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Briefing: Health Before Wealth

Mar 12, 2021

Don't let trade rules stop access to Covid-19 Cures for All

(Updated 12 March 2021)

This online briefing takes you through the key arguments and strategies needed to push governments to stop WTO trade rules from blocking access to Covid cures.

Overview

Public funding has paved the way for scientific developments to beat the virus – but now corporate property rights are threatening access to vital medicines and equipment and putting millions of lives at risk.

That’s why many governments – supported by unions and civil society – are calling for the WTO to waive intellectual property right provisions for vaccines, key medicines and medical supplies: because private profits must not be put ahead of public health.

Background

The pandemic has demanded extraordinary sacrifices from workers around the world.

A Covid recovery will require all countries and all people to have access to affordable medicines, vaccine, diagnostics and other medical products. Yet the monopoly powers given to pharmaceutical companies by the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement will allow companies to artificially limit global supply and make extravagant profits and charge prices that could be prohibitive for most of the world.

Frontline health staff have worked tirelessly to ensure we overcome this crisis. They have endured dangerous conditions, often facing extended hours with little or no time off and without appropriate personal protective equipment (PPE). This has led to the needless deaths of thousands of workers who have paid with their lives due to a lack of safety.

A huge number of new front line staff will be required to deliver and administer the vaccine.

Pharmaceutical companies should not be allowed to profit from the pandemic by enforcing monopoly power while everyone else has made efforts and sacrifices to overcome the crisis.

In early October, India and South Africa made a formal proposal to the World Trade Organisation for a “Waiver from Certain Provisions of the TRIPS Agreement for the Prevention, Containment and Treatment of COVID-19”.

This has since then been endorsed by over 55 countries and received support from many more. Without the waiver, pharmaceutical companies will be able to prevent other manufacturers from producing COVID-19 vaccines and medicines, thus impeding scaling up of production.

WTO rules ensure big pharma has a monopoly over the market and can dictate prices even to governments, which will consume public finances required for a healthy recovery.

The WTO Agreement recognises that intellectual property rights can be waived in “exceptional circumstances”, which this pandemic presents. Experts advise that flexibilities contained in the TRIPS agreement are inadequate to address global needs, hence the need for a waiver.

The World Health Organization, UN Human Rights Experts, UNITAID and UNAIDS have supported the waiver. The international trade union movement, including IndustriALL Global Union, Public Services International (PSI) and International Trade Union Confederation (ITUC) endorsed the proposal early on. More recently, UNI Global Union and Labour 20 have also endorsed it.

Trade unions can play a key role in supporting this waiver by ensuring national governments are aware that health-workers and other public services’ workers expect them to support the waiver.

The State of Play

Several meetings of the TRIPS Council were held during from October 202o to February 2021. However, the opponents to the waiver disagreed to start concrete discussions on the text of the waiver proposed in October and instead delayed the process by requesting more evidence and extending general discussions. These delegations are de-facto blocking the proposal.

As a result, on 1 March 2021, the General Council of the WTO noted that there was no consensus reached, including on whether to move the general discussion to text-based negotiations and extended the discussions, yet again.

The TRIPS waiver proposal was made to the TRIPS Council in early October. The TRIPS Council had 90 days to deliberate and forward a recommendation to the WTO General Council for a formal decision. On 17 December, based on a recommendation from the TRIPS Council, the WTO General Council agreed to extend the discussions into 2021 (i.e. beyond the 90 days required for by the WTO). This is the second extention, and it is costing lives.

In continuation, a formal TRIPS Council sessions will be held on 10 March followed by a few more sessions in April until the WTO General Council meeting of 5-6 May.

Following our statement Universal access to Covid-19 vaccine is possible if governments agree to WTO waiver, PSI affiliates across the world have taken action in support of the waiver.

These initiatives were impactful, including in putting pressure on governments not to be seen as opposing the waiver or obstructing the process.

We need to keep the pressure on our governments, bring this discussions into the public domain and continue to gather more support. Urgent action is needed ahead of the General Council meeting.

The Basics

The TRIPS waiver proposal submitted on 2 October proposes that countries party to the WTO would not have to implement, apply or enforce certain intellectual property right obligations contained in the TRIPS agreement in relation to prevention, treatment and containment of COVID-19.

Provisions which would be covered relate to:

  • copyrights (section 1)

  • industrial design (section 4),

  • patents (section 5)

  • protection of undisclosed information (section 7).

The waiver proposal will cover COVID-19 medical products including:

  • medicines

  • vaccines

  • diagnostics,

  • other technologies, such as masks and ventilators.

This is not a waiver from all TRIPS obligations, nor does it suggest a waiver beyond what is needed for COVID-19 prevention, containment and treatment.

The duration of the waiver is still unknown. However the proposal states that the waiver should continue until widespread vaccination is in place globally, and the majority of the world's population has developed immunity. The actual duration will depend on negotiations by members and will be time-limited (as is required by WTO rules).

The waiver would be applicable for all WTO members, including developing, developed, and least-developed countries (LDCs), but would not be compulsory. Any country that does not want to waive intellectual property obligations would have the liberty to continue implementing them.

Countries that
co-sponsor

Over 55 countries Bolivia, Egypt, Eswatini, India, Kenya, Mongolia, Mozambique, South Africa, Pakistan, Venezuela, Zimbabwe

Countries that oppose

Australia, Canada, Brazil, Mexico, Japan, Norway, Singapore, South Korea, Switzerland, UK, USA and the EU

Countries that support (including co-sponsors)

Close to 100 countries around the world , including from the Caribbean, Africa and the Pacific (ACP)

Myths and Responses

Here are the key claims and responses for engaging in this debate

CLAIM 1: Intellectual Property (IP) is required to promote innovation

  • Response

    Opponents of the waiver proposal argue that IP promotes innovation, but evidence points to a different reality.

    Many of the pharmaceutical corporations aim to commercialize scientific breakthroughs originating in public labs and from public funding around the world.

    Every vaccine and treatment that has been developed for the pandemic has received significant public funding. According to the new chair of the WHO Council on the Economics of Health for All, Mariana Mazzucato, in the United States, the National Institutes of Health (NIH) invests some $40 billion a year on medical research and has been a key funder of the research and development of COVID-19 treatments and vaccines.

    For instance, California-based company Gilead developed its COVID-19 drug, remesdevir, with $70.5 million in support from the federal government. In June, the company announced the price it would charge Americans for a treatment course: $3,120. A typical move for Big Pharma. According to another report, $113 billion in public funds has already been spent on Covid-19 vaccines and therapeutics globally.

    The pharma industry exists as a result of enormous public financing and support. According to Mazzucato, one study looked at the 210 drugs approved by the U.S. Food and Drug Administration from 2010 to 2016 and found that NIH funding contributed to every one of them. Even so, U.S. drug prices are the highest in the world. Pharmaceutical companies are under no obligation to make the final products affordable to Americans, whose tax money is subsidizing them in the first place.

    IP rules ensure big pharma has a monopoly over the market and can dictate supply and prices even to governments, at the cost of other measures for the recovery. These rules allow pharmaceutical companies to prevent other manufacturers from producing vaccines and medicines, impeding scaling up of production, limiting supply and keeping prices artificially high. This consumes public finances required for a healthy recovery. From available data on prices and Advance Market Contracts, USA has contracts to the tune of US$9.3 billion, and the EU US$ 15.8 billion. Effectively, tax payers are paying for the vaccine twice. (Calculated based on the prices published in the Washington Post and the numbers of confirmed doses gathered by Duke University)

    In addition, Big Pharma use tax havens to avoid paying their fair share. The Top 4 Big Pharma have avoided more than 3.8 billion dollars a year, including US165 million in Australia and 13.8 in New Zealand.

CLAIM 2: There is no evidence that IPR are a barrier to access to medicines, vaccines or other medical products

Response

  • Past precedents and emerging evidence demonstrate how IP is a growing barrier to COVID-19 medicines and technologies, such as diagnostics, medical equipment, treatments and vaccines. For instance:

    South Africa faced challenges accessing key chemical reagents for COVID-19 diagnostic testing due to proprietary testing equipment and reagents.

    Roche rejected a request from the Netherlands to release the recipe of key chemical reagents needed for increasing production of diagnostic kits and only released it after facing pressure from the European Commission.

    In Northern Italy, patent holders threatened producers of 3D printing ventilator valves with patent infringement lawsuits. N95 masks that offer much better protection than surgical masks have hundreds of patents on them by the multinational company 3M and others.

    A South Korean producer had developed an alternative version of a pneumonia vaccine for children (PCV13), but Pfizer’s aggressive patenting strategy compelled the company to stop its development and delayed the availability of this more affordable version of the vaccine.

    After ignoring demands calling for non-enforcement of its patents on COVID-19 candidate drug remesdevir, pharmaceutical corporation Gilead Sciences sign voluntary licensing agreements with a few manufacturers of its choosing from India, Pakistan and Egypt. The voluntary licensing agreements excluded nearly half of the world’s population and many countries with manufacturing capacity, some of which have supported COVID-19 treatment clinical trials. (Remesdevir has now being de-listed by World Health Organization (WHO) due to lack of efficacy).

CLAIM 3: Countries don't need a waiver, they can already use TRIPS flexibilities for public health

Response

  • The use of TRIPS flexibilities and waiver are complementary as TRIPS flexibilities wont be sufficient in the pandemic. The EU, Japan, Switzerland and USA have long undermined the use of TRIPS flexibilities in developing countries through free trade agreements and bilateral pressure. Yet these countries are now pointing to the availability of these same flexibilities to discourage the waiver proposal.

    The US Trade Representative (USTR)’s annual Special 301 report systematically criticises developing countries who either reform their IP law to include TRIPS flexibilities or make use of compulsory licenses.

    The EU’s annual IP enforcement report also criticises a number of developing countries for compulsory licensing laws and other uses of TRIPS flexibilities.

    Over the years such pressure has undermined the practical and institutional capacity required to exercise TRIPS flexibilities during the pandemic quickly and effectively.

    The “case-by-case” or “product-by-product” approach of TRIPS flexibilities is inadequate during the pandemic. Countries amended their national laws to make government use of compulsory license easier and quicker – including Australia, Canada, Germany and Hungary. A crisis situations requires expedited and extraordinary measures.

    Instead of blocking the consensus process at the WTO, countries that consider the waiver unnecessary for their national context can choose not to use it once granted.

CLAIM 4: The waiver is not adequate to solve the problem of access to COVID-19 medical products

Response

  • The waiver is not a magic solution, but it is an important element of a solution. We are currently in a situation where a large share of the limited number of vaccine doses have been secured by a handful of countries, such as USA, UK, and the EU, based on their ability to pay. It is only with more vaccines on the market that doses can be allocated according to WHO’s public health criteria.

    A rapid expansion of the overall global supply is required. The waiver is a key element to contribute to this. Unfortunately countries that have secured doses are the ones standing in the way of the others. Implementing the waiver is not compulsory and countries that do not see its value can opt out of its implementation.

CLAIM 5: Pharma companies are already committing to forgo profits and are providing voluntary licenses on COVID products, so the waiver is not required

Response

  • Promoting voluntary non-enforcement of intellectual property rights and voluntary contribution of technologies by companies has delivered limited results.

    AstraZeneca has signed secret licensing agreements on COVISHIELD with manufacturers in some LMIC. The limited details that have been released reveal worrying terms. For example, the license is restricted to only one manufacturer in India, although other vaccine manufacturers exist. This Indian manufacturer seems to be the only one allowed to export to LMICs.

    Another deal gives AstraZeneca the power to declare the pandemic over by July 2021 and charge governments and other purchasers higher prices after that, for a vaccine that was funded by public research and investments.

    Moderna announced it will not enforce its patents during pandemic period - an announcement that does not offer legal certainty to potential manufacturers, but it has not indicated any sharing of know-how. The U.S. government funded the totality of Moderna’s project to bring the vaccine to the U.S. Food & Drug Administration approval, yet the Trump administration paid Moderna an additional $1.5 billion to secure doses in advance. Taxpayers paid twice, yet again.

    Some other companies such as Pfizer/BioNTech are yet to license their IP.

    But unions know too well that voluntary actions of companies are not reliable.

CLAIM 6: COVAX is good enough to ensure access to countries that lack the resources to pay

Response

  • In the absence of a waiver on IP rules, COVAX will merely transfer public funds for big pharma's profits at a limited discount, and that too only for a limited supply. Opponents of the waiver point to their financial contributions to COVAX as a display of global solidarity. COVAX aims to facilitate access to vaccines to only around 20% of each country’s population in 2021. Yet, it has not been able to secure enough vaccines even for this, and some countries might only access this limited quota in 2024. There is a major bottleneck in production as not enough factories are manufacturing the vaccine due to limitations imposed by the patent holders.

    There is a fundamental difference between using financial contributions to increase the supply provided by a limited number of manufacturers who can dictate prices, and increasing the number of suppliers – which can have a significant impact on purchasing prices.

    The market monopoly of patent holders decreases their incentive to negotiate and agree to lower prices. Tax payers in HIC have not only paid for the research, and their own share of the vaccines, they are also paying for the additional profit margins pharma companies are extracting from LMICs, mediated through COVAX. To give an example of companies pricing across countries, AstraZeneca is charging the EU less than $2 a dose for its vaccine, it is charging the United States $4 a dose, and charging Thailand more than $8 a dose.

    While global financial solidarity is important and welcome, it is fair to taxpayers to direct this solidarity at mechanisms that provide real access to health products, rather than mechanisms that contribute to pharma companies' profits.

    Pharmaceutical companies have shown that they can act against the public interest by abusing the patent process. Companies often apply for a new patents on an already existing medicines to prolong their market control. This business strategy is known as “patent ever-greening”. In some countries, patents can be granted on second medical use of a repurposed medicine. Given that many of candidate therapeutics for COVID-19 are repurposed medicines. This is only one instance of the ways that pharma companies abuse the patent system under TRIPS against the public interest. We can not allow this to take place during the pandemic, we need a waiver.

If not mentioned otherwise, analysis from Medecins Sans Frontieres and People's Health Movement available in the References section.

Read More PSI Resources

What your union can do

  • Use the PSI model letter to write to your government.

  • Ask for an (online or face to face) meeting to discuss your country's position.

  • Hold internal discussions with your key union officers and union leadership and release a statement from your union.

  • Reach out to other unions in your country, especially your national centre, and ask them to write to your government too

  • Hold a press conference, or publish a press release to let the public know that your union supports the waiver proposal and expect your government to do so too.

  • Let us at PSI know what you are planning and what the outcomes are so that we can build solidarity across the region and across the world.

  • Reach out for support

Additional resources

Statements of international organisations

CSO and Union Resources

References




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