Access to Covid-19 Treatment and International Intellectual Property Protection – Part I: Patent protection, voluntary access and compulsory licensing

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In our new Covid19 world, advice by leading public health experts suggests that we will continue to live under quarantine or some form of social distancing regimes (which may have to be switched on and off) until populations have developed sufficient herd immunity – or an effective treatment (such as a vaccine) has been found. Given the dire economic outlook and the social costs of these measures (which however can also have positive effects), as well as the specifically devastating consequences for the poor on our planet, one can appreciate the importance of developing effective medical treatments as fast as possible. It is then not surprising that significant efforts are undertaken by publicly funded research institutions, public-private partnerships and the pharmaceutical industry in search for an effective treatment. As sufficient incentives for R&D hence are not an issue, the key question will be one of global, fast and affordable access once treatments have been developed, hopefully by Summer or Fall 2021. Under international law, this is primarily a matter of intellectual property (IP) protection for such treatments – although current export restrictions for essential pharmaceuticals and/or medical equipment in the EU, UK and India also implicate trade law (see Articles XI and XX GATT).

This Two-Part post explores options for countries to facilitate access to Covid19 treatment under the WTO TRIPS Agreement, taking account of generally more stringent commitments for IP protection under Free Trade Agreements (FTAs). In Part One, it considers what type of existing and future Covid19 treatment (including medical devices) countries will have to protect under their national patent laws, and how patent protection is likely to affect widespread access to affordable treatment around the world. My main argument is that while we can expect the use of existing drugs for treating Covid19 to be patentable in most high-income and some lower-income countries, and any newly developed vaccine to be patentable in most countries, patent rights will not serve a major barrier to access. That is mainly because most patent owners will have a strong interest to license their treatment widely, and hopefully on affordable terms, especially in middle and low income countries. Should that not be the case, international patent law generally allows countries to force a patent holder to license (compulsory licensing). A specific WTO system designed to overcome legal hurdles for access to medicines in countries with insufficient manufacturing capacity to produce drugs domestically can also be used. However, the key hurdle in all these scenarios is to find countries that have enough approved facilities to produce medicines for us all: not only for its own population, but especially for poor countries with no or little manufacturing capacity.

In most countries, treatment (in the form of a new vaccine, the possible application of existing drugs to treat Covid19, or necessary medical equipment such as diagnostic kits for testing) may to be subject to patent protection, and – to the extent such treatment requires marketing approval by health authorities – protection of test data submitted to obtain such approval. Under the TRIPS Agreement, WTO Members must protect a pharmaceutical product or process that is new, inventive and industrially applicable under their domestic patent laws, granting patent owners exclusive exploitation rights for 20 years. Under Article 27:3 a) TRIPS, WTO Members can exclude from patent protection ‘diagnostic, therapeutic and surgical methods for the treatment of humans or animals’ – which arguably includes the option not to grant patents for new uses of existing drugs, but may not necessarily extend to exclusions for the medical equipment used for therapy, surgery or diagnostics.

While some FTAs (including Article 14.8:2 US-Bahrain FTA and Article 18.37:2 TPP, although currently suspended after the USA left the TPP) oblige contracting parties to award new use patents, most WTO Members still have the flexibility not to afford patent exclusivity for the use of existing drugs for treating Covid19. And even in countries where a new use for an existing drug is in principle patentable, it will not always meet the conditions for patent protection, in particular the inventive step requirement. All WTO Members however would be obligated to grant patents to a drug developed to treat Covid19, a process for making that drug, or medical equipment used for that purpose – as long as the conditions of novelty, inventive step, and industrial application (assessed by the domestic patent office based on a patent application) are met.

Assuming that patents therefore are likely to be available for these key new Covid19 treatments and will be sought and (normally after 1-3 years) granted in most major markets, that alone however does not mean access will be solely on monopoly terms. Usually, exclusive rights to make and sell the patented invention are only available once the patent has been granted. And while often just compensation is due from publication of the patent application (which generally occurs 18 month after its filing), any use prior to publication is not infringing. In the case of break-through Covid19 treatment, relevant information enabling its large-scale production will likely become widely available very fast, and may therefore initially not infringe. And even once a patent is granted, one can assume that the patent owner will be under significant pressure to license it widely. Although there are reports about investors asking pharma companies to ensure huge profits, some companies have already shown their willingness to license their existing patented drugs for Covid19 treatment on terms that support accessibility, or to donate significant quantities; and others are allowing key equipment to be made by other producers. Companies can also use the Medicines Patent Pool to license (existing and new) drugs for Covid19 to ensure affordable access in low and middle income countries. Taking this idea a step further, Costa Rica has proposed for the WHO to set up a voluntary emergency Technology Intellectual Property Pool to ensure global and affordable access to all data, research publications, technology and other informational aspects of Covid19 treatment – a proposal now apparently being considered by the WHO. Overall, we should expect that corporate social responsibility (and in case of publicly funded research, the state’s responsibility to protect public health) will be taken serious and some form of voluntary licensing will be the norm.

However, in case a country finds that a patent owner does not or cannot produce or import relevant patented Covid19 treatments in sufficient amounts or at an affordable price, TRIPS allows it to grant compulsory licenses under the conditions of Article 31. In a nutshell, this enables local authorities to allow another entity to produce and sell the patented invention without a voluntary license, subject to adequate remuneration and usually only after unsuccessful negotiations with the patent owner. However, in cases of ‘national emergency or other circumstances of extreme urgency or in cases of public non-commercial use’, there is no need for prior negotiations.

While no-one would seriously doubt that addressing the Covid19 pandemic would satisfy the above, all WTO Members agreed in the Doha Declaration on TRIPS and Public Health that countries have ‘the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency’. As discussed by Ellen t’ Hoen in more detail here, several countries, including Germany, Israel, the United States and Canada have already indicated their willingness to issue compulsory licenses to facilitate access to Covid19 treatment. In the case of Israel, this led AbbVie, the producer of Kaletra (an HIV drug thought to potentially help treating Covid19) to license the import of its patented drug from suppliers abroad to ensure sufficient availability.

Although the TRIPS Agreement therefore will not stand in the way in case countries want to rely on compulsory licenses, things become more complicated whenever a country has insufficient or no manufacturing capacity to produce the relevant treatment domestically. As the case of Israel shows, a country can also issue a compulsory license for importing patented treatments, such as a medical drug, from elsewhere. But if that treatment is also patented in the country of exportation, Article 31 f) TRIPS in principle requires that production must be ‘predominantly for the supply of the domestic market’ – hence barring the grant of compulsory licenses purely for export purposes to countries in need. In the context of the HIV/Aids epidemic, WTO Members eventually agreed in 2003 on a special mechanism (now incorporated in a new Article 31bis TRIPS), designed to enable countries with insufficient manufacturing capacity to nevertheless benefit from compulsory licensing to facilitate access to medicines.

In a nutshell, a fairly complex system allows the exporting country to issue a compulsory license solely for the purpose of exports to an eligible importing country that has made a notification to the WTO about its (self-assessed) insufficient manufacturing capacity. Given the exorbitant global need for treatment (in particular a vaccine, once developed) for Covid19, it is not difficult to imagine that many countries will find their own manufacturing capacities to be insufficient, and hence might ask others to help produce sufficient supplies for them. As the system covers not only medical drugs (and their active ingredients), but also ‘diagnostic kits needed for its use’ (TRIPS Annex, para.1a), it should apply to a wide range of relevant medicines and supporting devices used in the treatment of Covid19. However, leaving problems about complexity and insufficient experiences in using the system aside, in our current situation, it may well be rather difficult to find any country able to produce sufficient amounts of a future Covid19 treatment for its own population, let alone to export for other countries in need. Reports about the Trump Administration trying to lure a German manufacturer to develop and produce a vaccine for the USA are quite telling, and show that countries are initially going to prioritise their own people.

But even if there are, for example based on India’s huge generic manufacturing capacity and experience, enough manufacturing sites that are approved by health authorities for producing medicines according to relevant standards, there are legal complications. First, several OECD countries (namely: Australia, Canada, the EU and its member States, Iceland, Japan, New Zealand, Norway, Switzerland, and the United States) have explicitly declared that they will not use the mechanism as importing countries. When the system was negotiated in 2003, that was an essential element for the US pharmaceutical industry (and by extension, the US government) to come on board – as they feared the system could be ‘abused’ by rich countries to obtain cheap access to medicines. So can countries that have opted out of the system now opt back in, for example in order to ask India to produce a future Covid19 vaccine in bulk quantities if their own domestic manufacturing capacities are insufficient?

Although paragraph 1(b) of the relevant Annex to TRIPS suggests that ‘a Member may notify at any time that it will use the system in whole or in a limited way’, this arguably was only meant as an option for other WTO Members that had not yet opted out. The WTO website confirms this, as it categorically states that ‘[s]ome members are excluded from using the system as importers’, referring to those listed above. For the United Kingdom, matters become even more tricky: while the relevant text of fn.3 to para.1(b) only refers to the EU (then EC) and ‘its member States’, a chairman’s statement accompanying the 2003 WTO decision explicitly states that ‘the following Members have agreed to opt out of using the system as importers’, listing, inter alia, the ‘United Kingdom’. That statement is seen by some WTO Members as a crucial part of the overall agreement, while others consider it a unilateral statement of the chair of the negotiations with no legal status. It hence remains to be seen whether a post-Brexit UK faces legal obstacles if it attempted to use the system as eligible importing country, for example arguing that the chairman’s statement is not legally binding, and that the EU’s declaration not to use the system does not constitute an ‘act’ of the Union under Articles 2(a) & 4(1) of the Withdrawal Agreement (which would bind the UK).

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