Fight Covid with compulsory licensing

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May 08, 2021 4:30 AM

If patents continue to determine global access to vaccines and drugs, then fighting Covid-19 will remain a distant dream for most countries

For India, there is little option other than authorising compulsory licences.For India, there is little option other than authorising compulsory licences.

Vaccines are badly required by the world, as are drugs like Remdesivir and Tocilizumab, and medical equipment like ventilators and oxygen concentrators. A large number of countries, particularly low- and middle-income ones, are struggling to access vaccines, drugs and equipment.

There cannot be a more important occasion than the current circumstances for issuing compulsory licences for producing patented health products.

The Covid-19 crisis underpins the importance of flexible global trade rules. Particularly important in this regard are rules linking ownership of intellectual property (IP) to cross-border movement of products involving IP, such as vaccines and medicines. The WTO’s rules insist on IP rights being protected in cross-border trade. An implication of the insistence is that health products like vaccines can move from one country to another only after ensuring their developers, i.e. pharmaceutical companies, are commercially compensated for proprietary knowledge. This explains why rich and higher-income countries have been much ahead of others in obtaining vaccines and inoculating their people.

If patents continue to determine global access to vaccines and drugs, then fighting Covid-19 will remain a distant dream for most countries.

Global trade rules need to back off from insisting on patent obligations. This doesn’t mean that drug and vaccine development becomes a philanthropic exercise. The current global health crisis and high demand for drugs and vaccines means their producers have enough countries and customers to supply to. The large volumes would ensure that they are able to recover the costs on their scientific investments. But what drug developers must avoid is the tendency to make profits by exploiting the helplessness of countries. And profits are indeed pouring in for companies like Pfizer, who have been among the earliest to make vaccines and sell to rich countries through advance purchase agreements.

One of the most effective ways in which global trade rules can contribute to better access of vaccines and medicines is by enabling compulsory licensing. The WTO’s rules allow countries to issue compulsory licences to domestic producers for manufacturing patented drugs and other products. This is allowed under situations of serious public health concern.

India’s Patents Act of 2005 provides for issue of compulsory licences in public health emergency. In the past, the provision was used for allowing Indian drug-maker Natco to locally manufacture Nexavar, a patented product of the German pharmaceutical firm Bayer, for treating kidney cancer patients. The licence also involved paying royalty to Bayer.

Under normal circumstances, compulsory licences are issued after detailed consultations with the patent holder. Such consultations are lengthy and take time to conclude. The Covid-19 conditions do not allow such luxury on time. Compulsory licences need to be issued fast for enabling Indian companies to make patented vaccines and critical drugs.

The Supreme Court has asked the government to explore the possibility of issuing compulsory licences under the Patents Act of 2005 for locally producing critical drugs like Remdesivir and Tocilizumab for treating Covid-19 patients. A three-judge bench of the Supreme Court described the current conditions as public health emergency and suggested exploring the possibility of issuing compulsory licences while royalty issues are simultaneously sorted out.

Well before vaccines became available for public use, in October 2020, India and South Africa had sought a temporary waiver of patent enforcement obligations by WTO members for enabling easier global access to patented drugs and products. The proposal, unsurprisingly, was resisted by several developed countries, including the US. Major global pharma companies from the US and Europe have always been able to successfully lobby their governments for protecting patent and business interests.

There is no denying that pharma companies need to earn sufficient revenues for recovering their costs of R&D and sustaining the research on drug discovery and new therapeutic applications. But Covid-19 is a situation where this perspective needs to be revisited. Patent rights, and commercial returns on proprietary knowledge, cannot be primary at this stage. The fastest and most cost-effective ways of obtaining vaccines and Covid-19 drugs are imperative now.

For India, there is little option other than authorising compulsory licences. Such licences shouldn’t be confined to only local production of patented medicines. These can also explore the option of India-made patented products being exported to countries that require them desperately.

Compulsory licensing provisions under India’s Patents Act are WTO-compliant. There shouldn’t be any hesitation in using these provisions. At the same time, it is important for India to work with the US, the UK and other countries, which had opposed India’s proposal at the WTO, to get the global trade body reach a consensus on allowing the flexibilities in trade rules that India and South Africa had demanded. The recent US decision to work towards ensuring that patents don’t obstruct flow of medicines and vaccines for tackling Covid-19 should be of great help in this regard.

The author is Senior research fellow & research lead (Trade & Economics), Institute of South Asian Studies, National University of Singapore. Views are personal. amitendu@gmail.com

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