The World Trade Organization’s (WTO) Director-Genera, Dr Ngozi Okonjo-Iweala has “warmly welcomed” the breakthrough reached this week over a waiver on intellectual property for the production of COVID-19 vaccines.

“This is a major step forward and this compromise is the result of many long and difficult hours of negotiations. But we are not there yet. We have more work to do to ensure that we have the support of the entire WTO Membership,” said Okonjo-Iweala, in a statement on Wednesday.

The agreement reached between the European Union, India, South Africa and the United States – referred to in some quarters as “the Quad” – still needs to be put to all 164 WTO members, which typically decides by consensus.

However, the compromise now has good chances of being approved since EU countries had been the major opponents to the proposal by South Africa and India, submitted in October 2020, to waive IP on COVID-19 vaccines and other pandemic-related health products for the duration of the pandemic. 

Major concessions

South Africa and India had to make major conceessions  – both narrowing the waiver to only vaccines, as well as narrowing the list of countries that would be eligible to take advantage of the waiver on patents and other IP.     

“My team and I have been working hard for the past three months and we are ready to roll up our sleeves again to work together with the TRIPS Council Chair Ambassador Lansana Gberie (Sierra Leone) to bring about a full agreement as quickly as possible. We are grateful to the four Members for the difficult work they have undertaken so far,” said Okonjo-Iweala.

The WTO’s Ministerial Council (MC12), postponed from late November to the week of June 13, could potentially approve the waiver move – although the date of that meeting has also been cast into doubt due to the recent outbreak of war in the Ukraine. 

However, the draft text of the proposed compromise, published by STAT News Tuesday evening, has elicited dismay from both health activists and the pharmaceutical industry – for not going far enough, or for going too far.

Restricted to vaccines and certain developing countries

In essence, the compromise does three things:

• Most critically, the new waiver would allow developing countries to not only manufacture, but also to export, generic versions of COVID vaccines that are still under patent protection. Currently, Article 31.f of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement restricts such generic manufacture to health products that are “predominantly for the supply of the domestic market” – leaving low-income countries with no manufacturing base unable to import cheaper generic versions of products from abroad. 
• However, the waiver would be limited to countries that exported less than 10% of the world’s vaccines in 2021. That effectively excludes well-established manufacturers in China, but not India, from waiver eligibility. 
• In contrast to the original Indian-South African proposal, the new IP flexibilities are restricted to COVID vaccines, thus excluding COVID treatments such as new antivirals that are particularly important for countries with low vaccination rates, as well as tests, personal protective equipment (PPE) and other pandemic-related goods.

Adam Hodge, spokesperson for US Trade Representative Ambassador Katherine Tai, said late Tuesday that the “compromise outcome that offers the most promising path toward achieving a concrete and meaningful outcome” after a “difficult and protracted process”.

Since last May @USTradeRep has worked hard to facilitate an outcome on IP that can achieve consensus across the 164 @WTO Members to help end the pandemic. USTR joined informal discussions led by the WTO Secretariat with South Africa, India, and the EU to try & break the deadlock.

— USTR Office of Public Affairs (@USTRSpox) March 15, 2022

He and others cautioned that details of a final text were yet to be concluded. 

“While no agreement on text has been reached and we are in the process of consulting on the outcome, the US will continue to engage with WTO Members as part of our comprehensive effort to get as many safe and effective vaccines to as many people as fast as possible,” added Hodge.

The informal discussions, led by the WTO Secretariat, have been trying to break the deadlock between the India-South Africa waiver proposal (supported by the Africa and Least Developed Nations groups and others) and the EU’s counter-proposal.  

India-South Africa proposal had sought a broad waiver on all vaccines, tests and treatments, while the EU had pushed for technical modifications in the existing TRIPS rules. 

Medicines access activists and pharma leaders both express dismay 

Both activists and industry reacted with dismay to news of the proposed agreement. For example, the US-based consumer advocacy group, Public Citizen, called on WTO member states to reject the proposal.

“Among its key limitations: the proposal appears to cover only vaccines (not tests and treatments), cover only patents (not other important intellectual property barriers), be limited geographically, and further undermine current WTO flexibilities for compulsory licenses,” according to Melinda St Louis, director of Public Citizen’s Global Trade Watch division.

“It would be a mistake for WTO members to prematurely agree to a weakened waiver that provides political cover to the US and EU while not making any meaningful difference in increasing access to vaccines, tests and treatments. No waiver is better than a weak waiver designed solely to save face,” added St Louis.

Knowledge Ecology International also expressed disquiet, saying that the waiver may even restrict certain flexibilities that are already allowed by Article 31 of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), regarding a country’s rights to manufacture and export generic versions of drugs or vaccines during a health emergency. 

“Countries are required to follow Article 31 of the TRIPS [agreement], which of course, is an existing and not a new flexibility, but with ‘clarifications’,” noted KEI’s Director, James Love.

However, those “clarifications”, also come with new obligations that could make Article 31 “more restrictive and burdensome”, such as a new obligation for a country to identify all of the patents to which it is applying an IP waiver, and to notify the WTO of its use of the waiver –  something not required for the issuance of compulsory licenses in general.  

On the other hand, the draft agreement makes a first-ever reference to a 2005 WHO/UNDP guidance on payments by developing countries to the original patent-holder, which embraces the concept of “tiered royalties”, based on a country’s ability to pay, and authored by Love himself.

Pharma says agreement sends ‘wrong signal’

Meanwhile, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) said that “weakening patents now when it is widely acknowledged that there are no longer supply constraints of COVID-19 vaccines, sends the wrong signal”. 

“​​When the IP TRIPS Waiver was first proposed in 2020, it was to the wrong solution to the problem of scaling up manufacturing of potential COVID-19 vaccines which at the time had not yet even been authorized,” said the IFPMA.

“Now the problem of supply has been addressed thanks to unprecedented collaboration involving companies from industrialized and developing countries, the TRIPS Waiver is not only the wrong solution, it is also an outdated proposal, that has been overtaken by events.”

It added that the TRIPS waiver proposal is “political posturing that are at best a distraction, at worse creating uncertainty that can undermine innovation’s ability to respond to the current and future response to pandemics”. 

“The current proposals should be shelved; and the focus should be directed, to admittedly more difficult actions that will change lives for the better: supporting country readiness, contributing to equitable distribution, and driving innovation,” the IFPMA concluded.

The final text of any agreement would first need to be approved by the WTO TRIPS Council, and then go before the MC12 for final approval. 

The TRIPS Council last met on 9-10 March, but at the time failed to reach a compromise – although some sources noted that the were close to agreement as the “Quad” of India, South Africa, the United States and the EU scrambled to reach a deal.

According to a WTO statement on 10 March, the TRIPS Council had agreed to keep the agenda item on the IP waiver open – so as to enable the council to be “reconvened at short notice if substantial progress is made in the high-level talks”.  TRIPS Council approval would pave the way for a consensus agreement at the WTO’s Ministerial meeting, MC12.