A blow to equitable access to essential medicines

News: In October 2020, India and South Africa tabled a proposal in the World Trade Organization (WTO) seeking temporary waiver from Trade Related Aspects of Intellectual Property Rights (TRIPS). This was to ensure availability of affordable vaccines, medicines and other medical products.

What are the reasons for such demand?

This was based on the contention that enforcement of intellectual property rights (IPR) were hindering timely availability of affordable medical products. Hence, rapid scaling up of manufacturing globally is required.

What is the stance of advanced countries?

US Approach: Initially, all advanced countries opposed the proposals. The advanced countries put the interests of pharmaceutical companies ahead of the interests of developing countries. However, after the Biden administration took office, the U.S. backed the waiver only for vaccines.

However, this has led to vaccine inequality as only 14% people in low-income countries have received at least one vaccine dose.

The EU ‘solution’: The EU has forwarded a “compromise outcome”. While opposing the concept of “waiver”, the outcome proposed granting compulsory licenses to enhance vaccine production.

India and South Africa, who had earlier tabled the waiver proposal, have diluted their stand and have accepted the EU’s proposal.

When are compulsory licences granted?

Usually compulsory licenses are granted if patent holders charge high prices in exercise of their monopoly rights. Or if the efforts to obtain voluntary licenses from patent holders have failed.

What are the provisions of the ‘compromise outcome’ with respect to licensing?

The solution proposes that voluntary license, as a precondition for compulsory license, should be removed in case of medical emergency. Also, WTO members would be able to issue compulsory licenses even if their national legislation does not have provision for the same. These can be granted using executive orders, emergency decrees, and judicial or administrative orders.

Conditions attached with the compulsory licensing provisions:

The solution can only be used by an “eligible member” i.e., a “developing country member” of the WTO that “had exported less than 10% of world exports of COVID-19 vaccine doses in 2021”.

This implies that “least developed countries” are excluded. Also, countries like Bangladesh which are developing but have a growing pharmaceutical industry are also excluded.

These conditions were introduced to limit China’s expansion in the vaccine market. But in reality, China has developed several home-grwon vaccines and does not need compulsory licenses to expand its production base. Hence, the proposal is a severely truncated version of “waiver proposal”.

Additional conditions: The proposal has introduced additional conditions, such as listing all patents covered under compulsory licenses, which are above and beyond already existing TRIPS provisions.

Hence, compulsory licenses may not result in the outcome the waiver proponents were aiming for. It will make it difficult to scale up production of COVID-19 vaccines, medicines and medical devices in the developing world.

Source: This post is created based on the article “A blow to equitable access to essential medicines” published in The Hindu on 23^rd March 2022.