When Indian Prime Minister Narendra Modi made an express plea to seek support of the group to lift patent protections for Covid-19 vaccines, during a virtual address at the inaugural outreach session of the G7 summit in the UK, he touched upon the real issue.
A proposal by India and South Africa to temporarily waive patents on Covid-19 vaccines to ensure their equitable access, received widespread support at the G7 summit in the UK.
Reportedly, the Indian PM’s call was supported by South African President Cyril Ramaphosa, Australian Prime Minister Scott Morrison, WTO Director-General Okonjo Iweala and UN Secretary-General Antonio Guterres.
The UN Secretary-General extended support to the initiative, cautioning that “technology transfer” must be backed up by “technical support”.
Patents: An Intellectual Property
A patent is an intellectual property that prevents competitors from simply copying a company’s discovery and launching a rival product. In India as in the US, patents on medicines typically last 20 years from when they are filed. The filing takes place when a drug maker thinks it has an important or lucrative drug.
The ‘term of a patent’ when used is indicative of the maximum time during which it can be maintained in force. The term is usually expressed in the number of years either starting from the filing date of the patent application or from the date of grant of the patent.
In most patent laws, annuities or maintenance fees must be paid regularly in order to keep the patent in force. A patent may lapse before its term if a renewal fee is not paid in due time.
Usually, it takes almost a decade to get a drug approved, till when companies enjoy competition-free sales during the period. And, concurrently, drug makers find ways to improve their product or widen its use and secure additional patents that can extend their monopoly for many more years.
The need for patents, one must understand, it felt because medicines are very expensive to develop. And most experimental drugs fail at some point during the years of laboratory, animal, and finally human testing before making the mark and hitting the market.
Cost of failures hike up price
Taking into consideration the cost of failures, it typically costs a fortune to bring a drug from discovery to regulatory approval. If it were not for the prospect of years of sales without competition, there’s very less incentive to take that risk. Now, given the situation, the Biden government has acted primarily under pressure from many Democrats in Congress to get more vaccines to the rest of the world. The patents waiver idea has been gaining support from several other countries while the outbreak worsened in many places.
The decision on the vaccine patent waiver depends on the 164-member World Trade Organisation (WTO) that administers complex trade rules among nations. And, for that, everyone will have to agree in tandem. A single refusal to consent to the proposal will lead to a rejection. To have a unanimous vote to waive the vaccine-related patents, PM Modi has spearheaded the campaign.
For the record, this kind of waiver has never been passed ever in the history of the World Trade Organisation. About 20 years ago, WTO members had passed a temporary waiver allowing poor countries to import cheap generic drugs for HIV, tuberculosis, and malaria amid health crises. And that temporary waiver was eventually made permanent.
Now, where the US is concerned, pharma companies, driven by profit, charge prices that are raised twice a year, often doubling or tripling them during a drug’s patent-protected years. It isn’t without surprise to find most lofty drug-producers among the world’s richest entities. Now, for innovation needed to fund early research there’s need for investment. Few investors would fund any kind of research if it weren’t for the prospects of profit in sight. It would be foolhardy to expect investors to work for social good and without profit in mind.
Pharma Cos generate jobs, medicines
Pharmaceutical companies generate thousands of plush jobs, create tax benefits and provide new medicines that save lives and most wealthy countries across the world lead in areas of research and innovation. Drug-makers spend fortunes year after year lobbying governments to maintain the status quo on patents.
Those opposing the move to waive patent rights feel the move won’t get Covid-19 vaccines delivered to developing countries any faster. Making the vaccines is a lot more complex, they maintain, than sticking to a formula that is shared. It needs extensive factories, skilled workers and quality control, all of it being above and beyond the simplistic move to waive patent rights.
Till date, while most developed nations that include Britain, Canada, EU, Japan, Norway, Singapore, Australia and the US opposed the waiver idea, some 80 countries, mostly developing ones, supported the proposal. Earlier, China and Russia hadn’t taken a stand but were open to discussions. Now, most of these countries who opposed the decision, including the US, have changed their position.
Joining the Biden administration, Australia’s Prime Minister Scott Morrison and Russian president Vladimir Putin are known to have welcomed the call to relax vaccine patents. UN Secretary-General Antonio Guterres has welcomed the US decision too. India and South Africa are already onboard. Now, while the EU remains non-committal, they are open for dialogue.
While France supposed the patent waiver, Macron said manufacturers in places like Africa were now equipped to make Covid-19 vaccines and that donations of shots from wealthier countries should be given priority instead. China too has said that it’s open to discussions.
Germany openly opposes lifting curbs
Germany, on its part, has spoken extensively and without mincing any words against lifting the restrictions. “The protection of intellectual property is a source of innovation and must remain so in the future,” said German Chancellor Angela Merkel’s office. Germany, reportedly, is focused instead on how to increase vaccine manufacturers’ production capacity.
In India, the first compulsory license was granted by the Patent Office on 9 March 2012 to Natco Pharma, an Indian company, for the generic production of Bayer Corporation’s Nexavar, a drug used for the treatment of liver and kidney cancer. It is the best-known example of grant of compulsory license in India. Soon after, pharmaceutical companies began paying a lot of attention in selecting composition/drugs to apply for patent in India, drafting of specifications, launch of new drugs, licensing and assignments of related patents, drug pricing in India, etc.
Indian law provides for compulsory license
Under the Patents Act, 1970 (the Act), the enabling provision for compulsory license is Section 84, which stipulates conditions for grant of a compulsory license, viz., if (a) the reasonable requirements of the public with respect to the patented invention have not been satisfied, (b) the patented invention is not available to the public at a reasonably affordable price, or (c) the patented invention is not worked in the territory of India.
Incidentally, before applying for the compulsory license under above mentioned conditions, the applicant is first required to make an attempt to obtain a voluntary license from the patentee. When the applicant is unable to procure a licence at reasonable and equitable terms within the prescribed period (six months), the applicant can file a request for compulsory licensing before the Controller.
With new laws, come ingenuity and tapping the same entities mostly in ‘developed’ nations find creative loopholes in the law to extend their monopoly over a drug. A case in point being, to fight legal challenges to its patents, Allergan transferred all patents for its eye drug Restasis to the St Regis Mohawk Tribe in September 2017, because the Native American tribe holds sovereign immunity against intellectual property lawsuits.
The deal was subsequently defeated in the US courts, with the Supreme Court rejecting Allergan’s petition to appeal the case; it became a powerful example of lengths some entities go to extend patent protection. This, among a string of others, provides a glaring example of how patent protection is misused and extended to simply maximize profit.
Probably, now the Covid-19 situation provides the perfect situation for the world to come around and understand the India’s age-old philosophy of Vasudhaiva Kutumbakam and curb the greed… to start with.
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Manu Shrivastava
Manu Shrivastava is a media legal researcher with DraftCraft International, and co-convener of ‘The Woman Survivor’ initiative that documents abuse of women and children within families.
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