invest in technologies.”

Now, as the WTO weighs whether to vote to put the IP waiver into effect, critics caution that the plan could disrupt drugmakers’ ability to address this pandemic and future health crises while doing little to address the actual barriers to broader global vaccination.

“It’s a red herring, as focusing on IP distracts from the root problems,” said Jaci McDole, senior policy analyst at the Information Technology and Innovation Foundation.

In McDole’s view, production proved problematic for Covid vaccine access in the pandemic’s early days, an issue largely due to supply chain disruptions. The present, however, is a different story.

“An overwhelming number of doses have sat in warehouses until they expired because countries lack an adequate distribution system to get them to their citizens,” McDole said. “Until that problem is addressed, nothing will significantly impact global vaccine access.”

Minimal Impact

In October 2020, South Africa and India pitched the WTO on dropping enforcement of drugmakers’ patent, copyright, and industrial design information. In May 2021, the countries gave it another go, this time getting Kenya, Pakistan, Egypt and others to sign on to the proposal.

The most recent proposal comes as a more narrow version, policy experts say. And though it still marks a threat to drugmakers, some critics say it likely won’t make a meaningful difference in Covid infection rates.

“For this pandemic, the IP waiver would not much impact on vaccines,” said Thomas Cueni, director general at the International Federation of Pharmaceutical Manufacturers and Associations.

Skeptics of the new waiver note that it solely focuses on patents while ignoring trade secrets, or the know-how many say is crucial to developing Covid vaccines.

“Developing and developed country manufacturers have consistently said that waiving patents would not help the scale-up vaccine production. If you want to scale up manufacturing, you need know-how sharing, trained technicians, supply chains of hundreds of ingredients and components and none of that information can be found in the patents,” Cueni said.

Yet when it comes to potential harm for the pharmaceutical industry and the public it serves, critics note the proposal still has teeth.

Biotech companies, for example, might run into difficulty trying to convince those funding “that it would be worthwhile taking a risk to invest in developing pandemic specific technologies,” Cueni said. In the case of drugmakers working to address Covid, “the financial risks associated with the rapid scale up were considerable.”

“It meant running innovation development and clinical trials in parallel to investing in manufacturing capacity before companies knew if the vaccine would be successful,” Cueni said. With a waiver, “biopharmaceutical companies, especially those who tried and failed to come up with a vaccine for this pandemic, they would think twice.”

Displeased and Disheartened

While the drug industry and advocates may balk at the idea of a waiver, the plan has drawn considerable support over the course of the pandemic.

The pro-waiver camp, however, is also displeased with the agreement, claiming it falls short of a meaningful shift to the pandemic’s state, particularly as it waives protections on vaccines but not other Covid treatments and tests.

“Vaccines are not the only tool in the fight against Covid-19. To save as many lives as possible, an IP waiver would include tests and treatments,” said Priti Krishtel, co-founder of the Initiative for Medicines, Access, and Knowledge. “It is disheartening to see this compromise limits the scope of the waiver when lives could be saved right now with expanded access to treatment.”

Should the plan be adopted, that could change.

According to the tentative plan, WTO members will decide whether to extend the waiver to “cover the production and distribution of COVID-19 diagnostics and therapeutics” within six months of an agreement.

McDole, however, noted that “like the vaccine manufacturers, Gilead and other therapeutic manufacturers are continuously entering into voluntary licenses to increase production and access” for Covid treatments.

The waiver, particularly from the U.S. point of view, is “the worst of both worlds,” Pooley said.

“It doesn’t solve the actual problems of vaccine availability,” and “it reinforces the idea that whenever we have some sort of global issue, let’s look at ways in which the IP system can be seen as a barrier,” he said.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Fawn Johnson at fjohnson@bloombergindustry.com