To Place a Patent Ban on COVID-19 vaccines or not? That is the Question.
What came first, the chicken or the egg? Do intellectual property rights promote more innovation and technological advancements or is necessity indeed the mother of all invention? In other words, with or without the incentive of Intellectual Property Rights (IPR), would we still have rapid advancements in technology and other fields?
These questions become even more pertinent in these times of COVID-19 pandemic. Should COVID-19 vaccines and other related technologies be protected by patents thus making them potentially unaffordable for low-income countries? On the other hand, should there be a patent ban on these vaccines and related technologies to enable more access to much needed resources in low-income countries?
The justification for IPR is that “…the IP system is required to incentivise new inventions of vaccines, diagnostics, and treatments, which might dry up in its absence.”1 However, poor countries argue that “…rich countries will benefit from new technologies as they come onto the market, while poor countries continue to be devastated by the pandemic. The proposal states that IP rights such as patents are obstructing affordable COVID-19 related products. A temporary ban would allow multiple actors to start production sooner, instead of having manufacturing concentrated in the hands of a small number of patent holders.”1
Image obtained from: https://www.investigate-europe.eu/en/2021/patents-vs-protection-a-covid-19-vaccine-for-all/
Rich countries such as the UK, USA, Canada, Norway and EU are of the opinion that there are ways to ensure equitable access to the COVID-19 vaccine where IP will not create a barrier for poor countries to gain access to it. The ways in which the poor countries propose to create equitable access is through:
- voluntary licensing,
- technology transfer arrangements, and
- the donor-funded COVAX Advance Market Commitment for vaccines.1
We understand that South Africa and India are however, of a different view. The two countries have called for the World Trade Organisation (WTO) to ban IPR relating to COVID-19 vaccines and related technologies. This they say, is to ensure that not only rich countries but poor countries too would gain access to much needed COVID-19 vaccines and related technologies. They argue that with IP systems in place, rich countries will benefit from COVID-19 vaccines and related technologies whilst poor countries will continue to be ravaged by the pandemic due to lack of access. They posit that IP rights especially patents, impede the development of affordable medical products to help fight the pandemic in poor countries. They suggest that the ban will increase the opportunity for collaboration, allowing more producers to enter the space and increase scalability within a short period.
Image obtained from: https://www.dsmranddtaxcredits.co.uk/will-a-covid-19-vaccine-be-patent-protected/
It is important to note the following existing measure available to the South African government, compulsory licensing. According to the South African Patents Act 57 of 1978 section 56:
“(1) Any interested person who can show that the rights in a patent are being abused may apply to the commissioner in the prescribed manner for a compulsory licence under the patent.
(2) The rights in a patent shall be deemed to be abused if—
(a) the patented invention is not being worked in the Republic on a commercial scale or to an adequate extent, after the expiry of a period of four years subsequent to the date of the application for the patent or three years subsequent to the date on which that patent was sealed, whichever period last expires, and there is in the opinion of the commissioner no satisfactory reason for such non-working;
(c) the demand for the patented article in the Republic is not being met to an adequate extent and on reasonable terms;
(d) by reason of the refusal of the patentee to grant a licence or licences upon reasonable terms, the trade or industry or agriculture of the Republic or the trade of any person or class of persons trading in the Republic, or the establishment of any new trade or industry in the Republic, is being prejudiced, and it is in the public interest that a licence or licences should be granted…”2
According to the Patents Act, the government has a solution to exorbitantly priced pharmaceuticals or cases where the patent holder is not able to meet the country’s demand. Pharmaceutical companies have already expressed a willingness to offer voluntary license agreements.
It is understandable why pharmaceutical companies, especially those in the rich countries are opposed to the IPR ban. Developing new drugs is a lengthy, complicated and highly costly exercise. With every new and complex disease that is discovered, more money is spent attempting to develop a cure or treatment.4 Pharmaceutical companies spend a whopping 17% of their revenues on research and development (R&D), this is the highest expenditure in any industry.4 To put it into perspective, on average, a pharmaceutical company spends about $4 billion to develop new medication, sometimes, it can be as high as $10 billion.4 So, which came first, the chicken or the egg? Will pharmaceutical companies continue to invest so much into R&D if they have no chance to recoup their expenses or will they continue to innovate?
Image obtained from: https://www.europeanpharmaceuticalreview.com/article/121900/patents-and-approvals-medicines-vaccines-and-diagnostics-for-covid-19/
On the other hand, millions of people living with HIV/AIDS have died due to lack of access to treatment. Access is defined by the WHO as: “…having medicines continuously available and affordable at health facilities that are within one hour’s walk of the population…”.3 The majority of African countries spend a disparate amount of their scant resources on procuring medication. “Africa imports 70% of its pharmaceutical products, with India alone accounting for nearly 18% of imports in 2011. Pharmaceutical imports in Africa include up to 80% of the antiretroviral drugs (ARVs) used to treat HIV/AIDS.”3
In 2001, 39 pharmaceutical companies took the South African government to court for their plans to manufacture and import more affordable and generic HIV/AIDS medication.3 They claimed that the government undermined their IP rights by the government’s planned actions. The case was later withdrawn. Evidence shows that local production of medicines increase access and reduces the cost of these medicines. The WTO, in recognition of this, permitted a waiver of 10 years for poor countries to manufacture generic drugs using IPR from big pharmaceutical companies.3
With this history in mind, what is fair? Do we ban IPR of pharmaceutical companies relating to COVID-19 vaccines and related technologies, despite the costs of R&D that these companies plowed into development of these technologies? Or do we put the health of people first and promote equal access especially to people in poorer countries? This would help prevent the “HIV/AIDS” mistake and prevent unnecessary deaths. Can we find a middle ground that will make both low-income governments and big pharmaceutical companies happy?
An EU spokesperson maintains that there is no evidence that IPR limit access to COVID-19 medicines and technologies.1 The Chair of the WHO Solidarity Trial of COVID-19 treatments, John-Arne Røttingen, is in agreement with the voluntary licensing route as the best one.1 The reason being that IPR is the least of poor countries’ worries in terms of access. The biggest barrier according to John-Arne Røttingen is infrastructure, production facilities and know-how especially since COVID-19 vaccines and therapeutics are “complex biological products”.1 For this reason, non-exclusive licenses and technology transfer of products would enable a faster establishment of production lines as was the case with the agreements established between AstraZeneca and Novavax with the Serum Institute of India.1
It is difficult to imagine the big pharmaceutical companies continuing with their rigorous R&D without the prospect of recouping even half of those costs. It is also difficult to imagine the loss of lives simply because medicines are too expensive, and access is limited to the lucky few that can afford it.
Written by: Tumelo Mashabela, Managing Director and Registered Patent Attorney
For all your IP, commercial and corporate law services, please contact us on 012 942 8710 / info@tm-attorneys.africa. You can also find us on social media platforms with the handle @TshayaMashabelaAttorneys.
References:
1: https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)32581-2/fulltext
2: http://www.cipc.co.za/files/9513/9452/7965/Patent_Act.pdf
3: https://www.un.org/africarenewal/magazine/december-2016-march-2017/dying-lack-medicines
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