By Kevin E. Noonan –

It is often observed (or asserted) that a fair compromise in a dispute has likely been reached when both sides are not particularly happy about it.  This is not always the case, of course, and is more likely not to be the case the more complex the dispute and disparate the parties' perspectives, prejudices, and goals.  These principles may explain the status of the current proposal to extend the COVID pandemic-created (or at least justified) waiver in the World Trade Organization (WTO) of patenting provisions under the TRIPS provisions that the WTO was created in part to enforce.

It will be recalled that the initial proposal by South Africa and India was focused on vaccines and preventing the purported, expected, or apprehended impediments to development or distribution of vaccines for SARS-CoV-2 during the COVID-19 pandemic.  U.S. support for the initial waiver was surprising (see "Biden Administration Supports Waiver of IP Protection for COVID-19 Vaccines"), particularly in view of opposition by IP groups (see "IP Associations "Concerned" by Reports of TRIPS Waiver Compromise") and members of Congress (particularly Senator Thom Tills; see "Sen. Tillis Asks Biden Administration to Oppose WTO Waiver Proposal" and "Sen. Tillis Writes to U.S. Trade Representative (Again) Regarding TRIPS Waiver").  And when agreement was reached on the waiver (see "Compromise Reportedly Reached on COVID-19 Vaccine Patent Waiver"), its provisions raised additional concerns, particularly to the extent they could encompass not only patents but trade secrets and other intellectual property (see "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?" and "The Proposed WTO IP Waiver: Just What Good Can It Do? — An Analysis").

The original waiver agreement contained a provision that a decision on whether to extend the waiver to diagnostic methods and therapeutic agents useful against SARS-CoV-2 and COVID-19 would be reached within six months, which deadline falls on December 17th.

On December 6th, the U.S. Trade Representative joined the growing international chorus at the WTO supporting delay for making a decision on extending the waiver, which includes the UK, the EU, Japan, South Korea, Singapore and most recently Mexico and Switzerland.  In addition, the USTR asked the International Trade Commission (ITC) to open an investigation to assess the extent to which "supply and demand, price points, the relationship between testing and treating, and production and access" affect market dynamics for COVID-19 diagnostics and therapeutics.  The ITC request includes specifics on what products would the proposed extension affect, the global market for these products and the extent to which there is an unmet demand for them or shortfalls in supply or distribution, as well as a report on the countries that have used the existing waiver versus countries using other options like the UN Medicine Patent Pool.  This inquiry could take up to nine months according to some estimates.

This decision raised an expected outcry from groups in favor of the original waiver as well as the extension.  Most vocal in decrying the decision to support delay were representatives from the People's Vaccine Alliance (who termed the decision "heartbreaking") and the Trade Justice Education Fund, who noted the 290,000 COVID-related deaths globally since the WTO decided not to grant a waiver for diagnostics and therapeutics in the initial vaccine waiver earlier this year.  Commentators also cited WHO statistics revealing that 2% (one in 50) COVID tests were administered in low- and middle-income countries (which make up 84% of the global population), and a recent Oxfam analysis estimated that only a quarter of the Paxlovid supply had been sent to developing countries (although under an agreement with the UN Medicines Patent Pool drugmaker Pfizer has licensed generic companies to make the drug in 95 countries).

On the other hand, the U.S. Chamber of Commerce, the Biotechnology Innovation Organization (BIO) and PhARMA have characterized the extension as unnecessary in view of the failure of the initial waiver, which has not been used by any country to increase access to vaccines.  In a talk sponsored by IP advocacy group C4IP last week (see "C4IP Presents Webinar on COVID Waiver Extension"), former U.S. Patent and Trademark Office Directors Andre Iancu and David Kappos and former U.S. Secretary of Commerce Gary Locke were in agreement that the waiver has had no effect, because problems with vaccine access have little to do with IP protection and were caused by logistical and supply chain limitations and failures.

The COVID 19 pandemic provided an opportunity for those opposing patent rights to medicines and vaccines to achieve their goals to turn back the clock on global acceptance of IP that reached its zenith with the TRIPS agreement and establishment of the WTO.  The latest delay in extending the patent (really, IP) waiver in the face of the declining pandemic may thwart these efforts for now, but inherent disparities in global access to medicines is a problem exacerbated although not created by the pandemic and one for which the need for a solution remains.

By Kevin E. Noonan –

Last week, the Council 4 Innovation Promotion (C4IP) put on a webinar entitled "Unpacking the Proposed TRIPS Waiver Expansion: A Conversation with Gary Locke."  Gary Locke (at right) was the Secretary of Commerce during the Obama Administration and later Ambassador to China, and he was joined in conversation with David Kappos, Undersecretary of Commerce and Director of the U.S. Patent and Trademark Office while Secretary Locke served as Secretary.  The conversation was moderated by Andrei Iancu, himself a former Undersecretary of Commerce and Director of the U.S. Patent and Trademark Office during the Trump administration.*

The conversation focused on the proposed expansion of the TRIPS waiver adopted as a reaction to the COVID-19 pandemic (see "The Proposed WTO IP Waiver: Just What Good Can It Do? — An Analysis").  That waiver, "limited" to vaccines against the SARS-CoV-2 virus, itself was fraught with risk that the scope of the waiver could be expanded beyond patents (see "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?").  But the new proposal expressly extends into therapeutic drugs and diagnostic assays relevant to the pandemic and accordingly poses a much greater risk to the international innovation regime.

Director Kappos began the discussion after an introduction by Director Iancu, with Ambassador Locke speaking about his involvement in the waiver issue.  He noted the bipartisan opposition to the TRIPS waiver and that even the original waiver had not achieved its goal of getting vaccines to less developed countries that needed them.  This was because he explained the problem was not intellectual property but rather was a confluence of logistics and the need for example for the vaccines to be refrigerated.  The risk, the Ambassador stated, was that actions like this are precedent-making without the justification of improving global health or response to the pandemic.  In addition, even in instances where vaccines supplies were available many of the countries used to illustrate the need for the waiver did not accept them, for historical and cultural reasons for example (Director citing the statistic of 100 million discarded doses).  The waiver was particularly troubling in view of the need for patent protection to provide necessary incentives to address unmet and unsolved disease treatment needs.  Ambassador Locke illustrated these concerns as follows:

The evidence is overwhelming that IP protections have not impeded people's access to treatment and did not in any way impede the development of vaccines.  Drug companies have been voluntarily licensing their technology to accelerate global manufacturing and distribution of treatments.  . . .  Pfizer and Merck have signed hundreds of agreements to allow generic versions of their medicines to be manufactured all around the world, they've worked with the UN Medicines and Patent Pool to allow generics to be manufactured by approx.  200 companies worldwide and many other companies have entered into voluntary licensing agreements . . . .  India actually threw out 100 million doses of vaccines that expired . . . [and] South Africa is trying to cancel the contract [with Johnson & Johnson] for over 10 million doses of the vaccine.  And so not a single country took advantage of the waiver for IP protections . . . to increase the supply of vaccines and [that's because] so many [generic] companies from around the world . . . had agreements with companies like Moderna and Pfizer to produce generic versions, but the problem in many of these developing countries was they couldn't refrigerate it . . . [or ] had distribution problems.  . . .  There is no evidence that there is a problem with getting access to the medicines to treat people who come down with COVID.  So, I fear we're creating a precedent that will eventually weaken the U.S. innovation economy, which is so important if we want to look at developing cures for some of the most dreaded diseases out there.

Ambassador Locke also noted the impetus for some countries in favor of waivers as being a desire to get access to the "secret sauce" of these technologies to obtain economic and competitive benefits.  Director Kappos mentioned the consequence of the waiver as being a "free giveaway" of the mRNA vaccine platform, and how this was particularly troubling because as a platform it implicates more than just SARS-CoV-2 and COVID-19.  Also discussed was the support from the Biden Administration (at least for the initial waiver) as showing evidence of a disconnect between treatment of medicines and biopharmaceuticals when compared with other Administration initiatives like the CHIPS Act and imposing restrictions on hi-tech materials to China and other countries.

On the bright side, the Ambassador and Director discussed rising opposition ("starting to ask the tough questions," according to Director Kappos) to the new waiver from Mexico, Switzerland, the UK, the EU, Japan, South Korea, and Singapore, but (regrettably) not the U.S., and that U.S. labor unions (a source of support for the Administration) oppose the waiver on economic grounds as a "jobs issue."  More significantly noted was the December 17th target date for the proposal to be formally considered by the WTO is likely to be deferred.  But despite these glimmers of silver lining both the Ambassador and the Director emphasized the continuing need to "get the message" to policymakers (both on the Hill and in the Administration) of the disincentives to innovation in medicine and the pharmaceutical industry that the waiver is certain to produce.

Director Iancu discussed with the speakers the policymaking and political realities of how a cabinet member like the Secretary of Commerce can influence the discussion in the Administration, supported by input from constituents like pharmaceutical companies and other innovation stakeholders.  But "if people are silent," the Ambassador noted, then the Administration might conclude the waiver was not an issue with these constituencies.  And Director Iancu noted that such waivers (although being prominent in the biopharma industry today) may be proposed for other technologies (such as climate change), with results negative to innovation in these technologies.

Director Kappos also mentioned that WTO is "wasting its time" on the waiver in view of more pressing international trade issues.  Director Iancu stated that the U.S. has a leadership role to play in persuading other countries about the real IP issues in view of international pressure on WTO and World Health Organization generated by the pandemic.  Ambassador Locke raised the issue of future pandemics and the need to build and maintain infrastructure to be ready for them.  Director Kappos noted that IP was particularly important for biopharma innovation because they were "risky, failure-prone" technologies.  And Director Iancu noted the need to achieve the long-term goal of building local capabilities, and that these will not develop unless there is adequate patent and other IP protection.

Ambassador Locke noted in conclusion that there needs to be a climate that enables R&D to address these challenges and that strong industry is required to achieve these goals, both in the U.S. and in countries like China (which he says recognizes these needs).  There is no basis or reason for waiving IP rights and protections ("we cannot just give [our technology] away"), he said in bringing the discussion to a close.

It is impossible not to have a feeling of déjà vu listening to these erudite and experienced speakers discuss these issues.  They are reminiscent of the arguments involved in gene patenting and more currently arguments about drug costs and the relevance of patents (actually almost none, in the popular mind almost entirely).  The 2018 volcano on the Big Island and public perception of it provides a vivid analogy:

Which is not to say that the only rational response is despair at the ability for those like Ambassador Locke and Directors Kappos and Iancu to cut through the misperceptions and misinformation now rampant to explain the objective reality and the consequences of proposals like the extension of the TRIPS waiver.  It is to say however than we must recognize how difficult the task may be, and also directly proportional to its importance.

*Aphorisms about broken clocks and blind squirrels can be applied according to the reader's political proclivities.