The Leaked WTO COVID Patent Waiver Text Promises A Very Bad Deal

In October 2020, South Africa and India’s governments tabled a bold proposal (PDF) at the World Trade Organization (WTO) to temporarily waive intellectual property (IP) protections for producing COVID-19 vaccines and other coronavirus-related medical tools for the duration of the pandemic.

The proposal aimed to address an urgent problem: multinational pharmaceutical companies and their backers using their monopoly power to prevent vaccine and medical product manufacturers across the world from scaling up production to meet global needs.

It has been more than a year since the proposal was tabled, and the ongoing disparities in access to timely supplies of vaccines and other key technologies show the need for a waiver agreement is still as urgent as ever. However, despite 65 members co-sponsoring and a total of 110 countries backing the proposal, the WTO has still not managed to pass the waiver.

The negotiations have “dragged out” because the pharmaceutical industry and the countries supporting it – mainly the United States and the European Union – maintained that the waiver proposal is not necessary as there already is “sufficient flexibility” in the existing rules. The reality, of course, is that the same countries and industries undermining the waiver proposal today have been opposing the use of public health flexibilities in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), such as compulsory licensing and parallel importation, even before the COVID-19 pandemic. For years, they have used a combination of trade threats and litigation to suppress challenges to the worrying patent dominance of the pharmaceutical industry. Therefore, the so-called “flexibilities” in the existing rules are not “sufficient” at all.

The dragging out of negotiations has had a catastrophic consequence: a vaccine and treatment apartheid. Amid a global shortage, rich countries swiftly hoarded all the vaccines they needed and then some more, leaving many developing and least developed countries way behind in the queue, despite what COVAX had promised. Since the waiver proposal was first tabled, at least 5.5 million people have died, and the pandemic’s “death toll has been four times higher in lower-income countries than in rich ones”.

A breakthrough that is anything but

After months of fruitless negotiations, missed deadlines and cancelled meetings, some three weeks ago, the media reported that South Africa, India, the US and the EU are close to reaching a compromise on the waiver, and published a document purported to be the “leaked” text of an agreement.

The US then said “there has been no agreement” but added that the leaked text “offers the most promising path toward achieving a concrete and meaningful outcome”. While also cautioning that “not all the details of the compromise have been ironed out”, WTO Director-General Ngozi Okonjo-Iweala hailed the leaked text as a “breakthrough” and even announced her intention to take it to all 164 members of theWTO for discussion. Now, WTO members are reportedly being pressurised by the WTO secretariat into rubber-stamping the leaked text.

Meanwhile, civil society organisations, academics and researchers have analysed the leaked text and highlighted several fatal flaws. There is now a growing consensus among experts that this proposed “compromise” cannot produce a meaningful deal and should be rejected. Here is why:

One small step forward – several steps back

The leaked text does include one small step towards allowing some manufacturers to scale up production to meet some global needs.

The TRIPS Agreement states that compulsory licences that allow countries to suspend patents must be employed predominantly for supplying the domestic market, so only less than half of a product produced under a “compulsory licence” may be exported. Thus, if there is no viable domestic market for the product, it would not be economically feasible for the holder of the licence to use it. The leaked text proposes to lift that requirement so that a producer may export the majority or all of the quantity produced (here, only vaccines).

The leaked text, however, immediately undermines this very small step by imposing restrictions on which countries may take advantage of the lifting of the domestic use requirement. By confining the eligibility criteria only to developing countries that “exported less than 10% of world exports in 2021”, it excludes major possible vaccine and treatment suppliers, such as China. This approach may severely restrict global production capacity and prevent people in the Global South from swiftly accessing the medications and vaccines they need.

India and South Africa’s waiver proposal included all COVID-19 medical technologies, but the leaked text mentions only “vaccines, and their ingredients and processes”. According to the leaked text, waivers on diagnostic technologies and medicines are to be decided in the six months after the agreement is reached, though no reason is provided for this carve-out. Because WTO processes move at a snail’s pace, this addition may never materialise. So, while patients in the Global North are already receiving new antiviral medicines to treat COVID-19, those in the Global South are being told to wait – perhaps indefinitely.

Moreover, the leaked text does not waive patent obligations and intellectual property protections entirely – so it will be difficult to engage in local manufacturing at scale in developing countries. This could hamstring the WHO mRNA technology transfer hub in South Africa, possibly exposing it to litigation and delaying access to life-saving vaccines even further.

The leaked text contains several TRIPS-plus provisions, including the requirement for licence applicants to “list all patents” covered in their applications, imposing a huge burden on them to work through non-transparent patent landscapes (according to the document “pending patents” and “patents that may not have been published” must also be listed). The leaked text also mentions requiring the details of the entities authorised to use, the duration of the licence, and the quantities and destinations for export, to be communicated to the WTO. These are unnecessary and onerous conditions that could hinder crucial efforts to increase production and expand vaccine and treatment access around the world.

Furthermore, the leaked text does not waive current protections on “trade secrets” and other “undisclosed information”, without which technology transfer will be delayed. The only aspect of “undisclosed information” that the leaked text references is a clarification relating to “clinical trial and other data required for regulatory approval of a follow-on product”, which is already available as flexibility in the TRIPS Agreement. In fact, the leaked text adds on a “necessity” test – a standard that is exceptionally difficult to satisfy in the WTO.

States should not be pressured to accept a bad deal

By bringing the waiver proposal to the WTO, South Africa – alongside India – assumed a position of global moral leadership. If it now succumbs to pressure and endorses the leaked text, it will risk losing the respect of the 110 nations that supported the proposal and sowing division among them. Such a misstep could irreparably break south-south solidarity. So too, the respect of civic groups and others that have supported the waiver for over 17 months.

Furthermore, accepting a “bad deal” now could make it impossible to secure meaningful intellectual property reforms that would allow the world to be prepared for future pandemics.

Protecting their billion-dollar for-profit pharmaceutical industries at the WTO and other international forums has always been a priority for the EU and the US and this is unlikely to change after the COVID-19 pandemic. Thus, the Global South should be wary of accepting such compromises.

This is why civil society organisations and concerned individuals in South Africa recently urged South African Trade and Industry Minister Ebrahim Patel “not to surrender to US and EU on the TRIPS Waiver negotiations” in an open letter.

“The government and the negotiating team have played a critical and leading role in bringing together … member countries of the WTO to support such a waiver and engaged the opposition from rich countries with reasoned arguments,” they wrote. “President Ramaphosa stated at the AU–EU Summit that Africa would still be getting the ‘crumbs from the table’ of the West without the TRIPS Waiver. That’s exactly what the leaked text is – ‘crumbs’ – and it is unacceptable.”

Indeed, millions of people across the Global South, including Nobel laureates, researchers, clinicians, advocates, activists and even former world leaders, did not support South Africa and its original and bold waiver proposal for the past 17 months just to settle for “crumbs”.

The South African leadership now needs to do right by the people of the Global South who have long been suffering from the greed and protectionism of the Global North – it needs to reject the leaked text and insist that members go back to the drawing board to deliver a resolution that works not just for the rich and the powerful, but the entire world.