A blow to equitable access to essential medicines

Context

Status of the proposal tabled by India and South Africa in the WTO

• At the height of the COVID-19 pandemic in October 2020 and in the midst of concerns over the availability of affordable vaccines, medicines and other medical products, India and South Africa had tabled a proposal in the World Trade Organization (WTO) seeking a temporary waiver on these products from certain obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
• Nearly 18 months later, 164 members of the WTO could not find common ground on the “waiver proposal” even as 63 developing countries have become co-sponsors of the proposal and another 44 countries lent support from the floor.

What the editorial is about?

• The relevance of the proposal to ensure that vaccines and medicines are accessible to all.

Significance of the proposal

Timely provisioning

• The application and enforcement of intellectual property rights (IPRs) are affecting the timely provisioning of affordable medical products to patients.
• Therefore, India and South Africa argued that “rapid scaling up of manufacturing globally” was “an obvious crucial solution to address the timely availability and affordability of medical products to all countries in need”, and for doing so, IPRs must be waived for at least three years.

Global public goods

• By submitting their proposal, India and South Africa had, thus, taken a firm position that when lives are at stake, these products should be treated as global public goods.

The stance of the advanced countries

Pharmaceutical companies VS Ordinary citizens

• It is hardly surprising as they have always put the interests of pharmaceutical companies ahead of the lives of the ordinary citizens in many countries who are yet to be fully vaccinated.

Worrying Factors

Vaccination

• As of today, only 14% of people in low-income countries have received at least one vaccine dose.

Recent Surge

• What is worse, the recent surge of infections in China is a strong warning to the global community that the threat from COVID-19 still remains.

The EU ‘solution’

• In this complex situation, when one of the consistent opponents of the “waiver proposal”, the European Union (EU), announces that the differences over the proposal had been resolved, there is considerable interest in the details (and the interests have been increased because of the compromised outcome.)

Compromise outcome

• India and South Africa, the movers of the “waiver proposal”, are among the four countries that found a “compromise outcome”.

Compulsory licenses

• The EU had proposed in a submission in June 2021 that “compulsory licenses are a perfectly legitimate tool that governments may wish to use in the context of a pandemic”.
• The “compromise outcome” adopts the approach that the EU has been proposing all along — namely, granting compulsory licenses to enhance vaccine production.
• Three of the four “Quad” members, who have been supporting the waiver proposal (the U.S. had extended limited support), have diluted their stand and have accepted the EU’s proposal as the “compromise outcome”.

As a truncated version of the “waiver proposal”

• The solution is a severely truncated version of the “waiver proposal” in terms of product coverage, as only vaccines are included.
• Generally, patent laws, including that of India’s, allow for the grant of compulsory licenses if patent holders charge high prices on the proprietary medicines in the exercise of their monopoly rights.
• Moreover, such licenses can usually be granted if efforts in obtaining voluntary licenses from the patent holders have failed.
• The EU proposal states there that in case of medical urgency, as is the case now, this condition will be waived.
• The proposal also provides that WTO members would be able to issue compulsory licenses even if they do not currently have the provisions to issue them under their national patent laws.
• Compulsory licenses can even be granted using executive orders, emergency decrees, and judicial or administrative orders.

Concerns with the EU Solution

Eligibility criteria

• The waiver solution can be used only by an “eligible member”, defined as a “developing country member” of the WTO that “had exported less than 10 per cent of world exports of COVID-19 vaccine doses in 2021”.

Case of Bangladesh

• This means that Bangladesh, which is still a least developed country but has a growing pharmaceutical industry, is also excluded.

A slap on China

• The eligibility condition seems to have been introduced to limit China’s expansion in the global vaccine market.

India seems not to be affected

• At the current juncture, India does not have to be concerned with the export restriction clause, as its share in global exports of vaccines was 2.4% as of January 31.

Export restrictions

Article 31(f) of the TRIPS Agreement

• While introducing the above-mentioned export restriction, the solution proposes to waive the obligation under Article 31(f) of the TRIPS Agreement.
• Article 31(f) provides that the compulsory licenses issued by any WTO member must be used “predominantly for the supply of the domestic market”.
• But while they have proposed the removal of Article 31(f), the solution includes a more stringent export restriction in the form of the eligibility criteria mentioned above.

Further conditions

Provisions under TRIPS VS Proposed Compulsory Agreement Conditions

• The proposed condition of listing all patents covered under the compulsory licenses is not a requirement under the TRIPS Agreement.
• Similarly, there is no obligation to notify the details of the licensee, the quantity and export destination under the TRIPS provisions. But the EU proposal text proposes mandatory notification.

Transfer of know-how is not ensured

• According to the EU, when compulsory licenses are granted, the “patent holder receives adequate remuneration”, but “transfer of know-how is not ensured”.

Availability at affordable prices

• This demerit of compulsory licenses would make it difficult to scale up the production of COVID-19 vaccines, medicines, and medical devices in the developing world, thus constraining their availability at affordable prices.

Way Ahead

• It must be said that by accepting the “compromise outcome”, India and South Africa could jeopardize their high moral ground which they had gained through their attempt to make medicines and medical products necessary for COVID-19 treatment or containment as global public goods.
• Consequently, the global community would lose an important opportunity to ensure that vaccines and medicines are accessible to all.

Practice Question for Mains

1. The ‘compromise outcome’ at the WTO could see India and South Africa losing their lead theme in the COVID-19 fight. Discuss. (250 Words, 15 Marks)