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This article was originally published by Mint
29 Apr 2022
Project Lead, Fourth Industrial Revolution for Health, India,
World Economic Forum, C4IR India
Deputy Commissioner Income Tax, Ministry of Finance, Government of India
As the COVID-19 pandemic has demonstrated, the development of new vaccines plays a fundamental role in the management of infectious diseases. However, grave inequalities exist when it comes to access and availability of the vaccine across the globe.
This is why vaccine patents and ownerships are being criticised by some. While they are needed to create incentives for innovation, they can also limit inclusive access across the globe.
Consequently, national policies and the international collaboration must foster innovation – while at the same time not infringing on technological access for downstream innovations and vaccine accessibility.
In pursuit of a long life that has been well lived, the development of new vaccines plays a critical role to fight infectious diseases and to face the challenges of public health and global bioethics. The issue of patent and ownership rights has been highlighted in the international discourse because there are grave inequalities in vaccine availability and access to the vaccine across different countries.
Data from Oxfam International reveals that as on May 2021, people in G7 countries had a 77 times more likely chance of being vaccinated than the people living in the world’s poorest nations. Around 28% of the total 1.77 billion doses of COVID-19 vaccines administered across the globe by May 2021 were provided in the G7 nations. The share of the low-income countries remained at an abysmal 0.3% of the total vaccinations.
What impact do patents and ownership rights have on the economy?
Public goods often lead to what is known as the Free Rider problem where people who benefit from public goods do not pay or underpay for using the same. This leaves little incentive to the producer to innovate and produce the good. Supporters of patent rights believe that patents are linked to contributing to economic growth by making inventions profitable and preventing infringements. Also, pharma companies are business entities operating for profit and hence it cannot be expected from them to act in a completely altruistic manner.
Despite this, patent holders already have a very strong incentive to innovate and enhance production, as complicated regulatory and licensing frameworks, lack of required capital and technological know-how and demand exceeding supply especially show how important their innovations are.
How ethical are ownership rights and patents?
The ethical principle of non-maleficence and justice are violated if developed countries deprive other countries in getting access to vaccines. The fundamental rights of life and liberty are basic human rights and should take precedence over ownership and property rights, especially in times of emergencies and crisis. A large part of funding is provided by the public sector which is not considered while granting patents for a certain period. These expenses are not accounted for when granting ownership rights to the companies.
In the wake of COVID-19, several companies came together for The Open COVID Pledge which grants a “non-exclusive and royalty-free license” and provides for an open framework where the patent holders could voluntarily pledge not to assert their rights of manufacture, use, sale, reproduction and import of the product. However, it cannot be regarded a long-term solution due to its voluntary nature.
The IBC (UNESCO International Bioethics Committee) and COMEST (UNESCO World Commission on the Ethics of Scientific Knowledge and Technology) advocate access to universal healthcare through international coordination based on equality, justice, and solidarity. They support COVAX which is an initiative led by WHO, GAVI and CEPI.
What role do nations play when it comes to vaccine markets?
There are several mechanisms regulating the patents and ownership rights domestically and internationally.
In order to prevent the patent right abuses, compulsory licensing has been introduced by TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement However, because compulsory licensing regulations are restricted to territorial jurisdictions, they may limit the global access to vaccines and drugs. Many countries have compulsory licensing enacted by their domestic laws but major economies like USA and China lack such a statute.
A major role is played by the national governments in promoting vaccine development domestically. For example, the Indian Council of Medical Research provides major funding for vaccine development in India. It is very important for the state to provide funding for research and innovation like giving grants to academics, building state of the art infrastructure for research, increase public investments in vaccine development and innovation.
However, increased foreign investment and venture capital funding leads pharma companies to look outside for a profitable market. In the last 15 years, there has been a phenomenal growth in the vaccine development by small manufacturers, while growth has stagnated in similar programs in the MNCs. For example, the Serum Institute of India developed a vaccine for meningitis for Africa (with help from the Bill & Melinda Gates Foundation (BMGF) and PATH). In this scenario, governments may commit to purchase the vaccines from the manufacturers in advance, thereby directing the research to more targeted goals and appropriate research projects.
Reaching vaccine equality through international collaboration and national policies
In the case of public health emergencies, direct funding from the governments like Operation Warp Speed in the USA led to rapid development and rollout of COVID-19 vaccines – by assuring the pharma companies decent profits.
In order to counter the effects of monopoly pricing for vaccines, vaccines could be purchased internationally (say by the UN or World Bank) for developing countries at a single price and then payments could be collected from these countries depending on their income levels.
Patent pools can improve access of vaccines by coordinating the behaviours of complementary patent holders and reducing the number of patent licenses, while reference pricing may be used by the governments to reduce the prices for both branded and generic drugs and vaccines.
Most countries have domestic patent acts which deal with the regulation of patents and other IP rights. There are other laws like the Competition Act, 2002 (India) which can be used to examine whether the high price or inadequate availability of a drug is due to anti-competitive practices or due to ‘abuse of a dominant position’.
Another form of incentive can be a cash reward by the government for development of any new vaccine which is made accessible to the public at minimal or zero cost.
Why patents should stay
It is true that patents may restrict the availability of vaccines to developing nations, but other elements like technology transfer or funding the pharma companies by the developed nations can address the problem of vaccine manufacturing and distribution to a large extent and at the same time overcome the negative impacts of patent waivers.
The domestic patent laws and the international conventions must foster innovation but at the same time not infringe on technological access for downstream innovations and vaccine accessibility. These should not be looked as separate government policies but should serve as complementary to one another with the adoption differing as per the status of public health in the country.
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Written by
Ruma Bhargava, Project Lead, Fourth Industrial Revolution for Health, India, World Economic Forum, C4IR India
Dr Megha Bhargava, Deputy Commissioner Income Tax, Ministry of Finance, Government of India
This article was originally published by Mint
The views expressed in this article are those of the author alone and not the World Economic Forum.
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