One Step Forward, Two Steps Back? Ensuring a TRIPS Waiver Drives Health Equity

World Trade Organization, Geneva, Switzerland. Photo via Unsplash.

Following a 17-month impasse, India, South Africa, the United States and the European Union have, as of March 15, 2022, negotiated a preliminary text for the much-anticipated waiver on Trade-Related Aspects of Intellectual Property Rights (TRIPS waiver) for COVID-19 vaccines. India and South Africa originally proposed a comprehensive TRIPS waiver to the World Trade Organization (WTO) in October 2020, seeking to facilitate greater and more expeditious access to COVID-19 vaccines and related products, particularly for developing countries.

While a significant milestone in the effort to vaccinate the world from COVID-19, the scope of the proposal matters greatly to its utility. As of now, the scope is narrow, with a focus on vaccine patent protection only, though there is room for expansion over the next six months. What does the text currently include? How could it be expanded to allow for maximum impact and what does it mean for the global fight against COVID-19?

Below is a breakdown of the positive developments of this proposed TRIPS compromise, as well as some key areas that should be addressed to boost regional vaccine production and build future pandemic resilience.

What’s included…

To start, the proposed text:

Allows countries to waive patent rights (under Art. 28.1), pursuant to Art. 31 with some additional flexibilities (noted below).
Allows countries to waive patent rights even if they don’t have a formal compulsory licensing regime, so they can use any type of government measure or action to get domestic generic production up and running.
Allows countries to “bundle” the patents for a single vaccine. This is particularly important given the complex networks of patented inputs and processes surrounding mRNA vaccines.
Allows countries to issue licenses for export without requiring that some percentage be used for domestic supply, and includes export to individual members, international supply channels like COVAX or regional joint initiatives. In this way, the waiver recognizes individual states are not the only actors receiving vaccines.
Allows “adequate remuneration” calculated for innovators to include consideration of humanitarian and not-for-profit purposes of vaccine distribution.
Remains in effect for up to five years from the date of the agreement.
Includes a “peace clause,” prohibiting WTO complaints based on measures implemented under the waiver.
Allows for further discussion about including diagnostics and therapeutics in the near-term future.

… And what’s not included

At the same time, there are some limitations in the current text, in that it:

Applies only to countries whose vaccine exports amounted to less than 10 percent of global vaccines exports in 2021, effectively excluding China.
Relies on the conventional compulsory licensing framework, largely requiring countries to identify through some legal process the need for a vaccine and the firm or firms that are licensed to produce it.
Requires some remuneration for the patent holders in the case were a license is issued.
Currently covers only patent protection (TRIPS Art. 28.1) and does not include trade secrets, copyright and other forms of intellectual property that might also place barriers to vaccine production.
Currently covers only vaccines, not diagnostics, therapeutics or other treatment technology.
Requires WTO members to police re-exportation so that vaccines may not pass through one country to end in a destination country (and holds countries accountable for failures in this respect).
Requires members to notify the TRIPS Council of any measure pursuant to the waiver text – a requirement that does not currently exist even for traditional compulsory licenses.

The compromise: Where it came from, and where it must go to achieve global health equity

While the limitations of this proposed text understandably disappoint TRIPS waiver advocates, the outcome is far from surprising. When the United States Trade Representative (USTR) Katherine Tai came out in support of TRIPS waiver negotiations in May 2021, the language was limited to vaccines only. Moreover, the EU counter-proposal, largely a restatement of existing compulsory licensing “flexibilities” already present in the TRIPS Agreement, made it likely that negotiating countries would be reluctant to walk away from that familiar framework. Finally, given the difficulty (both politically and practically) of relying on a waiver to provide access to non-patent IP, such as trade secrets, the lowest hanging fruit was to focus on patent protection alone.

Nevertheless, the text does respond to some of the real demands of waiver advocates. A major criticism of the EU compulsory licensing approach was that the procedures under TRIPS for compulsory licensing relies on (1) existing domestic laws and procedures not shared by all countries and (2) usually requires a product-by-product licensing process, such that each vaccine candidate might be covered by a network of complex patents. All this puts compulsory licensing out of reach for most of the world’s countries. In allowing countries to “bundle” licenses for patented products, and to rely on a diverse array of domestic legal procedures to issue those licenses, the text begins to address these major concerns. In leaving room for near-term negotiations to expand the scope to diagnostic and therapeutic products, it also responds to demands of earlier TRIPS waiver proponents and acknowledges that vaccines are not the only line of defense against the continuation of the pandemic. Ultimately, the text will need several revisions to effect substantial impact.

Over the next few months, WTO members will have the opportunity to vote in favor of (or against) this negotiated text, as well as expand its scope beyond vaccines into other health interventions – an essential component if the world seeks a comprehensive approach to health equity. However, an effective waiver cannot be limited to patent protection, or else many other aspects of protected intellectual property will present obstacles to developing new vaccine production. Moreover, any agreement must not create additional obstacles, such as TRIPS notification and new enforcement requirements. Finally, excluding China risks alienating a potential partner in health product development, exacerbating gaps in communication and cooperation among the world’s leadership. As many have echoed again and again, a TRIPS waiver, in any form, is necessary but not sufficient. Countries must incentivize and enforce parallel efforts to transfer technology and know-how to new vaccine manufacturers and provide financing for this massive effort to ramp up vaccine supply in new parts of the world.

The proposed text is a significant first step but risks becoming a step backwards if efforts aren’t made to address shortcomings that risk the utility envisioned. It is time for the rest of the WTO member states to ensure a waiver that helps end the COVID-19 pandemic by negotiating a more complete agreement that includes therapeutics and diagnostics, goes beyond only patent IP, extends eligibility to all countries interested in increasing production and does not add onerous new legal obligations.