On October 15, 2021, Afrocosmo Development Impact, LLC, and Frank Samolis, Partner, Squire Patton Boggs LLP Washington DC hosted WTO DG Dr Ngozi-Okonjo Iweala, in an in-person fireside chat where we discussed prospects for success of MC12 talks, IP waiver controversy and her “the third way” proposal.
On October 15, 2021, Afrocosmo Development Impact, LLC, and Frank Samolis, Partner, Squire Patton Boggs LLP Washington DC hosted WTO DG Dr Ngozi-Okonjo Iweala, in an in-person fireside chat where we discussed prospects for success of MC12 talks, IP waiver controversy and her “the third way” proposal. Her proposal called for waiver of IP protection for COVID-19 drug manufacturers to facilitate equitable access to affordable drugs in developing nations. Eight months after our October 2021 event with DG Ngozi, in June 2022, at the WTO 12th ministerial meeting (MC12 talks), the 164 member countries adopted her third-way proposal in an IP waiver decision, including article 3 of the Ministerial Decision on the Trade Agreement on Trade-Related Aspects of Intellectual Property Rights (IP waiver decision on the TRIPS).
The 2022 IP Waiver decision is one of several measures aimed at amending the original 1995 TRIPS agreement and it is also indicative of a shift from the US influence in adopting IP rights in 1995 to the influence of African nations in adopting TRIPS amendments that balance IP rights with public policy concerns in the 2001 Doha declaration and 2017 TRIPS amendment (aka compulsory licensing provisions). However, despite such African influence, in 2007, Rwanda is the only African country that exploited (implemented) the flexibilities of the TRIPS amendment (after the 2001 Doha Declaration and 2003 waiver) but implementation took place before it (the TRIPS amendment) came into effect in 2017. Therefore, the lack of implementation of TRIPS amendments in the 44 WTO member nations of AfCFTA (aka African nations) combined with the adoption of the recent IP waiver decision has resurrected some controversial debates that I will address. They include two vital questions with sub-questions: Did the flexibilities of compulsory licensing provisions enable equitable and expedited access to affordable drugs and did it sufficiently address the demands of African nations during the COVID-19 crisis? Within this context, was the IP waiver decision an unnecessary measure? And what are additional institutional, policy and socio-cultural challenges that prevent African nations from implementing the flexibilities of TRIPS amendments (compulsory licensing) and the IP waiver? Within this framework, how can they turn those challenges into opportunities to enable expedited and equitable access to affordable drugs during current and future health crises?
Concerning TRIPS amendments, some observers who subscribe to the human right to public health suggest that the compulsory license and the IP waiver decision have not settled the IP waiver debate because their flexibilities do not guarantee free access to COVID-19 vaccines for all people. However, on the contrary side, some opponents of IP waiver decision suggest that the compulsory licensing provisions and TRIPS amendments resolved the IP waiver debate and conflict between IP protection and access to affordable drugs in poor African nations. Therefore, the IP waiver is an unnecessary provision that is not needed to combat COVID-19 COVID-19-related public health crisis of member states because articles 31 f and 31 b of TRIPS (compulsory licensing provisions) already provided sufficient flexibilities (e.g. compulsory licenses) that addressed the demands of developing countries facing such crisis. They suggest that African nations can benefit from the flexibilities of Article 31 (f) which provides that a member state can issue compulsory licenses to permit the use of drug patents without permission of the right holder, but they (member states) must authorize such use mainly for supply of their domestic market. However, realistically, the article (31 f of TRIPS) was a dormant and ineffective provision for African nations because due to institutional and policy challenges (e.g. infrastructure deficiencies, underdeveloped markets, inadequate manufacturing capacity), African nations were unable to benefit from its flexibilities. They could not issue compulsory licenses for domestic markets during health and emergency crises.
Therefore, in response to their (African and developing nations) concerns, in 2003, the WTO members followed the 2001 Doha Declaration by adopting a waiver (of article 31f) that allows countries experiencing such challenges to import affordable drugs from nations where the drugs were protected by patent. In 2017, WTO member nations approved a permanent amendment to TRIPS that created the new flexibilities in Article 31 b. The new article (31 b) removed the import prevention problem of article 31f for poor developing nations but had its share of institutional and policy challenges concerning notification requirements. During extreme urgency and national emergency (e.g. public health crisis, COVID-19 crisis), it allows such nations (poor counties) to waive the requirement to seek consent (authorization) from an IP right holder and it also allows the member nation to import drugs from other countries. However, the country must still notify the right holder (about the use of the patent) within a reasonable time (“as reasonably practicable”).
The cumbersome notification requirements created import/ export delays in accessing drugs. Countries had unexpedited access (delays) to the drugs and such delays increased the risk of importing expired vaccines across Africa. In 2022, Dr. John Nkengasong, director of the Africa Centres for Disease Control and Prevention confirmed that 2.8 million COVID-19 vaccines expired across African nations and the amount (2.8 million) was 0.5% of the total vaccines (572 million) that the continent has received. The expired quantities were partly due to delays in importation. Therefore, Neither Article 31 f nor 31b sufficiently addressed the demands of developing nations during the COVID crisis.
Consequently, WTO members adopted Article 3 b of the IP waiver decision which provides additional flexibilities beyond the flexibilities in Articles 31 f and 31 b. It allows eligible members, particularly African and developing nations to waive COVID-19 vaccine IP protections under Article 31f that protect mainly domestic markets. It also allows them (eligible members) to issue compulsory licenses to permit such vaccines to be exported to other eligible member nations through various mechanisms, including joint international and regional initiatives.
The joint initiatives provision of the IP waiver decision provides an opportunity for the 44 WTO members of AfCFTA to create an enabling environment that promotes joint ventures between their local small and medium enterprises and companies incorporated in developed economies. Such ventures can strengthen local SME capacity to manufacture generic drugs for local and export supply.
But instead of reinventing the wheel, they must also build upon their experiences (during the US implementation of PEPFAR) in 2007 when they supported the Pharmaceutical Manufacturing Plan for Africa (PMPA), a non-binding agreement “to pursue, with the support of our partners, the local production of generic medicines on the continent…” Assuming the Biden Administration will renew the 1974 US Trade Promotion Authority (TPA), they should also enter into free trade agreements with the USA and other developed economies. The agreements should encourage joint ventures (between their local companies and drug companies in developed economies) that enable them to strengthen African local drug manufacturing capacity.
Unexpedited and Unaffordability Challenges
Strengthening such capacity will facilitate equitable and expedited access to affordable drugs during a crisis. Such enhanced local capacity expedites access to affordable drugs including avoiding the aforementioned delays from cumbersome importation and notification requirements that undermined the implementation of Article 31b. In this respect, they will also avoid reliance on monopoly drug pricing structures (of importers) that result in unaffordable drug prices, price distortions and gouging.
It will also equip the countries to manufacture enough vaccines to meet low levels of demand and to avoid importing excess drug quantities that exceed such demands.
This will reduce the aforementioned incidences and risk of drug expirations and wastage.
Therefore, in February 2022, the World Health Organization (WHO) announced the establishment of a COVID19 vaccine production programme aimed at strengthening the local production facilities (of 6 African nations) for manufacturing doses of mRNA vaccines. In this respect, they (African nations) must create an enabling environment to increase manufacturing productivity and reduce transaction costs of production. This includes supporting programs that provide access to affordable/reliable infrastructure, and human and financial capital. Concerning human capital, they must strengthen their capacity and skills of labor force in small and medium-sized entrepreneurship in manufacturing sector because only 8% of such entrepreneurs are involved in the manufacturing sector while more than 50% are involved in the services sector. The reason for higher percentage of employees in the services sector is that the latter requires lower-skilled labor than the manufacturing sector.
Regarding scaling up problems, they must also overcome the fragility and small economies of scale problems that undermine manufacturing productivity of the labor force where only two percent of entrepreneurs have more than 10 or more employees while 98 percent of employees have less than 10 employees. Within this context, they must develop and implement appropriate laws and policies, including those concerning competition and antitrust that encourage corporate expansion, consolidation and mergers and acquisitions.
This will enable small and medium enterprises to grow and take advantage of large economies of scale required to produce large quantities of drugs in factories at affordable prices.
However, assuming African nations strengthen local drug manufacturing capacity to provide access to affordable vaccines, socio-cultural challenges of low demand for such vaccines will still undermine equitable (broad) access to the vaccines. Therefore, they must also create an enabling policy climate to combat such additional challenges. As early as 2020, through COVAX, countries made some progress in importing vaccines. However, vaccine hesitancy and mistrust resulted in low demand and increased the aforementioned risk of expired drugs that are wasted in the African continent.
conducting clinical trials and medical research studies that promoted racists, genocidal and inhuman experiments on blacks. Such experiments concerned HIV Aids in South Africa in the 1980s and 1990s, Tuskegee Syphilis medical tragedy in 1932 and Pfizer’s 1996 anti-meningitis Trovan drug.
Therefore, to regain community trust and increase demand for vaccines, African nations must implement sound quality and accountable safety procedures and standards for such trials and medical studies. This should include requiring a formal system of prior informed consent for all clinical and medical studies patients in black and African communities.
They must implement socio-culturally sensitive and grassroots-oriented community awareness and outreach programs that help the communities to overcome the COVID-19 vaccine hesitancy and mistrust of the medical system in 10 African nations where hesitancy ranged from 4 to 38 percent.
The programs must aim to inform them about the risks and benefits of vaccines. To ensure sound developmental impact at the grassroots community level, they should use varied dissemination and communication strategies, including radio, social media, varied languages and local chiefs.
It is too early to predict the nature and timing of the next measures that the 44 WTO members of AfCFTA will take to domesticate and implement their IP waiver ministerial decisions. But their decisions signal a positive step in the direction of balancing IP protection with public policy issues. It also demonstrates their oral commitment to go beyond TRIPS obligations in articles 31 f and 31 b to create more flexibilities that facilitate adequate and equitable access to affordable COVID19 vaccines in low-income nations. However, opportunistically, they must create an enabling environment to exploit and implement the joint initiatives provision of the IP waiver decision.
They must promote joint ventures between their small and medium enterprises and companies incorporated in developed economies.
Such ventures should strengthen local SME capacity to manufacture generic drugs for local and export supply. Strengthening such capacity will facilitate equitable and expedited access to affordable drugs during current and future crises. But to successfully facilitate such access, African nations must move beyond the debates about the necessity and sufficiency of flexibilities of TRIPS amendments and IP waiver decisions. Instead, they should implement the aforementioned mechanisms (solutions) to combat institutional, socio-cultural and policy challenges that undermine the ability to exploit the flexibilities. The mechanisms should be aimed at turning those challenges into opportunities.
Comments
adamgordon
Thanks for this great post!
miaqueen
Thanks for sharing 🙂