Op-Ed | June 25, 2021
Stop Blaming Patents For The World’s Low Vaccination Rates
The rapid development and dissemination of highly effective COVID-19 vaccines should inspire confidence in human ingenuity and gratitude for the rules and institutions that enable such life-saving innovation to flourish in the United States. Instead, the Biden administration has endorsed the misplaced scorn for those rules and institutions that the activist left spoon feeds the developing world.
Last month, in service to “ending this pandemic,” President Biden’s Trade Representative announced U.S. support for an unnecessary waiver of intellectual property protections at the World Trade Organization (“WTO”), which will only reinforce the fallacy that biopharmaceutical patents are to blame for lagging vaccination rates in developing countries. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”) requires members to maintain minimum domestic standards to protect intellectual property. Even though there is vast scope for individual countries to exempt themselves from those minimal obligations to protect public health or national security, India and South Africa have been leading the charge to convince WTO members that an explicit waiver of TRIPS obligations is necessary, lest their failure to protect intellectual property be perceived as a violation that could lead to trade sanctions (“withdrawing concessions” in WTO speak).
But, in the words of James Bacchus, a renowned WTO scholar and former Chief Judge of the WTO Appellate Body:
Article 8 of the [TRIPS Agreement] provides that WTO members “may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health … provided that such measures are consistent with the provisions of this Agreement.” In similar vein, Article 7 of the TRIPS Agreement provides that the “protection and enforcement of intellectual property rights” shall be “in a manner conducive to social and economic welfare.” It can be maintained that these two WTO IP rules are significantly capacious to include any reasonable health measures that a WTO member may take during a health emergency, such as a pandemic.
“The rapid development and dissemination of highly effective COVID-19 vaccines should inspire confidence in human ingenuity and gratitude for the rules and institutions that enable such life-saving innovation to flourish in the United States. Instead, the Biden administration has endorsed the misplaced scorn for those rules and institutions that the activist left spoon feeds the developing world.”
If the obligation to protect intellectual property were the real bottleneck, wouldn’t any responsible government simply stop enforcing IP protections, issue compulsory licenses to produce vaccines, and not concern itself for one second with prospective trade sanctions in the middle of a deadly pandemic? Which cold-hearted member would even bring a complaint against a developing country government trying to save the lives of its citizens in a crisis? Are we really expected to believe that New Delhi would not take measures it considers necessary to protect public health because of the prospect of punitive tariffs on Indian exports? That would constitute a crisis of accountability, not an IP barrier.
The premise of the need for a TRIPS waiver is simply absurd. It serves to divert attention from the failures of governments to protect their citizens with smart public health policies and, importantly, to demonize intellectual property protections more broadly. Governments are already free to waive IP protections and to engage in compulsory licensing in times of health crises but have not done so because patents are not the bottleneck. The bottlenecks result from limited global expertise in the highly technical process of producing the vaccine, the dearth of production facilities and capacity to ramp up production at existing facilities, the tight supply of crucial pharmaceutical ingredients (including vials, bags, and other components), and the limited distribution channels through which the proper handling of vaccines at proper temperatures can be assured.
To be sure, global health officials and biopharmaceutical companies have been working to resolve these real bottlenecks—a process that has benefited significantly from the fact that U.S. officials have more bandwidth to devote more attention and other resources to these matters precisely because U.S. vaccination efforts have been successful. And why have they been successful? In large measure, they have been successful because intellectual property protections have bred expectations of future intellectual property protections, which has invited and enabled an accumulation of R&D investment, infrastructure, and expertise in the United States.
The effort to surmount these real impediments to producing, distributing, and injecting vaccines is not made any easier by a symbolic waiver of IP protections—and may be made more difficult. The volume of vaccines necessary to ending the pandemic requires governments and public health officials to coordinate and focus on ramping up the capacity to produce and distribute, and to safeguard against the squandering of pharmaceutical ingredients by ensuring those inputs are channeled to producers with expertise in manufacturing and distribution. On the contrary, suspending IP protection might encourage novice firms with no expertise to end up wasting limited, essential ingredients.
Biopharmaceutical companies—and technology industries that have kept us connected and productive for 18 months—are heroes of the pandemic, not villains. The biopharmaceutical industry was able to rise to the challenge of COVID-19 because of the R&D investments, production capacity, distribution networks, and expertise that have accrued over the years owing to the U.S. commitment to protecting intellectual property. That COVID-19 morbidity and mortality rates in the United States have significantly subsided and the economy has nearly completely rebounded are among the unheralded public dividends of IP protection.
Industries that invest in R&D are critical to the health of the U.S. economy. IP-intensive industries account for over $6 trillion in GDP and more than 45 million jobs, according to the Department of Commerce. Earlier this month, the Senate passed the U.S. Innovation and Competition Act, which would funnel $250 billion toward scientific and technological innovation over the next five years. Hopefully, this infusion won’t cause Congress to forget that intellectual property protection is a crucial driver of R&D.
Finding the proper balance to incentivize innovation without ultimately impeding innovation is a legitimate aim of public policy. But demonizing the innovators in the middle of a health crisis that they are essential to solving is lamentable and misguided.