K.M. Gopakumar, Senior Research and Legal Advisor at Third World Network, discusses the implications of the new patent vaccine waiver introduced in the WTO and how countries like India face political, technical, and policy constraints in accessing medicine. This interview is part of Politics of Vaccine Equity: Conversations on the Frontline and was originally published in Pandemic Discourses.
Mahajan: Thank you for talking to Pandemic Discourses. I was hoping to first discuss how difficult it is for developing countries, even large ones like India, to avail of existing flexibilities within the WTO that are meant to facilitate access to medicines. And then I wanted to discuss the waiver that has been introduced in the WTO by India and South Africa that tries to address these problems. It has been in the news because the US government has just announced that it will support it.
India recently announced a new vaccine policy in the midst of its devastating second COVID-19 surge. Many, including yourself, have written sharp critiques of different aspects of this policy. But there’s one specific issue that I was hoping we could discuss. On the one hand, India, along with South Africa, introduced a waiver in the WTO in October 2020; this waiver would allow countries to not enforce intellectual property related to COVID-related vaccines and other COVID-related technologies. But at the same time, the Indian government, in its domestic terrain, has been reluctant to avail of tools such as compulsory licenses.[1] These flexibilities already exist in the WTO and were affirmed in the WTO’s Doha round of negotiations in 2001. How should one understand this seeming contradiction – of, on the one hand, how the Indian government positions itself in international forums and its demand of patent waivers, but on the other hand, its reluctance in the domestic terrain to avail of the tools that the WTO already provides?
Gopakumar: This might seem like an apparent contradiction in India’s international position vis-a-vis its domestic position. There are a few reasons behind this.
The reluctance of the Indian government to issue compulsory licenses partly emanates from the political pressure faced by India since 2013.
The reluctance of the Indian government to issue compulsory licenses partly emanates from the political pressure faced by India since 2013. India had issued a compulsory license in 2012, which was followed by a Supreme Court decision in 2013 that affirmed the cancellation of patent protection for imatinib mesylate, a lifesaving medicine for people living with Chronic Myeloid Leukemia (CML). These two developments triggered a very concerted effort by the pharmaceutical industry in the United States to lobby the United States Trade Representative (USTR) as well as the US International Trade Commission (ITC). The US Senate Committee on Finance and the House Committee on Ways and Means recommended an investigation by the ITC. Then the ITC carried out two sets of investigations around 2014. During these investigations and the USTR special 301 process, the PhRMA lobby demanded the cancellation of GSP[2] and the cancellation of the classification of India as a preferred trading partner. This produced a mandate for the USTR to instantiate certain trade retaliatory measures in case the Indian government failed to address intellectual property (IP) concerns within 6 months.
This international pressure forced India to engage with the US in bilateral negotiations to discuss the differences on IP including pharmaceutical patents. The resultant institutional mechanisms established in 2014 for bilateral negotiation on IP issues marked a shift in India’s engagement with the US. Till then, India had refused to discuss the concerns on IP bilaterally with the US. This bilateral pressure has brought a chilling effect on the issuance of compulsory licenses.
Another reason for the Indian government’s reluctance to issue compulsory licenses could be the business model of India’s leading pharmaceutical companies. The major part of their revenue comes from markets like the US and Europe. Thus, their main focus is developed country markets. They are not willing to take litigation risks involved in compulsory licenses. Further, they opt for the less risky route of seeking voluntary licenses from multinational companies and get coopted into the global pharmaceutical political economy.
The Indian company that receives a voluntary license becomes the defender of the patent system and acts like it is part of a small club of the privileged. Ironically, the people of India become the victims of the success of the Indian pharmaceutical industry.
The Indian company that receives a voluntary license becomes the defender of the patent system and acts like it is part of a small club of the privileged. Ironically, the people of India become the victims of the success of the Indian pharmaceutical industry. The latest example of this is the case of a medicine like Remdesivir. In a pre-emptive move, Gilead Science granted a voluntary license to seven generic manufactures. Irrespective of high prices and supply shortages, the Indian government is reluctant to issue a government-use license. This reluctance is captured in the government’s submission to the Indian Supreme Court in which it says: “Any exercise of statutory powers, either under the Patents Act of 1970 or read with the TRIPS agreement and Doha declaration, or in any other way, can only prove to be counter-productive at this stage.”
Mahajan: The overall trend that you have described – of countries like the United States seeking out bilateral engagement and regional or bilateral treaties, rather than bringing disputes to multilateral forums like the WTO, is seen not only with India, but with a wide range of other countries. There has been a kind of abandoning of the WTO by rich countries, because the WTO was a forum within which developing countries could actually band together and have some clout. Civil society actors had some say. Despite power asymmetries, there was some transparency around negotiations.
Despite this progressive moving away from the WTO, a certain kind of romance persists about the Doha Round of 2001. An entire generation of activists and developing country bureaucrats point to it as a high watermark of a multilateral victory on the part of developing countries. But the track record of developing countries being able to avail of the Doha flexibilities for public health is actually patchy and poor. What have been the lessons from this history, which underlines how difficult it is to realize the goals of accessible medicines for the poor despite legal provisions within the WTO?
Gopakumar: The TRIPS flexibilities were won during the HIV epidemic. However, the reality was that compulsory licenses during the post-Doha days were largely limited to a few diseases like HIV/AIDS. Whenever compulsory licenses were issued on cancer or hypertension, developed countries, especially the US, exerted pressure on developing countries.
So having a worldwide public health crisis is what it takes to get rich countries to concede on patent laws and for political consensus on IP to possibly change?
Mahajan: So having a worldwide public health crisis is what it takes to get rich countries to concede on patent laws and for political consensus on IP to possibly change?
Gopakumar: Yes. For instance, during the COVID-19 pandemic, we have seen a change in the US approach. For the first time, the Special 301[3] Report of 2021 recognizes the rights of trading parties to use compulsory licenses. It states that, “The United States respects the right of its trading partners to exercise the full range of existing flexibilities in the TRIPS Agreement and the Doha Declaration on the TRIPS Agreement and Public Health in order to scale up the production and distribution necessary to overcome the challenges of the ongoing COVID-19 pandemic.”
Another important announcement is the US support for the TRIPS Waiver Proposal to scale up the production of vaccines, therapeutics, diagnostic kits and other relevant materials required for an effective COVID-19 response.
But beyond COVID-19, we don’t know if they will change their tune.
There are other lessons from the experience with the Doha declaration. Developing countries face technological, institutional, and policy challenges that make it difficult to use existing flexibilities within the WTO. First, let us take the technological challenge. Not many countries have the capacity to manufacture pharmaceutical products. Often their use of flexibilities depends upon some other country’s capacity or readiness to use the flexibility.
Mahajan: So hemming in a country like India is actually very important for the OECD because India has been a source for producing and exporting generic versions of patented drugs to many poorer countries which do not have the technological capacity.
Gopakumar: Yes, absolutely.
Second, you have institutional constraints, even in countries like India. For example, if you want to apply for a compulsory license, you need to show under Indian law that there is an unmet demand for that medicine. Getting government data to prove unmet demand is very difficult because there is no official database of various types of diseases and consumption of medicines.
Third, other national imperatives might push a developing country government to initiate a free trade agreement negotiation with a developed country, and the result might be that you will be hit with TRIPS Plus conditionalities that demand adherence to strict patent laws. So a government might be pushed towards a pro-patent position rather than a public interest oriented position because of other economic and political reasons.
Mahajan: Given this history of the last 20 years, from which we know how difficult it is to use existing WTO flexibilities, what should be a renewed framework for access to medicines?
COVID-19 has reinforced that medical products have to be understood as a public good. So we have to develop international and national policies, laws, – and a politics – that translates the concept of public good into a reality. In contrast, TRIPS and the WTO fundamentally promote private goods rather than public goods.
Gopakumar: COVID-19 has reinforced that medical products have to be understood as a public good. So we have to develop international and national policies, laws, – and a politics – that translates the concept of public good into a reality. In contrast, TRIPS and the WTO fundamentally promote private goods rather than public goods.
There have been challenges to thinking of medicine as a public good. The most common argument that is made is that patents are needed to support innovation and to recoup R&D costs. But the R&D efforts on COVID-19 solutions demolished this argument. As we know, in the case of COVID-19 vaccines, there was complete de-risking of R&D and manufacturing through huge public funding. And still, these companies, or the governments that provided the funding, are not ready to give up their monopoly. This means that patents are not about recouping R&D investments but a mechanism to maintain monopolies.
The justification of patents is also fundamentally political. It is about how to maintain your technological dominance. But even that fear needs to be addressed. For instance, India is often touted as the pharmacy of the poor world. If you put together the market value of India’s pharmaceutical industry, including the domestic market and export market, it comes around US $26 billion. But if you look at the top selling three brands in the world – that surpassed US $26 billion. The revenue from just three brands surpasses the entire value of the Indian pharmaceutical market. So the perception that there is a loss of revenue to big pharma due to the lack of effective patent protection for pharmaceuticals in India has no basis.
Mahajan: Can we talk more about the waiver that’s been introduced into the WTO by India and South Africa. As you noted earlier, in a somewhat dramatic departure, the United States recently announced conditional support for this waiver.
Gopakumar: There is a long way to go to translate the United State’s support for the text-based negotiations into actual decision text. There will be an attempt to limit the scope of the waiver or its duration. Furthermore, attempts can be made to introduce burdensome conditions or drag out the negotiations. But the hope is that the rationale behind the US decision to support the waiver will be reflected not only in the fine print of the decision text but also in the actions of the US government after the waiver’s formal adoption.
Mahajan: How does this waiver go beyond the existing TRIPS flexibilities?
Gopakumar: TRIPS flexibilities were negotiated in 2001 during the peak of the HIV/AIDS crisis in developing countries. At that time, we were very clear that what was needed was antiretroviral medicines. Those medicines were already in the market. Tools such as compulsory licenses are useful when you know the product that you need. But in the case of COVID-19, innovation is still taking place. It’s important to give full freedom and legal predictability to innovators, so that companies and governments don’t stay away from innovations or entire technological platforms. Thus the waiver will bring much more clarity and predictability for scientists and companies all over the world.
Second, patents are not the only relevant IP right relevant for COVID-19 medical products. Vaccines are protected through patents as well as trade secrets. Similarly, an artificial intelligence tool for COVID-19 may be protected through copyrights and trade secrets. This means that WTO member states need a mechanism like the wavier to address these varied IP issues. In the absence of the waiver, the existing flexibilities may not be sufficient to provide the freedom of operation to scale up and diversify the production of required medical products. Though the proposal mentioned waiver of IP is mainly in the context of vaccines, it is important to waive IP in the case of therapeutics, diagnostic kits, etc. Availability and accessibility of other medical products are critical in the light of incapacity of current vaccines to fully prevent infection.
Mahajan: There has been a sharp, perhaps predictable, resistance to the waiver from many quarters that weakening IP rights won’t allow you to address what is the urgent problem at hand, which is first, the supply of vaccines and then, the logistics of population-wide vaccination. The argument goes that you won’t be able to retool and ramp up factories, train personnel, and address supply chain gaps quickly just by waiving IP rights. So the critique of the waiver is that this focus on IP is misplaced, and not what will actually improve vaccine supply. What would be your response to these arguments?
Gopakumar: Let’s take the example of Moderna. Before 2020, Moderna had never produced any vaccine. Moderna licensed the technology to a Swiss firm and by July 2020, you have vaccines. Astra-Zeneca, similarly, has no recent history of producing vaccines. Around June 2020, AstraZeneca transfers the product to Serum Institute, and by September, there is a product in India. So within three months. So that shows that ramping up vaccine production is difficult but not that complicated. Companies around the world have this knowledge and capacity. Even the knowledge about the mRNA vaccine has been around for a few years within that small community of scientists.
Mahajan: This argument about how these technologies are too complex for developing countries’ to produce or scale up are reminiscent of an older discourse around antiretrovirals and how the South could not produce them, and that people in Africa would not know how to consume them.
Gopakumar: Yes. The first vaccine plant was established in India during the colonial period in the early 1900s. If you look at the WHO’s list of pre-qualified vaccines, it includes several dozen from developing country manufacturers, showing that they have a history of producing large quantities of high-quality vaccines.
Mahajan: We have India, and middle income countries like Brazil, Egypt and South Africa, which have manufacturing and R&D capacity. But the discussion of global health equity has to expand to how technical capacities and know-how can be built in a larger swathe of developing countries, including in parts of sub-Saharan Africa. How do access to medicines campaigns take on this broader issue – of not just getting medicines to everybody who needs them urgently, but about the vast asymmetries in the production of knowledge and technology?
Access to medicines is a development issue. Of course immediate access to medicines is required and it is critical at this moment. But we have to place this issue in the larger political and economic context and in a framework of social and economic determinants of health.
Gopakumar: Access to medicines is a development issue. Of course immediate access to medicines is required and it is critical at this moment. But we have to place this issue in the larger political and economic context and in a framework of social and economic determinants of health.
Furthermore, self sufficiency of essential medicines, vaccines and other critical medical products at the national or regional level is important to maintain a sustainable supply. Of course self-reliance has been a highly pejorative term for many trade economists as well as among mainstream policy makers and academics. But COVID-19 underlined the importance of having multiple sources of supply of essential medical products, so that everybody was not dependent upon a few countries, say China or the United States. We are also aware that that the export controls of the US slowed down vaccine production in India. So, the hard lesson we learned was that everything cannot be understood from an economic efficiency point of view. Some regional and domestic capacities might be needed, even if inefficient, because efficiency only is simply a means but the real end is human well-being. Therefore, we need to shed the means which hampers the end.
K. M. Gopakumar is a Senior Researcher and Legal Advisor at Third World Network (TWN) and based in New Delhi, India. TWN is an independent, not-for-profit organization that carries out policy research and advocacy on issues around trade and development, with a focus on third world countries.
[1] Compulsory licensing is defined as when a Government allows a company or some other entity to produce a patented product (such as a drug or vaccine) without the consent of the patent owner. This is one of the flexibilities enshrined in the WTO agreement on intellectual property. https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm
[2] The Generalized System of Preferences (GSP) is a trade program that provides nonreciprocal, duty-free treatment for certain U.S. imports from eligible developing countries. It is a “a preferential tariff reduction on imports from developing countries, as a tool to extract economic concessions from poorer nations” (Gopakumar 2019). In 2019, India was removed from the countries eligible for GSP. https://peoplesdispatch.org/2019/03/08/withdrawal-of-gsp-by-the-us-is-indias-opportunity-to-end-loot-by-big-pharma/
[3] Special 301 is an annual review process led by the office of the United States Trade Representative. U.S. trade law (“Special 301”) requires an annual review of intellectual property protection and market access practices in foreign countries. One of the goals of the review is to address the adequacy and effectiveness of trading partners’ protection of intellectual property rights. https://www.cmtradelaw.com/2021/05/highlights-from-ustrs-annual-special-301-report-for-2021-protection-of-intellectual-property-rights/