Industry disputes claims that waiving IP rights will ensure availability of medicines

The European Commission is leading talks on a waiver of intellectual property (IP) rights on COVID vaccines and treatments. However, critics from the pharmaceutical industry argue that changes to the current IP system could jeopardise research and development in their sector.

Approximately 18 months ago, India and South Africa asked the World Trade Organisation to waive IP rights for medicines in the hope of aiding the “prevention, containment and treatment of COVID-19.” So far, there has been no waiver and countries remain divided.

The pharmaceutical industry continues to oppose plans to waive IP rights. Kristine Peers, chief legal adviser to the European Federation of Pharmaceutical Industries and Associations (EFPIA), has warned that waiving intellectual property rights would have a negative impact on research and development, the backbone of the sector.

Some vaccines might not be developed at all, she told a recent roundtable discussion organised in Prague.

The proposal to waive IP rights is currently being negotiated in the World Trade Negotiations (WTO) by ‘The Quad’ group – India, South Africa, the EU and the US – who reached the first compromise on a partial waiver that now needs to obtain consensus support among WTO members.

The recently leaked provisional compromise text attracted criticism from those in favour of the waiver, with a call from 308 NGOs, unions, academics, and experts from across the world asking Indian Prime Minister Narendra Modi and South African President Cyril Ramaphosa not to agree on it.

However, according to EFPIA’s Peers, vaccines are now available so there is no need to waiver patent rights.

She also argued that intellectual property is not the main source of the problems surrounding low vaccination rates in some regions of the world, as it is caused by a lack of health workers or weak distribution channels.

€39 billion annual investments

“Intellectual property is a real driver of innovation in medicine. If we did not have it, we would not have pharmaceuticals,” Peers warned.

Likewise, a spokesperson of the European Commission recently told EURACTIV that it is crucial to have an “intellectual property framework which secures the rights of innovators” since an increase in production in developing countries requires transfers of know-how and investment from pharmaceutical companies that produced COVID-19 vaccines.

Intellectual property protection provides a limited period of exclusivity, typically 8-10 years, during which the owner of the patents and originator of the idea has the exclusive right to sell the drug or substance. After this period, the “recipe” is available to other manufacturers.

The development of a new drug usually takes 12-15 years and costs more than €1 billion. In Europe, the pharmaceutical industry invests €39 billion annually in research and development.

A shorter protection period could therefore discourage companies from investing in the lengthy development process, according to industry.

The fact that pharmaceutical companies have income from the production of drugs for common diseases also means that they can focus on rare diseases and are not bound by the market principle, said Czech Deputy Industry and Trade Minister Silvana Jirotková.

“The state should primarily complicate the life of entrepreneurs as little as possible, and this is also related to patent protection,” Jirotková said. Its aim should be to simplify the environment and connect individual players on the market, she added.

The system of patent protection currently in place in the EU is satisfactory and does not need changes, Jirotková and other speakers at the roundtable agreed.

Patents ensure access to know-how and local production

One of the added values of the current system is the ability to keep the production of drugs local, explained Deputy Health Minister Jakub Dvořáček.

According to Dvořáček, Europe’s self-sufficiency is also at stake – compared to the US, Europe is unable to react flexibly and deal with shortages of medicines. However, the problem lies mainly in production and logistics capacities or the availability of pharmaceutical substances, he noted.

“If the system were to change, to erode, to be abolished, then the force that drives technical development in the world forward would disappear,” emphasised Josef Kratochvíl, chairman of the Czech Industrial Property Office.

Despite these worries from the pharmaceutical industry, signatories of the recent letter to Modi and Ramaphosa say that the recent leak presents “the lowest common denominator of the European Union’s opposition to waiving intellectual property barriers and the United States government’s insistence that it be limited to vaccines and exclude certain countries.”

They also claim that it “would inexplicably and unjustifiably erect more barriers to manufacturing life-saving medical technologies, including adding an impossible requirement to list every patent related to a vaccine”.

[Edited by Gerardo Fortuna | Benjamin Fox | Zoran Radosavljevic]

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