by Chrysa Kazakou a Non-resident fellow at Property Rights Alliance
In a drastic policy u-turn, U.S. President Joe Biden has reversed the American stance on waiving intellectual property rights for COVID-19 vaccines, backing negotiations at the World Trade Organization on this. China, India, South Africa and many emerging economies have been pushing for this. According to former U.S. FDA Commissioner Scott Gottlieb, who is now on the board of Pfizer, “the only immediate beneficiary here is China, who has long sought a dismantling of these global rules that protect America’s intellectual property”
However, according to @ScottGottliebMD "the only country really that's going to be able to step in" if the IP is released is #China… Up to a year after the waiver its firms may be able to produce them https://t.co/5YIukLKTUO
— Philip Thompson (@Phili_Thomp) May 6, 2021
Waiving IP protection would backfire
Even if the stated intention of waiving IP is to advance the production and distribution of these vaccines, the policy may produce the opposite result.
The quick development of highly effective Covid vaccines gave the impression that once a vaccine has been developed, a billion doses can roll out of the factories effortlessly. That’s a wrong impression. IP is not the barrier to the rapid deployment of COVID-19 production which the world needs.
Waiving IP does not change anything with regards to the complex vaccine manufacturing process. On the contrary, IP now enables the rights owners to control the efficacy and the quality of vaccines, as it allows them to selected skilled partners to deliver high quality manufacturing.
Scrapping IP rights would also make it more difficult for innovators to share the technology and know-how needed for manufacturers to produce genuine and effective vaccines.
If there was no system of IP protection, a pharmaceutical company that had decided to produce a vaccine would not be required to share any knowledge about how they made it. In case of a second pandemic the research would have to start development from point zero as well. As a result, both developed and less developed countries would not have access to the information that the IP system obligates innovators to provide.
Despite Biden’s reversal, there is strong opposition in Europe against this
On 29 April, the European Parliament voted against the waiver and also the European Commission has remained consistent in its support for innovation. Europe has really been a driver in the fight against Covid19, as it was there where the first approved vaccine using mRNA technology was developed. This was the result of a regulatory framework which incentivises research and exploring new innovative technologies.
European Commission President Ursula von der Leyen told The New York Times last month: “I am not at all a friend of releasing patents.” Even if she reacted to Biden’s policy reversal that the is EU ‘ready to discuss’ a COVID vaccine patent waiver, the “EU pushes back on Biden plan to waive coronavirus vaccine patents”, according to Politico. There is indeed solid Europan opposition against waiving IP rights. The EU does notsee it as a “magic solution”, according to Charles Michel, the President of the EU Council. France seemed to have made some kind of change of heart on the topic, but over the weekend, French President Emmanuel Macron clarified that “the Anglo-Saxons must first stop their export bans,” adding “I am calling very clearly on the U.S. to end their export ban of vaccines and components that prevent production,” he said. “CureVac says it can’t produce in Europe because components are blocked in the U.S. … So lift the export ban — lift it, on the ingredients and the vaccines. And, secondly, liberate the doses.”
Furthermore, he stressed that “If we want to work quickly, today there isn’t one factory in the world that can’t produce doses for poor countries because of intellectual property. (…) The priority today is not intellectual property — it’s not true. We would be lying to ourselves. It’s production.”
The German government was even less ambiguous. German Chancellor Angela Merkel issued a warning that a patent waiver may do more to benefit a geopolitical rival like China than it would to help needy countries in Africa obtain vaccines, saying: “For me, the issue of patent protection is not the path that will lead us to more vaccines and better vaccines” and that IP protection therefore “must remain in place.”
This is no coincidence. According to the International Patent Index 2021, Germany is among the best performing countries when it comes to securing the protection of patents and preventing IP infringement. Even when sharing valuable platform technology with other companies, assets of right-holders are fully protected in Germany.
The real obstacles to quicker vaccine administration are logistics and vaccine protectionism
At the moment, the biggest obstacles to getting more Covid vaccines administratered are the limited availability of raw materials and the last-mile distribution. According to experts, even with the aid of the patent, vaccines still need the support of the laboratories that developed them. Another key obstacle, as European leaders have pointed out to U.S. President Biden, are trade barriers preventing companies moving their goods from one country to another. Belgian Prime Minister Alexander De Croo did put itas follows: “As Europeans, we don’t need to be schooled. The U.S. hasn’t exported a single vaccine in the past six months. Europe is the one that’s been producing for itself and the rest of the world these past six months.”
Releasing patent information related to vaccines would therefore not expand production capacity. Transferring the manufacturing process from one facility to another actually throws up many challenges with regards to assuring the quality of vaccines.
"removing tariffs and export prohibitions; eliminating burdensome import requirements; vaccine recognition agreements; putting in massive orders for vaccines from proven manufacturers; and assistance to scale up manufacturing capacity." https://t.co/9jisE9FKRP
— Philip Thompson (@Phili_Thomp) May 6, 2021
This harmful policy must not be implemented
Furthermore, another danger of an IP waiver is that it would open the door to counterfeit vaccines entering global supply chains. Every year, forced technology transfers and intellectual property infringements already threatens hundreds of thousands of jobs in the European Union. Economically, IP protection is truly key for the European economy. As much as 82% of all EU exports is generated by sectors dependent on intellectual property.
In the long term, an IP waiver would discourage pharmaceutical companies from rapidly responding to future global health threats through large research investments. According to the International Property Rights Index, the 15 countries with the strongest IP protection are responsible for 85% of COVID-19 therapies in development. IP protection in North America and Europe is 30 percent stronger than in the rest of the world.
COVID-19 remains a significant threat in every corner of the world. In times like these, Intellectual Property Rights (IPRs) are more important than ever, and their benefits are even greater. It has actually been an amazing year for IP, as this allowed firms with two decades of mRNA research to leverage their experience and create fantastic vaccines in a remarkable short period of time. Otherwise, from discovery to market approval, it takes about 12 years to develop these, at an average cost of 2.8 billion US Dollar. Less than 10 percent of projects ultimately make it all the way through.
During the Covid crisis, IP really has proven itself to be a tool to promote innovation as well as trust and knowledge-sharing between industry and individuals. To undermine this would make no sense whatsoever.
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