The battle against the Chinese virus induced COVID-19 pandemic is reaching perhaps a decisive stage. To some, it might be the beginning of the end. The year 2020 has been an exceptionally bad from economic and social point of view with the world engaged in battling this pandemic. The economy has shut down, so have the social interactions. As one nears the end of 2020, one seems to await with hope the beginning of 2021. The return of normal conditions is possible only with massive vaccination programs across the world. There are more than six billion people in the world and they need to be vaccinated. They belong to diverse countries and have diverse income ranges. More than 95% might not be in a position to afford the vaccines. For herd immunity to be reached through vaccines, roughly around 60-70% need to be vaccinated. This would mean still around 4 billion people. That is not a small number either. For the coronavirus epidemic to be declared ended in around six months or so, nearly 700 million must be vaccinated per month to achieve the rough 60-70% mark for herd immunity. The demand side far outweighs the supply side. The production plans as of now do not even indicate the possibility of meeting the same even by late 2022. This is not just true for developing countries but even the developed world too.
It is in this context, some mechanisms have to be developed to build production capacity. The firms which are in race for vaccine have finite capacity implying the production base must be expanded. This is where, India and South Africa among others have put forth a proposal in front of the WTO to allow these countries to take exceptional measures to ensure production of vaccines happen fast. These also would facilitate production of generic versions of the vaccines. The proposals envisage allowing member countries of WTO getting exemptions from enforcing some patents, trade-secrets and other pharmaceutical monopolies in these exceptional circumstances. The current regime of IPRs as built up on the foundations of Trade Related Intellectual Rights (TRIPS) hinders the affordability of these vaccines to larger masses.
As with any other instances with TRIPS enforcements or relaxations, the Western world is again united in opposing this proposal. This is irrespective of the fact, that the Western world itself might face shortage of vaccines. The regulatory regime of TRIPS does provide for a couple of exemptions. It does provide for compulsory licensing and parallel imports. Whenever these have sought to be enforced, the pharmaceutical industry along with the Western governments have come down heavily on the developing countries. It is a different matter that the developed countries have used these provisions whenever their interests were threatened. For instance, when anthrax scare engulfed US post 9/11, the US government did use its power to force Bayer to sell its antibiotic drugs at cheaper prices. there have been occasions when Britain has ensured the drugs for cystic fibrosis, a rare disease being available at lower prices. While firms like Moderna or Astra Zeneca have indicated their willingness not to enforce their patents during the pandemic, their offers usually come with lot of hidden conditions. For instance Astra Zeneca could declare the end of pandemic by mid-2021 even if large sections of population remain unvaccinated. Moderna might enforce other technical knowhows or trade secrets to ensure its monopoly. Therefore, there is every reason that the countries are likely to be suspicious of these firms. Interestingly for all the talk of huge investment in an uncertain world, these firms are riding on public money. Governments in the West have funded the research both in Pfizer as also Moderna. Further, these firms have entered into pre-production purchase contracts that ensured them approved sales before the vaccine was developed. Given few Western countries purchased far more doses than their population, the certainty of revenues was assured for these firms in case they succeeded. Yet, it is just not the Western world that needs vaccines but a large population that resides away from these centres.
The US representative’s arguments at WTO seemed to underscore the importance of the intellectual property rights and their role in facilitating innovation and competition. To the US and its allies, innovation was best driven through incentives- something no one would disagree with- but in their analysis, strong IP regimes were the desired route. To the countries on the developing side, the focus was on quick delivery of products which was hampered by the enforcement of IP norms. India has a strong pharmaceutical base and could be the vaccine factory of the world. Through the pandemic, India has sought to build on its image of pharmacist of the world. India was quick in delivery HCQ tablets to many part of the world as they did with paracetamol tablets. Now with producers like Serum Institute, India is well leveraged to export vaccines across the world. India could use its position to export to countries in Africa etc. It is in this regard that India’s position on IPRs in COVID-19 times comes into play. The allowance of parallel imports in emergency times, will help Indian firms capture the African and Latin American markets. India by enforcing compulsory licensing and the African countries enforcing parallel imports would be a good way of increasing the production and supplying the same to the African continent. India too is coming out with its own vaccine from makers like Bharat Biotech and Zydus Cadilla with Gennova Technologies not far behind. Bharat Biotech is awaiting the regulator’s nod, which if it gets will allow it to produce in masses. The position with Bharat Biotech is not difficult since it could be asked to licence to other companies to produce the same and thus leverage the position.
If one analyses the development of vaccines, they have been developed with the people’s money, the people would continue to pay for the same as the vaccination programme gets underway. There is a misconception that free vaccine would mean free in reality. It implies that the taxpayers are funding the vaccination programme. In case taxes are not sufficient, the government will borrow, leading to deficit which the future generations will have to bear. The people are ready to buy but they need it in time for it to restore the global economy to normalcy in the shortest possible time. Therefore, the time does exist for the facilitating the TRIPS exemptions to set in and WTO must make a decision quickly
Thoughts on Theory and Practice 