The European Commission proposed on Friday 4 June to use flexibilities in the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), such as compulsory licences, to ensure that IPRs do not impede the production and distribution of vaccines and therapies for Covid-19 in the countries that need them most.
The EU institution does not see the outright lifting of patents on Covid-19 vaccines, as proposed by India and South Africa, as a miracle answer to the current situation.
“You cannot force a company to share its know-how”, said an EU source. In the source’s view, a “holistic” approach - detailed in two separate papers presented on Friday - is needed.
For example, “Bangladesh has production capacity, but cannot produce because it does not have the know-how and access to raw materials”, said a second source, convinced that “there is no IP obstacle that prevents Bangladesh from producing”.
On the issue of intellectual property rights (IPR), the Commission believes that the use of ‘compulsory licensing’, as permitted by the TRIPS Agreement, is legitimate in an emergency situation such as the pandemic. Clearly, a State can grant a targeted licence that allows a company to produce a vaccine or medicine without the consent of the rights holder. And the Commission considers that this possibility applies both to domestic production and to exports, particularly to third countries that lack production capacity.
“There is no need to negotiate with the rights holder”, said the first source. And the level of remuneration for the manufacturer under a compulsory licence should reflect the need to deliver vaccines at affordable prices, the source added.
In order to address the concerns of WTO members that the current rules on compulsory licensing (Articles 31 and 31bis) are too complex and undermine legal certainty, the specific Communication on IPR makes concrete proposals.
In the past, compulsory licences have been used to combat AIDS, cancer, and kidney disease. For Covid-19, no compulsory licence has yet been granted. Bolivia has made a request to Canada, which is currently reviewing it.
In addition to the proposal from India and South Africa, the US has advocated for the lifting of patents on Covid-19 vaccines. But the authorities have “not clarified what this declaration means”, especially for treatments, the first source noted.
The Commission’s proposal, which is said to be supported by some 50 countries, will be discussed in the WTO’s TRIPS Committee on Tuesday 8 June.
See the specific communication on intellectual property rights: https://bit.ly/2S8Eo9P
Facilitating trade and increasing production
To complete its holistic approach, the Commission calls for the removal of barriers to trade, such as restrictions on ingredient supply chains and on the export of Covid-19 vaccines and treatments, especially for deliveries under the Covax Facility.
Any barriers to exports should be “transparent, proportionate and limited in time”, the EU institution stresses in its second communication. It recalls that with 250 million doses of vaccine exported, the EU exports almost half of its production, even though it has developed an export reporting mechanism. With an envelope of EUR 2.8 billion, it is also Covax’s largest donor. And the EU and its Member States also pledged at the World Summit in Rome to donate at least 100 million doses (see EUROPE 12724/5).
In addition, the Commission is encouraging industry to enter into voluntary licensing and production agreements to strengthen vaccine production in developing countries that have production capacity. Such agreements would allow producers to share their expertise, outsource part of the production and make productive investments in the countries concerned.
In July, the WTO General Council will begin work on the links between trade and health. The aim is to reach a declaration at the November ministerial meeting on the basis of a draft declaration submitted in December by the member countries of the Ottawa Group, to which the EU belongs.
See the draft declaration: https://bit.ly/3g4uiPc
Finally, the EU expects the pharmaceutical companies that developed the Covid-19 vaccines to commit to supplying vulnerable countries. In particular, the recent announcement in Rome that BioNtech/Pfizer, Johnson & Johnson and Moderna have committed to provide 1.3 billion doses this year at no profit for deliveries to low-income countries and at a low margin for deliveries to moderate-income countries was welcomed.
After debating the issue at the last plenary session, the European Parliament will adopt a specific resolution at the plenary session starting on Monday 7 June (see other news).
See the communication to the WTO: https://bit.ly/2RrIyJG (Original version in French by Mathieu Bion)