Backing IP waiver is wrong move in Europe’s fight against Covid

A Trade-Related Aspects of Intellectual Property (TRIPS) waiver is neither useful nor effective in solving global vaccination issues, and comes with plenty of negative consequences, writes Pieter Cleppe.

Pieter Cleppe is a Research Fellow at the Property Rights Alliance.

On 17 June, members of the World Trade Organisation (WTO) reached a controversial agreement to waive the Trade-Related Aspects of Intellectual Property (TRIPS) – a WTO agreement that, in 1994, set the standard for the protection of intellectual property – for COVID-19 vaccines, treatments and therapeutics.

Originally proposed last year by South Africa and India, the waiver has been presented as a silver bullet that will help supply vaccines to every corner of the world. After initially opposing the idea, the European Union (EU) has since changed its mind and provided lukewarm support for the agreement. The EU, however, would do well to reconsider its position as the waiver may ultimately end up doing more harm than good.

One of the reasons the EU initially opposed the waiver is because it recognised the danger of waiving IP rights to future innovation. After all, the rapid development of COVID vaccines was only possible because of the decades of research and development preceding it. For this, IP protection was pivotal, with many small startups involved. The enormous investments needed for this would simply never have materialised without the legislation allowing private companies and universities to own and market the intellectual property.

Of all the vaccines in development for COVID-19, only a few have been approved. In the US, on average, a new medicine can take up to 10 years and cost up to $2.8 billion, while 90% fail to make it through FDA approval. Therefore, the importance of IP protections to incentivise pharmaceutical firms to invest in medical research can hardly be overstated.

Despite what proponents may say, a TRIPS waiver not only hurts innovation but also does little to deliver vaccines or treatments more quickly. On the contrary, the fact that pharma companies know their innovation is protected allows them to outsource part of the production process.

During the pandemic, vaccine producers agreed to more than 350 voluntary licensing agreements with manufacturers worldwide to produce COVID vaccines, also in emerging economies like India or Brazil. Clearly, if pharma companies know that their innovations aren’t safe, they would be much warier to conclude such deals, which would complicate production.

More damning still is the fact that vaccine shortages, which many countries said would be solved by the waiver, simply do not exist. The reality is that, at the moment, there are simply too many COVID-19 vaccines, leading some nations to delay receipt and discard unused, expired doses.

In fact, India has interrupted the production of new vaccines at the Serum Institute – the world’s single largest manufacturer of COVID vaccinations – after accumulating a 200 million dose surplus.

What is currently slowing the global vaccination effort, especially in poorer countries, is not lagging production but instead logistical problems in distribution and growing vaccine hesitancy. Therefore, the continued insistence on a TRIPS waiver seems to be less of a solution than a distraction from the real reasons why vaccine uptake continues to lag in some parts of the world.

While a TRIPS waiver is neither useful nor effective in solving global vaccination issues, it has plenty of negative consequences. An aspect often overlooked in this debate is that waiving IP rights for vaccines may further undermine vaccine confidence.

mRNA vaccines can’t be produced by just any company. Even if anyone were allowed to copy these products that result from sophisticated medical technology, many potential producers would simply be unable to produce them.

A likely consequence would be lower quality vaccines, which may put people’s health at risk. Given the enormous vaccine hesitancy worldwide, this is something policymakers should take into account.

Stephane Bancel, Moderna’s Chief Executive, says this: “There is no mRNA manufacturing capacity in the world. (…) This is a new technology. You cannot go hire people who know how to make the mRNA. Those people don’t exist. And then even if all those things were available, whoever wants to do mRNA vaccines will have to buy the machine, invent the manufacturing process, invent verification processes and analytical processes.”

There would also be profound geostrategic implications that come with waiving IP rights. This ultimately revolves around handing over Western technology to China. We can only hope Putin’s brutal war will not lead to a new bipolar world, whereby the West would be put against the rest, with the rest being led by China.

Still, the truth is that this dire prospect may even culminate in a new cold war that has been brought closer since 24 February. Therefore, even those keen on diplomacy and opposed to hawkish foreign policy, to which I count myself, should favour more care when dealing with China.

As it stands, the TRIPS waiver agreement would not exclude China. This would mean that we could be potentially handing over valuable technology to a country with a poor record of IP protection and whose lack of transparency about the origins of COVID has exacerbated the effect of the pandemic on the whole world.

Not only would this be a huge win for China, but it would also set a terrible precedent. If enough political pressure is exercised, countries with woeful IP protection records may seek to waive requirements at a whim.

Even if one were to discount the mountain of reasons and evidence against a TRIPS waiver, it would be difficult to ignore the hypocrisy exhibited by its main proponents, India and South Africa.

Throughout the pandemic, protectionism has been a major hurdle to getting higher vaccination rates. While the United States and EU were heavily criticised for having limited trade of vaccine materials for a time, the West is not the only party at fault.

Despite complaining about vaccine shortages, it took India until October 2021 to scrap its tariffs on vaccine imports. India still has some of the world’s highest tariffs on pharmaceuticals and active pharmaceutical ingredients. As opposed to IP protection, these factors have actually held back the Covid vaccine roll-out. Policymakers should focus on this instead.