Richa Borthakur is a Final Year Law Student at the O.P. Jindal Global University. She is also an editor at the Jindal Digest for Competition and Innovation Laws blog.
The Covid-19 pandemic has brought into question a myriad of existing practices and made a case for greater flexibilities to promote public health. A prime example in this regard is the call to waive intellectual property protection for Covid related vaccines and other medicinal drugs. For example, the Biden administration has called for waivers of certain covid related patents. Another line of argument has advocated for the use of compulsory licences. To counteract accessibility concerns, multiple jurisdictions have enacted reactionary measures.
Israel is the only country which has granted Compulsory Licence. Canada has passed the COVID-19 Emergency Response Act which allows for the Canadian state to produce, sell and use patented innovation. In France, an amendment enacted in 2020 allows the prime minister to seize all goods and services necessary to fight the disaster and to temporarily control the price of products. In India, policymakers as well as the Supreme Court of India have asked the central government to consider compulsory licencing.
The discourse on intellectual property during a pandemic is immensely important. However, with respect to developing countries like India, waiver of patents and compulsory licencing mechanisms would achieve very little, in the present context.
Compulsory licencing and patent waivers
Briefly put, compulsory licencing is the procedure through which a government allows a third party or itself to produce a patented product, without the consent of the patent owner. Article 31 of the TRIPS agreement allows countries to grant compulsory licences and determine the grounds on which they can be invoked. This is particularly strengthened when the objective is related to the promotion of public health and access to medicines. Additionally, compulsory licences can be issued for the purpose of exporting generic medicines to Least Developed Countries (LDCs).
Why compulsory licencing and patent waivers achieve very little
The flexibilities envisioned by the TRIPS agreement have been successfully utilised by a myriad of countries in the past. However, the complexities of the Covid-19 pandemic may not adequately respond to mechanisms such as patent waivers and compulsory licences. The two major benefits of patent revocation are increasing access and reducing price, however the required objectives would not be achieved through these mechanisms.
Increasing access
Patent applicants are usually required to disclose ‘sufficient information’ to implement the invention to patent offices. Some jurisdictions may also require additional disclosures such as the ‘best mode for carrying out the invention’. However, certain information may remain undisclosed in the form of know-how or trade secrets. In the present context, trade secrets may include medical formulae, test data, genomic information, negative information and other biological resources. In the past, companies have successfully reverse engineered innovations without the aid of such undisclosed information. However, given the novelty of the technology used to create and manufacture Covid-19 vaccinations, the same may not be replicated. For example, for the use of sophisticated technologies such as monoclonal antibody therapy and messenger RNA biologics, technical know-how would certainly be required.
Even if the process of reverse-engineering is completed successfully, the new vaccine or medical drug would have to undertake costly and time-intensive clinical trials to obtain authorisation and appropriate licences. Test data is usually generated through multiple phases of preclinical and clinical trials and is submitted to regulatory authorities. Little to no legal mechanism currently exists to compel innovators to disclose test data and associated negative information. Thus, a successful manufacturing system would require simultaneous access to the intellectual stack which would include patents, trade secrets and test data.
Another significant hurdle could take the form of a lack of manufacturing capacity. Even if patent rights are waived, without adequate manufacturing capabilities of multiple third-party manufacturers, the objective would once again be frustrated. Manufacturing capability in this context must be viewed in relation to the novel virus.
For example, India has been one of the largest producers of vaccines in the world. However, this does not automatically translate to large scale production of Covid-19 vaccines. The current manufacturing strategy relies on switching the seasonal influenza vaccination capacity into manufacturing covid vaccinations. However, since most influenza vaccinations are manufactured for export purposes to developed countries, the overall capacity is fairly limited. As a result, some have argued that the manufacturing capacity of companies other than SII and Bharat Biotech would be lesser than their combined output.
The lack of the intellectual stack along with the low manufacturing capacity would arguably frustrate the objective of patent waivers and compulsory licences. Policymakers and immunologists around the world have deemed speedy vaccination as the most practical solution to the pandemic. In this context and given the delays that go hand in hand with reverse engineering the hurdles involved would be too high a threshold to achieve the appropriate results.
Reduction of prices
A secondary objective of compulsory licencing, particularly in lower income and developing countries is the reduction in the prices of treatment drugs and vaccinations. This would be of particular importance to countries like India where a large percentage of the population remains below the poverty line. However, realistically, it is unlikely that patent waivers and compulsory licences would lead to a solution. A perusal of current academic literature would reveal that the effect of compulsory licences on price is disputed, and in fact, the correlation between patent waivers and product price is often assumed rather than based on evidence.
Academic literature on the effect of compulsory licences on price is disputed. A study conducted by Beall, Kunh and Amir compared the prices of medicines obtained through compulsory licensing to the prices obtained by peer countries through international procurement. Through a case-by-case analysis, the study concluded that compulsory licencing tactics for medicinal drugs could result in prices higher than that achieved through international procurement. A contradictory study by Urias and Ramani concluded that while compulsory licences may reduce the price of patented drugs, the existing knowledge on the degree of price drop is insufficient. Given the ambiguity of the assertion, relying on the reduction of price as a significant objective to grant patent waivers and compulsory licence seems ineffectual.
The immediate goal of national governments should be to ensure the availability of vaccines as quickly and widely as possible. A possible solution would be to allow for the disclosure of trade secrets during national and health emergency. However, it must be noted that this can only be done through the time-consuming process of formulating new legislation. As a result, it may be beneficial to shift the conversation from compulsory licences and patent waivers to ease of technical transfers and increasing voluntary licence negotiations.
In India, several licence agreements for the manufacture of Covid-19 vaccinations and treatment drugs have already been concluded. Gilead has signed voluntary licence agreements with Egypt, India and Pakistan. In the Indian context, AstraZeneca has entered into a licence arrangement with the Serum Institute of India (Covishield); the Russian Direct Investment Fund has partnered with Dr Reddy’s Laboratories (Sputnik V); and Biological E has entered into an agreement with Johnson & Johnson. Additionally, Moderna has pledged their willingness to licence the intellectual property to others. Thus, it is clear that voluntary licencing with the cooperation and assistance of the inventor company would be the most efficient way to increase access to vaccinations and help tackle the pandemic.
All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.
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