Waiving patents on Covid-19 vaccines won’t be enough to ramp up supplies

Sharing vaccine formulae for Covid-19 with developing countries will not help mitigate the global pandemic crisis as many of these countries did not have the capacity to manufacture Covid-19 vaccines adequately, Bill Gates, one of the world’s leading billionaires and philanthropists, said on April 25.

A few days later, the Bill and Melinda Gates Foundation, of which he is co-chair, issued a statement saying they support a “narrow intellectual property waiver for Covid-19 vaccines during the pandemic”. The Gates Foundation has been involved with vaccine-development efforts since early into the Covid-19 pandemic.

Intellectual property rights on drugs and vaccine formulae give creators an exclusive right over inventions for a certain period of time and prevent multiple pharmaceutical companies from making the same items. This typically keeps prices high, and when drugs go off patents and multiple companies can make them, prices crash, making them more accessible and affordable.

The conversation on patent waivers began in the first year of the pandemic, when India and South African made a proposal at the World Trade Organization on October 2, 2020, for intellectual property rights exemptions on several items for Covid-19, including drugs, vaccines, protective gear, ventilators and diagnostic kits.

The WTO is the ultimate authority on global trade rules, including intellectual property rights and enabler of international trade agreements for 164 member countries including India. Internationally, intellectual property rights are governed by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, which would have to be waived as an exception, per the proposal. The proposal recommended that these exemptions be in place until “the majority of the world’s population has developed immunity” and until “widespread vaccination is in place globally”.

At the time, the World Health Organization’s director general, Tedros Adhanom Ghebreyesus, had also said that he supported this move as it would “ease international & intellectual property agreements on Covid-19 vaccines, treatments and tests in order to make the tools available to all who need them at an affordable cost”. Public health advocates have supported the proposal.

The tide has begun to turn in favour of the proposal only as of this month. Apart from the divergence between Bill Gates and his foundation, the United States government has also come out in support of a waiver.

On May 5, the United States Trade Representative said the government “supports the waiver of those protections for Covid-19 vaccines” in “service of ending this pandemic”. The United States is home to several Covid-19 vaccine-makers including Pfizer, Johnson & Johnson, Merck, Novavax and Moderna. In a day’s time, several other countries indicated they would support a waiver, including France, Russia and New Zealand.

Any waiver by the WTO would have to be by consensus among member states. The European Commission said it would begin discussions on waivers but Germany, home to BioNTech, the firm that created the vaccine being marketed by Pfizer, said it opposed a waiver because “the protection of the intellectual property is a source of innovation and must remain so”.

However, the Indian government has taken a different line domestically: At a hearing in India’s Supreme Court this month, the court asked the government whether it intended to issue any compulsory licenses to companies to manufacture drugs like remdesivir that are being used for Covid-19 treatment.

The government reportedly informed the court that as it was “actively engaging itself with global organisations at a diplomatic level to find out a solution”, and further: “Any exercise of statutory powers either under the Patents Act 1970 read with TRIPS Agreement and Doha Declaration or in any other way can only prove to be counter-productive at this stage”.

If the government were to use its powers to waive patents on Covid-19 items, this “would have serious, severe and unintended adverse consequences in the country’s efforts being made on a global platform using all its resources, goodwill and good-offices through diplomatic and other channels”.

The shortage of Covid-19 vaccines is global, and India being a major producer, its shortage directly impacts global supplies. Some 64 countries are due to receive Covid-19 vaccines from the World Health Organization’s COVAX facility for low and middle-income countries. But this has taken a hit –the WHO said in March 2021 that countries depending on the AstraZeneca vaccine from the Serum Institute of India, branded Covishield in India, would experience delays “due to the increased demand for Covid-19 vaccines in India”.

Likewise, the production and supply of the Johnson & Johnson and Novavax vaccines has also been delayed. Several countries in the developed world had placed advance orders, but the companies have not been able to deliver, according to the Launch and Scale Speedometer of the Duke Global Health Innovation Center in the US.

Tech-transfer is necessary

Waiving intellectual property rights without technology transfer “is like saying ‘From tomorrow we will make space travel free’,” said Gopakumar Nair, a former pharmaceutical industry executive and an expert on intellectual property rights.

“The patent waiver at the global level is a good move. Indian companies will be able to step in and make more Covid-19 vaccines,” said Sudarshan Jain, secretary-general of the Indian Pharmaceutical Alliance, which represents 24 leading pharmaceutical companies. The next step must be to ensure the transfer of technology, without which the first step is meaningless, he said.

India’s generics industry has for decades reverse-engineered drugs to sell cheaper, mass-produced generic versions. But vaccines, especially those using the newer mRNA technology, require a higher order of scientific knowhow, Nair said, which is the reason why technology transfer will be key.

Yet, pharmaceutical companies may not want to comply with WTO waivers, even if they come through – the WTO’s next meeting to discuss intellectual property rights is in June, and the next is slated in October. Experts believe vaccine production after waivers will take well over a year to ease the current shortage.

The most effective solution is for patent holders themselves to issue voluntary licenses to other companies, Jain said, adding that the recent announcements have created an environment where patent-holding companies will have to recognise this as a real and imminent issue.

“For generic companies wishing to make Covid-19 drugs and vaccines, it is important that they not only have access to the patent information but also have some sort of partnership or license with the innovator companies to figure out how to develop the item,” said Shivangi Mittal, senior associate at Koan Advisory. “This will help them arrange the necessary equipment, infrastructure, technical skills, technology, software, laboratories and raw materials.”

“Companies who receive these licenses from the innovator companies, to make the drug or vaccine on contract basis, will also avoid going through clinical trials again, which will not be the case for a generic company that develops the entire technology, product and process for the item on its own without a technology transfer,” said Mittal.

Amid this, the Indian government’s statement in court has drawn criticism. “We may think that big pharmaceutical companies are bluffing about not wanting to allow patent waivers, but it is the Indian government who is bluffing by saying these contradictory statements abroad and in India on whether it will support waiving patents,” said Murali Neelakantan, a lawyer, and formerly the legal counsel for Cipla and Glenmark. “How can Indian companies have confidence that they will not be sued for patent infringement when the government sends different signals?”

There are other reasons why those opposing patent waivers say they will not be immediately beneficial, as a May 2021 report from research and brokerage firm Sanford Bernstein highlighted. One reason they cite is that unless the waiver comes with technology transfer, it will take longer for Indian manufacturers to themselves develop the technology needed, end-to-end, especially for the mRNA vaccines such as from Pfizer and Moderna. Another reason they cite is that the existing manufacturing capacity in India is already in use, with very little idle capacity.

Big foreign pharmaceutical companies and their industry associations are not yet on board with the waiver or convinced that it will solve any of the current supply problems. They point out that a waiver could disrupt existing supply chains of raw materials and manufactured vaccines, and result in suboptimal use of limited resources at a critical time.

For instance, a statement from the Pharmaceutical Research and Manufacturers of America pointed out that patent waivers would not solve the limited availability of raw materials or provide solutions to actually distribute the various vaccines thus produced. Trade barriers and supply-chain constraints are a more worrisome problem than patents, according to the International Federation of Pharmaceutical Manufacturers and Associations.

Companies who want to manufacture Covid-19 vaccines and governments interested to make this happen must ensure that raw materials are available, adequate infrastructure and equipment are available, that high levels of quality control are maintained and that a large enough and skilled workforce is available, a report in the British Medical Journal said on May 10.

However, drawing it all together, “the patent is still the critical barrier”, said Davinder Gill, an expert on vaccines and former vice president for global biotherapeutics at Pfizer. “If you compare India with other countries in the sub-continent, and if the same waiver was provided to all countries, India would be the one to perform well. In India there is the capacity, and experience, to make drugs and vaccines.”

Without technology transfer, it may take longer, but Indian companies will be able to develop the vaccines, he said, adding, “But the patent is still the critical barrier which poses the risk and is preventing companies from jumping in.”

Giving licenses

As an example of voluntary licenses already happening with some success in this pandemic, Jain cited the examples of the AstraZeneca Covishield vaccine, the Johnson & Johnson vaccine and the Russian Sputnik-V vaccine. All of these companies have given out voluntary licenses to some companies around the world.

If the waiver itself does not automatically mean companies can immediately start producing Covid-19 vaccines, why has there been so much opposition from big pharmaceutical companies? Some experts believe it is to protect their long-held and rigid positions on intellectual property rights, for fear they may have to concede even more over time.

Neelakantan said that although patent-holding companies could license their vaccine and collect royalties, that too at a large scale, they have no incentive to do this. If a drug or vaccine is being sold at a cheaper price in India, the low price in India will be seen as a “reference price”, and the manufacturer will have to answer why the same item is sold cheaply in India but at a high price in the West. “Pharmaceutical companies do not have an incentive to allow cheaper pricing in the developing world. They do not want to be seen giving the situation an easy walkover.”

What India can do

In a global pandemic, governments must use all their powers, laws, and negotiation skills and reinvent how patents operate, said Leena Menghaney, global intellectual property rights advisor for Médecins Sans Frontières’ Access Campaign.

“Clearly the two Indian companies supposed to supply vaccines to India – Serum Institute and Bharat Biotech – have not been able to keep up,” she said. “So this duopoly should not be allowed to exist anymore. Why are we giving all our powers to pharmaceutical companies to decide whether people in India and around the world can afford or access Covid-19 drugs and vaccines and whether to give licenses to other companies to make them?”

The Indian government has the power to issue a compulsory license – to make a patent-holding pharmaceutical company compulsorily grant a manufacturing license to another company, which could be accompanied by the transfer of technology.

She added that Bharat Biotech’s Covaxin, which was developed with the Indian Council of Medical Research, has been licensed to three companies – the Indian Immunologicals Ltd, Bharat Immunologicals and Biologicals Corporation Limited and Haffkine Institute.

“This kind of licensing and technology transfer needs to be done for all the other vaccines too,” she said.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.