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US Asks to Extend Talks For New WTO Patent Waiver Into 2023 (1)

Dec. 6, 2022, 11:57 AM

The US won’t agree to waive intellectual-property protections for Covid-19 treatments and tests this year -- aligning with developed-nation peers and delaying prospects for a World Trade Organization accord aimed at boosting global access to life-saving medicines.

On Tuesday, US Trade Representative Katherine Tai said the agency needs more information about the market dynamics for Covid diagnostics and therapeutics, and plans to ask the US International Trade Commission to launch an investigation into the matter.

“Real questions remain on a range of issues, and the additional time, coupled with information from the USITC, will help the world make a more informed decision,” Tai said in a news release.

Such investigations can take nine months to a year to complete. That means further delay for a deal that aims to water down patent rights for antiviral medications like Pfizer Inc.’s Paxlovid, Merck & Co.’s Molnupiravir, Gilead Sciences Inc.’s Remdesivir and Eli Lilly & Co.’s Baricitinib.

Looming Deadline

The debate over waiving IP rights for Covid-19 therapeutics and diagnostics has simmered since this summer, when WTO members approved a five-year decision that authorized the use of vaccine patent secrets without the right-holder’s consent.

Developing nations such as India, South Africa and Indonesia are pushing to extend the waiver to cover the production and supply of Covid-19 diagnostics and therapeutics. WTO negotiators left the door open to amend the existing waiver by Dec. 17 -- a deadline that will now be missed.

The WTO operates on the basis of consensus, which means any agreement must have the support of each of the organization’s 164 members.

The US surprised negotiators a year and a half ago, when it backed an agreement to water down key provisions of the WTO agreement on trade-related aspects of intellectual-property rights for vaccines, known by the acronym Trips. Since then, the US consistently opposed any effort to expand the waiver’s coverage to tests and treatments and spent the past five months consulting with domestic stakeholders about whether it should change course.

The global market for Covid-19 treatments was worth $10.2 billion in 2021 and is expected to reach $25.6 billion by 2030, according to a report published by InsightAce Analytic.

Pharma, Hill Backlash

The US joins nearly three dozen nations in seeking more time and information about a potential waiver extension -- including the European Union’s 27 members, the UK, Singapore, Switzerland, Japan and South Korea. These governments say they have not seen any concrete evidence that IP rules are hindering the global rollout of Covid-19 treatments and tests.

The pharmaceutical industry argues that a waiver is unnecessary because the current supply of Covid-19 therapeutics exceeds global demand and warned that any effort to waive IP rights for Covid-19 treatments would eliminate the incentives for companies to invest in life-saving drug development.

“A USITC investigation and report will further demonstrate the harmful consequences to the US economy, global health, innovation and future pandemic preparedness that would result from Trips waiver expansion,” according to a statement from the Pharmaceutical Research and Manufacturers of America.

Separately, US lawmakers on both sides of the aisle have warned the White House that an IP waiver for tests and treatments “will have devastating, long-reaching effects on access to treatments beyond those used for Covid-19.”

(Updates headline, adds details from USTR annoucement in paragraphs 2-3)

To contact the reporter on this story:
Bryce Baschuk in Geneva at bbaschuk2@bloomberg.net

To contact the editors responsible for this story:
Brendan Murray at brmurray@bloomberg.net

Ana Monteiro

© 2022 Bloomberg L.P. All rights reserved. Used with permission.