By: Lori Wallach, Rethink Trade Director
Too bad there is no waiver of any Big Pharma intellectual property (IP) monopolies at all despite yesterday’s afternoon tweet from a Politico reporter about a “TRIPS waiver compromise.”
People were ready to celebrate progress after a 17-month fight to remove World Trade Organization (WTO) intellectual property barriers that undermine access to COVID-19 vaccines, treatments and tests. Clearly the pressure from campaigners, legislators, former heads of state worldwide, other major world luminaries and even the Pope has made unavoidable the scandal of millions of avoidable COVID-19 deaths and economic devastation.
But the actual text that later leaked would not facilitate a timely boost in COVID-19 vaccine production, or maybe not any boost at all. It would not meet the righteous mission of saving lives that President Biden declared last May when the U.S. announced support for a waiver.
And, it does not even cover COVID-19 treatments and tests despite these becoming frontline measures in the fight to save lives and limit the virus’ economic and social damage. Perversely, if this proposal were adopted, it would actually add some new burdens on countries relative to the limited flexibilities they now have in the existing WTO rules for making affordable medicines available.
So, it certainly is not a “compromise.” Instead of suspending provisions of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the text reflects the opposition of pharmaceutical corporations and their allies in the European Union (EU) trade agency to the very notion of waiving IP monopolies. For months, EU officials — with only the support of Switzerland and the UK in the entire WTO — have blocked the more than 100 WTO countries, including the United States, that support waiving some WTO barriers.
Yesterday’s leaked text is the marginalized EU position. It’s another day-of-the-walking-dead moment for the EU’s tired efforts to resell the existing WTO rules on what is called “compulsory licensing.” (A compulsory license or “CL” is a mechanism for a government to grant someone other than a patent owner rights to produce or sell something under patent protection without the permission of but usually compensation to the patent holder.)
Article 31 of the WTO’s TRIPS agreement provides for use of patents without the authorization of the patent holder, including by use of compulsory licenses. A 2001 Declaration on the TRIPS Agreement and Public Health spelled out WTO countries’ flexibilities in using the Article 31 rules.
Some reporters covering the leaked text picked up the EU spin and celebrated as new the terms that are already in the existing WTO rules. Already TRIPS Article 31 provides for “other use without authorization of the right holder.” Already the text of Article 31 does not specify whether that is via a compulsory license or some other mechanism, so already countries do not need to have a CL law in place and can use executive orders and the like. Already countries can cover multiple patents with one authorization. Article 31 already provides the flexibility that the EU claims is new.
But most critically, many WTO countries support a waiver precisely because they recognize that the existing WTO “flexibilities” won’t do the job in the COVID context. What might work for small molecule HIV-AIDS drugs (i.e. pills with fewer ingredients and fewer forms of IP) would not work for complex COVID-19 vaccines with hundreds of inputs subject to various forms of IP barrier.
Indeed, there is overwhelming evidence that product-by-product compulsory licensing for patents — the existing WTO approach that this text continues — simply will NOT facilitate the needed boost in production and supply of COVID vaccines in a timely manner, if at all.
The leaked text simply does not remove the limitations on “freedom to operate” that a prospective new manufacturer would need to be able to actually make the COVID vaccines in a timely manner. And it’s not only because it continues to require product-by-product authorizations of patent compulsory licenses by governments, in stark contrast to a waiver.
To maintain their monopoly control, pharmaceutical firms have created IP “thickets,” adding layers of additional trade secrets, copyright, industrial design and other exclusivities that extend beyond the patent barriers that were the focus of the 2001 WTO flexibilities. But the leaked text does not lift restrictions to access the undisclosed data and trade secrets that are the know-how needed to translate the right to “exercise” a patent into the ability to do so. (This would require a full waiver of TRIPS Article 39, not the leaked text’s reiteration of what is understood to already be permissible, namely governments’ ability to use previously filed test data to approve additional identical medicines.) As well, the leaked text also does nothing to deal with copyright protections on software and algorithms that would thwart production.
The one meaningful thing in the text is the removal of impossible procedural requirements now in place for medicines made under a compulsory license to be exported. But that prospective gain is illusory. First, because of the failure to waive all of the other IP barriers needed to make more vaccines, the leaked text would not lead to more shots being produced that could be exported. And perversely, while CLs on patents only could facilitate speedy increases in supplies of COVID treatments like Paxlovid, including for export, the proposal does not cover treatments. Worse, the leaked text introduces unnecessary steps and reporting requirements that could undermine the effectiveness of this one theoretically useful term.
Indeed, the leaked text represents the lowest common denominator of EU fealty to Big Pharma by not actually waiving intellectual property monopolies and the U.S. insistence that only vaccines be covered.
I did not support the U.S. vaccine-only focus, even as I could imagine the politics behind why it happened. But now with the new lifesaving treatments that President Biden spotlighted in his State of the Union speech available and critical to dealing with COVID-19, it is unconscionable to exclude them. If access to such treatments is the best way forward for people in the United States, why should these medicines be unavailable to people elsewhere?
Yet, the only reference to treatments and tests in the leaked text is an unenforceable pledge to revisit those issues in six months. As someone who has observed the WTO for its entire existence, I suspect that if treatments and tests are not included in a meaningful waiver of WTO IP monopolies before the WTO’s mid-June Ministerial ends, and the pressure of that moment subsides, the chance they will be added later is slim.
The bottom line is that this text is more than disappointing. But it also is not the final word. For this text to go into effect, it needs support from all WTO member countries. And that means there is an opportunity to achieve the major improvements that would be necessary to make it a net positive, much less for it to deliver the urgently needed real gains in global access to COVID-19 vaccines, treatments and tests.
And now for anyone who wants to get into the weeds, below is the text and an admittedly wonky guide to understanding what the heck the GATTese means. To avoid the legal text and get a sense of what is at stake and why negotiators need to go back to the table and do better, please check out this recent Rethink Trade event “Taking on Big Pharma Monopolies to End the Pandemic.”
TRIPS COVID-19 solution (the outcome of the quadrilateral discussions at the end of last week, to be presented to WTO Members)
1. Notwithstanding the provision of patent rights under its domestic legislation, an eligible Member [1] may limit the rights provided for under Article 28.1 of the TRIPS Agreement (hereinafter “the Agreement”) by authorizing the use of patented subject matter[2] required for the production and supply of COVID-19 vaccines without the consent of the rights holder to the extent necessary to address the COVID-19 pandemic, in accordance with the provisions of Article 31 of the Agreement, as clarified and waived in paragraphs 2 to 6 below.
2. For greater clarity, an eligible Member may authorize the use of patented subject matter under Article 31 without the right holder’s consent through any instrument available in the law of the Member such as executive orders, emergency decrees, government use authorizations, and judicial or administrative orders, whether or not a Member has a compulsory license regime in place. For the purpose of this Decision, the “law of a Member” referred to in Article 31 is not limited to legislative acts such as those laying down rules on compulsory licensing, but it also includes other acts, such as executive orders, emergency decrees, and judicial or administrative orders.
3. Members agree on the following clarifications and waivers for eligible Members to authorize the use of patented subject matter in accordance with paragraphs 1 and 2:
(a) With respect to Article 31(a), an eligible MembØer may issue a single authorization to use the subject matter of multiple patents necessary for the production or supply of a COVID-19 vaccine. The authorization shall list all patents covered. In the determination of the relevant patents, an eligible Member may be assisted by WIPO’s patent landscaping work, including on underlying technologies on COVID-19 vaccines, and by other relevant sources. An eligible Member may update the authorization to include other patents.
(b) An eligible Member need not require the proposed user of the patented subject matter to make efforts to obtain an authorization from the right holder for the purposes of Article 31(b).
(c) An eligible Member may waive the requirement of Article 31(f) that authorized use under Article 31 be predominantly to supply its domestic market and may allow any proportion of the authorized use to be exported to eligible Members and to supply international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization.
(d) Eligible Members shall undertake all reasonable efforts to prevent the re-exportation of the COVID-19 vaccine that has been imported into their territories under this Decision. All Members shall ensure the availability of effective legal remedies to prevent the importation into their territories of COVID-19 vaccines produced under, and diverted to their markets inconsistently with, this Decision.
(e) Determination of adequate remuneration under Article 31(h) may take account of the humanitarian and not-for-profit purpose of specific vaccine distribution programs aimed at providing equitable access to COVID-19 vaccines in order to support manufacturers in eligible Members to produce and supply these vaccines at affordable prices for eligible Members. In setting the adequate renumeration in these cases, eligible Members may take into consideration existing good practices in instances of national emergencies, pandemics, or similar circumstances.[3]
4. Nothing in Article 39.3 of the Agreement shall prevent a Member from taking measures necessary to enable the effectiveness of any authorization issued as per this Decision.
5. For purposes of transparency, as soon as possible after the adoption of the measure, an eligible Member shall communicate to the Council for TRIPS any measure related to the implementation of this Decision, including the granting of an authorization.[4]
6. An eligible Member may apply the provisions of this Decision until [3][5] years from the date of this Decision. The General Council may extend such a period taking into consideration the exceptional circumstances of the COVID-19 pandemic. The General Council will review annually the operation of this Decision.
7. Members shall not challenge any measures taken in conformity with this Decision under subparagraphs 1(b) and 1(c) of Article XXIII of the GATT 1994.
8. No later than six months from the date of this Decision, Members will decide on its extension to cover the production and distribution of COVID-19 diagnostics and therapeutics.
[1] For the purpose of this Decision, an “eligible Member” means any developing country Member that exported less than 10 percent of world exports of COVID-19 vaccine doses in 2021.
[2] For the purpose of this Decision, it is understood that ‘patented subject matter’ includes ingredients and processes necessary for the manufacture of the COVID-19 vaccine.
[3] This includes the Remuneration Guidelines for Non-Voluntary Use of a Patent on Medical Technologies published by the WHO (WHO/TCM/2005.1)
[4] The information provided shall include the name and address of the authorized entity, the product(s) for which the authorization has been granted and the duration of the authorization. The quantity(ies) for which the authorization has been granted and the country(ies) to which the product(s) is(are) to be supplied shall be notified as soon as possible after the information is available.
THE POCKET TRADE LAWYER’S GUIDE TO WHAT THE TEXT MEANS
The text needs to be improved dramatically. It falls far short of what is required to contain the COVID-19 pandemic. Treatments and diagnostic tests are altogether excluded. And, it would not deliver on enabling expanded production of vaccines around the world because it focuses only on patent rights. It does not waive patents but rather relies on governments issuing product-by-product compulsory licenses and includes only an Article 39.3 exception, not a waiver that would enable access to know-how. Since the beginning of the pandemic, it has been clear that for alternative producers to manufacture more supply in a timely manner, they would need access to trade secrets and undisclosed information, data, and know-how, especially for vaccines and biologic medicines. The first three paragraphs focus on patents only. Paragraph 4 imposes no obligation on confidential-information/trade-secret rightholders to disclose manufacturing know-how, quality assurance protocol, data, and other information and materials necessary for commercial scale production and quality assurance. Nor does it even remove governments’ obligations to do the opposite. There even are elements that set bad precedent with respect to use of compulsory licensing under TRIPS Article (Art.)31 by adding conditions that are not in the existing WTO text.
1. There is no waiver of IP monopolies. There is not even a waiver of all Art. 31 compulsory licensing conditionalities. To be at all effective, at least TRIPS Articles 31(a),(b) and (f) in addition to Article 28.1 must be unconditionally waived with respect to COVID vaccines, therapeutics and diagnostics for the duration of the waiver decision, as well as Art. 39 to ensure access to the confidential information that is imperative for vaccine manufacturing.
2. The paragraph 1 clause “to the extent necessary to address the COVID-19 pandemic” is problematic in two ways. First, does the entire text become inapplicable when the WHO determines COVID is no longer a “pandemic” but rather is, for instance, a global health emergency? I.e., could this text no longer apply even if it still has years to run within the contemplated three-to five-year timeframe? Second, the term “necessary” sets up a nigh-impossible-to-meet WTO legal standard. Whether a government’s policy meets the standard ultimately would be decided by a WTO tribunal of three trade lawyers. (The paragraph 7 reference to government actions taken in conformity with this text not being subject to challenge only refers to “nullification and impairment” cases. These are claims against domestic policies that do not directly violate WTO rules, but are still deemed not permissible because they undermine expected benefits of a WTO agreement.)
3. The paragraph 1 clause “patented subject-matter” excludes products that have pending patent applications, even as many COVID-19 products have many pending patent applications. WIPO’s COVID-19 patent landscape report reveals that from 2020 to September 2021, there were 5,293 patent filings on technologies related to COVID-19 in general, including 417 related to vaccine development and 1,465 related to therapeutics.
4. The text in paragraph 2 reiterates existing WTO compulsory licensing terms, rather than providing anything new, and continues to require product-by-product authorizations. This means prospective new producers would still have to wait for the government to take action to issue authorization for each product. And the requirements under paragraph 3(a) and footnote 4 impose additional burdens and complexities relative to the existing WTO rules for such authorizations. The clarification provided in paragraph 2 is useful, but it does not offer anything fundamentally new. TRIPS Article 31 already allows “Other Use Without Authorization of the Right Holder” and the existing WTO rules do not specify the nature of the authorization nor require that a country have a compulsory license regime in place. Thus, this language just restates what already is the WTO rule.
5. The text in paragraph 3 reiterates existing WTO compulsory licensing terms, rather than providing anything new given:
Paragraph 3(a): The current WTO text does not limit governments from issuing a single authorization to cover multiple patents.
Paragraph 3(b): The existing TRIPS Article 31(b) already provides for waiving the standard compulsory licensing prior negotiation requirement for emergencies, matters of extreme urgency and public non-commercial use.
Paragraph 3(d): This is an odd and problematic clause that relates to an issue pharmaceutical firms continually raise that has not emerged in practice. There also are drafting issues such that WTO countries to which the underlying rule would not even apply are captured under this language.
Paragraph 3(e): WTO countries have always been free to determine what is adequate remuneration for a compulsory license, nothing here is new.
But this paragraph does impose some additional “TRIPS-plus” requirements related to listing all patents that is almost impossible to meet as described below.
6. Paragraph 3(c) is the only real improvement relative to the existing TRIPS text in that it removes burdens related to TRIPS Article 31(f) related to exports of products under compulsory licensing, but this gain is limited by the reality that the leaked text does not facilitate actually producing new medicines to export. Paragraph 3(c) would facilitate exports without having to go through the TRIPS Article 31(b)’s procedure. But footnote 4, described below, could undermine that potential upside given the new compliance burdens.
7. New procedural obstacles added in paragraph 3 relative to the status quo. Paragraph 3(a) requires listing of “all patents covered” and an “eligible Member may update the authorization to include other patents.” This requirement is TRIPS-plus, meaning it imposes new obligations not already included in the WTO rules. The use of Article 31 does not now require any listing of patents. Further, it is not possible to comply with this requirement: There is no transparency into the patent landscape, since patent applications are a secret for the first 18 months from the date of international patent filing with the Patent Cooperation Treaty. So, a manufacturer cannot benefit from the authorization until a Member State is aware of the patent application and has listed it? These additional conditions undermine the use of the WTO’s existing compulsory licensing rules under Article 31.
8. New procedural obstacles added in footnote 4 relative to status quo. Footnote 4 requires listing a lot of information that is not now required to use Article 31, which creates a bad precedent.
9. Paragraph 4 doesn’t remove critical IP barriers beyond patents that will stop timely production of vaccines. The clarification in paragraph 4 with respect to Article 39.3 is limited to “any authorization issued as per this Decision.” This principally clarifies what most experts agree to be true — that data protections under Article 39.3 do not foreclose regulatory decisions concerning follow-on products that rely upon or reference originator regulatory data or the fact of a prior regulatory decision. It does not provide access to the undisclosed data needed to make these complex vaccines for it does not waive the entirety of Art. 39. Also, it fails to recognize that protection of undisclosed information can be a barrier irrespective of patent status.
10. Limited to vaccines. Paragraph 8 says that in six months WTO Members will decide whether to extend these terms to therapeutics and diagnostics. First, there is no guarantee that the WTO will reach a decision in six months. (Consider that required WTO service sector negotiations from 2000 remain undone.) Yet any WTO outcome on COVID-19 should also apply to diagnostics and therapeutics, as these are essential to containing COVID-19 and its damage.