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What are the Pros and Cons of Waiving Patent Rights on COVID-19 Vaccines?

Editor, TRANSFIN.
May 7, 2021 6:13 AM 5 min read
Editorial

This week, the White House threw its support behind a World Trade Organisation (WTO) proposal put forth by India and South Africa that seeks a waiver of patent rights on COVID-19 vaccines.

What Waiver?

Essentially an exception to WTO's Trade-Related Aspects of Intellectual Property (TRIPS) rules which would enable manufacturers in developing countries to access the intellectual property (IP) of big pharma cos such as Pfizer, Moderna, Johnson & Johnson, AstraZeneca etc. to produce cheaper versions of these companies' vaccines. This would act as the proverbial shot in the arm for the global inoculation drive, which has been dangerously slacking.

A patent waiver would basically decentralise vaccine manufacturing and scale up production of generic drug-equivalents of the COVID-19 vaccines.

 

So, Is This A Done Deal?

This is not the first time the developing world has lobbied for a dilution of TRIPS rules. 10 meetings in the last seven months failed to produce a breakthrough.

Now, while the USA's turnaround is admittedly a big deal, there is still opposition from the UK and the EU, among others. And because the WTO works on a consensus-based system, all 164 members need to agree for a decision to pass.

Therefore, regardless of Washington’s soft power - and the escalating severity of the pandemic in countries like India and Brazil - it is difficult to see a waiver happening at the next TRIPS council meeting later this month.

 

What’s the Debate Here?

On the surface, the arguments for a patent waiver to boost the production of life-saving vaccines amid a pandemic seem beyond dispute.

But it’s more complicated than that. Let’s begin at a familiar place...

 

Arguments For A Waiver

It’s easy to see why India is so eager for a waiver of IP rights. It has one of the world’s largest pharma industries, is the largest vaccine-making country, and houses a massive generic drugs sector that has been on pins and needles waiting to mass-produce cheaper versions of coronavirus vaccines.

Moreover the ongoing Second Wave has aggravated on account of a derailed and faulty vaccine rollout, which has also been beset by acute shortages even as the rollout has opened to everyone above 18 (more on India’s vaccine missteps here).

The same holds true globally, where vaccine inequality, enabled by vaccine nationalism, has risen to gross proportions. On one hand you have rich countries like the US and UK proceeding with inoculations at a breakneck pace whilst hoarding enough doses to immune their populations several times over. And on the other hand, you have the African continent, with 1.3 billion people, which has accounted for less than 2% of the total global vaccinations so far (more on global vaccine inequality here).

Waiving vaccine patents would enable poorer nations to contribute to production, ramping up their own vaccination drives and helping manufacture enough doses so that the world can finally bid adieu to this pandemic. This is important - even if richer nations immunise their people and return to some semblance of normalcy, they cannot afford to turn a blind eye to the virus continuing to spread in un- or under-vaccinated countries. This may cause newer variants and mutations to develop, some of which may be resistant to the vaccines we have currently, thereby prolonging the pandemic for everybody.

FYI: In March, epidemiologists warned that mutations could render current vaccines ineffective in a year or less.

This brings us to the economic argument. The much-talked-about post-pandemic economic boom can commence only when we are in a post-pandemic world. Oxfam estimates that unless the road to cheaper, mass-produced COVID-19 vaccines is opened, a $9trn “worst case” global catastrophe may be upon the global economy. Plainly put, nobody is safe until everybody is safe.

And finally, the moral argument. Ensuring that there’s vaccine equity and inoculations for all, regardless of which country they live in or how much they have in their bank account, is simply the right thing to do. The alternative is death (or a life of medical debt). Take India - it is recording nearly 4,000 daily deaths now (and that’s just the official number!). Most of these deaths could have been avoided had there been proper health infrastructure, oxygen availability - or enough vaccine doses to save people’s lives. After all, most people don’t die of COVID-19; they die of lack of access to treatment to COVID-19.  

 

Arguments Against A Waiver

Pharmaceutical companies, like all companies, naturally seek some profits off their products and services. They took a lot of risk and invested heavily in R&D to develop safe and effective drugs in a historically short period. Sure, they must have had humanitarian intentions in mind, but a successful venture of such a scale is obviously expected to elicit monetary rewards as well (for a deep-dive into how vaccine-makers make money, read this).

FYI: To their credit, many pharma firms have affirmed that they will sell vaccines at cost for as long as possible. J&J and AstraZeneca had pledged to make their vaccines available on a not-for-profit basis, with the latter adding that low- and middle-income countries would receive its vaccine at lower prices. Meanwhile, Moderna and Pfizer told US lawmakers last year that they would try to profit from their vaccines to cover R&D costs; they now expect to bring in $18.5bn and $15bn respectively from sales this year.

As anyone who has even glossed over a book on business basics will tell you, incentives are powerful drivers of innovation. Critics of patent waivers fear that waiving IP protections could disincentivise pharma companies from investing in future drugs and cures - not just for future pandemics but also for possibly resistive mutations of COVID-19.

Now, let’s say the patents are annulled - then what? There’s still a slew of other critical information, data and technical know-how that pharma companies keep to themselves to avoid competitive challenges - things they may be reluctant to divulge.

But let’s say these companies are forced to give up even this information - then what? Vaccine manufacturing is not everybody's cup of tea. Unlike typical medicines, which can be reproduced by typical generic drug manufacturers, vaccines are more complicated. They contain more ingredients in addition to modified viruses or genetic technology (e.g., mRNA). Hastily lifting IP bottlenecks could result in millions of ineffective and unsafe doses, which could potentially harm recipients, encourage mutations and fuel vaccine scepticism.

This side of the house also posits that there are alternatives besides recklessly cancelling patents. Pfizer or Moderna could license their IP rights to third parties in a "technology transfer" arrangement - akin to AstraZeneca’s deal with Serum Institute or the US government-brokered partnership between Merck and J&J. WTO’s Director-General Ngozi Okonjo-Iweala - an outspoken critic of vaccine inequality - is a big fan of such partnerships.

 

The Bottom Line

It’s probably unlikely the WTO will vote unanimously to suspend vaccine patents. Not only is there a pronounced divide between rich vs poor nations, but Big Pharma’s heft has meant there is no united stand from the latter. Even Brazil, a country ravaged by the pandemic, has opted to oppose waivers at the WTO (even though its Senate recently voted otherwise).

All said and done, on paper at least the move to abrogate patents to ensure a speedy end of the coronavirus pandemic seems ethical, rational and necessary. No doubt, doing so in a rules-based global economy would be an extraordinary thing. But we live in extraordinary times.

FIN.
 

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