In an interview with the British broadcaster Sky News on 25 April 2021, One of the richest people in the world, Bill Gates was asked whether it is better to share the intellectual property rights of the Covid-19 vaccine with developing countries. To this, he replied, ‘NO!’
“There’s only so many vaccine factories in the world, and people are very serious about the safety of vaccines,” he added. “Moving a vaccine, say, from a World’s highest-ranked healthcare company, Johnson & Johnson factory into a factory in India, it’s novel; it’s only because of our grants and expertise that can happen at all.”
“The thing that’s holding things back, in this case, is not intellectual property; it’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines. You’ve got to do the trial on these things. And every manufacturing process needs to be looked at in a very careful way,” he added.
His statement comes at a time when this virus is responsible for more than 3.19 million deaths worldwide (as of 02 May 2021), and the nations are looking to vaccinate the majority of their citizens as soon as possible.
It is believed that the lifting of the patents could have vastly increased India’s vaccine production capacity. Let’s analyse whether it’s time to consider a patent reprieve for COVID vaccines.
What are Patent Rights, and why are they important?
Patent right is a form of intellectual property right. It provides creators of new inventions (such as new vaccines and drugs) with a limited-period monopoly on those inventions on the market to help recover Research & Development costs. In other words, patents are the driving force of invention or innovation.
Patents are granted by various country/regions (individually) but do not apply across borders. In order to obtain global protection, inventors need to apply for patents in each country-which may be crucial in the case of vaccines. The Patent Cooperation Treaty helps simplify the process, but it is still expensive and time-consuming.
In order to balance the limited monopoly in the market, the patent holders are required to share information about their inventions in the register so that they can be used by anyone after the expiration of the patent protection, which is usually 20 years.
Once the product is patented, the patent holder has the exclusive right to manufacture and sell his invention. They can also choose to license the technology to others in order to manufacture and sell it to the public. This type of license includes a specified period and the geographic area in which the patent is used. In return, the patent holder receives royalties or licensing fees, or both.
Therefore, the race to develop a vaccine for COVID-19 is not only about saving lives during the pandemic but also about having patent rights. This allows the owner to control the production and distribution of vaccines in countries where patents have been granted. So far, no COVID-19 vaccine has been patented, but this process is definitely ongoing.
A look at the Patent Process
Drug companies tend to invest a lot of money in the research and development of drugs and vaccines. These drugs and vaccines will then undergo clinical trials.
After conducting a clinical trial, the results must be submitted to various jurisdictions for approval by each jurisdiction where manufacturers wish to sell their medicines and vaccines before public use.
At the same time, once the formula and production method are determined, the world’s biggest pharmaceutical companies will submit a patent application to each intellectual property office to ensure that any third party cannot use its formula and production method without its authorisation.
Usually, companies file patent applications in many jurisdictions to ensure the broadest possible protection.
When a pharmaceutical company submits a patent, in addition to the cost of research and development, it also pays legal fees and government fees. These costs may add up.
Once a patent is registered, only the registered owner of the patent can use the patent.
What about the rights of nations?
Even if patent ownership belongs to private companies, the state still has the right to use them for its own purposes or in emergency situations. Many top companies in the world have special laws to facilitate these arrangements. “Compulsory License” refers to the use of a patent without the authorisation of the patent holder. In India, Section 92 of the Indian Patent Act of 1970 discusses compulsory licenses. If there is a “national emergency” or “extreme urgency” or in cases of “public non-commercial use”, the central government can issue mandatory licenses manually by the Controller of Patents according to the notice of the central government.
In addition, the TRIPS Agreement gives the government some flexibility in the administration of patents for public goods, including pharmaceuticals. The Doha Declaration on the TRIPS Agreement and Public Health issued in November 2001 clarified the paramount flexibility granted to countries under Article 31 of the TRIPS Agreement-the right to grant compulsory licenses. Clause 5(c) states: “public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics”, can constitute “a national emergency or other circumstances of extreme urgency.”
There can be no bigger crisis than the current Covid second wave sweeping India, which qualifies as a “national emergency”. The Controller of Patents would be morally and legally justified to suo motu grant the compulsory license of vaccines to the competent public and private sector companies in order to boost up the production manifold.
Current Pandemic Situation
Assuming two doses per person, the world needs about 11 billion doses of coronavirus vaccine to immunise 70% of the world’s population. As of last month, 8.6 billion doses have been confirmed, which is a remarkable achievement. But about 6 billion of this will go to middle- and high-income countries. So far, poor countries (80% of the world’s population) have only had access to less than one-third of the available vaccines.
The leading cause of this imbalance is that wealthier countries have been able to place a large number of advance orders with relatively small groups of vaccine-producing companies, most of which are located in wealthier countries. Unless manufacturing and supply can be more evenly distributed, researchers predict that it will take at least two years for a large percentage of people in the lowest-income countries to be vaccinated.
This is why about 100 countries, led by India and South Africa, require other member states of the World Trade Organization to agree to upgrade intellectual property (IP) related to COVID-19 within a limited time. They believe that major vaccine suppliers should share their knowledge so that more countries (the lowest-income countries) can start producing vaccines for their own countries and populations.
This idea needs to be seriously considered because temporarily relinquishing IPR could accelerate the end of the pandemic. It will also send a strong message from rich countries and pharmaceutical companies that they are willing to forgo some profits for the common good. The campaign to temporarily relinquish IPR is called the “People’s Vaccine” and has the support of NGOs and UNAIDS, the UN HIV/AIDS agency. Its supporters point out that many companies have benefited from billions of dollars in public funds through research and development and pre-purchase agreements. Once the pandemic is over, IP protection will resume.
The timeline for patent applications is very different from the timeline for the pandemic. Obtaining a patent usually takes several years (especially on an international scale), and the duration of a pandemic is usually (comparatively) short. By the time the patent is issued (4-6 years), the crisis will likely be averted in some way or the other. Moreover, if the crisis continues, the government will simply bend/destroy the patent if the owner refuses to comply. This is obviously more aggressive than refusing to enforce patent rights and may shift the balance of power out of the hands of innovative companies.
The strongest argument for temporary abandonment is that the patent was never designed for use in global emergencies such as wars or pandemics. Patents reward inventors by protecting their inventions from unfair competition within a limited time. The keyword here is ‘competition’. The pandemic is not a competition between companies but a competition between humans and viruses. Rich countries in the world and companies must make every effort to stop this pandemic rather than competing.
It is crucial that the current governments of various countries consider giving up the benefits of intellectual property rights. While competition and profit incentive help research and innovation, in certain scenarios, it needs to be set aside for the greater good.