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Can the waiver of intellectual property rights on COVID-19 vaccines ensure equitable access for the developing countries?

The alarming rise in inflation across the world post-pandemic continues to hinder economic recovery.

An estimate suggests that after Omicron the total number of COVID-19 infections has crossed 403 million cases, while 5.78 million people have lost their lives worldwide to this deadly virus.

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Where the world continues to adopt mitigating measures to address Omicron’s spread;

World Health Organization (WHO) has also warned about the spread of other COVID variants. The only viable and sustainable solution to this pandemic is mass vaccination across the globe.

However, the majority of the low-income countries are yet to get a sizeable amount of their population vaccinated.

In this crisis, the pharmaceutical industry particularly vaccine-producing companies like Pfizer and Moderna have recorded historic profits by selling COVID-19 vaccines.

Therefore, the debate of increasing the distribution of COVID-19 vaccines to low-income countries highlights the following hypothesis:

Can the waiver of intellectual property rights on COVID-19 vaccines ensure equitable access for the developing countries?

Health experts argue that firms like Pfizer have capitalized on the health emergency to maximize profits as they continue to deny patent rights for companies in developing countries. However, the debate is far more complex as it takes into account multiple other factors.

What are the Intellectual Property (IP) Rights or Patents?  

Intellectual Property rights ensure the exclusive rights to an individual or organization for its work (invention, industrial design, trade secret, etc.).

The entity with patent or IP rights can capitalize on its innovation and earn profits (Loft, 2022).

In the scenario of waived intellectual property rights, the countries can disregard all protections, by patents, copyrights, and IP rights, of the original creator’s rights (Loft, 2022).

The vaccine-producing companies like Pfizer $PFE & Moderna $MRNA continue to hold exclusive patent rights for COVID-19 vaccine production.

Critics of exclusive patent rights argue that these companies use their patents to capitalize on the medical emergency – COVID-19.

However, the companies defend their right to respective patents by arguing that it is their right to earn profits on the innovation.

In case of waiver of patents, the vaccine-producer may not necessarily be liable to compensate the vaccine manufacturer, causing them to lose a significant amount of their business.

Another way of helping developing countries produce vaccines is by granting the ‘voluntary licensing framework’.

In this case, the vaccine manufacturer can voluntarily agree to transfer technology to the vaccine developer as part of an agreement.

Countries supporting Waiver

The unequal distribution of COVID-19 vaccines in low-income countries can be estimated from the fact that only 9-10.6% of the population in these countries have been vaccinated (Mathieu, Ritchie, Ospina, et al.).

In comparison, more than 77% of the population in high-income countries were already vaccinated until the first month of 2022.

The OECD estimates reveal that the high-income countries secured around half of the world’s COVID-19 vaccine supply when their population accounts for only 16% of the world population (Loft, 2022).

In this context, India and South Africa led the campaign to demand the waiver of intellectual property rights on COVID-19 vaccines for three years to improve access for the non-developed countries (Loft, 2022).

This campaign got support from around 100 countries, including the United States of America & France. However, vaccine manufacturers continue to hold exclusive patents.

The proponents of waiver argue that vaccine manufacturers primarily serve the interests of the developed countries as they are placed in high-income regions like North America & Europe.

Therefore, in times of crisis companies like Pfizer and Moderna focus on meeting the demand of these countries only rather than adopting the policy of equitable distribution.

In response to the argument that the waiver encourages innovation, the critics cite the latest report published in British Medical Journal’s Global Health.

According to it, overwhelming funding for research to Oxford-AstraZeneca vaccine was by the public. Therefore, the demand to waive patents in the interest of public health makes more sense.

The human rights watch’s latest report states that more than 120 companies in Asia, Africa, and Latin America possess the capacity to produce mRNA vaccines if leading vaccine manufacturers (Pfizer and Moderna) share their IP knowledge.

To support this argument further, the case of the patent waiver on HIV/AIDS drugs during early 2001 is usually cited.

The prices of patented drugs were reduced significantly to less than a tenth of the previous level in one year (Ito, 2021), after patent waiver on HIV/AIDS drugs.

Countries not supporting Waiver

In contrast, the United Kingdom & member states of G7 continue to oppose the waiver of IP rights on COVID-19 vaccines.

They argue in favour of providing incentives for pharmaceutical firms to innovate and produce on a larger scale.

Whereas, these countries support the idea of technology sharing and increasing the capacity of the low-income countries to produce and procure COVID-19 vaccines in greater numbers.

Pharmaceutical Industry’s Profits

The repercussion of the COVID-19 pandemic on the global economy has been severe as most of the countries continue to struggle from a historic recession and inflation.

However, the vaccine-producing pharmaceutical companies have recorded phenomenal growth in their profits.

The revenue of Pfizer rose by a whopping 134% according to their latest financial report compared to the last year.

‘The company said its COVID vaccine sales accounted for $13 billion of that revenue. Revenue outside of its COVID vaccine business was up by a far more modest 7%.’

Johnson & Johnson on its account recorded $82.6 billion in revenue in 2020

According to an estimate, Pfizer’s security will increase from $29.7 billion to $59.5 billion at the end of 2022 (Liu, 2021). These numbers show the significance of vaccines in increasing profits.

The report of Oxfam reveals that Pfizer, BioNTech $BNTX & Moderna are making $1000 profit every second in the wake of COVID-19 vaccines (Pfizer, BioNTech and Moderna , 2021).

This makes their combined profits $65,000 every minute. Only 1% of their (Pfizer and BioNTech) supply has been dedicated to low-income countries (Pfizer, BioNTech and Moderna , 2021).

They have also received public funding of over $8 billion for the development of vaccines.

Another report of Global justice highlights that the publicly owned European Investment Bank, supported BioNTech in inventing the COVID-19 vaccine by financing €100m (£84m), and the company also received a €375m grant from the German government (Pfizer, BioNTech and Moderna , 2021).

The case of vaccine manufacturers weakens further by Global Justice claim that the UK’s National Health Services (NHS) was charged £2.8bn more than the production cost for 189 million of Covid-19 vaccines (Covid-19, 2021).

In comparison, the vaccines were sold to African countries at the price of $3 to $10 per shot (Loft, 2022). ‘It has indicated that a non-profit dose costs just $6.75 or £4.98 to produce.

But it has reportedly charged the NHS £18 a dose for the first 100m jabs bought and £22 a dose for the next 89m, totaling £3.76bn, Global Justice Now said – amounting to an eye-watering 299% mark-up (Mathieu, Ritchie, Ospina, et al.).’

These varying numbers depict the need for public accountability of vaccine manufacturers during this medical emergency as the problem of vaccine shortage is worsening post requirement of a booster dose.

Way Forward

The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) projected the production of vaccines to reach 12 billion by the end of 2021 (Loft, 2022).

However, the medical need of taking the booster dose has created a further deficit between the demand and supply.

A critical evaluation of the challenges of increasing global vaccine production would help to conclude that the world community needs to develop a conclusive framework to increase the input capacity of the developing countries to complement the entire supply chain of vaccine production.

The trade restrictions on medical products can be reduced to facilitate vaccine production.

In addition, the capacity issues of the low-income countries like lack of biobanking, health workers, power shortages should be addressed to enhance vaccine allocation.

It can be concluded that there is an immediate need for technology transfer to low-income countries if the international community wishes to control the further spread of the COVID-19 virus.

To do this the international community needs to adopt comprehensive measures including patent waivers, technology sharing agreements, and enhancing low-income countries’ capacity by improving their respective health infrastructure.

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