Impact of Intellectual Property Rights on Covid-19 And Global Pharmaceutical Companies with Special Emphasis on India

Since 2019, the world has been witnessing a major pandemic that has claimed myriad lives and it still poses an alarming threat to the human race. The virus originated in Wuhan, China and in no time spread across the globe causing immense loss of life, education, and resulting in an impeded economy. It has claimed approximately 3.2 million lives since it emerged in late 2019. The dire situation caused nations to impose a lockdown to curb the spread of the deadly disease. However, the virus spread kept on aggravating all over the globe, creating an urgent need of a cure and specified vaccines to curb this global pandemic as it not only has affected the political and economic paradigm of the countries but has also affected the socializing patterns of the society

Organizations like the United Nations and World Health Organization have also been working on red alerts when it comes to COVID-19. WHO along with other organizations of the world has tried to initiate various programs to speed up the vaccination process and doze drives for free of cost or at the minimum costs possible. Countries individually have also started taking charge in the development and deployment of vaccines all around the globe. Some examples can include Pfizer, Covaxin, Covishield, Sputnik etc. These vaccines have different efficacies and efficiencies when it comes to their usage, dosage and effectiveness on protection from Covid-19.

Different governments of different countries started vaccine drives along with the help of renowned pharmaceutical companies. However, the distribution and availability of vaccines across the globe has been scathingly uneven so far. Pharmaceutical companies which operate and thrive on the model of Research & Development (R&D) have been limited by the resources to produce in order to meet the current demand of dosage.

The rights of these companies concerning their patented formulas of vaccines has also been questioned across the globe as the problem of shortage of resources can be tackled with the concept of waiver of rights. In order to understand the aforementioned problem, we will first have to look into the concept of Intellectual Property Rights and the concept of Patents along with the rights it creates.

 Intellectual property rights are the rights given to the creations of the mind which may be tangible or intangible in nature. They include patents, copyrights, trademarks, designs, etc. Intellectual property is everything that is a product of a person’s imagination. They are exclusive rights which are subject to certain limitations and exclusions and are usually given for a finite period of term. It allows the owner of the property to have a monopolist control over the IP. One such type of rights are patents which are territorial rights used in order to protect an invention, which is a process or a product that offers an effective technological solution to a problem. These exclusive rights are only applicable in the country or region in which a patent has been filed and granted, in accordance with the law of that country or region.[i]A granting of a patent requires certain parameters to fulfil which may include the concept of ‘industrial applicability’, ‘Uniqueness’ etc. which eventually results in granting the patent holder a exclusive monopoly right of using that particular invention in exchange of making that invention register in public domain. A patent owner has a complete right to stop anyone from commercially manufacturing, importing, selling, distributing his product without his consent.

Hinderance created by Intellectual Property Rights in expediting the production of vaccines

A considerable number of debates have been going on around the waiver of IP rights over covid-19 vaccines. Intellectual Property Rights play a crucial role at every stage of drug production. IPRs protect the investments that are done since the early stages of vaccine production to provide them to the patients by promising a return and encouraging trust.

The problem that has turned up during this pandemic lies in the very right that is created by the issuing of Patents for any pharmaceutical product. Different vaccines which are being developed by different companies have proven to be effective at a different rate and time when compared with each other as a result of specialized formulas which are used in these vaccines after various rounds of research and development. However, these companies have a limit of resources when it comes to the production in order to meet the demand of the vaccines in need and because of the monopoly rights enjoyed by these companies by the way of patents, no other company can produce the vaccines using the patented formulas.

When it comes to India, it is battling with the second wave of the virus, and the rapid need for the vaccine has caused a few nations to support a waiver of IP rights. India and South Africa were the first countries to support a waiver of certain provisions of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement in the World Trade Organization (WTO).  With over 3 million deaths worldwide, this proposal of waiving off of IP rights has drawn attention and support from different nations. Academicians, Scholars, Health Activists have constantly been warning about how IP rights are going to obstruct and hinder the elimination of covid-19.  

Concept of Monopoly rights of Patents and Waiver of rights

Patents protect a certain invention from manufacturing and launching rival copies of those products and hence creating a monopoly over the market. The drug makers can eventually fluctuate or adjust the price as per their will during a drug’s patent protected years. A patent is only granted for an invention that is “new” and involves an “inventive” step, for a specific number of years, usually 20 years. While it can be argued upon the definitive nature of the absolute monopoly that is being granted to a patent owner, it is completely affirmed and accepted that it does create some monopoly rights of usage which are subjected to certain restrictions.

Under the Indian Patent law, the interest of the public in general is given an equal value when put on the same pedestal which provides rights to the patent holder for their individual interest. Section 107 A, of the Indian Patent Act provides for certain provisions which are considered for the interest of the public in general. This provision of the Act provides for concepts like Bolar-Like provisions and Parallel Import provisions for pharmaceutical companies and generic drugs which do not ultimately result in an infringement of the law under the statute.[ii]

While when we talk about ‘waiver of patent rights’, it refers to the removal of such absolute monopoly rights which are created while a patent gets registered by the government or any other regulatory body. The main purpose of waiving of the rights which are created through patents is to impediment a faster commercialization of the patented product in the market for quick supply in case of emergencies or needs.

In India, the exception for security enshrined in Article 73 of TRIPS has been incorporated and included in Section157 A of the Indian Patent Act. It allows the Government to not disclose any information which is relating to any patentable invention which can be termed against the interest of security of India. Moreover, the Government also has the power to revoke any patent which is considered necessary in the interests of the security of India by them. The interpretation of this section is wide enough to include the situation of COVID-19 as an emergency which is hampering the security of the state.

Analyzing Ground Reality and Assessments

With the advent of deployment of certified vaccines all over the world by different companies, the cure for this deadly pandemic was predicted to an end but instead the ground reality of resolving such an issue of the pandemic seemed unreal and never ending because of the shortage of the supply and production. The developed countries like the United States of America, Russia, France etc. have somewhat controlled the spread by the means of proper vaccination drives throughout the state. According to the recent guidelines issued by the Centre for Disease Control and Prevention, people who have been vaccinated with the second dose can stop wearing masks and can return back to the life they were living pre-pandemic.

US Trade representative Katherine Tai acknowledged the importance of patents however, she also mentioned how the central aim is to supply safe and effective vaccines to as many people as fast as possible. The Biden administration is putting to expand vaccine manufacturing and to pace up the production of raw materials required to develop the vaccines. More than 1.2 billion doses have been administered globally but only 1% out of that have been given to people in the developing countries.[iii] While the developing countries are dealing with advanced variants of covid-19, vaccine shortage has only added to the problem. In the United States, vaccines are aplenty with 300 million extra doses but the real challenge is being faced by the developing countries like India, which is battling with the second wave of coronavirus. The country is still dealing with virus mutations, a crumbled health infrastructure and shortage of vaccines.

While the situation seems promising in developed countries related to the pandemic, the underdeveloped and the developing countries are facing a lot of issues in tackling the need and demand of vaccination across their countries. Countries like India, parts of South Africa, Bangladesh etc. have been the most prominent states which are negatively affected by the spread of this virus. The death tolls in the second waves in these countries took off to extreme levels because of various social and political reasons.

Moreover, the most important factor which is affecting the stopping of the spread is the shortage of vaccines available in these countries. For instance, In India, Covaxin and Covishield were the only vaccines available in the market for a long time and that also was subjected to a huge scarcity. It was until, Russia decided to help India and send regular supplies of Sputnik vaccines which are indigenously developed by the Russians. Even though on paper, the country is having a regular supply of vaccines and various active drives but in reality, the population is struggling to get themself and their family a dose of life from the hospitals.

Viewpoints on waiver of rights across the world

US released a statement supporting temporary waiver of covid-19 vaccine to speed up the production and availability of covid-19 vaccines. It has been opined that the pandemic calls for extraordinary measures and this health crisis calls for ways and methods where vaccines can be easily produced. Around 120 countries have supported this temporary waiver of Intellectual Property Rights on covid-19 vaccine to fight this pandemic.

The proposal made by India and South Africa strongly argues that intellectual property rights could hinder the production and supply of vaccines at affordable prices. Therefore, at this time when the production of vaccines needs to be scaled up to meet the demands, it is proposed that “a waiver from the implementation, application, and enforcement of” certain provisions of the TRIPS Agreement (waiving IP rights like patents, copyright, and trademarks) for prevention, containment or treatment of Covid-19.

Germany has expressed its opposition to the proposal saying that “the protection of intellectual property is a source of innovation and must remain so.” [iv]Pharmaceutical industry is stern on its argument that a waiver of IP rights is not going to contribute to the increased production of vaccines and in turn it is only going to affect innovation in the long run.

BioNTech, the German company which partnered with Pfizer, contended that developing the manufacturing process itself took a decade and validating production sites could take up to a year. There is also a scarcity of raw resources required in the production of a vaccine.

Industry bodies fear that a waiver could result in quality, efficacy and safety issues and possibly even counterfeits. They point out that Moderna has already said it would not prosecute those found to be infringing their patent – but no one has yet.[v]

Concerns and Possible Solutions

Concern

-Can lead to fake products and fraud vaccine adulteration problems

After various deliberations on the issue and different arguments, it can also be predicted that in case of waiver and less regulations on the production in order to increase the supply, the problems of fake products and adulterated products will be witnessed in near future. The inference can be derived after people have sold many fake copies of Remdesivir medicine during the treatment process in India at exorbitant rates.

-Lesser efficiency and degraded quality production

After President Joe Biden’s support for international talks on waiving patent protections for Covid-19 vaccines, The European Federation of Pharmaceutical Industries and Associations says that a waiver could result in a fall in quality and efficacy of the vaccines, if raw materials are diverted away from approved production facilities.

However, a global concern for the waiver is palpable due to the inadequate number of vaccines in the developing countries like India and Brazil, where the cases are on surge. These countries have been facing disastrous loss to life due to mutated viruses and the variant that’s driving the second wave might pose a serious threat to other countries that have already made progress in controlling the transmission.

-Lack of technological advancement

Another concern that surrounds after the waiver of IP rights can be tracked down from the primitive methods and less advanced technical usage of the production process. There is a very high possibility that even after waiving of the rights secured through patents, the smaller companies will fail to produce the vaccines because of lack of technology. [vi]

Solutions

-Compulsory Licensing of the Patents

Compulsory licensing is an important tool against patent monopolies. During times as such, where public health is a matter of grave concern, compulsory licensing can help break the monopolistic control of the patent holder. Compulsory licensing is when a government allows a patented product to be produced with or without the consent of the patent owner. The patent owner will still have a right over his patent, including a right to be paid for the compensation for copies of the product in question made under the license. This concept is recognized at both national and international levels, with express mention in both (Indian) Patent Act, 1970 and TRIPS Agreement.

Owing to the condition of the majority population of the developing states, compulsory licensing could be a hopeful measure that can maintain a balance between safeguarding public health and complying with the international provisions of patent protection.

Since compulsory licensing permits certain activities without the consent of the patent holder, it faces a strong opposition for an emerging supplier with sophisticated technical skills might be able to compete aggressively with a patent holder by its means. [vii]

Inflow of technology and expansion of pharma companies in different countries to boost up the vaccine development process.

Another solution that can be put forward while catering the demand of vaccines in developing and underdeveloped countries like India, Bangladesh, Nepal etc. can be establishing new foreign company plants for immediate production of vaccines. The companies can be allowed to set up in places like India with minimum regulations and paperwork in order to expedite the faster production of vaccines. Moreover, this will also increase the inflow of technology in the host countries and will facilitate smaller companies in the jurisdiction to increase their production as well.

Conclusion

As a conclusion to the aforementioned research, it will be a challenge for the governments of different countries to come up to a decision as to the feasibility of waiving off the Intellectual Property Rights of the pharmaceutical companies in order to cater the demand of the vaccines over the world, but what is to be evaluated on a priority scale shall be the deciding factor of allowing or not allowing the waiver. The success of huge production of vaccines is not predetermined in case of allowing the waiver as it won’t be feasible for the small companies to gather resources, capital and most importantly technology even if they are allowed to license the patented information and to start production of new vaccines.

Therefore, in order to make the availability of the vaccines and its supply equivalent to the demand, there are more than just one step (Waiver of rights) required along with collaborative effort of different governments and non-governmental bodies.


[i] Jaya Bhatnagar, Vidisha Garg, “Patent Law in India”, available at: https://www.mondaq.com/ (Last Modified December 13, 2007).

[ii] Christopher Garrison, “Intellectual Property Rights and Vaccines in Developing Countries”, April.13,2004.

[iii] Narayan Lakshman, “Explained | Intellectual Property Rights waiver resolve the COVID-19 vaccine shortage?”, The Hindu, May.9,2021. (Katherine)

[iv] Vaccine patent waiver: What are IP rights, and which nations stand for and against US proposal, available at:https://www.firstpost.com/ (Last modified May 07, 2021).

[v] Geetika Mantri, “Why removing patents on COVID-19 vaccines is the need of the hour”, The News Minute, May.6, 2021.

[vi] Philips Stevens, Mark Schultz, “Why Intellectual Property Rights Matter for Covid-19”, Geneva Network, January, 2021.

[vii] Compulsory Licensing in India, available at: https://www.iiprd.com/compulsory-licensing-in-india/ (Last

Modified January 14, 2019).

Author: Layba Yaseen from Amity Law School, Lucknow.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s