Was the WTO right on vaccine patent waivers?

The World Trade Organisation (WTO) has finally adopted the long awaited Ministerial decision no. WT/MIN(22)/30 (“WTO Decision”) on 17 June 2022, wherein WTO Member States may grant a patent waiver to address the inequality in accessing to covid-19 vaccines.

For the government leaders and ministers, the result signifies a giant step in the right direction, given the unanimity required for the decision and the time constraint given. However, the ruling left others, particularly lower income countries, unsatisfied.

In May of this year, the World Health Organisation (WHO) reported only 16 per cent of people in low-income countries had received a single vaccine dose – compared to 80 per cent in high-income countries, significantly impacting the rate of economic recovery experienced by these countries.

This has left many questioning whether the waiver goes far enough in addressing the barriers that undermine responses to vaccination against covid-19. Meanwhile, there’s been continued concern from others, who fear that waiving patent rights of vaccine developers compromises research and innovation and therefore access to vaccines. The UK opposed the proposal for this reason until the last minute.

What was agreed?

From a legal perspective, the WTO decision does not add anything new to what the TRIPS Agreement and Doha Declaration on Public Heath already provides: WTO member states are entitled to use the compulsory licensing of patents, provided that certain conditions are fulfilled.

For example, compulsory licenses have been issued in the past in Hungary, Israel and Thailand, especially with respect to antiretroviral medicines to treat HIV/AIDS. Countries like Canada and Chile have also amended their laws to facilitate easier and quicker processes for compulsory licenses in the pandemic.

Using compulsory licensing for access to medicines has always been heavily politicised and countries have been discouraged from this for fear of trade retaliation. This is where the WTO decision brings new hopes since it helps remove political and trade pressure by openly allowing the use of compulsory licenses against covid-19 vaccines.

From a procedural angle, the WTO decision brings flexibilities compared to the TRIPS Agreement and Doha Declaration by removing some important requirements when negotiating the grant of a compulsory license with a patentee:

-        It removes the requirement on the licensee to make efforts to obtain an authorisation from the patent right holder; it also removes the requirement on the licensee that the vaccine shall be manufactured to predominantly supply the licensee’s domestic market and may allow any proportion of the vaccine to be exported to other eligible members in order to ensure the equitable access of other WHO member states to the covid-19 vaccine. There is a safeguard requiring member states to take measures to prevent the re-exportation of the vaccines manufactured that have been imported into their territories.

Member states may apply the provisions of the WTO Decision until 5 years from 17 June 2022 (ie. 17 June 2027) and this period may be extended by the WTO General Council based on the exceptional circumstances of the covid-19 pandemic.

Guidance is provided in relation to the determination of adequate remuneration to the patentee. The remuneration may take account of the humanitarian and not-for-profit purpose of specific vaccine distribution programs, existing good practices in instances of national emergencies, pandemics or similar circumstances.

While only covid-related vaccines have been covered, WTO members agreed to insert a clause stating “no later than six months from the date of this decision, members will decide on its extension to cover the production and supply of covid-19 diagnostics and therapeutics”. Patents on medical devices to treat covid-19 are particularly patent intensive and easier to produce than vaccines, meaning this extension is likely have consequences for patent owners and their licensees/distributors.

The debate continues

The agreed approach is subject to review in just six months but has already been met with divided opinions. Patent prosecution and licensing strategies of pharmaceutical companies and medical device manufacturers need to be re-assessed in light of the WTO decision, especially in developing countries. Also, the export of vaccines manufactured under compulsory license to countries where no such waiver has been issued will add complexity and may lead to a flow of patent lawsuits.

Nick Redfearn is Deputy CEO and Enforcement Head and Fabrice Mattei is Global Head of Patents at Rouse