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Patent Protection and Access to Covid-19 Medical Products
in Developing CountriesΩ
Sudip Chaudhuri
Professor (Retired), Indian Institute of Management Calcutta
Email: sudip1953@gmail.com
June, 2021
Abstract:
Several new vaccines that have been developed for Covid-19 are patent protected. The
patentees control the production, supply and pricing of these vaccines. Most people in low-
income countries have been unable to access the vaccines. India and South Africa supported
by a large number of developing countries have submitted a proposal to the TRIPS Council of
the WTO requesting a temporary waiver to eliminate patent and other intellectual property
barriers for the development, production and supply of all COVID-19 medical products. Nine
months have passed since the proposal was first made in October 2020 but still no decision
could be taken because of the opposition from developed countries. The disagreements
essentially revolve around four issues: whether suspension of patent rights will act as a
disincentive for the development of new medical products; whether patented products can be
manufactured in the absence of manufacturing capacities; whether voluntary initiatives are better
than a patent waiver; and whether a waiver is necessary in view of compulsory licensing and
other measures which TRIPS permits. The paper briefly reviews these issues and also provides
some suggestions about what developing countries can do to make Covid-19 medical products
affordable and accessible.
Key words: Covid-19, vaccines, patents, TRIPS, R&D incentive, compulsory licensing,
voluntary licensing, manufacturing capacity.
ΩThe edited version of the paper written in late June 2021, is proposed to be published as a chapter in
the book, “The Impact of COVID-19 on India and the Global Order - A Multidisciplinary Approach",
edited by Mousumi Dutta, Zakir Husain and Anup Sinha.
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I: Introduction
It was clear right from the beginning of the Covid-19 pandemic that measures such as lockdown
may help to contain the pandemic to some extent, but it will be difficult to properly control it
without effective vaccines and other medical products for preventive and curative purposes.
Development of new medical products and ensuring its access is of critical importance to
combat the pandemic. But if new medical products developed are patented, then the patentees
will have the right to prevent others from entering the market (till the patents expire). This may
result in supply shortages and high prices. Together with the need for developing new products,
the problem of access under product patent protection also attracted wide attention.
Usually it takes years of R&D to develop a vaccine. But in the case of COVID-19, this has
been compressed into less than a year since the World Health Organization (WHO) declared
the coronavirus disease to be a pandemic on 11 March, 2020. Several vaccines have been
developed and are in use in different parts of the world including those developed by Pfizer-
BioNTech, Moderna, Astra-Zeneca/Oxford, Johnson & Johnson, Gamaleya (Sputnik V),
Sinovac and Bharat Biotech (Covaxin).
But the access has been grossly unequal. Relevant medical products for Covid-19 include
diagnostics (such as testing kits), equipment (such as ventilator valves, N95 masks), treatments
(for example medicines such as Remdesivir) and most importantly, vaccines. As South Africa’s
Statement in the TRIPS Council meeting of the World Trade Organization (WTO) reveals, the
US, the UK and the EU accounted for about 50% of the vaccines administered globally as on
22 February, 2021. More than 130 countries did not receive even a single dose.1 The situation
has improved since then. But huge inequalities remain. The share of people who received at
least one dose of COVID-19 vaccine is 63.56% in the UK, 53.11% in the US and 47.76% in
the EU. The corresponding figure for people in low-income countries is only 0.9% as on 21
June, 2021.2
As apprehended, various COVID-19 medical products are patent protected including some on
the technologies used for the three widely used vaccines developed by Pfizer-BioNTech,
Moderna and Astra-Zeneca/Oxford (MSF, 2020a). These organizations control the production,
supply and pricing of these vaccines. And most people in low-income countries have been
unable to access the vaccines as mentioned above. This is reminiscent of the situation during
the HIV/AIDS pandemic when despite the development of antiretrovirals drugs (ARVs),
people were dying in developing countries unable to access the patented ARVs. After Indian
generic companies started supplying the ARVs, prices fell dramatically resulting in a
remarkable improvement in access to ARVs. India could do so because those ARVs were not
patented in India. The situation is different now. In line with WTO’s Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS), India has re-introduced product
patents in pharmaceuticals in 2005. India is manufacturing indigenously developed Covaxin
and Covishield (under licence from AstraZeneca/Oxford though with some restrictions as
discussed below). But India or other developing countries such as China or Cuba cannot
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manufacture and sell Pfizer-BioNTech, Moderna and other patented vaccines unless permitted
to do so.
Though it is mandatory for all WTO member countries to recognize product patents, TRIPS
provides for exceptions and exemptions depending on circumstances. TRIPS permits generic
production of patented products under certain conditions. India and South Africa have asked for
a waiver for patent and other intellectual property (IP) for Covid-19 medical products. Can
suspension of patent rights improve access to vaccines and other medical products? In the light
of this proposal, the basic objective of this paper is to re-visit for COVID-19, the old debate on
patent protection and access.
II: The Patent Waiver Proposal
On 2 October, 2020, India and South Africa submitted a joint proposal to the TRIPS Council
requesting a waiver so that WTO member countries are not required to implement, apply and
enforce patents (and other intellectual property - copyright, industrial designs and protection
of undisclosed information) relating to prevention, containment or treatment for COVID-19.3
The proposal was for a temporary waiver “until widespread vaccination is in place globally,
and the majority of the world's population has developed immunity”. A revised proposal was
submitted on 21 May, 2021 by India, South Africa and several other developing countries.4 It
addresses two concerns that the October, 2020 proposal was too broad and did not specify a
time limit. The May 2021 proposal clarifies that the temporary waiver is “…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 May 2021
proposal also specifies that the waiver will be in force for at least three years from the date of
the decision. While the objective of the waiver is to eliminate all IP barriers for the
development, production and supply of all COVID-19 medical products, in this paper we will
primarily focus on patents.
Article IX 3 and 4 of the Marrakesh Agreement Establishing WTO permits such a waiver in
exceptional circumstances provided a justification is provided. And WTO did grant waivers in
the past, for example the waiver related to Paragraph 6 of the Doha Declaration. (This permitted
countries to export generic medicines under compulsory licences to other countries which
lacked the manufacturing capacity to produce the products themselves). The Ministerial
Conference or the General Council decides whether to grant the waiver based on deliberations
at and recommendations from the TRIPS Council (MSF, 2020b).
Since October 2020 the TRIPS Council has deliberated on the waiver proposal in several
meetings. The vast majority of more than two-thirds of the WTO members have supported the
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call for the waiver but a handful of developed countries - the EU, the UK, Japan, Canada,
Switzerland, Norway, Australia and initially the US opposed it and no decision could be taken.5
These countries opposing the waiver to eliminate patent barriers are the ones which have
grabbed much of the vaccines supply. The high-income countries including the UK, the US
and the EU have secured vaccines which would cover 200% of their populations.6 But on 5
May, 2021 the US has expressed support to the waiver proposal and has agreed to participate
in text-based negotiations. The US announcement however, mentions only vaccines and not
the other COVOD-19 products. But the EU continues to oppose it and in fact in a
Communication to the TRIPS Council on 7 June, 2021 has argued for use of compulsory
licensing and other TRIPS flexibilities rather than waiving of IP. The Chair of the TRIPS
Council has informed the countries that text-based negotiations will begin but has cautioned
that “we should not think that substantial differences have evaporated”.7 No decision has yet
been taken on the waiver proposal as on late June, 2021 when this paper was written.
The disagreements essentially revolve around four issues: whether suspension of patent rights
will act as a disincentive for the development of new medical products; whether patented
products can be manufactured in the absence of manufacturing capacities; whether voluntary
initiatives are better than a patent waiver; and whether a waiver is necessary in view of
compulsory licensing and other measures which TRIPS permits. We will briefly review these
issues in the next four sections. In the light of this review, we will provide some suggestions in
the last section about what developing countries can do to make Covid-19 medical products
affordable and accessible.
III: Patent Protection and Incentive for Innovation for Covid-19
A basic objection to suspending patent and other IP protection for COVID-19 products is that
it “would jeopardize future medical innovation, making us more vulnerable to other diseases,”
to quote the Director General of the International Federation of Pharmaceutical
Manufacturers and Associations, which represents the MNCs.8 Development of new
medicines is costly and risky. Without profits from selling patented products, MNCs such as
Pfizer and AstraZeneca may not find it worthwhile to spend on R&D for new drugs. But the
proposal is only for a temporary suspension of IP rights related to only COVID-19 medical
products. It is not applicable to other products and hence the incentive for the MNCs to do
R&D for other diseases remains intact. Moreover, the new vaccines which have been developed
for COVID-19 are not the result of the efforts and investments by the MNCs alone. The fact
that vaccines have been developed in such a short period of time is the result of huge public
funding and global collaboration among research institutions, universities and industry.
Perhaps the apprehension is that if the Covid-19 patent waiver is granted, then similar demands
will be made in future for other diseases as well and the incentive effect of patent protection
will be blunted. The principal economic rationale for granting patents is indeed that it will
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stimulate R&D for innovation. This is the expected positive effect. But when patent rights
prevent others from producing and marketing the product as in the case of Covid-19, fewer
people benefit from it. This is the negative effect. The net benefits of the patent system to
society have remained controversial over the years. What is recognised in patent laws around
the world and also emphasized in the TRIPS agreement is that the protection of the rights of
the patentees is not the sole concern of patent laws. It is important to balance the rights and the
obligations. Patent rights can be constrained in broader public interest as acknowledged also
by the WTO Secretariat in a Note issued on 15 October, 2020 after the India/South Africa
proposal was submitted (WTO, 2020). In the extraordinary public health crisis created by the
Covid-19 pandemic, ensuring access to affordable medical products should be accorded greater
priority than patent rights.
IV: Patent Protection and Manufacturing Capacity
Another important argument that has been advanced in this context is that the main constraint
is not IP but manufacturing capacity. Even if the waiver is granted, developing countries will
not be able to take advantage of it because they lack capacities and capabilities to manufacture
the new products.
It is of course true that patent is not the only barrier. But the basic premise of the waiver
proposal is that there are unused and underutilized capacities and that some firms in some
developing countries at least can initiate steps to develop and manufacture if not all the patented
products, at least some of them.9 This will permit a larger number of people to access vaccines
and other products. But if new manufacturers cannot manufacture Covid-19 products protected
by IP, then as the India Representative pointed out in the TRIPS Council meeting, commercial
interests of the exiting IP holders will not suffer.10 Hence why make such a hue and cry about
the negative impact of patent waiver on innovation? The monopoly markets can continue to
provide the necessary incentives for MNCs.
Actually, vested interests in developed countries have traditionally resisted attempts to eliminate
patent barriers in developing countries citing manufacturing deficiencies. In the debate that
preceded the abolition of product patent protection in pharmaceuticals in 1972 in India, doubts
were expressed that India will not be able to take advantage of it. The Indian generic industry
proved them wrong. To give an example from vaccines, an Indian firm Shantha Biotechnics was
successful in developing complex recombinant Hepatitis B vaccines in the 1990s at a much lower
cost despite the scepticism of MNCs such as Merck and GSK which dominated the market at
that time (Krishtel and Malpani, 2021). The tendency to downplay the negative role of patent
protection has continued during discussions on Covid-19 medical products.
The fact that no other firm has manufactured the vaccine despite the announcement of Moderna
that it will not exercise its patent rights, is used as an example that patent protection is not a
barrier. But the mRNA technology used by Moderna for manufacturing its vaccine is protected
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by hundreds of patents including pending applications (Correa, 2021). And Moderna which
uses these patents is reluctant to licence out the product (Rowland, Rauhala and Berger, 2021).
Therefore, any of these patentees can file a suit alleging infringement against any non-patentee
attempting to manufacture the vaccine. An environment where there are no patent barriers
whatsoever and no threat of litigation, is more conducive for experimentation and development
of products.
Elimination of the patent barrier is necessary. But this is not sufficient. What played a significant
role in India, for example was also supportive industrial policies.11 It is also important to take
proactive steps to enhance manufacturing capabilities and capacities. The focus of this paper is
on issues related to patent protection.
V: Voluntary Initiatives
Voluntary initiatives have been advocated not only by the MNCs but by others as well. It is
contended that voluntary licensing offers a better solution than patent waiver or other
mandatory measures such as compulsory licensing. The point is not that voluntary initiatives
are not necessary or not desirable. If voluntary licensing works, it is of course a better option.
In the case of voluntary licensing, the patentees may provide technological assistance. If patent
rights are suspended, it is likely that patentees will resist such attempts and will not want to
share technologies. Particularly when generic companies may not have the necessary
manufacturing capabilities, this can be a critical bottleneck. The question really is whether
voluntary licensing is working and helping to realize the desired goal of making products
accessible. If not, rather than depending only on voluntary measures, it is necessary to explore
other options. This may involve not only non-voluntary measures such as compulsory licensing
but also taking steps to enhance manufacturing capabilities and capacities to reduce the
dependence on patentees. In this Section we will try to analyse the experience with voluntary
initiatives in recent years and draw lessons from it.
COVID-19 Technology Access Pool: The initial response to facilitate universal access to
Covid-19 medical products was to set up a voluntary patent pool. Within a fortnight of WHO
declaring the disease to be a pandemic, Costa Rica requested WHO on 23 March, 2020 to create
a voluntary pooling mechanism for “rights to technologies that are useful for the detection,
prevention, control and treatment of the COVID-19 pandemic”. The idea was that patented
products and other relevant technology for COVID-19 would be placed voluntarily in a pool
and be available for licensing in every country to make these affordable and accessible.12
Despite some dissenting voices about the effectiveness of voluntary mechanisms without
binding commitments, the Costa Rica proposal evoked huge interest and optimism.
In early April, 2020, the WHO Director General responded by welcoming the idea and in late
May, 2020 the COVID-19 Technology Access Pool (C-TAP) was launched. The WHO DG
and the President of Costa Rica issued a Solidarity Call “to key stakeholders and the global
community to voluntarily pool knowledge, intellectual property and data necessary for
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COVID-19.” The holders of IP were specifically called upon to provide voluntarily licences on
non-exclusive and global basis.13
The Call has been endorsed by 40 other WHO members states including some developed
countries such as Belgium, Norway and the Netherlands. This however does not include
developed countries such as the US, the UK, France and Germany and developing countries
such as China and India. The MNCs, the patent holders have opposed the move and Pfizer,
Moderna and AstraZeneca and other vaccine manufacturers in developed countries have
refused to join C-TAP.14 Thus, the voluntary pool has remained inactive and non-operational.
And it remained so because patentees did not want to join it and WHO or others could not
induce them or force them to do so. If the governments who have been funding the development
of COVID-19 medical products had insisted that the pharmaceutical companies should
mandatorily place the patents in a pool, then it could have worked. But none of the developed
country government (or charitable donor) has announced or indicated that R&D funding will
be conditional.
If C-TAP had succeeded, it may not have been necessary to ask for a patent waiver. It is
important to note that the patent waiver proposal was made in October, 2020 several months
after the creation of C-TAP.
Medicines Patent Pool: The example of MPP is often used to tout voluntary licensing as a
solution to the Covid-19 medical products access problem. In fact, C-TAP was influenced by
the MPP model. But what has been the experience with MPP?
The initial focus of MPP was on ARVs. The number of people receiving antiretroviral
treatment increased from 8 million in 2010 to 21.7 million in 2017.15 Surely MPP has
contributed to improving access to ARVs. This has been a major achievement. But this has
been possible because the MNCs already pursuing voluntary licences were keen to join MPP
in their own interests.16
MPP extended its activity to include hepatitis C and tuberculosis medicines in 2015. But here,
where the background and the context are different and where the MNCs are not that keen to
join MPP, the success has been much less. In 2018 MPP decided to expand its activities to
other life-saving medicines such as cancer and diabetes and in 2020 to Covid-19 medical
products. But hardly any progress has been made in these sectors.
Even in ARVs where the performance is better, MPP could not prevail upon the MNCs to agree
to grant of voluntary licence to all the low income and middle-income countries. The MNCs
continued to impose restrictions on the countries eligible for licensing. In the countries not
covered under licensing through MPP, prices remained high and unaffordable. So, even in
products under MPP, some countries are required to use compulsory licence or to take other
measures to make medicines more affordable.
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Thus, the experience of MPP shows that voluntary licensing cannot be considered to be a
substitute for mandatory measures.
Voluntary licensing in Covid-19 pandemic: Among the three major developers of COVID-19
vaccines, as of now only AstraZeneca has signed licensing agreements with technology transfer
for its product. The vaccine licensing initiative of AstraZeneca is commendable. In India, the
vaccine is manufactured as Covishield by the Serum Institute of India. Covishield and the
indigenously developed Covaxin have contributed significantly to the vaccination drive in
India. But AstraZeneca/Oxford voluntary licences are not non-exclusive licences and not
without conditions. In India, Serum Institute is not free to decide where to sell. It is prevented
from supplying to more profitable markets in upper middle income and high-income countries
(MSF, 2020a). There are also issues with pricing. Serum Institute of India is reported to be
have sold the vaccine to South Africa and Uganda at 2-3 times the price of the vaccine in
Europe.17 Licences have been given to only selected firms in selected countries - Argentina,
Brazil, China, India, and Indonesia. Licences have not been offered to other firms in these
countries or in other countries such as Cuba, Thailand and Bangladesh which have vaccine
manufacturing capabilities. Some firms in some countries, for example in Bangladesh are keen
to manufacture vaccines under licences but are unable to do so in the absence of any positive
response from the patentees (Gebrekidan and Apuzzo, 2021; Rowland, Rauhala and Berger,
2021).
The main lesson that can be drawn from the experience with voluntary licensing will not
surprise its critics – that it is voluntary and hence it depends on what the patentees decide to
do. Some firms in some products have given voluntary licences. Others have not. Even those
which have done so, have not offered voluntary licences without any conditions attached.
Thus, voluntary licensing cannot be relied upon as a general solution in a public health crisis.
In a pandemic such as COVID-19, the fundamental issue of access to medical products cannot
be left to the discretion of the patentees.
COVAX: Another initiative which has raised hopes that people in developing countries will be
able to access vaccines is COVAX. It is the vaccine pillar of the Access to COVID-19 Tools
(ACT) Accelerator - a global collaboration to accelerate development, production, and
equitable access to COVID-19 tests, treatments, and vaccines. (The other pillars deal with
diagnostics, treatment and health system strengthening). It is coordinated by GAVI, the
Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and the WHO
and the target is to procure and distribute equitably between developed and developing
countries two billion doses of vaccines by the end of 2021.18
COVAX is a very promising initiative. It is funded by donations from high income countries
and 92 lower-income member countries are not required to pay for the vaccines supplied.
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Unlike C-TAP supported by only 41 countries, 190 countries have joined COVAX. This
includes major developed countries which did not endorse C-TAP.
But the performance has lagged far behind the targets. It has succeeded in procuring far less
than the two billion doses planned. While funding is one reason, the bigger problem is the
vaccine grab by developed countries. These countries have directly negotiated with vaccine
manufacturers and procured or reserved for themselves vaccine supplies. COVAX does not
forbid countries to directly purchase from manufacturers and the latter find it more convenient
and profitable to directly deal with the former. This has resulted in huge inequality in vaccines
access among countries as mentioned above. Developing countries which are unable to directly
purchase from manufacturers have suffered the most. In contrast to the aim of free distribution
of vaccines, many in the lower income countries have received not a single dose.19
More funding has been promised but larger funding will not eliminate the structural problem
of inability of developing countries to compete against developed countries to get supplies from
limited number of manufacturers.20 What is critical is to enlarge the manufacturing base. It is
important to take steps to eliminate patent and other barriers. Larger production by a larger
number manufacturers can actually make COVAX more effective. The dependence on MNCs
and donors will also reduce.
Even if COVAX functions properly as planned, it can at best distribute two billion doses of
vaccines for one billion people by the end of 2021. This is far below the need of vaccinating
7.7 billion people in the world. Thus, COVAX funded through donations is insufficient to
ensure equitable access to vaccines.21
VI: Compulsory Licensing and Other Options within TRIPS
Finally, we consider the argument that the patent waiver is not necessary because TRIPS
provides WTO members with several options to intervene when necessary to realize the
objectives of providing access to vaccines.
While TRIPS has made it obligatory for WTO member countries to recognize product patent
protection in all fields including pharmaceuticals, the protection of the rights of patentees is
not the sole concern of TRIPS as we have mentioned above. Countries enjoy some flexibilities
to fine tune the protection to ensure that social and economic goals are also taken into account.
Article 7 of TRIPS on “Objectives” and Article 8 on “Principles” specifically speak of the
mutual advantage of both producers and users of technological knowledge, stress the need for
a balance of rights and obligations and empower the member countries to take steps to protect
public health and prevent abuse of patent (and other intellectual property) rights.
To avoid any ambiguity, it was clarified and confirmed by the Doha Declaration on TRIPS and
Public Health (2001) that the TRIPS flexibilities can in fact be interpreted and implemented to
protect public health and in particular to promote access to medicines.
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Article 31 of TRIPS permits compulsory licensing and government use of a patent without the
consent of the patentee under certain conditions on payment of royalties to the patentees. This
is one of the most important flexibilities that countries can use in COVID-19.22 Another option
which countries have in the Covid-19 crisis is to use the national security exception under
Article 73 of TRIPS.
Compulsory licensing: As different studies and reports have highlighted, in a product patent
regime, a proper compulsory licensing system is of vital importance to deal with the negative
implications of product patent protection. If generic companies are given licences to produce a
patented drug, not only supplies will be enhanced. Competition among manufacturers would
drive down prices, but the royalty paid to the innovators would continue to provide funds and
the incentive for R&D. (WHO and WTO, 2002, p. 99) points out that compulsory licensing is
one of the ways in which TRIPS attempts to strike a balance between promoting access to
existing drugs and promoting R&D into new drugs.
But compulsory licensing is not a substitute for waiving of patents. There are several structural
and practical limitations of using compulsory licensing.
To grant compulsory licences, certain conditions listed in Article 31 need to be satisfied. These
include: (i) that authorization of such use will have to be considered on its individual merits,
(ii) that before permitting such use (except in such cases as situations of national emergencies,
extreme urgency, public non-commercial use), the proposed user will have to make efforts over
a reasonable period of time to get a voluntary licence on reasonable commercial terms, (iii) that
the legal validity of the compulsory licensing decision and the remuneration will be subject to
judicial or other independent review. These conditions need to be satisfied for each application
for each product in each country.
Hence, the patent waiver is a better option because the country-by-country and case-by case
consideration of compulsory licensing applications can be avoided. In a pandemic, the speed
with which medical products are provided is critical. And the patent waiver is a faster and more
convenient solution.
For countries with no manufacturing capacities, compulsory licensing is practically
unworkable. Article 31 as originally drafted imposed the condition that compulsory licensing
can be used predominantly for supply in the domestic market. In other words, a compulsory
licence could not be granted in countries with manufacturing capacities exclusively or mainly
to export to countries with no manufacturing capacities. Thus, compulsory licensing provisions
of TRIPS could not be used by a country with no manufacturing capacity to import drugs to
take care of her health needs. Initially through a temporary waiver and later permanently
incorporated in the TRIPS agreement through Article 31bis, this lacuna has been corrected and
now compulsory licences can be granted for exports to countries which are essentially
dependent on imports. But several onerous and time-consuming conditions have been imposed
which make it almost impossible to use this flexibility. Not surprisingly only one such
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compulsory licence has been granted till now for exporting an antiretroviral drug from Canada
to Rwanda. Conditions which need to be satisfied include the following: compulsory licences
need to be granted both in the importing and the exporting country. The importing country
needs to inform the TRIPS Council specifying the names and the quantities of the product(s)
needed; establish that it has insufficient or no manufacturing capacities. The exporting country
also needs to inform the TRIPS Council the quantities being supplied to each destination and
the distinguishing features of the product(s). Products are required to be clearly identified
through specific labelling or marking and through special packaging and/or special
colouring/shaping of the products.23
In the case of the patent waiver, all these problems can be avoided and countries with
manufacturing capacities can export and countries with no manufacturing capacities can import
without much difficulty.
The patent waiver is a better option and developing countries should continue to pursue it in
the TRIPS Council. But simultaneously, it is important to use the existing compulsory licensing
provisions. Even countries with manufacturing capacities have been finding it difficult to do
so. 40 countries have issued 74 compulsory licences till April, 2021 and this may appear
impressive.24 But what is striking is that among the major pharmaceutical manufacturing
countries, Brazil and India have issued one licence each and China only two licences. Again,
out of the 74 compulsory licences executed, 58 are for HIV. Out of the remaining 16, 8 licences
were issued in Ecuador and Thailand (4 each). And the remaining 8 licences were issued in
only 6 countries – India, Italy (2 licences), Malaysia, Russia and Taiwan. In the COVID-19
pandemic, only three licences have been issued in Hungary, Israel and Russia. But in Israel, it
is for importing antiretroviral medicine, lopinavir/ritonavir for experimental use for treating
COVID-19 patients. And in Hungary and Russia, it is for the COVID-19 medicine, Remdesivir,
which no longer is considered to be very effective. No compulsory licence has been issued for
COVID-19 vaccines. (WTO, 2020, p. 9; MSF, 2021, p. 5).
Thus, the TRIPS flexibility of compulsory licensing has remained practically unused even by
countries which have manufacturing capacities except for HIV in some countries. A major
reason is the undue political and economic pressure exerted by some developed countries on
developing countries to forego the use of TRIPS flexibilities (UN High Level Panel on Access
to Medicines, 2016, p. 25). In fact, just before the outbreak of the pandemic, the EU issued a
report and in the middle of the pandemic, the US issued the Special 301 Report condemning a
number of developing countries including India, Indonesia and Turkey for their laws on
compulsory licences.25 In the TRIPS Council meetings, developed countries opposing the
patent waiver highlight the use of TRIPS flexibilities. In the formal intervention in the TRIPS
Council meeting on 10 December, 2020, South Africa asked whether the EU and the US would
henceforth in actual practice not oppose use of compulsory licensing by developing countries.26
Developed countries are yet to make any such commitment.
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In the TRIPS Council meeting on 16 October, 2020, another problem with the use of
compulsory licensing was raised. South Africa stated that some countries suffer from
limitations with respect to their national laws and lack of practical and institutional capacity
required to utilize TRIPS flexibilities during the pandemic.27 But for countries such as India
the problem is not of lack of legal or institutional capacity. The problem is with the willingness
to put in place an easy-to-use compulsory licensing system. Despite the conditions imposed by
TRIPS, it is possible to introduce a simpler compulsory licensing system. But in India the
process is excessively legalistic, costly, time consuming and uncertain.28 The result is that
despite having one of the strongest generic sectors in the world, only three applications have
been made by generic firms in India and only one has been granted.
Compulsory licensing pre-supposes that developing countries have the manufacturing capacity.
To make full use of compulsory licensing what is required is not only simplification of
procedures but also enhancing manufacturing capacities and capabilities.
Security exception: Under Article 73 (Security Exceptions) of TRIPS, any WTO member is
permitted to take any action “for the protection of its essential security interests” in an
“emergency of international relations.” Carlos Correa has advocated the use of the Security
Exception in the COVID-19 pandemic to suspend obligations relating to granting and
enforcement of intellectual property rights.29 Though not very common, there is a history of
countries using security exceptions to justify non-compliance of rules otherwise applicable.
But using this exception has not been smooth and objections from other countries had to be
adjudicated by the WTO Dispute Settlement Body. The security exception has never been used
in a public health emergency. And the issue is whether the COVID-19 pandemic satisfies
Article 73 conditions. Reviewing the legal rules and jurisprudence, Abbott (2020) has
concluded that the COVID-19 pandemic does constitute an emergency in international relations
and suspension of IPRs may be considered as necessary to protect the essential security
interests.
The advantage of using the security exception is that no further authorization is required from
WTO. Despite the potential and the promise, no country has yet tried to invoke it.
VII: Conclusions and Discussion
The basic problem is that the MNCs and the developed countries have been dictating terms and
developing countries have not been able to resist this and act without or against their consent.
Compulsory licensing is permitted by TRIPS. One of the reasons why it has remained
practically unused is that developing countries have been subjected to undue political
and economic pressure to forego the use of TRIPS flexibilities.
TRIPS was amended to permit compulsory licences for exports of products from
countries with manufacturing capacities to those which lack it. But developed countries
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succeeded in putting several onerous conditions which have made it practically
unworkable.
Developed countries have opposed and prevented in the last nine months any decision
at the TRIPS Council on the patent waiver proposal. In a pandemic like Covid-19, time
is critical. In the absence of a consensus, the decision can be taken by voting.
Developing countries have the required two-thirds majority for the purpose. But they
have not been able to take the proposal to the General Council for approval by voting.
It is not certain how long it will take to arrive at a decision and what form it will take.
Developing countries should continue to pursue the proposal of patent waiver. But it is also
important for them to take other steps which are possible. Even after a year of the pandemic, a
large number of people in developing countries have received not even a single dose of
vaccines. The pandemic has resulted in more than 3.8 million deaths with more than 179
million confirmed cases.30
Developing countries should pursue both compulsory licensing and security exception
permitted under TRIPS. Simultaneously, the pandemic should be used as an opportunity to
develop manufacturing capabilities and capabilities.
Compulsory licensing: Two important reasons why the potentially powerful TRIPS flexibility
of compulsory licensing has not been adequately used are political and economic pressure from
developed countries and lack of preparedness on the part of developing countries.
Compulsory licensing procedures can be simplified. Interestingly some developed countries -
Canada and Germany have carried out amendments to Acts to facilitate grant of compulsory and
government use licences in situations of public health emergencies such as Covid-19. Hungary
issued a special legal order to take extraordinary measures and grant special public health
emergency compulsory licensing.31 In the case of compulsory licensing in a national emergency
or other circumstances of extreme urgency, TRIPS permits waiving of certain conditions such
as prior negotiation for voluntary licences. The Doha Declaration affirms that WTO members
have the right to determine what constitutes a national emergency or other circumstances of
extreme urgency and have the freedom to determine the grounds for compulsory licences.
There is no reason why developing countries cannot take special and urgent measures in the
extraordinary situation arising out of COVID-19 pandemic. It is a question of political will and
priority. Significantly enough while India is playing a leading role in the deliberations at WTO
for IP waiver, India is not keen on using compulsory licensing at home.32
Security exception: Not as a substitute for compulsory licensing but simultaneously, the
developing countries can pursue the security exception. The effect is similar to patent waiver –
patent rights can be suspended. This is critical for those countries which lack adequate
manufacturing capacities and find it very difficult to use compulsory licensing. For countries
such as India which has incorporated the security exception in its patent law (Syed, 2020), it is a
Page 14 of 19
question of applying it. Others need to take legal and administrative steps to invoke the security
exception. If the political will is there, it should not be difficult to amend the acts or to take other
necessary steps in a pandemic.
Unlike the patent waiver, using security exception does not require any further approval of
TRIPS/General Council. The problem is that developed countries may oppose it and take the
matter to the WTO dispute settlement body. But the developing countries will have the
opportunity to defend their action. The onus will be on developed countries to argue for the
rejection of security exception unlike in the case of patent waiver where the onus is on the
developing countries to argue for its approval.
Industrial and technology polices: The focus of this paper has been on issues related to patent
protection. But developing countries also face manufacturing barriers. Where the necessary
capabilities are absent, developing countries will not be able to manufacture the patented products
even if patent barriers are eliminated. To ensure universal access to Covid-19 medical products,
it is important not only to eliminate patent barriers but also to take proactive steps to enhance
manufacturing capabilities and capacities. Since biologic products such as vaccines are more
complex large molecule products, these are more difficult to manufacture compared to the
traditional chemical-based drugs. Hence more focussed intervention is required. There are
pockets of manufacturing and innovation competencies and success stories in different
developing countries including in Bangladesh, Brazil, China, Cuba, India, Indonesia, South
Africa and Thailand. One major reason why developed countries are able to dictate terms is their
control over advanced technology. Through appropriate national industrial and technology
policies and collaboration among developing countries, the technology gap with developed
countries can be reduced. This will make them less dependent on developed countries and make
them better prepared to deal with Covid-19 like situations.
Page 15 of 19
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Notes
1 “South Africa’s intervention at the formal TRIPS Council meeting of 23 February 2021” accessed
from https://www.keionline.org/35453.
2 https://ourworldindata.org/covid-vaccinations, accessed on 24 June, 2021.
3 “Waiver from certain provisions of the TRIPS agreement for the prevention, containment and
treatment of covid-19: Communication from India and South Africa” 2 October, 2020 (IP/C/W/669),
Council for Trade-Related Aspects of Intellectual property Rights
((https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669.pdf&Open=True).
4 “Waiver from certain provisions of the trips agreement for the prevention, containment and
treatment of covid-19: Revised Decision Text”, 21 May, 2021 ((IP/C/W/669/Rev.1), Council for
Trade-Related Aspects of Intellectual property Rights
(https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669R1.pdf&Open=True).
5 “Strong support for TRIPS waiver amidst opposition by Big Pharma”, TWN Info Service on Health
Issues, 12 March, 2021 (https://www.twn.my/title2/health.info/2021/hi210306.htm).
6 The Report of the Independent Panel for Pandemic Preparedness & Response on Covid-19: Make it
the Last Pandemic, 2021 (https://theindependentpanel.org/wp-content/uploads/2021/05/COVID-19-
Make-it-the-Last-Pandemic_final.pdf), p. 41.
7 “Developing countries remain upbeat on TRIPS waiver negotiations”, TWN Info Service on WTO
and Trade Issues, 21 June 2021 (https://twn.my/title2/wto.info/2021/ti210612.htm).
8 Thomas Cueni, “The Risk in Suspending Vaccine Patent Rules”, New York Times, 10 December, 2020
(https://www.nytimes.com/2020/12/10/opinion/coronavirus-vaccine-patents.html).
9 For vaccines manufactured in different countries, see “KEI Notes on Vaccine Manufacturing
Capacity” (https://www.keionline.org/covid-19-vaccine-manufacturing-capacity), accessed 7 April,
2021.
10 “Two-thirds of WTO members issue call for a TRIPS waiver”, TWN Info Service on WTO and
Trade Issues, 25 February 2021
(https://www.twn.my/title2/wto.info/2021/ti210220.htm#:~:text=Geneva%2C%2024%20Feb%20(D.,
19%20pandemic%20by%20ram).
11 But since the 1990s, the government has withdrawn from much of what it did earlier (Chaudhuri, 2021,
Section III). As the Statement of 1 June, 2021 of the All India Peoples’ Science Network endorsed by
214 eminent scientists, academicians and doctors has pointed out, the huge public sector infrastructure
to manufacture vaccines has been neglected. But in the situation arising out of Covid-19, it is important
for the government to give priority to the revival of the public sector units so that the latter together
with the private sector may contribute to the production of vaccines
Page 18 of 19
(https://www.indianpsu.com/news/1033/urgently-expand-public-private-sector-production-to-meet-
vaccine-requirement).
12 See the Letter from the President and the Minister of Health of Costa Rica to WHO Director General
(https://www.keionline.org/wp-content/uploads/President-MoH-Costa-Rica-Dr-Tedros-
WHO24March2020.pdf).
13 See “Making the response to Covid-19 a public common good”
(https://www.who.int/initiatives/covid-19-technology-access-pool/solidarity-call-to-action).
14 The Chief Executive of Pfizer reportedly called the concept “nonsense” - see,
Rowland, Rauhala and Berger, 2021.
15 See MPP, 2018 Annual Report: Expanding Access to Public Health.
16 The discussion on MPP is based on Chaudhuri (2020), which provides a more detailed analysis on
the background and limitations of MPP.
17 See, E R Fletcher, “Patents ‘Not’ The Main Barrier To Equitable Vaccine Rollout – Two Leading
Vaccine Scientists & Pharma Execs At WHO Event”, COVID-19 Science, 8 March, 2021
(https://healthpolicy-watch.news/ip-not-the-main-barrier-to-equitable-vaccine-rollout-say-two-
leading-pharma-execs-at-who-press-conference/).
18 See https://www.gavi.org/vaccineswork/covax-explained.
19 For an assessment of COVAX, see Ghosh, 2021; Usher, 2020 and de Menezes, 2021.
20 See in this connection, MSF, 2020a.
21 See, “South Africa’s Intervention at the formal TRIPS Council meeting of 10 December 2020”,
accessed from https://www.keionline.org/34811.
22 Among the other common TRIPS flexibilities are Exemptions from grant of patents in certain cases
under Article 27(1) and Exceptions to exclusive rights in certain cases under Article 30. The three most
common exceptions are Early working (Bolar exception), Parallel imports and Research and
Experimental use.
23 See “Annex and Appendix to the TRIPS Agreement”
(https://www.wto.org/english/docs_e/legal_e/31bis_trips_annex_e.htm).
24 See the TRIPS Flexibilities Data Base maintained by Medicines Law and Policy
(http://tripsflexibilities.medicineslawandpolicy.org/), accessed on 3 April, 2021.
25 See, “WTO TRIPS Council (October 2020): South Africa issues clarion call urging support for TRIPS
waiver proposal”, (https://www.keionline.org/34235). Only one compulsory licence has been granted
in India. But if India which is a major generic manufacturing country starts giving more compulsory
licences, then it can have a major effect globally. The purpose of critical comments by developed
countries seems to be to preclude such possibilities.
Page 19 of 19
26 South Africa’s Statement, cited in endnote 21.
27 South Africa’s Statement, cited in endnote 25.
28 For a critique of India’s compulsory licensing system, see Chaudhuri, “Industry Response” in
Chaudhuri, Park and Gopakumar, 2010, pp. 29-30; 69-70.
29 See the Open letter dated 4 April, 2020 from Carlos Correa to WHO, WIPO and WTO
(https://www.southcentre.int/wp-content/uploads/2020/04/COVID-19-Open-Letter-REV.pdf);
webinar presentation by Carlos Correa, “The Covid-19 Pandemic: Intellectual Property Management
for Access to Diagnostics, Medicines and Vaccines”, 30 April, 2020 (https://us5.campaign-
archive.com/?u=fa9cf38799136b5660f367ba6&id=c865cddeb9).
30 “WHO Coronavirus (COVID-19) Dashboard” (https://covid19.who.int/) accessed 25 June, 2021.
31 The special legal order has been terminated in Hungary but Canada and Germany have not rolled back
the amendments (WTO, 2020, p.9).
32 NITI Aayog, the policy think tank of the Government of India has stated that: “Compulsory Licensing
is not a very attractive option since it is not a ‘formula’ that matters, but active partnership, training of
human resources, sourcing of raw materials and highest levels of bio-safety labs which is required. Tech
transfer is the key and that remains in the hands of the company that has carried out R&D” (“Myths &
Facts on India’s Vaccination Process”, 27 May, 2021 -
https://pib.gov.in/PressReleasePage.aspx?PRID=1722078). The argument is counter to the stand that
India has taken at WTO regarding patent waiver. If technology transfer is the key and if compulsory
licensing does not help then how does a patent waiver ensure it? (see Arul George Scaria, “NITI
Aayog’s Position on Compulsory Licensing Fails Both NITI and NYAYA”, 29 May, 2021
(https://science.thewire.in/health/niti-aayog-position-compulsory-licensing-covid-19-vaccines-ip-
waiver/).