The COVID-19 pandemic has reignited a long-running debate about the right balance between private profits and public health. Many experts and activists contend that World Trade Organization (WTO) rules on intellectual property (IP) limit poor countries’ access to critical medicines. Others say the IP rules are needed to incentivize drugmakers. Countries are now discussing whether to suspend the WTO rules amid the pandemic.
How did the debate kick off?
In late 2020, a group of developing countries led by India and South Africa put forth a proposal at the WTO to temporarily waive IP protections for vaccines and other products needed to fight the pandemic until most of the world’s population is immune. The last time the WTO altered its rules on the sale of patented medical products was in 2003.
Wealthy countries, including the United States, initially balked at the proposal. Then, in May 2021, under pressure from activists and Democratic lawmakers, the Joe Biden administration reversed course and announced its support for a vaccine IP waiver. Later that month, the coalition of developing countries pushing for the waiver submitted a revised proposal [PDF] that was largely the same as the first. It specified that the waiver would apply to pandemic-related “health products and technologies,” including vaccines, diagnostics, therapeutics, and personal protective equipment (PPE). The waiver would be in force for at least three years, with an opportunity for extension.
Why are countries asking for the waiver?
Proponents say the waiver could boost the production of vaccines and other live-saving products. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) commits members to guaranteeing a minimum level of IP protection, including twenty-year patents and safeguards for copyrights, trade secrets, and industrial designs. Those rules, advocates of the waiver say, are preventing companies other than the inventors from manufacturing critical medical products.
In their initial proposal, India and South Africa cited an example of such a bottleneck: early in the pandemic, the United States suffered N95 respirator shortages which led Kentucky Governor Andy Beshear to call on the manufacturer to lift its patents. Waiver proponents also point to the generous government funding that pharmaceutical companies received to support their development of COVID-19 vaccines and argue that the public is entitled to greater access even if that means fewer profits.
Without a waiver, governments still have the authority to allow companies to produce a patented product without the rights-holder’s consent during public health emergencies—known as compulsory licensing. But those in support of a waiver say the process is too complicated and piecemeal. In addition, the United States and other wealthy countries have looked unfavorably on, and often pressured, countries that grant compulsory licenses.
What do opponents say?
To opponents, the waiver is a red herring that will do little to improve global vaccine distribution while eliminating incentives for innovation. Pharmaceutical companies, health experts, and some governments argue that IP rules—and the profits they allow—promote the development of breakthrough technologies such as the COVID-19 vaccines. They also say that low manufacturing capacity, not patents, is the biggest impediment to global vaccination efforts.
Even if the patents were waived, critics argue, many countries would be unable to produce the vaccines without the technical expertise of the inventors or access to critical ingredients that are already in short supply. Meanwhile, some U.S. lawmakers and experts are leery of allowing China and other rival countries to obtain essential IP.
Instead of an IP waiver, the United States should stop hoarding vaccines and increase its exports, argue former U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb and former Acting FDA Chief Scientist and CFR Senior Fellow Luciana Borio. In addition, they say, vaccine-producing countries such as Australia, Belgium, France, Japan, and the United Kingdom should invest in a major manufacturing expansion. CFR’s Thomas J. Bollyky and Jennifer Nuzzo say a patent waiver will not be enough, and have urged countries to create a “geographically distributed vaccine manufacturing network” to produce vaccine prototypes for the COVID-19 crisis and future pandemics.
What happens next?
WTO negotiations are notoriously slow, and it could take months before countries reach an agreement, particularly over the scope and duration of a waiver. Decisions are normally made unanimously, and though a TRIPS waiver could be granted by a three-quarters vote of WTO members, it is unlikely that members would break precedent.
Following Biden’s move, the European Union said it is open to negotiations, but Germany is opposed to a waiver, and other EU and WTO members are skeptical. Meanwhile, the EU is pushing its own plan to bolster vaccine production, increase exports, and better utilize compulsory licensing.
Biden’s support for a TRIPS waiver is an unusual defeat for the powerful pharmaceutical lobby, says CFR’s Edward Alden, and a chance for the industry to work constructively with governments to remove obstacles to vaccine production. “As with the vaccination effort in the United States, success will require the best of both government and the private sector,” he writes in Foreign Policy.