By Michael Rosen

Occasionally, when a compromise is reached over a controversial topic of public policy, its advocates will say, “People on one side are unhappy, and people on the other side are equally unhappy, so we must be doing something right.” But sometimes, as was the case with the grudging agreement by World Trade Organization (WTO) member states last month over intellectual property (IP) protections for COVID-19 vaccines, a compromise can simply be flat-out bad, as a recent AEI panel discussion on the topic made clear.

“Big Pharma hates the WTO’s deal to let poorer countries make generic copies of COVID jabs,” thundered a headline at Forbes, following the breakthrough in Geneva. “So do vaccine equity advocates.”

Recall that the debate began in late 2020, when India and South Africa presented the WTO with a proposal that would have suspended Trade-Related Aspects of IP Rights (TRIPS) for everything connected to the COVID-19 pandemic: diagnostics, treatments, and vaccines (which didn’t even exist at the time). The Trump administration and our European allies rejected the proposal out of hand as an ineffective solution and a harmful deterrent to future innovation.

That approach, however, was reversed in May 2021, when the Biden administration unexpectedly announced its support for the waiver measure. From that point forward, the various WTO member states wrestled over the proposal inconclusively, and not until June 2022, with the pandemic’s crisis phase largely passed, did they finally come to terms.

Those terms, neatly summarized in a two-page decision reported by the WTO, provided less than the original proposal had sought:

Notwithstanding the provision of patent rights under its domestic legislation, an eligible Member may limit the rights provided for under Article 28.1 of the TRIPS Agreement . . . by authorizing 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 to the extent necessary to address the COVID-19 pandemic.

The agreement, painstakingly and determinedly hammered out among member states by WTO Director-General Ngozi Okonjo-Iweala, was limited to a period of five years (which may later be extended) and covered only vaccines, not treatments or diagnostics. (Although the group will meet again in six months to consider expanding the agreement to include them). In addition, it applies only to vaccine-related patents, not the trade secrets and know-how that enable manufacturers to make doses. It also effectively excluded China, which, as a “developing country Member with existing capacity to manufacture COVID-19 vaccines,” had pledged at a previous WTO meeting not to avail itself of the waiver.

And indeed, the compromise made nobody happy. Jamie Love, the director of Knowledge Ecology International, which has labored to steer the waiver through the WTO, lamented that “the big pharma industry can be pleased with the precedents on notifications and anti-diversion, which are important to them, as well as the exclusion of most vaccine manufacturers and the 5 year duration.” More pointedly, Love wrote that:

It is hard to imagine anything with fewer benefits than this, as a response to a global health emergency (other than the earlier negotiating texts for this Decision). The fact that the exception is limited to vaccines, has a five-year duration and does not address WTO rules on trade secrets makes it particularly unlikely to provide expanded access to COVID-19 countermeasures.

For its part, the International Federation of Pharmaceutical Manufacturers and Associations said, in a press release:

[The] decision sends a dangerous signal not only to the pharmaceutical industry but to all innovative sectors. Dismantling the very framework that has brought solutions to tackle COVID-19 and facilitated the unprecedented number of partnerships, voluntary licensing, and knowledge-sharing taking place during this pandemic can have ripple effects for the future.

Perhaps more ominously to those who favor IP protections, Director-General Ngozi also observed, at the conclusion of the WTO’s deliberations, that the agreement “will make access to medical supplies and components more predictable in this pandemic—and in the next one.” (Emphasis added.) Thus, when the next major pandemic (monkey pox?) comes around, we may have to go through this whole exercise all over again. And nobody will be happy then either.

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