Increasingly Isolated, EU Struggles to Derail Global Momentum for Emergency COVID Waiver of WTO Intellectual Property Barriers, Submitting Papers in Defense of Big Pharma and Status Quo Rather Than Offering a New Proposal

On Eve of June 8-9 TRIPS Council Meeting, EU Seeks to Block U.S., Japan, China, and 100+ Nations’ Negotiations on Waiver Needed to Deliver Necessary Manufacturing Scale Up of COVID-19 Vaccines, Treatments and Diagnostic Tests

FOR IMMEDIATE RELEASE: June 7, 2021
CONTACT: Matt Groch mgroch@citizen.org (202) 454-5111 

WASHINGTON, D.C. – Instead of unveiling alternative plans at the World Trade Organization (WTO) to boost production and availability of urgently-needed COVID-19 vaccine, treatments and tests production, the European Union revealed its intentions to block negotiations the rest of the world support to temporarily waive intellectual property (IP) barriers to end the pandemic and save lives.

The EU’s latest move is the height of hypocrisy: EU officials say Covid vaccines should be a universal common good and no one is safe unless everyone is, yet act to prioritize Big Pharma demands and block the rest of the world from enacting a critical first step, the WTO IP waiver, to boost production and access.

The increasingly isolated EU not only is blocking a waiver that the vast majority of the world’s countries deem necessary to save their people and end the pandemic. It is trying to distract and delay the rest of the world from moving forward. On Friday, the EU submitted two papers at the WTO that recycle debunked, stale Big Pharma defenses of WTO rules and claim that anything but expansive IP monopolies are causing the dire global shortage of COVID vaccines, treatments and tests. The EU “plan” is to urge current vaccine makers to produce more, an approach that already has failed spectacularly and now imperils the world.

As major economies with large pharmaceutical industries such as the United States, Japan and China and other developed nations like New Zealand have joined 100-plus developing nations supporting waiver talks, the increasingly isolated EU is expected to block waiver negotiations during the June 8-9 meeting of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council.

While the vast majority of WTO members agree a temporarily waiver is necessary to remove intractable webs of patent, copyright, trade secret, industrial design and other IP barriers pharmaceutical firms have constructed to maintain monopoly control of COVID-19 vaccines and related medicines, the EU doubled down in opposition in May 2021 after German Chancellor Angela Merkel echoed attacks from the pharmaceutical industry when the Biden-Harris administration announced U.S. support for a waiver.

The EU’s latest WTO submissions closely hew to the Big Pharma talking points leaked last month. They  include the colonialist insinuations that developing countries do not understand what is in their own interest and cannot act for themselves. They assume that the press and public do not understand that the supply chain “bottlenecks” that the EU claims are the issue are in no small part caused by IP barriers that limit production of COVID-19 vaccine inputs as well as finished vaccines not by “trade barriers,” as the EU claims. As Human Rights Watch recently documented: “The TRIPS waiver proposal sponsors and experts at the leading science journal Nature, Médecins Sans Frontières (MSF) Access Campaign, the Third World Network, and others have presented many other concrete examples of how enforcement of IP rules blocked, delayed, or limited production of chemical reagents for Covid-19 tests, ventilator valves, Covid-19 treatments, and elements of Covid-19 vaccines. IP constraints have not only led to vaccine shortages but have also led to shortages of key raw materials like bioreactor bags and filters.”

They pretend that manufacturing shortfalls are not caused by IP barriers even as a few firms holding vaccine monopolies have refused to license technology to world class drug producers worldwide.

Despite the overwhelming evidence to the contrary, the EU paper reviews existing WTO TRIPS  “flexibilities” and argues these are sufficient.

It’s an absurd claim on its face. Countries worldwide support a waiver because, contrary to the claims of Big Pharma and the EU, the existing WTO “flexibilities” for HIV/AIDS treatments that were reaffirmed in the 2001 Doha Declaration after hard campaigning are obviously insufficient in the COVID-19 context.  First, because COVID vaccines have complex global supply chains that rely on numerous inputs subject to patents, and other forms of IP monopoly that are cross-licensed and produced in multiple countries, the existing flexibilities that are focused on compulsory patent licensing are widely recognized to be unworkable for quickly boosting COVID-19 vaccine production.

Even leaving aside other IP restrictions, pharmaceutical firms have made sure that webs of patent claims underpin and restrict the marketing of many vaccines, as exposed in a recent Nature article that exposes the complex patent and licensing deals for mRNA vaccines and their underlying technologies. This intricated web of patents, licenses and sublicenses eviscerates the UE papers’ claims that somehow existing compulsory licensing flexibilities suffice to ramp up production.

Second, technology has developed rapidly since 2001 and pharmaceutical firms have created IP “thickets,” adding layers of additional copyright, industrial design and other exclusivities that extend beyond the patent barriers that were the focus of the 2001 flexibilities.  Copyright protections on software, algorithms and training materials used to make the drugs and on storage and use guidelines, as well as undisclosed data protections covering some trade secrets, plus perhaps industrial design protections for key machinery used to mix lipids and genetic materials for mRNA vaccines are among the innumerable IP barriers thwarting production by non-originator firms. None of these IP barriers are addressed by the EU plan communication to supposedly boost production and availability of COVID-19 vaccines.

In order to manufacture a COVID-19 mRNA vaccine using compulsory licensing, the relevant producer would have to seek licenses for each IP-protected commodity in its country of origin and for export, which would require the compulsory licensing cooperation of the exporting country and input producer. It would likewise have to seek a compulsory license allowing for import of each such component and allowing for production of the vaccine. These multiple cases of component-by-component and country-by-country licenses result in timing and coordination complexities that are virtually insurmountable even if the existing WTO flexibilities were determined to cover all of the different forms of IP exclusivities involved.  Even for medicines not subject to such complicated supply chains, successfully obtaining a compulsory license requires a time-consuming and administratively burdensome process.

The EU touting compulsory licensing as the way forward is even more cynical given decades of developing countries’ attempts to use compulsory licensing being viciously attacked with trade threats and more by rich countries, including the EU and its member nations. In the midst of COVID-19 pandemic, pharmaceutical firms continue to pressure countries over the use of compulsory licensing. Gilead sued Russia for issuing a compulsory license on remdesivir. The Pharmaceutical Research and Manufacturers Association (PhRMA), the Biotechnology Innovation Organization (BIO) and the U.S. Chamber of Commerce tried to recruit the U.S. government to threaten countries that have used or planned to use compulsory licenses to incentivize domestic manufacturing of COVID-19 vaccines and treatments.

The EU communications does not address any solution to overcome these problems. In contrast, a TRIPS waiver would simply clear the thorny IP thickets, the related investment-chilling liabilities and threats of trade sanctions. 

The EU papers were only novel in the seeming ignorance that what is labeled as reforms in fact are terms that have been in place since the 2001 WTO Declaration on the TRIPS Agreement and Public health:

  • The EU purports that the use of the compulsory licensing system can be eased by formal clarification that COVID qualifies as a national emergency so countries are not subject to requirements to negotiate with patent holders when issuing compulsory licenses. Beyond the absurdity that the WTO must clarify that COVID has caused national emergencies, under existing WTO rules countries self-declare emergencies, and emergencies are not the only basis for waiving the negotiate-first rule. Public non-commercial use is also included, like when governments provide vaccines to their populations.
  • The EU purports to clarify that WTO Members can set patent holder remuneration under a compulsory license at the price charged by the manufacturer of the vaccine or therapeutic. Yet the TRIPS Agreement already makes that clear. And, the problem with compulsory licensing of COVID vaccines is not related to compensation, but that compulsory licensing is not a workable solution in this context.
  • The EU papers restate as a new reform another existing TRIPS rule: That when countries export medicines made under a compulsory licensing to countries with no or insufficient pharmaceutical manufacturing capacity, the exporting country can provide a single notification that lists all the importing countries to which vaccines or therapeutics would be supplied. Yup, that’s been the case for many years…

Given the EU is increasing alone against the world in service of Pharma, the latest EU WTO papers that restate existing WTO rules as if they are innovations and recycle old Big Pharma claims that have been so thoroughly debunked are surprisingly lame.

Instead of obstructing the world’s progress towards the massive increase in COVID vaccines and medicines needed to save lives and end the COVID pandemic, the EU should just say nein to Germany’s deadly, self-defeating position and join the community of nations in favor of the WTO TRIPS waiver.

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