Covid opens a new flank in the IP vs public health stand-off

PT Jyothi Datta | Updated on April 25, 2020

It has made governments realise that IP could impede their access to medicines, vaccines, tech or reagents

April is usually a month of much activity on the Intellectual Property (IP) front. There are global IP rankings and reports, actions and counters, that fly thick and fast between countries, and a key player here is the US.

Take the Special 301 report, a scorecard by the US Trade Representative’s office that reviews trading partners on how they stack up on the IP front. The report is usually released around this time of the year.

This exercise is closely watched by the Indian pharmaceutical industry and health advocacy groups, for instance. Because, when it comes to healthcare, IP could affect a country’s ability to make medicines, and make them affordable for its own citizens and others around the world.

The novel coronavirus (Covid-19) pandemic may have cast its shadow over these IP reports and the cross-country discussions around them. But it has, however, brought home to governments the realisation that IP could impede their access to medicines, vaccines, technology or reagents that are used in laboratory tests.

The latest trade versus public-health stand-off is playing out, though, after industry associations and organisations had made their submissions to the USTR in February, in a lead-up exercise to the final Special 301 report. As a result, they trace on-going concerns between countries seeking to strike that elusive balance between people’s health and keeping trade healthy.

So, for instance, the Indian Pharmaceutical Alliance (IPA) has, in its presentation to the USTR, made a case to remove India from the Special 301 Report’s “Priority Watch List”, because the country had complied with international obligations on intellectual property rights. India was one of 11 countries placed on the Priority Watch List in the 2019 report.

But putting the spotlight on public health, the IPA dismantles misconceptions on India’s use of patent provisions like the compulsory licence (CL), which allows a third party to make an original drug on the payment of royalty to the innovator.

“There been no grant of a compulsory licence in the last seven years in India and the IPO (Indian Patent Office) has maintained a judicious and cautious approach in its decisions on applications for compulsory licences,” states the IPA, a platform for large domestic drugmakers.

It’s another matter that health advocacy groups point to this very data point as a problem area, in that the government was not using this provision as much as it should in public interest. The IPA nevertheless adds, “CLs have been used as a tool against anti-competitive activities and enforcement of affordable commodities globally. Countries like Canada, Germany, Malaysia, Thailand, Brazil and Ecuador, among others, have all been known to issue Cls.”

Discriminatory access

Picking up these very concerns from the other side of the spectrum, PhRMA (Pharmaceutical Research and Manufacturers of America) urges the Trump administration to address “discriminatory market access practices abroad” that free-ride on American innovation and put US jobs and exports at risk. The report urges action to reverse Cls in Malaysia and to end damaging pricing policies in markets like Canada, Japan and South Korea.

“America leads the world in the research and development of new medicines and vaccines,” PhRMA Senior Vice-President for International Advocacy, Brian Toohey, says in a communication. “But foreign trade barriers are undervaluing US biopharmaceutical innovation and putting jobs and exports at risk,” he adds.

Public health advocates often lock horns with pro-IP practitioners because patent protection leads to monopolies that could price medicines beyond the reach of patients. Patent protection blocks competitors from offering the same medicine at lower prices.

Innovators differentiate IP protection from pricing, but explain the latter as a method to recoup funds invested in research. And, they add, without original research, there would be no original drugs. This too, however, gets contested if a publicly-funded university had done the original research on the drug that was bought later by the company and commercialised at a high price. The Covid pandemic adds a new layer of complexity to public-health and trade discussions as governments confront new realities. Dutch authorities reportedly had to weigh in on Roche for the formulation of reagents, as the country faced a shortage.

In a recent article, Nobel Laureate in economics, Joseph E Stiglitz, along with Arun Jayadev and Achal Prabhala, wrote, “With the arrival of Covid-19, it is now painfully obvious that such monopolisation comes at the cost of human lives. Monopoly control over the technology used in testing for the virus has hampered the rapid roll-out of more testing kits, just as 3M’s 441 patents mentioning “respirator” or “N95” have made it more difficult for new producers to manufacture medical-grade face masks at scale.

“Worse, multiple patents are in force in most of the world for three of the most promising treatments for Covid-19 — remdesivir, favipiravir, and lopinavir/ritonavir. Already, these patents are preventing competition and threatening both the affordability and the supply of new drugs.”

As a new flank opens up on access to health discussions, the emerging world order on trade would depend on how governments navigate this pandemic.

Published on April 25, 2020

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