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Patents a litmus test for global vaccine rollout

Late in December last year, the world saw some light in the dark humanitarian tunnel of the coronavirus pandemic when more vaccines were approved for use. 

Until then, the world relied primarily on non-pharmaceutical interventions (NPIs). These range from wearing masks and social distancing to hard lockdowns, with the latter having profoundly harmful effects and consequences around the world. The lockdowns decimated economies large and small and amplified social dichotomies.

Where learning was disrupted, those with access to technology and online platforms gained a step in the socioeconomic ladder, putting them ahead of their peers. The effect of this disparity has intergenerational consequences for learning outcomes and social mobility. 

Non-pharmaceutical interventions on their own were never going to be the silver bullet needed to conquer the pandemic. The effect of these preventative measures relied on the capacity of states to implement them, and the willingness and ability of citizens to comply. In light of this reality, vaccines aimed at injecting a pharmaceutical solution to the pandemic were always going to be the big shot in the fightback.

The race to develop a vaccine — pitting pharmaceutical giants and start-ups against each other — accelerated at a pace not seen for any previous healthcare crisis. As countries committed funding and public and private resources towards this singular mission the turnaround time — usually measured in decades rather than months — led to the December 2020 breakthroughs. 

Questions emerged regarding whether the fast turnaround times amounted to a compromise in the laborious process of clinical trials and regulatory approvals. One such example is the Bharat Biotech vaccine, which was approved for use in India before the submission of data regarding its efficacy. 

The country is in a unique position because it is home to the single largest producer of vaccines — the Serum Institute of India. But in the world of pharmaceuticals, the ability to produce relies on licensing agreements with owners of the drug. One of the more popular Covid-19 vaccines was developed by AstraZeneca in association with Oxford University and has been approved for production in India. Although India may be the manufacturing hub of the world, its capacity is not unlimited. Historically, the Serum Institute is able to produce 1.5-billion dosages annually. 

The problem with manufacturing in India — and around the world — is that it cannot easily be expanded overnight. 

By the end of November last year, rich countries had pre-ordered more than 10-billion Covid vaccines. Although this number sounds high in relation to the global population of seven billion, it remains unclear how many of the single-dose vaccines will thrive in comparison to double-dose vaccines like AstraZeneca’s.

The problem with relying on patent owners is that a successful drug with mass demand is a once-in-a-generation achievement for them. As a result, they seek to extract significant, durable returns from it by holding on to the production rights for as long as possible. It is during the exclusivity period that returns are maximised — particularly when there are no competing alternatives. The expiry of the exclusivity period enables others with capacity to reproduce the drug as a generic alternative, which is cheaper than the exclusive price.

An organisation that actively monitors adherence to this gentlemen’s agreement is the World Trade Organisation (WTO) through its Council for Trade-Related Aspects of Intellectual Property Rights. It is through this council that violations of patents and intellectual property rights are ventilated. Consequently, it is this council where applications for consensus on waivers are initially lodged. 

In October last year, as a response to the looming vaccine production crisis that will leave poor countries at the back of the inoculation queue, India and South Africa tabled an ambitious request to the WTO for patent waivers to be applied for the duration of the pandemic. 

The essence of the proposal is that although everyone acknowledges the importance of intellectual property rights and the protection thereof, this pandemic represents an unprecedented global crisis that requires unorthodox responses. 

Countries that have the capacity to produce vaccines on the back of this intellectual property would be free to do so. This would accelerate the introduction of the generics phase of the drugs’ commercial lifecycle which usually takes years.

The proposal has been opposed by rich nations and Big Pharma — for obvious reasons. Rich nations are at the front of the distribution queue and hence suffer fewer anxieties from production bottlenecks. Waivers therefore are seen to add little benefit for such countries. Big Pharma, on the other hand, insists that patent protection is fundamental to their viability because any changes will kill off incentives for undertaking and funding risky research. 

Additionally, there is a view that such waivers would not address the immediate problem of production bottlenecks. In the eyes of big pharma, the waivers might generate nothing more than a pyrrhic victory because very few countries have the capacity to create conducive production facilities in the short-term. Rather, if implemented, the waivers might set a precedent that will have long-term consequences for the WTO.

Interestingly though, the world has been here before. Seventy years ago, in 1951, India faced a food crisis as a result of floods and a drought that left it with a shortage of four million tonnes of grain. That galvanised India to a commitment to ensure its food security would never be threatened again. It committed to providing subsidies to its farmers to enable them to produce sufficient grain for the nation to achieve food security. 

When India became a member of the 160-country strong WTO, the fairness of the subsidies was brought into question by other nations, which complained that subsidies distort market prices and argued that this is what the WTO ought to manage through its rules on agriculture subsidies.

The reality of the world back then — and indeed today — is that India’s survival hinges on the continuation of the farming subsidy. According to Unicef, the United Nations’ emergency fund for children, a third of the world’s malnourished children live in India. Altering or abolishing the subsidy programme would plunge millions of Indians into food insecurity. 

The subsidy programme has previously been challenged — by the US in particular. After tense negotiations, the US finally conceded and allowed the farming subsidies to remain in place. But when India sought to initiate a similar concession in relation to medicinal patents, the resistance was much stronger from the US and big pharmaceutical companies.

This pandemic is forcing the WTO to revisit this question. According to the pharmaceutical industry, the pace and volume of approvals for Covid vaccines implies that the natural monopolies that usually emerge under exclusivity phases will not materialise in this case. Another problem with the waiver being championed by India is that it leads to the question of whether this is a new iteration of the farming subsidies conversation with India as the primary beneficiary. 

Second, in November 2019, the WTO was faced with an application for an abolition of the moratorium on tariffs on data crossing borders. The sponsors of that motion were India and South Africa. The problem is that 22 years ago, when the moratorium was established, India had established itself as the global centre of offshoring for technology companies and relied on this moratorium to elevate itself as the destination of choice. The moratorium benefited India more than most countries. The idea of abolition was therefore regarded as a hypocritical gesture by India.

As India leads the Covid waiver process, its history of extracting concessions at the WTO entangles countries like South Africa into longstanding tensions related to agreements inked in a world where the lobbying power of farmers pales in comparison to the economic power of Big Pharma.

Whichever way the conversation moves, the fact that the world once took on the moral position to concede on farming subsidies for India means humanity occasionally rallies together for the common public good. 

Whether the big pharmaceutical companies can be convinced that the current humanitarian crisis requires nothing short of social solidarity and concessions on competitive instincts is the litmus test for the WTO primarily and humanity at large.

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Khaya Sithole
Khaya Sithole is a chartered accountant, academic and activist who writes regularly for the Mail & Guardian and discusses the issues raised in his columns on his Kaya FM show, On The Agenda, every Monday from 8pm to 9pm

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