By: Alexandria Johnson
A year ago, analysts predicted the transmission of COVID-19; now they’re predicting the dissemination of the vaccine. As countries worldwide seek to inoculate their populations, soaring demand and limited supply have left some countries out in the cold.[1] Experts use the term vaccine nationalism to describe the process by which governments enter into contracts with pharmaceutical companies to secure vaccines for their populations ahead of other countries.[2] Deals such as this are why countries throughout Africa, South America, and Asia are expected to be fully vaccinated by late 2022, at the earliest.[3] Conversely, the United States and the United Kingdom are predicted to have fully vaccinated their populace by the end of this year.[4]
As of December 2020, more than half of the vaccine doses that could reach the market by the end of the year were preordered by wealthy countries before even determining their efficacy.[5] If all of those doses are administered, Canada will be able to vaccinate its residents six times over, the United States and the United Kingdom could do so four times over, and the European Union could do so two times over.[6] Conversely, estimates suggest that countries in the global majority might be able to vaccinate, at most, 20% of their populations by the end of 2021.[7] Underlying this disparity is the wealth gap between high-income countries and their lower-income counterparts.[8] This allows the former to not only reserve copious amounts of the vaccine but also dictate the balance between intellectual property protections and the need for those essential medicines around the world.[9]
The balance weighing in favor of high-income countries with economic and political bargaining power is not a new occurrence.[10] At the height of the HIV/AIDS crisis, people throughout Sub-Saharan Africa were left without access to the life-saving medicines that their counterparts in high-income countries could obtain.[11] Pharmaceutical manufacturers relied on the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) to maintain their control over when and where their products were sold.[12] TRIPS is a multilateral agreement between members of the World Trade Organization (WTO).[13] It establishes minimum protections for varying kinds of intellectual property, including pharmaceutical and drug patents.[14] WTO members who fail to implement and uphold these standards are subject to challenges via the organization’s dispute settlement process.[15] TRIPS’ safeguards create a monopoly for pharmaceutical manufacturers by decreasing competition and allowing them to control the market.[16]
Under the current WTO regime, member states who have not yet reserved the vaccine but still want to inoculate their populations have two options.[17] One option is a compulsory license. Following their failure to distribute medicine during the height of the HIV/AIDS crisis, WTO members elected to weaken pharmaceutical manufacturer’s monopoly.[18] They bestowed upon themselves the authority to grant compulsory licenses to fellow member states on a case-by-case basis.[19] Compulsory licenses allow WTO members to waive TRIPS protections for pharmaceutical products thereby allowing someone else to recreate the patented product or process.[20] In 2017, this option to waive became an official amendment to TRIPS, cementing high-income member’s ability to dictate access to medicine and medical products throughout the world.[21] Countries without the infrastructure to manufacture the vaccine could import the vaccine as outlined in Paragraph 6 of the Doha Declaration.[22] The WTO implemented this flexibility when members recognized that compulsory licenses were not viable solutions for every member.[23]
With more than half of the existing COVID-19 vaccine supply spoken for, many countries are worried that neither of these flexibilities is sufficient.[24] While compulsory licenses ensure the use of a patent without authorization from the patent holder, that party is still entitled to “adequate remuneration” based on the economic value to the importing member.[25] Furthermore, TRIPS protections impact when a country can begin production and how it can price a drug.[26] Finally, countries that obtain compulsory licenses risk retaliation from pharmaceutical companies that could destroy any future investments or relationships.[27] Accordingly, many countries are relying vaccine assistance programs developed by non-governmental organizations (NGOs) to gather monetary donations or excess doses for countries in need.[28]
Rather than relying on the altruism of other countries, India and South Africa submitted a communication to the WTO’s Council for TRIPS in October 2020.[29] The proposal asked all WTO members to waive their TRIPS’ obligations under sections 1, 4, 5, and 7 of Part II of the agreement until there is global immunity.[30] Pharmaceutical companies and high-income countries alike have opposed the measure.[31] However, they should consider the economic ramifications for doing so. Countries in the global majority are critical components of supply chains that enrich high-income countries.[32] Thus, the longer they remain unvaccinated, the bigger the economic impact for wealthier economies.[33] Experts suggest that even if these countries were able to vaccinate half their populations by the end of 2021, there would still be an overall global GDP loss of $4.4 trillion.[34] Supply chain interruptions slow production processes for everything from textiles to car parts; this could be an added burden for producers who were already forced to relocate their supply chains during the pandemic as a result of the Trump administration’s policy toward China.[35] Distribution programs and compulsory licenses offer temporary solutions to the permanent problem of inequality. Without global coordination, even countries that obtain 100% vaccination levels may continue to feel the virus’s economic impact as long as other countries are unable to reach full inoculation.[36]
[1] See Stephanie Hegarty, Covid: The countries worried they won’t get the vaccine, BBC (Dec. 19, 2020), https://www.bbc.com/news/world-55325450 (referencing a statement from the special assistant to Pakistan’s prime minister on health as saying they are competing with wealthier countries for access to the vaccine).
[2] Dr. Amir Khan, What is ‘vaccine nationalism’ and why is it harmful?, Aljazeera (Feb. 7, 2021), https://www.aljazeera.com/features/2021/2/7/what-is-vaccine-nationalism-and-why-is-it-so-harmful.
[3] See Stephanie Hegarty, Covid vaccine tracker: How’s my country and the rest of the world doing?, BBC (Feb. 12, 2021), https://www.bbc.com/news/world-56025355 (noting that countries such as the UK and the U.S. who could invest money in vaccine development early on are well supplied with vaccines in comparison to their counterparts who a chart from the Economist Intelligence Unit suggests will not be vaccinated until late 2022); see, e.g.,Interview by Emily Priborkin with Maria De Jesus, Am. U. SIS Professor (Mar. 9, 2021) (demonstrating the disparity in vaccine distribution between countries such as Israel which has administered at least one dose to 57.3% of their population and South Africa which has administered less than 0.001 doses per person).
[4] Hegarty, supra note 3.
[5] See Megan Twohey, Keith Collins, & Katie Thomas, With First Dibs on Vaccines, Rich Countries Have ‘Cleared the Shelves’, The New York Times (Dec. 15, 2020), https://www.nytimes.com/2020/12/15/us/coronavirus-vaccine-doses-reserved.html; see Hegarty, supra note 1 (noting that countries like the US, UK, EU, and Canada risked buying the vaccine before knowing how effective it was).
[6] Twohey, Collins, & Thomas, supra note 5.
[7] Id.
[8] See Lauren Leatherby, See Which Country is Leading the Global Race to Vaccinate, The New York Times (Jan. 25, 2021), https://www.nytimes.com/interactive/2021/01/25/world/europe/global-vaccination-population-rate.html (acknowledging that even with slow rollouts and lengthy bureaucratic processes across Europe, the global majority hasn’t even begun administering doses like its wealthier counterparts who preordered more than half the vaccine supply).
[9] See Khan, supra note 2 (explaining that the U.S. has reserved 800 million doses of at least six different vaccines while the UK has secured 340 million doses); see also Arvind Subramanian, Medicines, Patents, Has the intellectual property pact opened a Pandora’s box for the pharmaceuticals industry?, https://www.imf.org/external/pubs/ft/fandd/2004/03/pdf/subraman.pdf (last visited Mar. 21, 2021).
[10] See MSF calls on all governments to support landmark move at WTO to suspend monopolies during COVID-19, reliefweb (Nov. 19, 2020), https://reliefweb.int/report/world/msf-calls-all-governments-support-landmark-move-wto-suspend-monopolies-during-covid-19 (quoting Dr. Khosi Mavuso, Medical Representative for MSF in Africa, as he noted that granting a waiver for COVID-19 vaccine protections would avoid the mistakes of 20 years ago where people in developing countries did not have access to life-saving HIV medicine).
[11] Id.
[12] See Pharmaceutical patents and the TRIPS Agreement, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e.htm (last visited Mar. 26, 2021) (explaining that under TRIPS a patent owner has the right to dictate who can make, use, sell, or import their products).
[13] See TRIPS-Trade-Related Aspects of Intellectual Property Rights, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/trips_e.htm (last visited Mar. 16, 2021).
[14] See TRIPS-Trade-Related Aspects of Intellectual Property Rights, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/trips_e.htm (last visited Mar. 16, 2021).
[15] See VI. TRIPS Dispute Settlement, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/ta_docssec6_e.htm (last visited Mar. 20, 2021).
[16] See Subramanian, supra note 10 (noting that the stronger patent protections that resulted from TRIPS creates a monopoly for patent holders).
[17] See Obligations and exceptions, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm (last visited Mar. 26, 2021) (outlining parallel or grey-market imports and compulsory licensing as exceptions to a country’s TRIPS’ obligations).
[18] See Subramanian, supra note 10.
[19] Id.
[20] Compulsory licensing of pharmaceuticals and TRIPS, World Trade Org., https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm (last visited Mar. 26, 2021).
[21] See id. (explaining that the amendment was enacted on January 23, 2017).
[22] See Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health, World Trade Org. (Aug. 30, 2003), https://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm (instructing the Council for TRIPS to find a solution for Members with little to no manufacturing capabilities).
[23] Id.
[24] See Terence Stewart, India and South Africa Seek Waiver from WTO Intellectual Property Obligations to Address COVID-19 – Issues Presented, Washington Int’l Trade Assoc. (Nov. 2, 2020) (outlining the views countries like South Africa and India who believe that existing flexibilities may face bureaucratic and legal hurdles).
[25] See Dina Halajian, Inadequacy of TRIPS & the Compulsory License: Why Broad Compulsory Licensing is Not a Viable Sol. to the Access of Medicine, 38 Brook. J. Int’l L. 1191, 1210 (2013) (noting that one of TRIPS’ limitations is that it does not define what is “adequate” or how to calculate economic value).
[26] Id. at 1205 (noting that TRIPS limits production to predefined quantities of the drug, which limits not only the amount a country can distribute but also hinders them from being affordably priced as larger batches typically are); see, e.g., Donald Harris, TRIPS After Fifteen Years: Success or Failure Measured by Compulsory Licensing 18 J. Intell. Prop. 368, 389-91 (2011) (noting that Canada and Rwanda demonstrated the difficulties of the exception after finding that the process was too complicated, lacked incentive, and didn’t even deliver doses until four years after it started).
[27] See, e.g., Hilary Wong, The case for compulsory licensing during COVID-19, 10 J. Glob. Health 1, 3 (2020) (explaining that after Thailand was granted a compulsory license for Abbott’s HIV drug, the company and Western governments threatened to withdraw products from the Thai market).
[28] See Gabriele Steinhauser, What is Covax and How Will It Deliver Vaccines to Poorer Countries, Wall St. J. (Mar. 2, 2021), https://www.wsj.com/articles/covax-covid-19-vaccine-11613577473 (identifying Covax as the predominant way by which poorer countries will obtain vaccinations).
[29] See Council for Trade-Related Aspects of Intellectual Property Rights, “Waiver from Certain Provisions of the TRIPS Agreement for the Prevention, Containment, and Treatment of COVID-19: Communication from India and South Africa, World Trade Org. (Oct. 2, 2020), https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/IP/C/W669.pdf&Open=True.
[30] Id.
[31] See MSF’s international president appeals to governments including the US, to stop stonewalling the process, Doctors Without Borders (Mar. 9, 2021), https://www.doctorswithoutborders.org/what-we-do/news-stories/news/us-must-stop-blocking-wto-waiver-covid-19-medical-tools (offering a map detailing countries individual positions on the waiver proposed by India and South Africa); see also, Pharma delivers COVID-19 solutions, but calls for the dilution of intellectual property rights are counterproductive, Int’l Fed’n of Pharm. Mfg. & Ass’n (Dec. 8, 2020) https://www.ifpma.org/resource-centre/pharma-innovation-delivers-covid-19-solutions-beyond-expectations-but-calls-for-the-dilution-of-intellectual-property-rights-are-counteproductive/ (expressing the body’s opposition to waiving IP protections for COVID-19 vaccines on behalf of research-based biopharmaceutical companies and associations); see also, Saeed Shah, Developing Countries Push to Limit Patent Protections for Covid-19 Vaccines, Wall St. J. (Sept. 17, 2020), https://www.wsj.com/articles/developing-countries-push-to-limit-patent-protections-for-covid-vaccines-11600355170 (referencing a statement from Alberta Bourla, Pfizer’s chief executive officer describing the waiver as “nonsense and dangerous”).
[32] Michael Safi, Hoarding Covid vaccines ‘could cost wealthy countries $4.5 tn’, The Guardian (Jan. 25, 2021), https://www.theguardian.com/world/2021/jan/25/hoarding-covid-vaccines-could-cost-wealthy-countries-45tn.
[33] See Jonathan Wheatley, Vaccine delays in poorer nations threaten advanced economies, Fin. Times (Jan. 24, 2021), https://www.ft.com/content/53c668bc-1066-4d8c-8c8d-5d29ba34a06e (noting that if countries in the global majority don’t receive the vaccine advanced economies will bear more than half the burden).
[34] See id.
[35] Patti Domm, Market risks are rising as US, China tensions escalate toward new cold war, CNBC (Jul. 22, 2020), https://www.cnbc.com/2020/07/22/as-superpowers-turn-their-backs-on-each-other-the-risk-for-markets-is-rising.html.
[36] Wheatley, supra note 34.
