Companies stop buying patents

Global Vaccine Distribution: Blocking the Rich

Many poor countries are currently unable to supply their populations due to a shortage of vaccines. So that they can produce enough vaccine themselves, some are demanding a patent release from the World Trade Organization. But rich states want to prevent this step.

WTO Director General Ngozi Okonjo-Iweala. The financial expert suggests voluntary licensing as a middle ground between vaccination nationalism and patent releases. Photo: SALVATORE DI NOLFI / KEYSTONE / AFP

Are rich nations putting the profits of domestic pharmaceutical companies on a faster end to the corona pandemic? These are serious allegations that numerous aid and human rights organizations, trade unions and more than a hundred national governments around the world are making against the European Commission, the USA and other representatives of wealthy states.

The background to this is an application that India and South Africa submitted to the World Trade Organization in October. In it they ask the WTO body responsible for intellectual property to recommend the suspension of certain aspects of the patent protection agreed between the members until the end of the pandemic.

With the help of this so-called waiver, manufacturers in developing countries should also be able to produce the urgently needed COVID-19 vaccines according to the formulations developed mostly in rich western countries without having to fear lawsuits. In this way, not only vaccines, but also diagnostics and therapeutics could arrive in poorer countries much faster and at lower prices, according to the application.

Mass vaccinations not until 2024

Because while in Germany, for example, every inhabitant should receive a vaccination offer by late summer, many countries in Africa, Asia and South America have not yet been able to start vaccinating due to a lack of vaccines. The world's richest countries, which make up nearly 16 percent of the world's population, have secured 70 percent of the 2021 doses of the top five vaccines, according to an analysis recently published in the Lancet.

The purchase prices paid are not affordable for poorer countries. Due to patents, however, they also have no way of producing sufficient vaccine themselves - although the corresponding capacities are partially available. If this initial situation remains, mass vaccinations in poorer countries could not begin - if at all - until 2024, predict data analysts from the British magazine The Economist.

But a partial repeal of the so-called TRIPS Agreement - short for Agreement on Trade-Related Aspects of Intellectual Property Rights - would deeply encroach on the market economy interests of the pharmaceutical companies. "Since the patent rights would be temporarily revoked, the companies would no longer have the opportunity to earn money when other manufacturers manufacture their vaccines, for example," explains the left-wing member of the Bundestag Kathrin Vogler, who campaigns among other things for the global network "People's Health Movement" supported the application by India and South Africa. "In addition, prices would fall significantly if more producers got involved."

Rich industrialized countries with traditional pharmaceutical locations such as the EU, Japan, Canada, Australia, Great Britain, Switzerland and the USA did not want to set a precedent and thus damage the relationship with the companies in the long term, according to Vogler. Because of this, these and some other wealthy countries blocked the proposal from South Africa and India to the WTO. Almost without exception, it is states that have already secured sufficient vaccine for their population through bilateral agreements with manufacturers, as a continuously updated map of the world by the aid organization Doctors Without Borders shows.

Agreement unlikely

Over 100 nations are in favor of the initiative, including the entire Africa section and the group of the least developed countries of the WTO. Numerous non-profit organizations also support the TRIPS waiver, including the African Commission on Human and Peoples' Rights, Amnesty International, Human Rights Watch, Doctors Without Borders, the United Nations Joint Program on HIV / AIDS (UNAIDS), Unitaid, representatives the High Commissioner for Human Rights of the United Nations and the World Health Organization (WHO) and the Holy See. However, this has no direct influence on the decision of the WTO.

Here, decisions are usually made by consensus. And since the blockade states are among the weighty members of the organization, an agreement is unlikely. Only last week, a meeting of the WTO General Council led by the new Director General Ngozi Okonjo-Iweala elected in February broke up on this point.

The limit of 90 days in which the responsible body usually sends a recommendation to the highest organ of the WTO, the ministerial conference, has long been exceeded. So far, the blockade has even prevented so-called text-based negotiations, which are considered the first essential step in upcoming decisions.

“What we are currently observing is that rich countries seem to be adopting a kidnapping tactic, although speed would be required in the pandemic. It is argued that even if the waiver came tomorrow, there would not be more vaccines immediately, ”says Elisabeth Massute from Doctors Without Borders.

“But it is politics, in particular, that are now slowing down. A technology transfer takes an average of six months. If the decision is delayed, intellectual property rights will create significant barriers, drive prices up and create artificial shortages, ”said Massute. "But this pandemic will only be over when it is over for everyone."

Representatives of the blockade states also repeatedly emphasize this argument. However, a TRIPS waiver is not a solution. There is no evidence that this would actually create additional capacities and help to resolve the vaccine shortage quickly, according to some of the reasons sent to the WTO. The German Federal Ministry of Justice also considers the waiver to be “not expedient”, as a small request from the Left Group on the subject shows.

The arguments of the pharmaceutical companies are similar. “Like other knowledge-driven industries, the pharmaceutical industry needs patents. Of course you can question that. But if you do, shouldn't you be able to prove where the functional crisis of the patent system is supposed to be? I can't see it, ”commented Han Steutel, President of the Association of Research-Based Drug Manufacturers, at a Bundestag hearing in February, which included patents on corona vaccines.

Protection of innovations

During the pandemic, pharmaceutical companies developed effective vaccines in record time and offered them at moderate prices. Researchers expect the legal system to protect innovations successfully. "The appropriate protection of intellectual property rights offers an important market-based incentive for the development of drugs and vaccines by private companies," emphasizes the Federal Ministry of Justice. When asked, a spokeswoman for the European Commission said: "Our main concern is the impact this derogation could have on ongoing public-private partnerships."

From Elisabeth Massute's point of view unfounded: It is not about the fact that pharmaceutical companies should not be paid for their work, but about the difference between profit maximization in a global pandemic and the health needs of people. Even before the pandemic, the development of drugs and vaccinations had been massively financed from taxpayers' money. "That intensified again in the pandemic," explains the representative from Doctors Without Borders. However, intellectual property rights and patents only protected the economic profits of the individual pharmaceutical company. “Governments must attach specific conditions to their subsidies and subsidies, which ensure affordable prices, transparency and the possibility for technology transfer, and thus an expansion of global vaccine production,” demands Massute. So far, according to human rights experts, this has not been done to a sufficient extent.

Instead, the Federal Republic of Germany and the EU Commission, on behalf of all members, refer to three other measures that, from their point of view, make a TRIPS waiver superfluous: voluntary license agreements between vaccine developers and other manufacturers, national compulsory licenses and the global vaccine initiative COVAX, for which both the EU and Germany have already made billions available. Supporters of the waiver do not allow any of the measures to apply.

“National compulsory licenses, which the TRIPS agreement allows in emergency situations such as a pandemic, have so far never been implemented by countries in the Global South, as the vaccine manufacturers or the countries in which they are based threatened them with sanctions or the process complicated, "says left-wing politician Vogler. The best example is the AIDS pandemic, in which the patents were protected despite many deaths and numerous attempts by African countries to obtain a compulsory license. The crisis was only brought under control after the patents had expired.

Support for compulsory license

A spokeswoman for the EU Commission told the Deutsches Ärzteblatt that they are ready to work with the applicants India and South Africa "in order to make the flexibility usable for them if this is their intention and the voluntary cooperation has failed." Without additional stumbling blocks, the process is lengthy and complicated and has to be restarted for each individual product, explains Elisabeth Massute. The applicants themselves express similar concerns in their letter to the WTO.

In any case, the EU and other blockade states prefer voluntary solutions. "We believe this is the way to go, as collaboration and voluntary licensing is the most effective tool to get production going in the short term," said the spokeswoman. There are already numerous examples of licensing and production between different companies in the EU, such as Sanofi and Pfizer / BioNTech or GlaxoSmithKlein and CureVac. There are also partnerships with manufacturers in developing countries. For example from AstraZeneca with the Serum Institute of India and Johnson & Johnson with Aspen Pharmacare in South Africa.

But aid organizations see problems here too. In contrast to a patent release, the companies themselves decide under which conditions they cooperate with others. Often the license agreements are restrictive and opaque. In a position paper, Médecins Sans Frontières writes in a position paper that producers cannot usually decide for themselves who to supply, in what quantities, and at what price.

The South African-based pharmaceutical company Aspen Pharmacare has agreed with the US manufacturer Johnson & Johnson to produce 300 million cans, Aspen CEO Stephen Saad told Reuters - there are capacities for 600 million cans. Whether these are used depends entirely on Johnson & Johnson. It is also unclear how many of the cans are intended to supply the severely affected African continent.

For South Africa itself, which is currently limited in its vaccine selection due to an aggressive variant of the coronavirus, eleven million doses have been firmly committed, said Health Minister Zweli Mkhize. Johnson & Johnson has not yet decided whether these will come from production in their own country, which would be appropriate due to the urgency and short supply chains.

In India, on the other hand, there are currently massive legal problems with AstraZeneca. The British manufacturer sent the Serum Institute a legal warning last week. The producer, who made 60 percent of the world's vaccine prior to the pandemic, is apparently withholding large quantities of the licensed vaccine. Indian media report that the pandemic is currently so widespread in the country and at the same time there is so little vaccine available for its own population that the doses intended for export are now being illegally used in their own country.

Market bought empty

Large parts of these deliveries were intended for the COVAX vaccination initiative, in which all blockade states are involved. "COVAX was supposed to serve as a global vaccine distribution mechanism, but it has been undermined by rich countries," says Massute.

Actually, the program co-organized by the WHO should function similarly to the EU's vaccine procurement: Each participating country registers a need, COVAX negotiates for everyone, the rich countries take the doses at the purchase price, poorer countries receive them subsidized. But the wealthy states signed bilateral agreements with the manufacturers from the start, and although some donated generously to COVAX, they were far from compensating for the amounts that they would otherwise have paid for the vaccine doses.

With their own treaties, the rich states have not only removed the negotiating power of the initiative, but also the vaccine itself, according to Massute. "The market is currently empty, so there is almost nothing left for poorer countries." Alina Reichardt