On 22 April 2021 the World Trade Organization’s (WTO) TRIPS Council addressed the proposal for a waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19 (IP/C/W/669) in an informal session of the TRIPS Council
The full text of South Africa’s statements are reproduced below.
South Africa’s intervention at the informal TRIPS Council meeting of 22 April 2021
Thank you Chair for giving us the floor and for convening this open-ended meeting. We would like to thank you for you report on your consultations, as well as on the small group process and your participation in other events. Regarding the draft report to the GC, we will examine the content and revert with comments and observations as appropriate. As already indicated in the small group consultations held earlier this month, cosponsors are in the process to update the waiver proposal. We are happy to announce that we have started our consultation process with various delegations in order to test the revised proposal and will soon submit this amended version to this Council for further consideration and deliberation with all Members. This is line with our call for a move to expeditious text-based discussions. Yet is seems that this call has fallen on deaf ears since delegations opposing the waiver continue to ask for evidence.
Before we turn to the substance of today’s meeting, we would like to bring to the attention of WTO Members the extensive global support that the proposed TRIPS waiver has enjoyed. Recently the proposal was endorsed by about 175 former and existing Presidents, Prime Ministers and Nobel Laureates including the former Prime Minister of the United Kingdom Gordon Brown, former President of Colombia Juan Manuel Santos, former President of Liberia Ellen Johnson Sirleaf, former President of France François Hollande, Nobel Laureates Professor Joseph Stiglitz and Professor Francoise Barre-Sinoussi. [1]
We would like to recall that as the pandemic broke out there were calls of commitment to global public goods and international solidarity. In April 2020, President of the European Commission, Von der Leyen said “We need to develop a vaccine. We need to produce it and to deploy it to every single corner of the world. And make it available at affordable prices”…..this vaccine would be ‘our universal, common good’. [2]
In May 2020, President Macron said “a vaccine against COVID-19, it would be a global public good and everyone should have access to it” and “Human health cannot be quarrelled over, cannot be appropriated, and cannot be bought and sold”. [3]
In June 2020, UN SG Antonio Guterres said that “COVID-19 VACCINE MUST BE SEEN AS A GLOBAL PUBLIC GOOD, A PEOPLE’S VACCINE!”
One year on, 3 millions deaths later, there is still huge disparity in access to vaccines, while the technology and knowledge for the development, and production of vaccine is monopolised through the intellectual property system, with only select manufacturers allowed to manufacture by way of a license, and even then on terms that restrict production and supply.
There are a handful of developed countries blocking progress on the discussion of our proposal that has received massive global support. These same countries call for international solidarity and yet at the same time have purchased most of the vaccine supply sufficient to vaccinate their population several times over with the result of denying developing countries access to vaccines. Most of these countries have vaccinated between 10% and 50% of their population with at least one dose. [4] Many of these countries are in the process of purchasing additional doses for 2022 even as most of the developing world is struggling to vaccinate even 5% of their population.
While we have circular discussions in this forum, the virus is running rampant, evading vaccines, with a strong likelihood that the lack of vaccines in many parts of the world will come back to bite hard, with many more lockdowns and illnesses.
During meetings on 12-13 April, it was suggested that the discussion thus far has been quite general. We disagree with this contention and would like to point to the detailed explanations provided by the co-sponsors in IP/C/W/670, IP/C/W/672 and IP/C/W/673, a total of 49 pages. We will take up a few issues raised in those meetings.
Impact of Waiver on existing partnerships.
During the 12-13 April meeting, the delegation of Switzerland asked how the waiver would ensure uninterrupted collaboration of existing partnerships if it suspends large parts of the TRIPS agreement, which is, in our view, a basis for these partnerships? Switzerland also suggested that a waiver would globally lift the contractual and voluntary potential of manufacturing and scaling up of manufacturing.
We have addressed this issue on IP/C/W/672 (pg 29) wherein we have made clear that “The waiver is about lifting the legal barrier, it does not preclude the possibility of companies agreeing to voluntary licenses”.
Maybe some delegations may not understand the legal nature of VLs. They are governed by contract law, and each agreement would contain clear clauses on the governing law, and how it may be terminated.
In any case the majority of the current manufacturing agreements are contract manufacturing agreements, or fill and finish agreements. Even with the waiver technology holding companies can continue to contractually engage contract manufacturers to manufacture on their behalf as well as companies only interested in fill and finish with the technology holding company supplying the bulk drug. Technology holding companies may also offer licensing deals in relation to their expertise and knowledge of the technology they hold.
Adoption of a waiver does not end such collaborations. Instead we are of the view that free from the shackles of monopolies, there is likely to be greater sharing of knowledge and greater collaboration.
However, without the Waiver, while several developing countries have the capacity to manufacture vaccines, intellectual property (IP) rights and limited technology transfer remain barriers to build local production capacity as stated in a recent OECD report. [5] The report further states that R&D of vaccines, as well as production capacity, is concentrated in just a few countries in the world, thereby requiring most low-and middle-income countries to import vaccines. Sustainable policy options to respond to the virus should include encouraging the transfer of technical know-how to manufacturers in developing countries.
Impact of waiver on incentives for innovation.
Several opponents asked during the small group meetings how proponents envisage that the R&D incentive is maintained, arguing that the IP system is an enabler of R&D.
We have addressed this point in much detail in IP/C/W/672 on pgs 4, 11, 27, 28. In any case, let me elaborate, as some of these points may not have been understood by the opponents.
We refer to a policy brief by the Boston University which addresses this point succinctly: “……much of this innovation has been predicated on decades of public support for research and development (Torreele, Mazzucato and Li 2021). With respect to the COVID-19 vaccines, governments around the world have invested an estimated $100 billion through different means in COVID-19 vaccine development so far (kENUP 2020). These vaccines would not exist without support from governments who have the resources available to contribute. Even where vaccine creators did not rely on public funds for the initial research and development stage, they had significant pre-orders and guaranteed global demand, ensuring massive profits”. [6]
The Guardian revealed on 15 April that at least 97% of the funding for the development of the Oxford/AstraZeneca Covid-19 vaccine has been identified as coming from taxpayers or charitable trusts. [7] Less than 2% of the identified funding came from private industry. This confirms once again what the co-sponsors have said on pg 28 of IP/C/W/672 that “AstraZeneca has gone so far as to state that the development of the vaccine will have no financial implications for the company since “expenses to progress the vaccine are anticipated to be offset by funding by governments and international organisations.” [8]
Forbes reports from Dec 2020 has found that Moderna has received almost a billion dollars in public funding from R&D and 1.5 billion from the US federal govt for an initial 100 million doses of the vaccine while Moderna executives also profited handsomely from stock sales that just happened to coincide with announcements of results, with amounts of the top three totaling about $100 million. [9]
A Guardian report as at 6 March 2021 titled From “Pfizer to Moderna: who’s making billions from Covid-19 vaccines?” reveals that expected sales for Pfizer in 2021 is between $15 billion to $30 billion; for Moderna expected sales in 2021: $18bn-$20bn; for Johnson & Johnson expected sales in 2021: up to $10bn; for Astra Zeneca, expected sales in 2021: $2bn-$3bn; with the remaining vaccines also likely to earn billions of dollars.
As we have pointed out in IP/C/W/672 and further reinforced by latest news reports, firstly public funding has played the main role in incentivizing innovation, and secondly pharma companies are making billions and will continue to make money from advance purchase agreements.
Is the concern of opponents really that Pfizer and BioNTech, Moderna, Astra Zeneca etc have not made sufficient billions, while in the current Covid situation, the world economy is losing in its trillions, with SMEs globally collapsing, specific industries and economies collapsing and millions of lives and livelihoods around the world at stake. If the opposition, is just to protect the few more billions these companies will make, then the opposition is self-defeating and short sighted.
We stress that the proposed waiver is limited to Covid-19 and does not extend to other sectors or disease areas. So there is no argument with respect to R&D at large being impacted. We also hope that the opponents are not opposing proposed TRIPS waiver proposal based on ideological reasoning, even at the cost of many industries, economies and lives globally. Pharmaceutical innovation has been predicated on decades of public support for research and development. With respect to the COVID-19 vaccines, governments around the world have invested an estimated $100 billion through different means in COVID-19 vaccine development so far. These vaccines would not exist without the significant public funding provided, in some cases almost 100% of the vaccine development is publicly funded.
Operation of the Waiver
Several delegations opposing the TRIPS waiver proposal have sought clarification on how the waiver would facilitate technology transfer, sharing of know-how leading to vaccine manufacturing.
We addressed similar issues in the documents submitted by the co-sponsors. However, we can respond to these issues again summarily.
The questions were primarily focused on vaccines. But we stress that the proposed waiver is not just about vaccines, it also extends to other medical products such as therapeutics.
There are several therapeutics under investigation. For instance, Monulpiravir has shown promise in suppressing the virus. This candidate has primary and secondary patent applications in many jurisdictions, with an estimated expiry date of 2035 or 2038. In our submission IP/C/W/670 the patent landscapes of several priority therapeutics have been identified. Some of the therapeutics under investigation are presently off-patent but as its use is explored for COVID-19 treatment, the filing of new patent applications extending to secondary uses of these therapeutics can be expected. For instance, recent news has suggested second medical use patent application on ivermectin, a decades old medicine repurposed for COVID19 now, might have been applied for.
We recall that early on in the pandemic when Remdesivir was considered to be useful for the recovery of COVID-19 patients. The primary patent on the base compound of Remdesivir has been granted to Gilead in more than 70 low-and middle-income countries. Civil society called for non-enforcement of Gilead’s patents. But this call went unheeded. Instead, Gilead signed a voluntary agreement with a few manufacturers of its choice, side-lining other manufacturers and with nearly half of the world’s population prevented from being supplied by the licensees and hence denied from accessing more affordable generics. At the same time, a few developed countries snapped up the supply that Gilead could make available. To date, we have no information about the terms of the license agreement.
What we can learn from this experience is that issues and concerns with respect to intellectual property barriers are not just about vaccines, they extend to other products. And even more importantly WTO members need additional tools to address IP barriers. Governments already face a myriad of social and economic challenges arising out of Covid 19, and they should not also have to also deal with intellectual property related challenges.
On the issue of how the waiver would support the sharing of technology and know-how. As we have mentioned above, in the case of Remdesivir, the freedom to operate where patent has not been a barrier, has led to manufacturing and diversification of supply beyond the limited few licensees of Gilead.
Similarly, in the case of vaccines, the waiver will offer freedom to operate to manufacturers with capacity and the confidence to enter the market. This freedom to operate is absolutely crucial in view of the complex patenting around vaccine technology and the uncertainty with respect to patent landscape.
In conclusion Chair, our responses to questions raised have been comprehensive. We once again repeat our call for discussions to move into text-based mode.
Second Intervention
We thank the US for its intervention and further questions posed, as already indicated at the small group meeting, a more granular discussion of issues raised could best be addressed in a text-based discussion since we can also deal with some of the implementation issues raised. We note the intervention by Australia, if we are to consider solutions, we have to look at all possible solutions. As indicated in our first intervention, we do not see VLs as the most appropriate means to address COVID-19 given the inherent contractual bias and unequal bargaining positions of parties to such contracts. However, we are encouraged to hear that Australia is of the view that such arrangements should not be left only market mechanisms. If governments are to play a role in this regard, what steps would be required to ensure that VLs can be fit for purpose? To what extent can governments exercise oversight especially where vaccines benefitted from government support? Even contract law is not sacrosanct. The point being, we believe that the comments we heard today and during the small group meeting could be discussed in a text-based discussion which could further clarify issues. We would also like to thank the UK for the barrage of questions in respect of the implementation of the waiver, we invite the UK to submit these questions in writing. We think even these can be more accurately answered in a text-based discussion. The proposed waiver is part of the WTO toolbox and remains firmly within the multilateral framework.
Many of the questions repeated today have been answered. Let me try to summarize some of our responses.
After many years of discouraging WTO members especially developing countries to take steps to improve their patent law so that compulsory licenses may be issued in the interest of public health, how could it be expected that all WTO members to be ready to use CL, especially now during a time of global pandemic?
Exceptional situations created by COVID-19 require global solutions where any one country would not be able to solve access or manufacturing problems by acting alone. Article 31 and Article 31bis of the TRIPS Agreement are conditioned on the premise that individual countries or regions can exercise flexibilities to address the particular health problem they face. These provisions were never designed to deal with pandemics that exist at the same time in all countries in the world. In these circumstance individual actions will not be effective and would have to be complied on a case- by-case individual basis. Such individual actions may nonetheless impede global solutions such as envisage by the TRIPS waiver proposal. Further, the flexibilities as they exist need further clarification to help us to react to pandemics such as COVID-19, clarification is required across the board ranging from copyright, to industrial designs, patents and undisclosed information.
TRIPS flexibilities, including those confirmed in the Doha Declaration on TRIPS and Public Health, have undoubtedly, played a crucial role in promoting access to medicines. However, the present COVID-19 global pandemic presents exceptional circumstances. In our view, though the TRIPS flexibilities do allow limited policy space for public health, they were never designed to address a health crisis of this magnitude.
As is already apparent, many countries lack the institutional capacities to utilise such flexibilities. As proponents we encourage Members to implement TRIPS flexibilities to fullest extent possible including under Article 31 and Article 31bis. However, Article 31 and Article 31bis was never designed to address the global access challenge of a pandemic as its primary focus is to empower individual countries to solve domestic problems with production and supply. In this pandemic, as we have collectively experienced and witnessed to date, supply of essential medicines, vaccines and diagnostics requires actions beyond national borders. Using compulsory licensing under Article 31 and Article 31bis will not leverage uninterrupted collaboration for countries to share production and supply capacity and to walk out of this pandemic together. In the current situation where every country is suffering and in desperate need of adequate supplies, relying mainly on Article 31 and Article 31bis to address IP challenges in ensuring global access is seriously ill-advised. Article 31 and 31bis offers a country-by-country, case-by-case and product-by-product solution. However, what we have seen is that COVID-19 is a global pandemic that required global cooperation, individual countries are incapable of addressing this issue by themselves.
The existing mechanisms for compulsory licenses under Article 31 and Article 31bis of the TRIPS Agreement contain territorial and procedural restrictions that make the practice of issuing product-by-product compulsory licenses a complex process, making it difficult for countries to collaborate. There are two specific issues that we would like to highlight:
a. Article 31 requires that compulsory licenses are issued on a case-by-case basis and used predominantly to supply domestic markets, thereby limiting the ability of manufacturing countries to export to countries in need.
b. Article 31bis requires that any product produced and exported under a compulsory license be identified with specific packaging and quantities, which can lead to unnecessary delays in the context of COVID-19 where countries need urgent access to medical tools.
To illustrate this, we would like to refer to a very recent example where a company has sought to obtain a compulsory license for export of vaccines under a Members legal framework.
Biolyse Pharma, a Canadian company has gone on record in saying it could be producing as many as 20 million doses COVID-19 vaccine for export annually, but it’s waiting for action from the Canadian government. At the WHO Fair Pricing event yesterday, the company indicated that it is anticipating a lengthy process despite the urgency it says the pandemic poses. The company is seeking a compulsory licence through Canada’s Access to Medicines Regime specifically for the Johnson & Johnson/Janssen vaccine. It would be good to hear from the Canadian Delegation on how this process is unfolding and whether the point raised by opponents, that Article 31bis is an expeditious and available remedy for supply, would be true in this instance?
[1] https://peoplesvaccinealliance.medium.com/open-letter-former-heads-of-state-and-nobel-laureates-call-on-president-biden-to-waive-e0589edd5704 .
[2] https://ec.europa.eu/commission/presscorner/detail/en/ac_20_749
[3] https://edition.cnn.com/world/live-news/coronavirus-pandemic-05-18-20-intl/h_1a073cf579cd5d1bae66e3718c3f98f6
[4] https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution
[5] “Coronavirus (COVID-19) vaccines for developing countries: An equal shot at recovery” of 4 February 2021.
[6] https://www.bu.edu/gdp/files/2021/03/GEGI_PB_013_TRIPS.pdf
[7] https://www.theguardian.com/science/2021/apr/15/oxfordastrazeneca-covid-vaccine-research-was-97-publicly-funded
[8] https://www.astrazeneca.com/media-centre/press-releases/2020/covid-19-vaccine-azd1222-showed- robust-immune-responses-in-all-participants-in-phase-i-ii-trial.html
[9] https://www.forbes.com/sites/judystone/2020/12/03/the-peoples-vaccine-modernas-coronavirus-vaccine-was-largely-funded-by-taxpayer-dollars