It has now been over a year since the COVID-19 outbreak. This unprecedented health crisis has put the focus on the right to health and positive obligations of states in this regard. In order to protect this fundamental right, western societies made big public investments in COVID-19 vaccine programs.
As the first vaccines were developed and approved, the world felt huge relief and optimism. But in the beginning of 2021, the hopes of putting an end to a pandemic fast were shuttered as the limited capacities of the pharmaceutical companies enabled the mass vaccinations. We witnessed the EU threatening to sue AstraZeneca for not being able to deliver the doses previously agreed upon.
The World Health Organisation (WHO) is insisting on solidarity and fair distribution, but the reality is that the world’s high-income countries have pre-ordered doses that far outnumber their populations, whilst the developing countries face less access to vaccines. Developing countries must rely on the vaccine sharing scheme—the COVAX mechanism—as they do not have strong negotiating positions with the pharmaceutical companies for vaccine procurement.
But the fact is, the global herd immunity will not be achieved before the whole world gets access to vaccines. This is a vicious circle, as the unvaccinated parts of the world can produce new mutant viruses, endangering the vaccination process in developed countries. The fast vaccination is therefore of utmost importance to bring this pandemic to an end as quickly as possible.
SO, WHAT ARE THE OBSTACLES AND ARE THERE LEGAL MECHANISMS THAT CAN CONTRIBUTE TO MAKE VACCINES MORE AVAILABLE GLOBALLY?
The pharmaceutical products, including vaccines, are protected by patents. Intellectual property system regulated by TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) obliges all World Trade Organisation (WTO) member states to offer 20 years of monopoly protection on new patented products (article 33). Nobody can use the IP rights without the permission from the IP holder. This way the IP system is encouraging investment in research and innovation, and protects the interest of the patent holder.
TRIPS gives the patent owners the right to assign, or transfer by succession, the patent and to conclude licensing contracts (article 28).
As AstraZeneca, Pfizer/Biontech, and Moderna cannot meet the demands of the world fast enough, the possible solution could be licensing vaccine formulas to drug manufacturers throughout the world to a larger extent. As these vaccines were partly funded by public funds, there should be a stronger commitment to public access.
According to UNICEF the annual global vaccine manufacturing capacity is estimated at as much as 20 billion doses, and half of vaccine manufacturing potential is located in developing countries such as Argentina, Bangladesh, Egypt, Cuba, Indonesia, Iran, Mexico, Taiwan, and Thailand.
By granting voluntary licenses and sharing IP, pharmaceutical companies will be able to meet the overwhelming market demand and still make profit from royalty fees. This is a win-win situation as the incentives to research would be preserved.
It is clearly not enough to state, such as Moderna did already in October 2020, that the IP rights will not be enforced against those making vaccines intended to combat the pandemic. Their obligations must go beyond generic commitments to availability and include concrete support to potential producers of the vaccines.
This means they actively have to transfer the intellectual property, together with the know-how and cell lines needed to copy vaccines. Moderna states that they are willing to license intellectual property for COVID-19 vaccines to others for the post pandemic period. Why not also during the pandemic?
SHOULD LARGE, FOR-PROFIT, PHARMACEUTICAL COMPANIES BE ABLE TO DECIDE WHO GETS VACCINES AND WHO DOES NOT?
The international and national law systems have provisions on possibility of suspension of monopoly effect of a patent—a compulsory license. It is a license that may be issued by the governments without the consent of the patent owner in order to, inter alia, protect public health and increase access to medicines. It is prescribed in articles 5A (2) and (4) of the Paris convention on intellectual property rights and article 31 of the TRIPS agreement and is one of its most controversial provisions.
In order to balance the position of the patent holder and the public interest, TRIPS contains conditions aimed at protecting the legitimate interests of the right holder. Hence these licenses can only be granted if an unsuccessful attempt has been made to acquire a voluntary license on reasonable terms and conditions within a reasonable period of time (refusal to deal). The decision to grant this license must be subject to judicial or other independent review.
Compulsory licenses are further aimed and authorised only for the supply of the domestic market. Yet, paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health created a new form of compulsory license specifically for the export of medicines.
Another condition to grant compulsory license is adequate remuneration to the patent holder. According to the United Nations Development Programme, royalty rates should be 4% of the sales price, and may be up to 2% higher if medicine is particularly innovative, or the governments where contributing to research and development.
Unlike the voluntary license, compulsory license can be only non-exclusive, and the licensee cannot give sublicenses. Such licenses can only last if the reasons for which they were granted exist. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable.
The negative side of this approach is that the patent holder usually opposes the compulsory license, so the licensee usually has to work in a hostile environment and would lack important knowledge the patent holder usually holds back in form of know-how.
Some countries have suggested a TRIPS waiver during the pandemic. If the pharmaceutical companies release the IP to countries that have the capacity to manufacture, this could increase the production of vaccines. The problem is that this possibility is not supported by the states where the pharmaceutical companies are located or states that have already negotiated good deals with producers. These are the US, the UK, Canada, Australia, Japan, Switzerland, Norway, the EU and Brazil.
In May 2020, the WTO formally launched a COVID-19 technology access pool (C-TAP). This sharing initiative could help scale up the global production of vaccines, but this project has yet to be supported by USA and UK, and most of the EU countries.
We see that IP law has got the means to make the vaccines more accessible in order to preserve public health, but there has to be more willingness to look beyond interests and the profits of the big companies, in order to help humankind combat this virus.
Dr. Lana Bubalo is an associate professor of law at the University of Stavanger, School of business. She currently works as the head of department for accounting and law and coordinator for the law program. She completed her PhD at the “Dzemal Bijedic” University in Mostar, Bosnia and Hercegovina. The subject of her doctoral thesis was protection of honour and reputation from a comparative perspective. Her areas of interest are tort law, protection of personality rights, comparative law and intellectual property law. She is a member of European Law Institute. She speaks Bosnian/Croatian/Serbian, English, Norwegian and French.