Ministerial Decision: “TRIPped” the Waiver?

World Trade Organization

The 12th Ministerial Conference (MC12) concluded on Friday, June 17, 2022, with a “Ministerial Decision on the TRIPS Agreement” (WT/MIN(22)/W/15/Rev.2) (‘the Decision’), to facilitate exportation of Covid-19 vaccines under the compulsory licence to enhance availability and accessibility for poor countries.

The Decision waives Article 31(f) of the TRIPS Agreement. Article 31(f) lays down that the production under compulsory licence and government use should be predominantly for the supply of the domestic market. Paragraph 3(b) of the Decision waives this requirement and now allows exportation of any proportion of products manufactured under the authorisation in accordance with the Decision. The Decision aims to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization. Paragraphs 3(c), 3(d) and 5 set the conditions under which the waiver of 31(f) can be utilised. Paragraph 3(c) generally prohibits re-exportation of vaccines imported under the Decision. Paragraph 3(d) clarifies the flexibility under Article 31(h) for the determination of adequate remuneration while issuing compulsory licence under the Decision.

Paragraph 5 requires the exporting countries to notify the TRIPS council regarding utilisation of the Decision including the details of compulsory licence such as name, address, product and duration of authorisation, etc.

Paragraph 4 of the Decision reiterates the existing flexibilities of the TRIPS agreement, especially of Article 39.3, which protects the disclosure of test data and other data submitted to governments for product marketing approval. The Decision reiterates maintaining the safeguards in Article 39.3 and calls for rapid approval for the use of Covid-19. The application of the Decision is for the duration of 5 years.

The Decision allows vaccine manufacturers in developing countries to bypass patents on the Covid-19 vaccines and export them for sale in countries lacking manufacturing capabilities. Negotiations over the Decision started in October 2020 with a comprehensive TRIPS waiver proposal drafted by India and South Africa and backed by more than 100 countries. The proposal aimed at waiving IP rights concerning therapeutics, testing, vaccines and technologies related to Covid-19. Hopes went high when the Biden administration came out in support of the proposal, which was significant as this was the first instance so far that the US departed from its stand of opposition to alleviating IP rules for medicines. However, negotiations ended with a much narrower scope just aiming for global vaccine supply. According to experts, it is not even serving that narrow scope and has been a complete failure and a massive setback towards achieving global health equity, which will take decades to recover from.

The TRIPS Decision no longer remains an IP waiver as proposed originally by India and South Africa and 65 co-sponsors. It lacks the comprehensive measures as in the original proposal to address the concern of production and supply of Covid-19 vaccines to meet global demand, especially from lower-income countries who are deprived of their fair share of vaccines in the current pandemic.

The Decision suffers from the following shortcomings:

Narrow scope: Paragraph 1 of the Decision limits the scope, relaxing IP commitments only for vaccines. It excludes all other important elements such as testing technologies and therapeutics, which are equally or more urgent priorities. Production of tests and therapeutics could have been increased to meet demand by removing IP protections.

Paragraph 8 addresses the issues of therapeutics and diagnostics by promising to decide on their inclusion within six months. This seems a far-fetched promise in the future, which showcases the lack of will among the developed nations to implement it. Moreover, this approach does not align with the “test and treat” strategy as diagnostics and therapeutics do not get appropriate facilitation, which comes ahead of vaccines. As per reports, in countries such as those in sub-Saharan Africa the large majority of cases go undetected and only one in 20 people have ever been tested. Similarly, the treatment landscape is rapidly changing favourably where some novel antivirals such as Merck’s Molnupiravir and Pfizer’s Paxlovid are available. However, the promising antivirals alone will not tap this important opportunity for pandemic control unless they are being made accessible to the population worldwide. Postponing a decision on therapeutics for another six months will result in the loss of the golden period and will further prolong the pandemic and more avoidable deaths, especially in poor countries. Experts call for scaling up the test and treat strategy before the global community gets entrapped in preparing hospitals for the next deadly surge.

Regarding vaccines, mRNA technology is an important element in their production. The mRNA technology falls under the purview of trade secrets, and therefore there was an arrangement in the earlier revised proposal to address the trade-secret barriers. However, this was completely overlooked in the present Decision. Its omission will significantly hamper the vaccine development for developing countries.

Eligibility criteria: Footnote one sets standards of eligibility for the use of the subject matter of a patent required for the production and supply of COVID-19 vaccines without the consent of the right holder strictly for the purpose of addressing the COVID-19 pandemic. It strongly encourages Member countries with existing manufacturing capacity to make binding commitments not to avail themselves to the Decision. In other words, it forces the Members with existing capacity to manufacture Covid-19 vaccines not to make use of the Decision for their own domestic use. This contradicts Article 31(f) of the TRIPS Agreement, which authorises Member countries to avail the use of compulsory licence and government use for their domestic market. Ironically, instead of waiving TRIPS obligations, it imposes additional conditions (TRIPS-plus) not originally present in the TRIPS Agreement.

Export barriers: paragraph 3(c) discourages the re-exportation of Covid-19 related products that have been supplied under this decision. Footnote three of paragraph 3(c) imposes the condition of “exceptional circumstances” for humanitarian and not-for-profit purposes by the eligible Members to export to other eligible Member countries. Proving “exceptional circumstances” is a complicated and time-consuming process. Further, the footnote points to the lengthy authorisation mechanism for ‘the purpose of transparency’ set out in paragraph 5 which obligates the eligible Members:

The information provided shall include the name and address of the authorized entity, the product(s) for which the authorization has been granted and the duration of the authorization. The quantity(ies) for which the authorization has been granted and the country(ies) to which the product(s) is(are) to be supplied shall be notified as soon as possible after the information is available.

“Necessity” test: paragraph 3(b) favourably enhances Article 31(f) of the TRIPS Agreement by allowing exportation to eligible countries. However, paragraph 1 contradicts paragraph 3(b) by prescribing the “necessity test” explaining the necessity and requirement the use of the subject-matter of a patent for production and supply of Covid-19 vaccines. This puts the burden of proof on generic manufacturers in developing countries, which is a tiresome process and will eventually discourage them from manufacturing them in the first place, thereby altogether defeating the purpose of the Decision itself. Similarly, the facilitation provided by paragraph 3(b) by encouraging exportation to other eligible countries is contradictory to footnote one which discourages the eligible member countries with existing manufacturing capacity to remain outside this Decision through a binding commitment. Under this arrangement, the countries that are most likely to be able to put the Decision to use are excluded. This raises the question that if that is the case, how will supply to other developing and least developing countries be met?

Time-limited compulsory licence: paragraph 6 of the Decision sets a time limit of 5 years from the date of the decision, after which the compulsory licence can be terminated. This 5-year period will discourage production by generic manufacturers with limited investment capacity, who would need time on the market to recoup investments. The Decision further complicates the process by authorizing the General Council to extend it beyond 5 years under “exceptional circumstances.” The General Council  will review annually the operation of this decision.

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Civil society and public health experts observed that the Decision is a worrying trend and a significant departure from the Doha Declaration on TRIPS and Public Health adopted at the height of the HIV/AIDS crisis, and the use of non-voluntary licence under Article 31 of TRIPS, both of which are applicable to all Members. It is worried that we are now being faced with a future where life-saving technologies and know-how will remain beyond the reach of the poor. It seems a distant dream where global equity to access to diagnostics and therapeutics will be achieved. In the light of the Decision, it is not incorrect to say that there appears no possibility that the power of  big pharma can be taken away at the height of the Covid-19 pandemic. Big pharma, backed by developed countries, remains unchallenged and unfettered from profiting billions of dollars against millions of deaths.

About the Author

  • Research Scholar and L.L.M. Candidate (IP & Technology)
    American University Washington College of Law (AUWCL)
    InfoJustice Fellow, 2021, PIJIP