Compulsory Licensing: The Key to Accessing the Future COVID-19 Vaccine for Africa?
Faith Tigere is an Independent Consultant and an Associate at the Trade Policy Hub- London School of Economics. Her twitter handle is @FaithTig. Kugler Kholofelo is Counsel at the Advisory Centre on WTO Law.
Image courtesy of Shutterstock
Trade in medical goods has experienced a boom with the outbreak of COVID-19. However, the imposition by governments of trade restrictions on COVID-19 medical products has affected global supply chains, which in turn impact public health interventions. Export bans have resulted in the oversupply of these products in some countries, and extreme shortages in others. These measures undermine the coherent global policies that are required to control this pandemic. It is thus necessary to adopt a coordinated global response that ensures every global citizen access to relevant treatments and preventative medication, including vaccines. Notwithstanding these challenges, African countries (and other developing countries) may access the necessary COVID-19 medical treatment by issuing compulsory licences. This option is available under World Trade Organization (WTO) rules. However, the system is inefficient, cumbersome, and mired in political disagreement.
Africa's lack of access to COVID-19 essential products
One of the regions most affected by the lack of access to COVID-19 essential products is Africa. Recent studies by the WTO and the ITC indicate that the main providers of medical products and equipment to Africa have imposed restrictive measures on these products. These restrictive measures disproportionately impact the region, which imports around 94% of its pharmaceutical products from sources outside the continent. Consequently, a global shortage of testing kits has left many African states struggling to increase their testing capacity, despite many of them having adopted trade-facilitating measures. It is evident that unilaterally reducing trade barriers is not enough. Africa's ability to manage and contain COVID-19 thus depends heavily on the goodwill of its external trading partners.
In addition to the breakthrough in vaccine development recently announced by US-based Pfizer and the German company BioNTech and, separately, the US biotech firm Moderna, there are 46 other vaccines at various stages of the clinical phase. Of these, only nine vaccines are in Phase III and 21 are in Phase I. Thus far, only one African institution, Egypt's National Research Centre, is involved in the development of these vaccines. Its vaccine is one of the 164 that are in the pre-clinical phase.
Due to the lack of domestic pharmaceutical research and development (R&D) and manufacturing capacity in Africa, its access to the vaccine could be threatened by high prices and restrictions in favour of intellectual property (IP) rightsholders. It has been reported that high-income countries, including the United States, the United Kingdom, Canada, Australia and the European Union have concluded advanced purchase agreements with Pfizer and BioNTech for at least 500 million doses of their vaccine. This means that poorer countries that cannot afford the high costs to guarantee priority access to vaccines must simply wait their turn.
This vulnerability has spurred a recent initiative lead by South Africa and India to propose a WTO waiver to facilitate an appropriate coordinated response for the “prevention, containment or treatment” of COVID-19. If approved, this waiver would allow for the temporary suspension of copyrights, industrial designs, patents, and undisclosed information (trade secrets) under the WTO's Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement) of COVID-19-related medical products, including vaccines. While this proposal is still being considered by the TRIPS Council, some Members, including the United States, the European Union, and Norway are opposed to it. Norway considers this waiver unnecessary because, in its view, the TRIPS Agreement already provides adequate flexibility for compulsory licensing of patents. Norway's stance is correct, in theory. However, actually accessing essential medicines under the compulsory licensing regime of the TRIPS Agreement is wrought with challenges.
The TRIPS Agreement's Compulsory Licensing Mechanism is Not Enough
The stark reality is that once a vaccine is approved, it will be subject to a patent for at least 20 years and may not be easily affordable to everyone. No country can afford to wait until a generic vaccine becomes available. Notwithstanding the looming threats posed by the protection of IP rights, the TRIPS Agreement can offer vulnerable countries a means of accessing the much-needed COVID-19 vaccine through the compulsory licensing mechanism in Article 31, as modified by Article 31bis and the TRIPS Annex. However, this system is notoriously inefficient.
Article 31 of the TRIPS Agreement allows a WTO Member or a third party authorised by that Member to use a compulsory licence to access essential medicines. Compulsory licences may only be used in situations of “national emergency” or “other circumstances of extreme urgency,” such as, ostensibly, the COVID-19 pandemic. In these circumstances, a Member may authorise the use of a compulsory licence to enable a generic pharmaceutical producer to manufacture the necessary medical products, subject to certain conditions. These conditions include limits on the scope, duration, and the purpose of the authorization.
Article 31(f) requires that the use of a compulsory licence must be “authorised predominantly for the supply of the domestic market.” However, this provision does not enable Members that have little or no domestic pharmaceutical production to issue compulsory licences. Moreover, Article 31(h) requires that the right holder must be paid “adequate remuneration.” This term is not defined. However, the Member issuing the compulsory licence may decide on the amount, which the right holder may review.
The above constraints were raised by the African Group at the WTO's TRIPS Council's first session on TRIPS and Access to Medicines in 2001. These countries sought to confirm that nothing in Article 31(f) prevented Members from granting compulsory licences to supply offshore markets in need of essential medicines.
These interventions led to the 2001 Doha Declaration on the TRIPS Agreement and Public Health. Consequently, the Decision on the Implementation of Paragraph 6 was adopted, which temporarily waived the obligations under Articles 31(f) and 31(h) and established procedures to facilitate the export of pharmaceutical products under a compulsory licence. These changes were incorporated into the TRIPS Agreement as Article 31bis and the Annex to that agreement. Currently, Members that have not ratified the TRIPS Agreement are subject to the modalities adopted in the Decision on Paragraph 6.
Compulsory licensing for export purposes has always been a sticking point at the WTO. Members with R&D capacities have pushed for strong protection of intellectual property rights and those with little or no research or manufacturing capabilities have argued for their right to protect public health through access to affordable essential medicines. But, without compulsory licences, most developing countries simply cannot access these vital medicines. For example, in 2015, the price for Hepatitis C drug Sofosbuvir was US$64,690 per treatment in the US; however, the generic version of this drug in India cost just US$539.
While compulsory licences are often used, the WTO's Paragraph 6 solution has, thus far, only been used once when the Canadian firm, Apotex, exported an anti-retroviral (Apo-TriAvir) to Rwanda. This case illustrated the practical difficulties of implementing Paragraph 6 – the procedures are long and cumbersome. Moreover, many Members with R&D capacities have not amended their legislation to allow for compulsory licensing in this manner. Thus far, only Israel has issued a compulsory license to import Lopinavir/Ritonavir (brand name Kaletra), one of the drugs being tested for COVID-19, from a generic producer in India. However, Israel did not use the WTO's compulsory licensing mechanism, which underscores the inefficiency of this process.
The situation is different for LDCs. Pursuant to Article 66.1 of the TRIPS Agreement, paragraph 7 of the Doha Declaration on Public Health Members exempts LDCs from protecting pharmaceutical patents until 1 January 2033. This means that these countries do not have to grant patents for medicines or issue a compulsory licence to import pharmaceutical products. The only necessary compulsory licence is the one issued in the supplying country if the medicine is patented in that country. This is important to Africa because 26 of the WTO's 36 LDC Members are African states. This should make it easier for African LDCs to obtain a future COVID-19 vaccine. However, the Article 31(f) mechanism has only been used once, by Rwanda. Essentially, the legal flexibilities provided to LDCs offer cold comfort in the light of the practical challenges.
No one is Safe Until Everyone is Safe
The cost associated with the development of vaccines necessarily means that African states may have difficulties accessing a COVID-19 vaccine, when it is finally commercialised. However, the highly contagious nature of COVID-19 indicates that vaccine sovereignty for purely commercial interests, is not a feasible option for global public health. The good news is that vaccine development cooperation initiatives like COVAX seek to ensure universal access to, inter alia, COVID-19 vaccines. But while 172 countries have joined this initiative, the absence of the United States puts into jeopardy calls for equitable access to COVID-19 treatments.
While African countries (like other countries with limited pharmaceutical production) certainly have a compulsory licensing trump card in their hands, the mechanism for accessing a future COVID-19 vaccine through the WTO may prove to be a deterrent. Unless Members agree otherwise, African states might be better off negotiating directly with the relevant manufacturers and countries either in sub-regional groups or at the continental level for better leverage to secure access to this essential vaccine. That said, given the global interconnectedness and the highly contagious nature of COVID-19, it would be futile for developed countries to secure the vaccine for themselves while imposing high access barriers to developing countries. It is apparent that the only way to control this disease is through a concerted effort that ensures that nobody is left behind.
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