Professor Brook K. Baker, Senior Policy Analyst Health GAP

October 14, 2021

The EU draft proposal entitled “Ideas on the points of convergence on the TRIPS issues for discussion” (below) tries to make a silk purse out of a cow’s ear, by relying on moderately revised compulsory licensing on patents as the sole IP solution to the glaring problem of artificially restricted supplies, profiteering prices, and grossly inequitable distribution of COVID-19 health products. 

The text expands slightly on the EU’s earlier proposal that focused solely on restating what was already obvious in TRIPS Arts. 31 and 31bis concerning countries’ rights (1) to declare COVID-19 a national emergency or matter of extreme urgency, (2) to provide for remuneration that supports affordable pricing, and (3) to include multiple products in export notifications to the WTO.  The text proposes waiving (1) prior negotiation requirements (already not necessary for emergencies and government-use licenses); (2) requirement that production under a compulsory license be predominantly for domestic use (a required already inartfully waived in Art. 31bis; (3) that Art. 31bis be waived, except potential with respect to eligible importing countries and a possible export reporting requirement to the WTO; and (4) waiving adequate remuneration in favor of specific rules on remuneration designed to allow for discount prices (hardly necessary because past CLs have adopted very modest remuneration rates as low as .5%).

Mostly troubling, the EU continues to stick its head in the sand by pretending that trade secrets and confidential information rights are not a barrier to the technology transfer needed to produce vaccines and many therapeutics, especially biologics.  The public discourse has been focused for months on the absence of viable technology transfer requirements that incentivize or force rightholders to “share their secret recipes,” especially the complex manufacturing know-how, data, formulas, equipment demands, and biologic resources needed to successfully manufacture equivalent products.  Similarly, the EU fails to recognize that data exclusivity rules and patent-registration linkage rules in some countries would bar regulatory approval of equivalent products. 

In sum, the EU convergence would lead us back to the swamp of ineffectual solutions at best under the guise of a breakthrough compromise. 

This EU proposal must be relegated to the trash pile and real negotiations begun on a TRIPS waiver that will offer a real solution to temporarily removing all WTO-enforced intellectual property barriers that prevent expanded supply, lower prices, and equitable distribution of life-saving vaccines, therapeutics, diagnostics, PPE, and other medical supplies that prevent, contain, or treat the COVID-19 pandemic.  The US needs to stop sitting on the fence and force the EU to the real bargaining or into the corner by proactively negotiating an actual waiver text that is now one-year overdue.

[EU] Ideas on the points of convergence on the TRIPS issues for discussion

Objective

Given the extraordinary circumstances of the COVID-19 pandemic and the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector face with access to COVID-19 vaccines, it is important to ensure that the intellectual property system plays an enabling role in deploying existing capacity or creating new capacity for the production of COVID-19 vaccines and medicines.

In that regard, ensuring that all WTO Members can make effective use of the TRIPS Agreement is crucial and consequently a waiver with respect to certain requirements related to granting compulsory licenses for the production and export of COVID-related pharmaceutical products, allowing for their rapid supplies, could be considered. The objective would be to lift or simplify the key requirements related to exporting COVID-related pharmaceutical products under a compulsory license to the Members in need.

Form

Decision of the Ministerial Conference in a waiver format, based on the precedent of a waiver adopted in the wake of the HIV/AIDS crisis in 2003, i.e. Decision of 30 August 2003 on the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (WT/L/540).

Product Scope

Pharmaceutical products, i.e. vaccines, diagnostics, therapeutics against COVID-19

Scope of the waiver-TRIPS provisions covered:

  • Article 31(b) – prior negotiations with rights holders – to be waived
  • Article 31(f) – requirement to supply predominantly the domestic market – to be waived.
  • Article 31bis – mechanism for compulsory licenses for exports – to be waived, with conditions, e.g. on eligible importing Members, for discussion.
  • Article 31(h) – remuneration – to be waived and replaced by specific rules on remuneration to support deliveries of the products at discounted prices.
  • Article 28(1), 39 and Part III of the TRIPS Agreement – outside the scope of the waiver as the inclusion of these provisions is not required for the objective described above and would not be justified or proportionate.

Other aspects to be considered:

  • Length: 3 years with a possibility of further extension if the General Council so decides (e.g. if the circumstances of the pandemic persist).
  • Transparency: notification to the WTO of the measures taken and exports made.