Biden Administration Supports Waiver of WTO Intellectual Property Rights for COVID-19: Next Steps for Innovators | Hogan Lovells

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Proposal for a WTO waiver of intellectual property rights

Since October 2, 2020, the WTO has been considering a proposal by India and South Africa to waive the intellectual property protections of the TRIPS Agreement for medical products related to COVID-19. In their request, India and South Africa cited the global nature of the COVID-19 pandemic, stating that “it is important that WTO Members work together to ensure that intellectual property rights such as patents, industrial designs, copyright and the protection of undisclosed information do not create barriers to rapid access to affordable medical products, including vaccines and drugs, or to intensifying research, development, manufacturing, supply and distribution of essential medical products to fight COVID-19. ”

The proposal has since acquired around 60 co-sponsors, most of them from developing countries, but until recently it was blocked by the United States, the European Union, Japan, the United Kingdom, Switzerland , Singapore and South Korea, among others. However, the Biden administration is under increasing pressure to support a waiver from a variety of sources, including letters from 100 former heads of state and Nobel laureates and of 109 House Democrats arguing that a waiver is necessary to ensure sufficient and equitable global access to COVID-19 vaccines and therapeutics, and thus to protect US public health and a US economic recovery.

The US biopharmaceutical industry (including professional associations such as PhRMA and ORGANIC), Congress Republicans, and some outside organizations (e.g., originally the Gates Foundation) opposed a waiver, arguing that it will not make COVID-19 vaccines more readily available, given other significant barriers to production, and that the magnitude of the waiver will result in a major transfer of US biomedical technology to China and Russia.

On May 5, 2021, Ambassador Tai reversed course and ad the support of the Biden administration for a waiver. Administration officials say the issue reached “the highest levels” and was ultimately decided by President Biden. Ambassador Tai made the following statement:

This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary action. The administration strongly believes in intellectual property protections, but in the service of ending this pandemic, it supports waiving such protections for COVID-19 vaccines. We will actively participate in the text-based negotiations at the World Trade Organization (WTO) necessary to achieve this.

She warned that “these negotiations will take time given the consensual nature of the institution and the complexity of the issues at stake.”

Implications for COVID-19 Technology Innovators

The upcoming negotiations on a TRIPS waiver will impact a wide variety of products, technologies and businesses. The waiver proposed by India and South Africa is extremely broad. Unlike WTO precedents Declaration on the TRIPS Agreement and Public Health, (Doha Declaration) Regarding the proposed compulsory license for anti-HIV / AIDS drugs, the pending exemption request is not limited to patents, but also covers copyrights, industrial designs and trade secrets. The Indian and South African project is equally broad in terms of product coverage and specifically refers to “diagnostic kits, a medical mask, other personal protective equipment and ventilators, as well as vaccines and medicines. for the prevention and treatment of patients in need ”. Finally, the draft waiver does not limit exports and would allow developing country Members of the WTO with large vaccine and pharmaceutical industries, for example India, Russia and China, to export to other WTO markets.

As a result, the waiver potentially has profound implications for a wide range of innovative products related to COVID-19, including diagnostic tests, therapies for the treatment of COVID-19 patients (antivirals and AIMs), medical products and devices used in prevention and treatment. COVID-19 (ventilators), and productions for administration (hypodermic needles), storage and distribution of vaccines (refrigeration systems). The copyright reference appears to be designed to cover software applications used to track the spread of COVID-19 or monitor patients. Finally, as drafted, lifting the waiver would require a decision by the WTO General Council, which, like other WTO bodies, operates on the basis of consensus. Reaching a consensus of 164 WTO members is difficult at the best of times, but getting one to end a TRIPS waiver is likely to be particularly difficult, as China, India, Russia and Africa countries would almost certainly resist lifting the waiver because doing so would deny their rights to freely copy valuable COVID-19 technology from other WTO Members.

Implications for Future Global Access to COVID-19 Vaccines

While the proposed WTO waiver request arouses the political theater, it is unlikely to lead to significant improvements in developing countries’ access to vaccines in the short term. Months of difficult negotiations over the scope and duration of the waiver are likely before a WTO consensus can be reached.

More importantly, patents and other forms of intellectual property are not the main (or even a significant obstacle) to improving access for developing countries today. Major American and European vaccine developers have already licensed their technologies to Indian, Chinese, Russian and South African vaccine makers. Instead, the problem is that unprecedented global demand for COVID-19 vaccines far exceeds limited global production capacity. Even with access to intellectual property, the ramp-up of new vaccine production would require the construction and qualification of new facilities to manufacture vaccines, a difficult, specialized and demanding process, given the high stakes and costs. potentially fatal failures. It also requires access to essential inputs, many of which are in short supply due to unprecedented demand. In order to manufacture advanced mRNA vaccines, new forms of vaccine production must be mastered, as it is a new technology. And vaccine production requires essential know-how, which begs the question of whether a WTO waiver will involve forced technology transfers. Finally, to date, one of the biggest challenges for developing country access has been that much of the global supply of COVID-19 vaccines has been purchased by the United States, the ‘EU and other wealthy economies, which have restricted exports until their own populations are. fully vaccinated.

Despite its political appeal, a waiver carries risks of unintended consequences, as it would discourage future investments in new vaccine technologies and treatments at a time when they may be urgently needed to cope with new variations in the virus. It appears at odds with the Biden administration’s “Build Back Better” initiatives to shift production of key medical technologies to land, build more resilient U.S. supply chains, and support U.S. global leadership in biomedical innovation, as it would transfer major US technologies overseas to China. , India, Russia and South Africa, among others.

Conclusion

While the United States has embraced the idea of ​​a waiver, a difficult and protracted negotiation at the WTO awaits them on the scope, product coverage and duration of the waiver. India, China and South Africa have very skilled trade negotiators and will be up to the task after the US overthrow. As COVID-19 puts unprecedented pressure on the WTO to reach a deal, reaching consensus among 164 WTO members – which is necessary to complete the waiver – will likely be a complicated endeavor and long.

Next steps

For COVID-19 innovators who could be affected by the proposed WTO waiver, concerns about possible negative effects on existing intellectual property rights should be raised as soon as possible. Engagement with the Office of the United States Trade Representative (USTR), Commerce, the White House, the State Department, other parts of the Biden administration, Congress, and / or foreign governments and stakeholders ( both in the WTO and in major WTO member countries) can be considered. Hogan Lovells closely follows developments in WTO waivers.



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