Abstract
The world is divided over India’s representation and insistence on the issue of granting “Compulsory License” status for COVID 19 Vaccine. It seems ‘Humanity’ which was the basis for WTO-TRIPs – WIPO Regulatory regime and in terms thereof, respective member countries incorporating ‘Compulsory License’ provisions in their IPR laws, has taken a backseat and commercial elements and urge for international dominance has been at the forefront. Vaccine Diplomacy & Green Passport measures have invoked mixed responses. Given India’s better vaccine manufacturing abilities amongst the developing nations, world is looking at India for its policy stand. Author has made an effort to take stock of India’s strategy of bringing developed nations to agree for co-ordinated efforts to fight against Wuhan Virus and how it adheres to its well established thought process on “Vasudheiva Kutumbakam”
Key Words: Patent, Vaccine, COVID - 19 – Wuhan Virus, Compulsory License, Vaccine Diplomacy, Indo-Pacific Rim.
Intellectual Property (IP) refers to an intellectual creation of mind and it gives people the right to own and profit from their artistic, scientific, technological creations for a designated time period. The primary objective of an IPR is to encourage inventions by promoting their protection and utilization so as to contribute to the development of individuals, industries and in turn Nation. Amongst different categories of IPRs, Patent leads to technological and industrial revolution. Industrial Revolution (IR 1.0) to the current wave of Industrial Revolution (IR 4.00) – the latest wave is mainly driven by Artificial Intelligence (AI), Internet of Things (IOT) and 3-D Printing technology. Such disruptive technologies have laid to shifting of balance and power centres leading to dominance from certain countries in the world markets. Such fierce competition and urge to control the world markets, has laid and will continue to lead to Polarization of world economy and likely to prove detrimental to the objectives of equitable growth for all. To serve larger objectives, countries under World Trade Organisation Forum agreed for some common guidelines, rules and regulations for all the countries in the world. This led to the formation of World Intellectual Property Organisation (WIPO). WIPO was created to promote and protect intellectual property (IP) across the world by cooperating with countries as well as international organizations. It began operations on 26 April 1970. WIPO's activities include hosting forums to discuss and shape international IP rules and policies, providing global services that register and protect IP in different countries, resolving transboundary IP disputes. WIPO also works with governments, non-governmental organizations (NGOs), and individuals to utilize IP for socioeconomic development.
However, with the emergence of China as a formidable force in the world order, has drastically changed the equation of US, Europe & Japan laid growth & IPR initiatives and Chine is making its presence felt at least in the area of micro-electronic chips, mobile technology, earth moving equipment, semi - conductors to name a few, though not so formidable in Pharma Industry. Possibly, another player who can challenge the west laid dominance in IPRs – Patents in specific could be India. Disruptive technological innovations have shortened the life of waves of innovation. The time span of protection of 20 years being given was due to the estimation that innovation would remain relevant and commercially useful for that period. But the series of innovations in IR 4.00 has proven this wrong and many businesses due to lack of innovations and keeping pace with speed &competition have been wiped out from the markets e.g floppy / CD diskettes as storage device, pagers, camera etc.
As Patent gives exclusive right to the innovator, the registration authority makes it absolutely sure that the right being registered is not infringing any existing innovators’ right and hence it generally takes 4-5 years to register the patent. In Pharma industry, granting patent takes longer as the innovation has to undergo series of trials to prove its efficacy and understand its side-effects. Further, the process has become lengthy as in many occasions human trials are not permitted under Human Rights violation.
The future of Pharma companies hangs in balance largely on its success rate in ‘Research & Developments’ activities. A report in 2018 affirms this view -
“According to industry estimates, the average cost of bringing a new drug to market is US$ five billion. It takes approximately 13 to 15 years to develop and launch a drug in the marketplace including the clinical trials which accounts to 6-7 years for a chronic disease. Among these drugs, only a small portion makes it to market post the approval from regulatory authorities. As the cost involved in developing new drugs is too high, pharma companies are focusing on marketing of commercially successful drugs that could address the symptoms of big diseases and generate revenues annually. Intellectual property rights especially patents are the bedrock of the pharma industry as the industry solely rely on the innovation that can be monetized in the future. According to industry estimates, patents contribute 70%-80% of overall revenues of the pharma companies. Patents in the pharma industry are generally treated equivalent to their product portfolio and are one of the effective ways to protect the innovation and generate a return on investment. Patents are also critical for the industry as they help in recouping investments incurred during research and development and marketing of the drug. A strong patent protection can secure the invention from the potential infringers and cannot be used, made, or distributed without patentee’s consent.
The lack of patent protection in the developing countries suppresses the development of the industry, As these companies already face the pressure of increased costs in relation to development of new drugs, plummeting sales at the end of product lifecycle can lead to discouraging innovations in the pharma sector.
In the globalised era, new and improvised drugs are being introduced in the market driven by rapid changes in technology. Over the past couple of decades, many advances in the pharma sector have led to introduction of blockbuster drugs, thus saving lives of millions of people. Innovation is the key element that defines the success of the pharmaceutical sector while the risk associated with launch of new drugs can threaten its survival in the marketplace. Besides this, innovation help pharma companies to distinguish themselves from generic manufacturing company to research-based company. As stakes in the industry are very high, pharma companies need to spend a significant amount of revenues on innovation. To ensure profitability and better profit margins, the companies are making huge investments in R&D including the likes of Sun Pharma, Dr. Reddy’s, Lupin, Novartis, Pfizer, Roche, etc. However, the companies are spending more on marketing than research and are looking for novel ways to monetize these innovations. According to industry estimates, the average cost of bringing a new drug to market is US$ five billion. It takes approximately 10 to 12 years to develop and launch a drug in the marketplace including the clinical trials which accounts to 5-7 years for a chronic disease. Among these drugs, only a small portion makes it to market post the approval from regulatory authorities. Many a times, these Pharma majors, adopt unethical ways and means to create a need in the minds of customers to buy their products. Patents in the pharma industry are generally treated equivalent to their product portfolio and are one of the effective ways to protect the innovation and generate a return on investment. As medicines and drugs directly impact humans and developing and under developed nations have to procure them at a very high cost from the pharma majors, in case of epidemic/pandemic scenario, on humanity ground provisions pertaining to “Compulsory Licensing” were introduced in the legal regime.
Under this mechanism, the government permits a third party to produce the patented product or process without the permission of the patent owner. In return, the Government grants reasonable compensation in the form of royalty to the patent holder. The primary justification for granting compulsory licensing is to allow developing countries, increased access to critical lifesaving medicines at an affordable price. India’s accession to the TRIPS Agreement had led India to amend its patent law by implementing product-patents for its pharmaceuticals. This was a significant challenge for the generic drug manufacturers as it restricted their ability to operate through the proprietary process, thereby directly undercutting the supply of affordable medicines and indirectly eliminating the generic competition that India has been thriving on for a long time.
India was in a difficult position, on the one hand, to protect the public interest and, on the other hand, to comply with the provisions of the TRIPS Agreement. Nevertheless, the Government of India has managed to incorporate the flexibility that exists in the TRIPS agreement in order to ensure that the generic industry remains viable. India has achieved a successful patent policy by striking a balance between the Agreement on TRIPS mandate and protecting poor people’s access.
The TRIPS Agreement has been implemented with the aim of providing adequate safeguards for IPR in line with the priorities of developing countries’ public health and dissemination of innovation in the world.
• Article 31 of the TRIPS Agreement allowed the Member States to issue compulsory licensing, subject to certain conditions. However, in the event of national emergency, extreme urgency, etc., the preconditions may be waived off. It is important to note that TRIPS failed to define “national emergency” anywhere in the text, which led to confusion with regard to the exceptions and led to different interpretations of the specific exceptions by the Members.
• In addition, Article 31 (f) effectively limited the advantages of compulsory licensing to Members with sufficient manufacturing capacity and technical know-how, as it allowed the licensees to supply the product only to their country’s domestic market.
• Since the Nations which are most likely to make use of the exceptions to patents are economically distressed nations with insufficient or no manufacturing capabilities, the exceptions in TRIPS failed to serve the needs of those nations. Although there is no doubt that TRIPS has sought to establish a strong patent regime, it has restricted countries with poor and low manufacturing capacity to access medicines to meet their public health needs.
• A compulsory license under Section 84 shall be issued when the patented drug is unavailable, unaffordable, or not supplied adequately to the public. Therefore, the 2005 Act, protects the public health by allowing for compulsory licensing in situations beyond “national emergency”, thus ensuring that the patents do not impede the country’s overall health. First Compulsory Licensing Case: NATCO v. Bayer.
In WTO, major patrons being western developed nations, probably they accepted such a provision pertaining to “Compulsory Licensing” thinking other developing countries will never able to compete with including in Research & Development” activities in Pharma industry and that developed nations will never face with shortages and ability to buy lifesaving drugs in the market. Developed Nations probably went wrong in underestimating the capabilities of developing nations including India, Brazil, Indonesia to name a few.
COVID 19 – Pandemic has proven all these superiorities complex imaginary dead wrong. In fact, this Pandemic has badly impacted developed nations as compared to developing and under developed nations. The existing medical infrastructure was proven grossly inadequate and the life style of western people has not done any good to them while facing the global onslaught of virus. All existing drugs and treatments were proven inadequate while dealing with Wuhan virus.
And the race against time started, for finding out effective vaccine on Wuhan Virus in almost all major countries in world. Western Pharma majors saw this as blessing in disguise, thinking that if at all only they can come out with effective vaccine in the world thereby giving then opportunity to mint money on sale of the expected vaccine.
As some of the scholars who were touting 21st Century to be India’s Century, were proven right, accidentally or otherwise, due to successful launch of ‘Covishield’ by Serum Institute of India manufacturing the vaccine developed by British-Swedish pharma giant AstraZeneca and Oxford University, known as Covishield. Covishield was also granted emergency license for its use in India, locally made, as vaccine on Wuhan Virus with 75% efficacy post 2nd dose way ahead than many others including Pfizer. To add to their agonies, Bharat Biotech came out with “Covaxin”, another vaccine on Wuhan virus. It was truly remarkable considering very less data was made available on different variants of the ever-mutating Virus. It was a shot in arm for one and all including western philosophers, pharma companies, political leaders, health experts. Now it was a question of scalability of vaccine production and a requirement of some imported raw material from US. Not surprising, for US it was difficult to digest, they made all efforts to stall the supply of critical raw material required for manufacturing of Covisheild / Covaxin vaccines. However, India’s growing stature, with outward looking international relations with most of the countries in the world paid handsomely. With international support and pressure from international community, within short time span, US had to change its stand and make critical raw material available to India with some assurance of its continued supply. It was moral victory for India and probably recognition of its international presence and diplomacy.
At world Forums, India proposed to other countries that they should consider giving vaccine - compulsory licensing status considering global emergency rather than going thru’ normal route of Patent Co-operation Treaty Application process (PCT Application) Going solo on Compulsory licensing in India, sounds easy but has many limitations, to name a few –
Covaxin intellectual property (IP) is the only 'Indian' IP vaccine with approval as of now. Covishield, is the IP of AstraZeneca sub-licensed by the Serum Institute of India. AstraZeneca is British-Swedish company that itself has an exclusive licence of the IP from Oxford University. Therefore, the question of compulsorily licensing it under Indian intellectual property law would be subject to the limitation of the TRIPS agreement as well.
India has been supporting a waiver on TRIPS agreement that would enable manufacturing of the vaccines without the restrictions of patents. This is crucial to the effort against Covid-19, but is being opposed by Western nations. Essentially, India is left with the option of compulsory licensing of Covaxin, but this might not be the panacea to its vaccine woes or help it in scaling up production of Covaxin.
The barrier is rather the facilities required to manufacture Covaxin, which should be upto the standards of 'Biosafety level-3' production facility, which only Bharat Biotech and Panacea Biotech have in India. The facility is required for the manufacture of the virus causing Covid-19, SARS-CoV2, before it is killed.
This is in addition to two central public sector units (PSUs), Indian Immunologicals Limited and Bharat Immunologicals and Biologicals Limited being granted permission and financial support to manufacture Covaxin. However, the production capacity of these units is limited to only 10-15 million doses a month. Not to mention that the Haffkine Institute, a Maharashtra PSU was granted the licence to manufacture Covaxin. However, the bottleneck of requiring a biosafety level-3 production facility means that it will take a year for the vaccine to roll out from there. Compulsory licensing will not solve any of the problems that we face in scaling up the manufacture of Covaxin.
Panacea is also set to manufacture 100 million doses of Sputnik-V per year in any case, though meant for the export market. There are no instant solutions to the vaccine shortage that we are experiencing right now. The 20 million doses of the Astra-Zeneca vaccine that the US might send to India will only be a temporary relief. It will unfortunately take time for the production to scale up and for mass vaccinations to kick into high gear. A variety of vaccines are at various stages of production, clinical or bridging trials. So India’s efforts on seeking all members approval for granting of “Compulsory License” status for Indian Vaccine, is imperative but a kind of double-edged weapon for western countries. On one hand, it is in the interest of humanity and on the other hand it will lead to possible ascendency to India in the dynamic world order. For US it could be a calculated deal to support India on this front and then leverage it, while dealing with growing menace of China especially in Indo-Pacific region.
Vaccine Diplomacy, mis-propagated by the opposition within India and Outside as “Govt. using this tool for its political milage at the cost of shortage of vaccine in India and thereby, loosing precious human lives” Whereas international community and amongst especially non-resident Indians, Vaccine Diplomacy is looked upon as strategic tool of soft power for mustering international support. Externally, India’s Vaccine Diplomacy is hailed from all quarters. According to Duke University’s Global Health Institute, developed countries with 16% of the world’s population, including Canada, US and UK — each of whom have guaranteed enough supplies to vaccinate their populations several times over – have secured 60% of global vaccine supplies for themselves. Other countries commandeering supplies exceeding their domestic needs include Australia, Chile, and several European Union members. To quote unquote the Official “Most of the developing countries wouldn’t have got their vaccines so early if India had not supplied them,” While many countries in the Indian Ocean region have been sent vaccines, Pacific Island nations and those in south-east Asia are next. Indeed, this is at the heart of the “massive joint” Quad vaccine initiative, which US National Security Advisor Jake Sullivan referred to as “With Indian manufacturing, US technology, Japanese and American financing, and Australian logistics capability, the Quad committed to delivering up to 1 billion doses to ASEAN, the Indo-Pacific, and beyond by the end of 2022.”
After, adeptly managing US consent (may be a give and take – quid pro quo) for supply of critical raw material, Indian Govt presented the strategy in Supreme court’s Suo-Moto petition – on how it proposes to scale up manufacturing of Vaccine and administering thereof under Central Govt. control.
Now if we connect the dots,
Appealing international community to seek ‘Compulsory Licensing status’ at UN
Exporting vaccines to 71 countries mostly LDCs, small island countries and countries from Indo-Pacific rim under combination of “free vaccine – covax deal – commercial sell”
8 Countries of European Union have included Covishield & Covaxin for issuance Green Passport.
Taking over vaccine administration, management under Central Govt. control
Only a foolhardy can say that ‘Vaccine Diplomacy’ was a mere political coloured mission. In fact, it could be termed as Diplomacy par excellence keeping at its core ‘National Interest’
References
1. Wikipedia
2. http://www.annauniv.edu/ipr
3. Pharmabiz.com – Post by - Manoj Poonia and Surbhi Bhardwaj - December 17, 2015
4. https://www.legalbites.in/compulsory-licensing-impact-india-pharmaceutical
5. Indian Express – March 14, 2021 Edition.
6. www.jpost.com/health-science/green-passport-vs-vaccination-certificate-lets-m…
