‘Compromise’ on TRIPS waiver is a sellout

Tough new conditions emerge in the compromise deal to ease WTO intellectual property barriers to production of COVID-19 medical tools

By Latha Jishnu
Published: Tuesday 29 March 2022

We are back to square one. Back to the beginning after 18 months of a wearying, tortuous series of negotiations that carried on while millions of lives hung in the balance — and still do.

The waiver of intellectual property (IP) rights on medicines, vaccines and diagnostics to fight the COVID-19 pandemic sought by India and South Africa — and backed by more than 100 countries at the World Trade Organization (WTO) — has not made much headway, a leaked document reveals.

In fact, experts say the so-called compromise merely reiterates existing flexibilities in the WTO rules and, worse, adds new conditions that are onerous in the extreme.

The document, made public by global health campaigners on March 15 this year, is a purported compromise reached by a quad of interested parties to break the impasse at WTO. It comprises the two movers of the October 2020 proposal and the world’s two largest trading blocs, the EU and the US.

The agreement, brokered by WTO chief Ngozi Okonjo-Iweala, has to be formally approved by the four parties to the secret negotiations that have been going on for some weeks now. That is how uncertain the outcome is. Even if the four parties endorse the current draft, it could also be turned down by other members of WTO, which requires consensus on such matters. 

While that may be the case, the leaked compromise begs several questions. First and foremost is why India and South Africa are backing a decision that essentially does little to remove the IP barriers that are blocking the increased production of COVID-19 medical tools, from vaccines and therapies to diagnostic kits, and are thus restricting access to these life-saving products.

In fact, what does the compromise do other than reinforce the flexibilities already available in WTO’s agreement on protecting IP rights, known as TRIPS (the Agreement on Trade-Related Aspects of Intellectual Property Rights)?

Why have the two countries agreed to a limited and constricting compromise that only covers vaccines and is applicable only to “eligible members” among developing countries, that is, those which have a less than 10 per cent share in total global exports of 2021?

There is a provision that promises the decision will in due course cover the full range of medical items needed to fight sars-cov-2, stating that “no later than six months from the date of this decision coming into force, members will decide on its extension to cover the production and distribution of COVID-19 diagnostics and therapeutics.” But the wording makes it clear that is another battle.

Perhaps it was a foregone conclusion that powerful drug companies who control the required technology on these tools, and their rich host countries, would not allow it to be made freely available. Is that why India has been forced to settle for maintaining the status quo on WTO rules?

For that is what the compromise amounts to. It limits the flexibility to patents alone, leaving untouched the critical issue of other forms of IP such as trade secrets and manufacturing technology that are most relevant for making the new-era mrna vaccines that the World Health Organization has identified as the best option to fight the pandemic.

Worse, it adds new obligations on countries using existing flexibilities in the TRIPS agreement. Well-known IP expert James Love, director of Knowledge Ecology International, a non-profit focused on social justice, is scathing in his analysis of what it entails. He writes in his blog that the quad’s “compromise” proposal would temporarily modify a 20-word paragraph in Article 31 of the TRIPS agreement, to eliminate the requirement that exports under a compulsory licence be predominately for the domestic market.

But that exemption is “only for COVID-19 vaccines, only for some countries, and only when subject to new TRIPS plus obligations.” TRIPS plus requirements are those that go beyond the current TRIPS deal and are usually imposed through free trade agreements signed by rich nations.

The “compromise” conditions are tough for less developed countries to meet. Not only do parties have to name all patents involved — a next-to-impossible task given the complex web of the global patent landscape — but they also have to notify WTO for each authorisation. In addition, they have to implement anti-diversion obligations, which means they have to ensure that production does not go to ineligible countries.

The trickiest of the three new conditions is the demand to list “all patents covered”. Even if countries were to bend their best legal talent to this task, how would they be able to identify the complex thicket of patents covering say, for instance, Moderna’s mRNA vaccine that is caught up in multiple disputes?

It is difficult to understand how India, a seasoned negotiator, could have fallen into this trap. To agree to a minor change in the existing flexibility of Article 31 with added obligations that make the rules more restrictive is hardly the way to push its demand for a waiver.

The compromise has the stamp of the US all over it. And, one would add, that of Okonjo-Iweala, who has not been sympathetic to the demand for a waiver. She has described the compromise as “a major step forward”, but admits “we are not there yet. We have more work to do to ensure that we have the support of the entire WTO membership.”

Has exhaustion set in? As someone said, we cannot be negotiating forever, and countries need to find common ground. But if the compromise bears no resemblance at all to the original proposal, then it is best the idea of waiver be dropped. It would be suicidal to make TRIPS plus conditions part of the WTO regime.

That may be the reason why the lobby group of Big Pharma has been muted in its response to the potential waiver plan. The Pharmaceutical Research and Manufacturers of America, repeating its stance that a waiver of IP rights is unnecessary and harmful, has said voluntary technology transfers and partnerships are the best way forward — which is par for the course. Meanwhile, COVID-19 cases are spiking in Asia and Europe.

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