What just happened?
With backing from the Pope, on 5th May President Biden expressed support for a temporary waiver on patents for Covid vaccines. At the WTO conference in Porto however, EU nations have pushed back against the proposal, suggesting instead that the US should allow the increased export of doses and key ingredients to countries that are currently facing a shortage of doses and rising death tolls,1 such as India and Brazil.
What does this mean?
Last autumn, developing nations led by India and South Africa proposed to the World Trade Organization (WTO) that the patents on vaccinations and other Covid-related items should be waived on a temporary basis. Their argument was that, given the extreme nature of the pandemic, this move could help make the formula for the life-saving injections more widely available, effectively enabling local bulk production and avoiding the need for expensive and time-consuming exports. The measure was also proposed on the basis that most of the costs of the vaccines are incurred in research and development, whereas manufacturing tends to cost comparatively less.
The principle financial objection to lifting patents is that it could erode revenue and deter innovation,2 despite the proposed waiver’s temporary nature. The scheme’s most worrying flaw is the effect it would have on the quality and effectiveness of vaccines produced, which is yet to be seen. Suspending intellectual property rights also doesn’t resolve issues such as distribution and the limited availability of raw materials, as German Chancellor Angela Merkel pointed out after the two-day EU leaders’ summit in Porto. Instead, she called for a focus on ramping up production instead.3
French President Emmanuel Macron and other EU leaders supported the German premier’s position in response to the US’ surprise move. Both France and Germany are currently being faced with accusations that they are hoarding vaccines, while much of the world sees few or no shipments coming from Europe. Merkel told reporters after the summit concluded on Saturday: “I think that we need the creativity and innovation of the companies — and for that we need patent protection.”4
How does this impact the legal sector?
Without the regulation of Intellectual Property, industry bodies fear that due to lack of access to expertise and specialist equipment, a waiver could result in quality, safety and efficacy issues and possibly even counterfeits. They point out that Moderna has already said it would not prosecute those found to be infringing their patent - but no one has yet.5
While recent resistance from the EU makes a waiver unlikely, experts at Bloomberg contend that a potential WTO waiver of patent and trade secret protections for Covid-19 vaccines would leave pharmaceutical companies with limited legal avenues to recover costs,6 which could lead to a downturn in the sector from the perspective of law firms. However, it may not be all bad news for firms’ Big Pharma clients: the WTO is proposing that governments impose compulsory licenses on vaccine makers, compelling them to share their expertise and overseeing the production process along the way. Those pharmaceutical companies would have to be compensated by the government for doing so.7
Written By Hannah Phelvin
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References:
1 Daniel Boffey, 'US must export vaccine doses before waiving patents, say EU leaders' (The Guardian, 8 May 2021)
2 Dharshini David, 'Covid: The Vaccine patent row explained' (BBC News, 7 May 2021)
3 Sam Fleming, Jim Brunsden, Mehreen Khan, Michael Peel and Guy Chazan, 'EU leaders confront US over vaccine patent waiver demands' (Financial Times, 8 May 2021)
4 Ibid
5 Dharshini David, 'Covid: The Vaccine patent row explained' (BBC News, 7 May 2021).
6 Ian Lopez and Tina Davis, 'Pharma has limited legal options if vaccine patents waived' (Bloomberg, 8 May 2021).
7 Dharshini David, 'Covid: The Vaccine patent row explained' (BBC News, 7 May 2021).
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.