Bad Faith from Big Pharma, Rich Countries and the WTO Poison WTO TRIPS Waiver Negotiations

In October of 2020, foreseeing the deadly consequences of vaccine apartheid, South Africa and India submitted a proposal to the WTO that it temporarily waive intellectual property protections enshrined in the WTO TRIPS Agreement for COVID-19 health technologies in order to support expanded production by alternative manufacturers and quicker, greater, and more equitable access to life-saving medical countermeasure. 

Predictably, the trillion-dollar biopharmaceutical industry responded to the waiver proposal with outrage, claiming that intellectual property IP was not a problem even though it was essential; that new producers would disrupt and waste supplies; that the vaccines were impossible to duplicate; that companies could not take the time to engage in technology transfer; and that manufacturers elsewhere could not be trusted to make vaccines of assured quality. Despite these misleading claims, component manufacturers were quickly able to scale up supplies, and companies built new manufacturing capacity in a matter of months and transferred their vaccine technologies via 300 agreements while simultaneously ignoring the existing capacity of another 120 companies located mostly in developing countries.

The biopharmaceutical industry also boycotted an effort to set up a comprehensive COVID-19 Technology Access Pool at the WHO, and rich countries had raced to the front of the line to secure advance purchases of disproportionately large stockpiles of COVID-19 vaccines, especially mRNA vaccines from Moderna and Pfizer/BioNTech. Since that time there has been an endless cycle of bad faith from industry and rich country governments that succeeded in totally blocking textual discussion of the comprehensive waiver proposal.

In May 2021, however, the Biden administration stated its support for an IP waiver focused solely on vaccines but thereafter did nothing to actively negotiate an effective text, let alone expand its support to the diagnostics and therapeutics that had become the core of its own test-to-treat program in early 2022.

In May of 2021, the European Commission (EC) tabled a paper at the WTO proposing a limited intervention solely focused on compulsory licensing (CL), ignoring all other forms of IP that create barriers to access beyond patents (such as trade secrets, copyright, and industrial design). The EC has insisted on this flawed approach ever since.

Despite its promise not to enforce its mRNA COVID-19 vaccine patents in October of 2020, Moderna steadfastly refused to share its manufacturing know-how resulting in no new producer being able to clone its vaccine on a commercial scale.

And after almost 20 months, rich countries have doubled down on the EC proposal for a shrinking and increasingly ineffectual mechanism for compulsory licensing, restricted to vaccines only and now burdened with so much red tape and so many conditionalities that it is worse than nothing at all.

Here is the latest analysis from civil society, while trade officials are in the middle of meetings at the World Trade Organization’s Twelfth Ministerial Conference in Geneva with this crisis nothing short of a litmus test of the relevance of the WTO itself. 

After months of delay, stone-walling, and disinformation from the U.S. and EC, the WTO organized direct negotiations between the Quad parties:  the EC, U.S., India, and South Africa. The result was a feigned compromise text, actually drafted as evidence of “convergence” by the WTO Secretariat. This text, finally released May 3, 2022, contained the worst of the EC and U.S. positions. It did not deliver access to vaccines because it failed to include access to trade secrets, the essential component to technology transfer. And it proposed to delay for six months any decision on whether or not to eventually include diagnostics and therapeutics.

At the insistence of the EC, the draft text would have required the impractical (or impossible) listing of all pending and granted patents not only for the finished vaccine but on its components and methods of manufacture, a requirement with no precedent in any countries’ national legislation. The EC and U.S. also insisted on limiting the definition of countries eligible to issue compulsory licenses to developing countries only, with the U.S.’s further demand of excluding China. In addition, the U.S. and EC mandated anti-diversion measures, notification requirements, and tight duration limitations that would make use of the authorization procedure economically impracticable for “generic” producers.

The bad faith of the U.S. and EC encapsulated in the draft text was replicated in the exclusionary process that the WTO set up to allow input to and discussion of the draft text. The WTO adopted “green room” negotiation procedures open to 30 Members only, excluding the vast majority of WTO Members, including some developing country members eager to make counter-proposals. Although the WTO accepted additional proposed amendments from Switzerland and the U.K. that made the proposed authorization mechanism even more restricted, it rejected liberalizing proposals from the African delegation as out of order. Simultaneously the Secretariat, after the U.S. delegation walked out of negotiations in protest, ruled out proposals in the separate, broader negotiation of a pandemic response text of an automatic suspension of IP during pandemics offered by the Africa, Caribbean and Pacific (ACP) Group.

The U.K. and Switzerland proposals would grant access only to finished vaccine product patents (excluding access to patents on components and manufacturing processes), further limit the duration of compulsory licenses, and eliminate any stated intention to apply the CL mechanism to diagnostics and therapeutics.

Meanwhile, industry bewailed the proposed text as an IP give-away, whereas in reality there is a single, highly conditionalized deferral of a single patent obligation concerning the quantity of a vaccine produced under a CL that could be exported to other countries. At the same time, Pfizer mounted a human rights claim against a compulsory licensing effort in the Dominican Republic seeking access to its outpatient antiviral, Paxlovid.

The collective bad faith of Big Pharma, of the U.S., EC (especially Germany), the U.K., and Switzerland, and of the WTO, is breathtaking though hardly unexpected. Evidence of 15-20 million deaths apparently does not constitute evidence of IP being a problem to the pharmaceutical industry. The impracticality and incompleteness of a compulsory licensing mechanism relating to patents only has not deterred the EC and the U.K. from its championing this ineffectual approach for over a year. The cynicism of the U.S. (and now the U.K. and Switzerland) in refusing to remove even patent barriers to treatments now widely used in rich countries, but virtually inaccessible in poor countries, is maddening. And the rich countries’ collective effort to make the proposed “solution” even more impractical to use because of restrictions relating to eligibility, anti-diversion measures, notification requirements, and duration is cynical obstructionism at its worst, all of which has been enabled by a corrupt process at the WTO. The final decision on the June 10 Draft Decision hangs in the balance behind closed doors, with protesters locked out, blocks away. The best outcome at this Ministerial is a resolute rejection of this deeply flawed, bad-faith text by South Africa, India, and the multitude of “real waiver” proponents. Thereafter, the battle for access should be rejoined in negotiation on a meaningful IP waiver for future pandemics, on country and regional campaigns to bypass and override IP monopolies on COVID medical technologies, and on demands against rich countries to unilaterally disarm themselves from seeking trade sanctions and making threats against countries that enable access for their residents. WTO member states must simply say no to this poison pill of a proposal.