Presently the entire global health system is grappling with the COVID-19 ( Coronavirus ) pandemic. A viral disease that affects the respiratory system, it seems the world health system was caught off guard right from when the disease broke out in Wuhan, China.
Reportedly, this flu like disease still does not have a cure in form of vaccine. And as expected, scientists, researchers and pharmaceutical firms are frantically working round the clock in a bid to come up with that magical cure. The research outfit or the pharmaceutical company that will come up with the cure will as a matter of right, proceed to patent the same. Once patented, the vaccine or cure would only be used by others with express permission of the patent holder and of course at a fee. This is the essence of intellectual property rights (IPRS).
Currently, a German pharmaceutical company, CureVac is reported to be working on the Covid-19vaccine.https://www.curevac.com/news/curevac-focuses-on-the-development-of-mrna-based-coronavirus-vaccine-to-protect-people-worldwide.
According to Reuters the U.S. administration has in fact been looking into how it could gain access to a potential vaccine being developed by the German firm and this indicates how there is already [profit seeking] movements in the big pharma.https://www.reuters.com/article/us-health-coronavirus-germany-usa-idUSKBN2120IV.
The questions worth addressing include a; what happens if the drug for a disease that has been declared a pandemic is discovered and patented by say the big pharma? b; How do the other countries receive the treatment without having to make the huge compensations to the patent holder?
The World Trade Organization(WTO) members negotiated the Trade Related Aspects of Intellectual Property (TRIPS) to deal precisely with the situation above. TRIPs is part of the Legal Texts, the foundations of the WTO as an organization focused on multilateralism and global trade.
How Does TRIPS deal with Patents in Medical Emergencies?
According to WTO, TRIPS is best described a minimum standards agreement. This means that [WTO] members states can employ more intensive and appropriate methods of protecting intellectual property rights within their national legislative frameworks. There is no more comprehensive multilateral agreement on intellectual property than the TRIPS agreement.
It covers copyrights, related rights patents , geographical indications , trademarks , industrial designs and integrated circuits, among others.
We shall focus more on patents as it is relevant in area of medical inventions. Article 27. 1 of TRIPS is to the affect that Members countries should make patents available for any inventions, whether products or processes, in all fields of technology without discrimination, subject to the normal tests of novelty, inventiveness and industrial applicability. Further, the patents be available and patent rights enjoyable without discrimination as to the place of invention and whether products are imported or locally produced. This of course subject to the usual exceptions of public morality and public orders (Article 27.2).
We should also remember that diagnostic, therapeutic and surgical methods for the treatment of humans or animals are not patentable under the TRIPS ( article 27.3).
The import of Article 27.2 therefore is to enable patent holders to enjoy the benefits of their innovations. This , it has been argued, encourages innovations and investors to dedicate time , energy and resources towards patents. It is a fact that the amount of investments into these researches can be huge , And therefore it is only fair that holders of patents are allowed time to reap from their efforts in Research and Development.(R&D).
However, when it comes to medical inventions and disease outbreaks, this principle seems not to apply strictly and public interest does take precedence over profits, thanks to the Doha Declaration of 2001 , discussed below.
The Doha Declaration on the TRIPS Agreement and Public Health
Doha Declaration was made in 2001 at the WTO Ministerial in Doha, Qatar and it aimed at addressing “public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”( Declaration 1).
In essence the WTO members felt that in case of disease breakouts , the developing and the Least Developed Countries (LDCs) could be overwhelmed hence there was need for some intervention from the multilateral trading system to help ease this pressure, especially as far as drugs are concerned.
Declaration 2 therefore stressed that the WTO TRIPS Agreement should be “be part of the wider national and international action to address these problems.” In short this Declaration was aiming at relaxing of the patent holder’s rights during medical emergencies in a way that would help these LDCs and the Developing Countries, which are technically considered poor. This indeed a version of of what is known in Multilateral Trading System as Special and Differential Treatment.(S& D). As making of drugs is costly in terms of research and development, Doha Declaration aimed at ensuring these drugs are available to the poor countries cheaply. In fact, Declaration 3 expressly states that;
“ 3 We recognize that intellectual property protection is important for the development of new medicines. We also recognize the concerns about its effects on prices.”
The Doha Declaration thus allowed Members to interpret the TRIPS agreement in a manner that allowed Members to interpret that TRIPS Agreement in a manner that is supportive of the Member’s right to protect public health and in specifically to promote access to medicines for all. This is the hallmark of what is often referred to as “TRIPS Flexibilities” and they are detailed below.
TRIPS Flexibilities
Flexibility simply means capable of being bent or being able to cope with different circumstances. The TRIPS Flexibilities would therefore mean cases where the WTO Members states are allowed to benefit from intellectual property rights in a manner that would ordinarily have been an infringement , so as to address a public health issue.
The Doha Declaration 4 contains the flexibilities and among them two are key for our discussion and these are that Each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted (Declaration 5.a) ; And that Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency. (Declaration 5.b).
What the flexibilities mean is; when a member states declares a national emergency after a public health crisis relating an epidemic, then they can apply compulsory licensing. And this means that the affected country can either manufacture the drugs or cause them to be manufacture in a third county , without the express permission of the patent holder. To bring this closer home, the Corona virus disease (Covid-19) as a pandemic, a type of that relates to geographic spread and describes a disease that affects an entire country or the whole world. If, for example, there were to be a new drug for the diseases then China( a ‘ developing country’) would have simply declared a national emergency and commenced compulsory licensing of the drug to alleviate the situation. This is the import of the TRIPS Flexibilities in the Doha Declaration.
It is worth noting that the Doha Declaration brought in the much-needed clarity to the TRIPS Agreement’s flexibilities and assured governments that they can use the flexibilities as , according to WTO, some governments were unsure about how the flexibilities would be interpreted.
The Parameters of Compulsory licensing under TRIPS Agreement.
It is not always automatic that once a public health crisis has arisen then Countries can just compulsorily acquire patents for essential medicines. Instead, the TRIPS agreement lays down conditions to be met. For a start, in compulsory licensing the generic copy of the drug is produced.
Article 31, TRIPS Agreement as amended in 2017 generally provides that Member State can apply compulsory licensing under certain key conditions namely a) that the authorization must be considered on individual basis. For instance, suppose Kenya applies compulsory licensing , the license shall apply to Kenya only; d) the proposed user is supposed to demonstrate the prior efforts made to obtain the authorization from that right holder on reasonable commercial terms and that the efforts did not bear fruit within a reasonable time; But in cases e of emergencies (such as this Covid-19 moment), these are not necessary; c) the scope is limited .For instance the patent license can only be limited to the public health crisis at hand ;use must be non-exclusive and unassignable(d, e);must be for domestic market (f); must be subject to review by competent authorities if circumstances cease to exist( g); adequate remuneration for the license holder(h); right to challenge validity of the decision(i);right of the license holder to challenge the compensation(j).
As can be seen the process is indeed complex. However it is instructive that under the TRIPS the All WTO members are eligible to import medicines under this special compulsory licensing mechanism. Currently the LDCs can use it straight away while others have to notify their intention to do so, through a brief communication. This means that a county like the US for instance must first send a brief communication to the relevant WTO body before applying compulsory licensing.
As to the issue of capacity, under compulsory licensing a country is free to have the medicines made by a third party before they are imported. This is referred to as parallel importation. A parallel import is a non-counterfeit product imported from a third country without the permission of the intellectual property owner. The AIDS drugs generic drugs which come mostly from India to the least developed countries as a typical example of parallel imports. What most don’t appreciate is that without compulsory licensing the AIDs scourge would have caused unimaginable deaths especially in the poor countries.
The Kenya Industrial Property Act 2001 and Compulsory Licensing
Section 80 of the KIPI Act titled Exploitation of the patented inventions by the Government or by third persons authorized by the Government empowers the government to engage in compulsory licensing;
80. (1) Subject to this section, where— (a) the public interest, in particular, national security, nutrition, health, environmental conservation, or the development of other vital sector of the national economy so requires; or (b) the Managing Director determines that the manner of exploitation of an invention by the owner of the patent or his licensee is not competitive, the Minister may, upon application to him in the prescribed form and after consultation with the Institute and the owner of the patent, order that the protected invention shall be exploited by a Government Ministry, Department, agency or other person as the Minister may designate in the order subject to the payment of adequate compensation to the owner of the patent in accordance with this section.
So essentially should Kenya need to use TRIPS compulsory licensing, it just needs to comply with the conditions and not worry about capacity, as countries like India can easily make generic vaccines under the explained arrangement.
What About the Interests of the Big Pharma?
There has been a debate on whether compulsory licensing is a disincentive to inventors. How do you balance the rights of the patent holders the public interest? This debate is ongoing and us certainly a long one. For now, we need to concentrate on how to acquire the Coronavirus (Covid- 19 ) jab to restore normalcy across the globe.
Patrick's Trade Digest 