Analyzing the Value of a World Trade Organization Intellectual Property Patent Waiver for Medicines
On March 15th, 2022, representatives from South Africa, the European Union, India, and the United States began brokering a consensus deal regarding intellectual property patent waivers for COVID-19 vaccines (Shalal & Farge, 2022). The deal a recent development of a long-lasting dispute beginning with the original request on October 2nd, 2020 when India and South Africa formally requested an intellectual property waiver to aid their underserved populations (World Trade Organization, 2020). The claim was met with support from low-income countries, but push-back from high-income nations (Usher, 2020). The discourse is centered around the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS agreement), an element of the World Trade Organization’s (WTO) international patent law system that covers its exceptions. The negotiated deal, if passed with a consensus among all 164 member nations, would waive IP protections for the necessary ingredients and processes of the COVID vaccine.
The fundamental arguments for a medical intellectual property waiver come from a history of businesses exploiting patent law loopholes in domestic and international spheres. Specifically in the pharmaceutical industry, evergreening is a problem disproportionately affecting the disadvantaged who either do not have insurance or cannot pay the exorbitant prices of medications. It is a corporate practice of extending the lifetime of expiring patents by slightly changing a drug (Collier, 2013). The advantage of this is the resulting monopoly that comes from said patent; an inventor owns exclusive rights to their intellectual property, usually for twenty years after its creation, giving them the ability to sell their innovation without any competition (Department of Commerce, 2021). One study found that, between 2005 and 2015, more than 75% of drugs with new patents already existed (Feldman, 2019). The patent monopoly is meant to incentivize innovation and cause societal progress in medicine, but slightly changing a pill for negligible benefit allows for unrestrained monopolies that are bolstered rather than hindered by their own governments. Furthermore, Evergreening may have an effect on generic medicine alternatives. According to Dr. Gaurav Dwivedi, an Associate Science Director at Takeda, by constantly switching from an older drug to a slightly changed new one and marketing it as an enhanced formula, corporations minimize market share loss and keep customers away from cheaper generics (Dwivedi, 2010).
Instances of corporate malfeasance are hardly rare or new; they’ve been a staple of the pharmaceutical industry for decades. The common excuse given for higher prices or extended patent monopolies is the need to cover the cost of research and development. The claim follows that for every drug that works there are many more that do not, and each drug requires millions of dollars to study, ideate, and test. However, it is important to note that medical funding for ailments that affect a large number of people (i.e. COVID, polio, smallpox, etc.) is overwhelmingly composed of public funding. According to a study published by Harvard’s FXB Center for Health and Human Rights, many antiretroviral drugs were developed in public-funded laboratories. The study claims that “patent monopolies are [not] the only means of recuperating costs of, and therefore incentivizing, research and development for … health technologies.” (Harvard FXB, 2017, pg. 14). With this decrease in risk caused by public funding, the protection of intellectual property for the purpose of maintaining financial stability may be redundant, especially since the result could be inflated prices for life-saving medications like Gilead’s $3120 price tag for Remdesivir (Baker, 2020). The principle of over-priced medications has even worked its way into the COVID-19 response. The AstraZeneca vaccine was sold to South Africa at $5.25 per dose, while sold to the European Union at $2.16 (Sariola, 2021). In this way, a medical patent waiver could deliver cheaper medicine to those who need it by removing the drug monopoly. This is because patents may not be necessary to protect investments in medicine.
The working poor of the world are often hit hardest by these patent policies. With their enforcement internationally through the World Trade Organization (WTO), countries may not be able to afford the medications required (World Health Organization, 2006). Foreseeing this potential problem, the WTO put in place a system called “compulsory licensing”, in which specific countries can waive a patent’s exclusivity if they deem it essential for public health (World Trade Organization, 1994). However, the use of compulsory licensing can lead to retaliation from wealthier nations or companies. For example, Thailand used a compulsory license for certain AIDS medications causing the United States to revoke preferential trade status for some Thai exports (Silverman, 2021). If the intended use of compulsory licensing (countries attempting to fight a public health crisis) is met with resistance, then a waiver may solve the problem as the entire WTO would have to agree, leaving no room for negative pushback. Furthermore, the current system for medical research is distorted toward lifestyle diseases that usually affect the rich. In a market-rewards system, research is done by companies looking to make a profit and is therefore tailored toward customers that can pay to have their ailments cured. Research from Yousef Vawda and Brook Baker, Associate Professors of law in the University of Kwazulu-Natal and Northeastern University respectively, finds there is “comparable underinvestment curing less profitable diseases that affect high income earners” (Vawda and Baker, 2013).
However, a medical patent waiver may not be the barrier stopping lower-income nations from achieving certain public health goals. The real problems with medical access may lie with administration, distribution, and manufacturing rather than an inability to pay for the medicine. For example, the Democratic Republic of Congo returned over a million doses of the COVAX-donated vaccines due to an inability to distribute and administer them in less developed areas (Locke, 2021). While the acquisition of medicine may have a sizable price, the cost of distribution also plays a massive factor in population inoculation and immunity. The Institute of Medicine writes that the cost of medical distribution in India is “roughly 2 to 3 times greater than in the [United States] or [European Union]” (Institute of Medicine, 2013). The drugs must reach rural villages and towns crossing difficult terrain with poor supplies and have more intermediaries between public and private companies that have complicated nets of regional supply chains.
Another issue lies in the production capacity of lower-income countries. Intellectual property in pharmaceuticals is a blanket term referring to the secret processes and ingredients required for medical manufacturing, but if revealing those secrets leads to no new manufacturing and production of the medication, then a waiver could be misguided and redundant. For example, in 2020, Moderna voluntarily waived its patent rights for the COVID vaccine, which should have allowed any manufacturer to begin production. However, as Dr. Rustchman and Dr. Barnes-Weise, Assistant Professor of Law at Saint Louis University School of Law and Executive Director of the Global Healthcare Innovation Alliance Accelerator respectively, state, due to “infrastructural limitations, scarcity of raw materials, [and] concerns about licensees having the ability to manufacture effective vaccines”, the patent waiver did not do much, if anything (Rustchman and Barnes-Weise, 2021). The sheer complexity of the most effective vaccines produced thus far would be beyond any low-income country’s manufacturing capability. For example, Pfizer’s vaccine has “more than 280 ingredients”, and needs millions of “specialized, high volume plastic bags” to meet the demands of the world (Mannix 2021). Those are conditions that are limiting for even the patent holder, and likely will be impossible to meet for low-income countries' production.
Figure 1: Amount of COVID-19 vaccine doses donated to or purchased by countries by income in increments of billions. Data compiled from Duke Global Health Innovation Center (Nature, 2021).
While calling for the World Trade Organization to waive Intellectual Property for medicines has good intentions, the efficacy of the action may leave more to be desired. Lack of access to medications is a driving force behind continued poverty, but the solution for that may have more to do with donated vaccines, corporate incentives, and improving supply chains. Exploitative patent extensions like evergreening need to be curtailed, but a full blown waiver would go far beyond that, affecting research, development and innovation. Public funding for research is often necessary, but the fact remains that the private companies are still taking the risk of conducting the studies and doing the work, losing valuable time. Arguments for reducing the timeframe of the monopoly or making it less exclusive have merit, but are a far cry from a waiver and are really meant to target businesses, not help the poor.
The largest problem in healthcare access may be better solved through communities working together, which could reduce transportation costs, as well as “contracting” solutions, where the government pays private industries to deliver health care/medicine (Jacobs et. al, 2011a). During a controlled study in a Cambodian village, this form of contracting (after 5 years of use) had a profound impact, especially in preventive medicine, with 97% of kids becoming vaccinated (Jacobs et. al, 2011b). Money, supply chains, and medications are all necessary components of solutions like this, and that is what we should focus on bettering. People deserve access to life-saving treatment, but rather than risk losing vital innovation incentives, community-oriented and financial solutions are better suited to address these problems.
Around the world, millions die annually due to a lack of medical infrastructure (Kruk et al., 2018). The poor deserve a solution, but a WTO medical patent waiver is not necessarily the solution they need. Instead, researchers, scientists, corporate directors, and community leaders must understand the limitations of access and address them through increased cooperation and calls for governmental change. South Africa and India’s push for a COVID Vaccine IP waiver should be met with empathy and a desire to combat the real structural problems affecting not only those nations but underdeveloped countries across the globe.
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