The Covid-19 patent waiver proposal

Covid vaccines and medical equipment are privately owned by those companies that have patents to them. On October 2, 2020, India and South Africa proposed a temporary lift of patents on products for the “prevention, containment or treatment of Covid-19” while the pandemic lasts. The purpose is to release whatever spare production capacity exists worldwide.  By April, only 0.2% of the 700 million vaccines administered around the world had been in low-income countries, according to the World Health Organization (WHO).

The proposal was tabled in the TRIPS Council of the World Trade Organization (WTO). It met with immediate opposition from the EU, the US, Australia, Brazil, Canada, Japan, Norway, Switzerland, and the UK. Seven months on, however, approximately 100 countries in the Global South stand behind the waiver proposal.

Western countries argue that patents are essential, and not a hindrance, to access and that a waiver is no solution to production capacity problems. This is also the line of the pharma industry.

On May 5, 2021, the new US government sent shock waves through the WTO system by declaring support for the waiver — defined as a lifting of patents on Covid-19 vaccines, not therapeutics or diagnostics. 

The TRIPS (Trade-related aspects of intellectual property rights) agreement

The agreement protects patents, trademarks, and copyright against use or copying without permission. If a patent is granted, the patent holder has a limited period — usually 20 years — in which they have the exclusive right to exploit the patented invention. “This monopoly encourages innovation and research. Patents are particularly important for products that are expensive to develop but easy to copy, such as pharmaceuticals”, says the Norwegian government.

IP rights create monopolies that are barriers to access and let companies profiteer, argue supporters of the temporary patent waiver proposal for Covid-19 products, here and here.

What is the dispute about?

Are patents the very reason vaccines are made? Or are they, on the contrary, a deadly barrier for people in need? At the World Trade Organization in Geneva, this issue chased everyone into the trenches last October; over 100 governments in the Global South to one; the EU, the US and other rich countries to another.

Although vaccines exist, the Covid-19 pandemic is nowhere under control, as too few vaccines are produced. Usually, 3.5 billion doses of vaccine — against all kinds of diseases — are produced globally every year. The need for Covid-19 vaccines is 15 billion doses, and all of them are required now. 

The handful of companies that hold the intellectual property to the four vaccines that are presently approved in the EU — Pfizer-Biontech, Astra Zeneca, Janssen and Moderna –  are not able to produce nearly enough for now, despite ramping up capacity dramatically. They nevertheless have the power to prevent others from producing the quantities that they themselves cannot deliver.

Unless this changes, most people in the world will not see a vaccine this year, nor next year or the following, and many not until 2024, if ever, according to the Economist Intelligence Unit. This threatens even already vaccinated populations. In a survey of 77 epidemiologists from 28 countries recently, two-thirds thought there is a time window of one year or less before the virus mutates in ways that may make most first-generation vaccines ineffective and require new or modified vaccines, according to The People’s Vaccine Alliance, a coalition of aid groups and trade unions.

The public share of Covid-19 vaccines

The public sector spent at least €88.3 billion on Covid-19 vaccines in 2020, according to an analysis by Kenup, a foundation that promotes new innovation systems in the European healthcare sector. Most of the money, around €86.5 billion, was spent on so-called advance market commitments. These are deals where governments finance part of the upfront production costs, in return for the right to buy a specified number of vaccines.

32% of the funding to vaccine producers come from the US, 24% from the EU, and a total of 13% from the governments of Japan and South Korea. 71 % of the money went to small and medium-sized enterprises. 18% went to big pharmaceutical companies.

Pfizer’s vaccine generated $3.5 billion in revenue in the first three months of 2021, according to the company. Pfizer did not take money from the US government for its development last year, but its partner Biontech had major German support. Taxpayer-funded research has helped both companies previously.