“There remains a shocking imbalance in the global distribution of vaccines. On average in high-income countries, almost one in four people has received a vaccine. In low-income countries, it’s one in more than 500.”, said WHO chief Tedros Adhanonom at a conference in April 2021

Just about 10 countries in the world have received 75% of all the vaccines administered so far, while 0.3 per cent have gone to lower-income nations, with the African continent receiving just about one per cent. It goes without saying (but I’ll say it anyway), that we are not in a good situation. So, how did we get here? 

In early 2020, hundreds of public health experts flocked to the World Health Organization’s Geneva mothership to discuss the matter of a virus, that had left the entire world upended. 

They came to a consensus that the global research community should maintain broad and open channels of communication. This was done in the hopes that collaboration and information sharing would minimize duplication and accelerate discovery. The underlying premise was that the world would unite against the virus. 

One of the issues that appeared to be missing from the initial discussions was the matter of Intellectual Property (IP). 

Jump to 2021, with the virus still raging deadlier than ever in some countries, it has become increasingly clear that the only way out is mass immunization. Unfortunately, this has proven to be easier said than done. 

Currently, there is a global debate on whether or not vaccine patents should be waived to allow low-income countries to produce doses for themselves. The growing crises in India and countries across South Asia have brought the issue into the limelight. A campaign was initiated by India and South Africa in late 2020, to temporarily waive Intellectual Property Protection (IPP) on Covid related technology, including vaccines. The move was backed by more than 100 countries and international organizations including the World Health Organization and the United Nations Aids. The principle underpinning the campaign is that every country should have the right to make its own vaccines during a pandemic. 

 Patent waivers: the solution for the gross vaccine inequity? 

Well, that remains unclear. 

While the United States, China and Russia have recently come out in support of an IP waiver on vaccines, the proposal does not yet have the support of the pharmaceutical industry, nor that of most high-income countries. 

Before diving into the arguments made by proponents and opponents of the campaign, a brief overview of the role of patents would be a good place to start. 

The economics of patents are pretty straightforward. Patents give an individual or organization that invents something new, exclusive legal rights over it for a while before others are given access. They are put in place to act as an incentive for innovation, wherein firms will be prepared to fund the necessary R&D if they can reap the rewards. 

Coming to the matter of Intellectual Property, all countries that are members of the World Trade Organization are bound by the Agreement on the Trade-Related Aspects for Intellectual Property (TRIPs), and are thereby required to comply with its stipulations with regards to patents, copyrights, and other intellectual property laws. Manufacturers of Covid vaccines are protected under patent law. One of the main concerns about IP waivers is that they will provide a shortcut to competitors that are looking to purchase expensive technology. 

It is important to note here, that the TRIPs agreement does have a provision to permit countries to exercise special powers under extraordinary circumstances. All members of the WTO have the right to opt for ‘compulsory licensing’ of patents if they feel it is necessary to handle a public health emergency. Thus, governments and pharma companies opposing the waiver use this provision to argue that compulsory licensing to override IPP during the coronavirus pandemic already exists, so there is no requirement for a blanket waiver of IPP. 

However, studies have also stated that compulsory licenses are extremely complex and time-consuming to apply for. 

Circling back to the debate at hand; will a temporary waiver on patents have a significant impact on lower-income countries that lack adequate doses? 

First, the argument against IP waivers

According to Alex Tabarrok (along with several others), economist and co-author of the popular economics blog Marginal Revolution, “patents are not the problem!”. 

Vaccine manufacturers are trying to increase supply as quickly as possible. Tabarrok argues that licenses are widely available. AstraZeneca has already licensed their vaccine for production with manufacturers across the world including India and Brazil. Similarly, Sputnik and J&J have also licensed their vaccines and ramped up production in several countries. 

The issue isn’t with the presence of patents, but has more to do with the difficult task of technology transfer coupled with a serious supply-side shortage of raw materials. He states that the American administration’s decision to support the patent waiver is essentially just virtue signalling to the anti-market left, and will do little to increase supply. 

Following suit, an article published by The Economist concluded that Mr Biden’s decision to waive IPP is at best, an empty gesture. A waiver would not do much to improve the urgent shortfall of doses in 2021. Technology transfer would take a minimum of 6 months to be completed, with the new mRNA vaccines produced by Pfizer and Moderna expected to take even longer. The vaccines cannot be recreated in a short span. 

Thus, opponents of the IP waivers claim that a real impact can be made by improving the supply chains. For instance, Serum Institute, an Indian vaccine maker, has struggled to get parts such as filters from America because exports were gunned up by the Defense Production Act (DPA). They also state that rich countries should focus on donating vaccines through Covax (a global public-private-philanthropic collaboration to accelerate the development and distribution of COVID-19 vaccines and treatment). 

Waiver opponents fear that a patent waiver could set a dangerous precedent, it would deter innovation, by disrupting supply chains and wasting resources. 

Coming to the voices of “pro-waivers”

Economist and Nobel laureate Joseph Stiglitz, along with Lori Wallach in their article ‘Will Corporate Greed Prolong the Pandemic?’, strongly pushed for IP waivers on Covid vaccines. 

According to the authors, being for-profit entities, pharmaceutical companies are focused primarily on their earnings and not on global health. Their goal is to maintain as much power as they can, for as long as they can, to maximize profits. Thus, it is the responsibility of governments to intervene directly and solve the vaccine supply issue. 

They discard the argument that developing countries lack the skills to manufacture Covid vaccines themselves. When US and European manufacturers agreed to partnerships with foreign producers like Serum Institute of India and Aspen Pharmacare in South Africa, these institutes did not appear to have notable manufacturing issues. There are several other firms around the world with similar potential to help boost vaccine supply, all they need is access to the technology and know-how. 

The Coalition for Epidemic Preparedness Innovations has identified 250+ companies that could manufacture vaccines. While it may be difficult and expensive to develop the mRNA vaccine technology, that doesn’t translate to the production of the actual shots being out of reach for other countries around the world. 

As stated earlier in the article, the provision of compulsory licenses is extremely complex and time-consuming, because mRNA vaccines have more than 100 components worldwide, many with some form of IP protection, the coordination of which would be far too complicated. 

Lastly, with regards to the final argument that IP waivers would reduce profits and curb innovation, the article goes on to discard this as well, stating that even with a WTO waiver, vaccine makers still stand to make a ton of money. A WTO waiver would not abolish national legal requirements that IP holders be paid royalties or other forms of compensation. 

Whether or not IP waivers would solve the gross vaccine inequity we are witnessing today, remains up for debate. However, the nature of this strange virus has made it clear that no one is safe until we are all safe. Waiver or not, mass immunization is the only way out, and world leaders along with pharma companies need to set aside their differences to ensure an equitable, just and timely rollout of vaccines.