India capitulates to EU on TRIPS waiver for Covid-19 medical products

Contrary to India’s public stand for a waiver of intellectual property rights such as patents and trade secrets for manufacturing all Covid-19-related medical products, the country has instead reportedly agreed for a compromise with EU and the US for compulsory licensing of the vaccines. This has come to light after a document was leaked from the European Union.

The compromise agreement omits several proposals put forth by India and South Africa and limits the agreement to only vaccines. It covers only patents and does not address other intellectual property barriers, such as trade secrets and the compulsory licensing introduces unnecessary listing of patents for World Trade Organisation members. There are too many limitations in the agreement to make any significant difference.

The European Union has been consistently opposed to a waiver of the IP rights and initially the US administration under Joe Biden had supported them partially, but now the Biden administration has reversed its position. The EU has been, instead, pushing for limiting export restrictions and issuing licences that would allow specific manufacturers to avoid intellectual property rights without a complete waiver. The EU’s compromise agreement is a win only for pharmaceutical companies, who were lobbying for intellectual property protections over essential medicines.

All countries are required to follow the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement for transfer of knowledge, but this new compromise agreement introduces new obligations that currently do not exist in TRIPS Article 31 and makes the agreement more restrictive on countries.

Compulsory licence is a permission given by the government to a company to make use of a patented vaccine owned by another company. Rules for issuing the compulsory licence for Covid-19 vaccines are agreed upon between EU, whose countries have invested in several biotech companies which produced the vaccine, US, where several of the countries which produced the vaccine are based and India and South Africa, where a large number of generic pharmaceutical manufacturers are based.

Under a waiver, there would be no set conditions for the manufacturing vaccines in an emergency like the Covid-19 pandemic. Under compulsory licensing of vaccines, India will have to list all the relevant patents. This is an onerous task because one vaccine will have several hundreds of patents for each vaccine. A study has stated that there are 1,000 patents for an MRNA vaccine.

The compromise reached stacks the odds against poorer countries. Additionally, the eligibility is limited to WTO developing countries that exported less than 10% of the world’s vaccines in 2021. This would leave out Brazil, China and non-WTO countries such as Kosovo, Palestine, Iran, Serbia and Syria.

Timeline of the negotiations

In October 2020, India and South Africa submitted a proposal which called for the waiver of patents, but also industrial designs, copyrights, and trade secrets that are guarded by the WTO agreement on TRIPS.

In May 2021, a revised proposal was filed which specified that the TRIPS waiver would only apply to COVID-19-related vaccines, diagnostics, therapeutics, medical devices, and personal protective equipment and would remain in force for at least three years.

In December 2021, the WTO secretariat called for a meeting between the four parties — South Africa, India, the US and the EU— but it was held in two formats. For one meeting, only the commerce and trade ministers of the quad met and in the other meeting only the negotiators of these four countries met. India’s commerce minister Piyush Goyal attended these meetings. Normally, both negotiators and ministers attend the meetings together. In the next round of online meetings, India met the US and South Africa met EU.

On March 11, 2022, there was a meeting of all the four ministers only where the compromise was agreed upon. It is after that the EU officials sent out a note to their member countries on the compromise reached.

The United States Trade Representative (USTR) released a statement on March 16 that a compromise had been reached but the countries were still to agree on the final test. Soon after, WTO Director-General Ngozi Okonjo-Iweala stated that the details of the agreement were yet to be ironed out.

However, India has been silent on the matter after the compromise was reached. In November 2021, a senior government official at the Ministry of Commerce had reiterated that India would continue to demand for an intellectual property rights waiver for COVID-19 vaccines and supplies. India had asserted they woud see the interests of the developing nations were not compromised.

Current status in India

Though there has been relative silence from the government, Congress MP from Kerala TN Prathapan wrote to the Prime Minister Narendra Modi drawing his attention to the “compromised text which evolved out of the negotiations with the EU and US”. In his letter, he pointed out that the compromise reached showed a complete surrender to the demands put forth by the EU and a total rejection of India’s demands.

He pointed out that by engaging in an opaque process initiation by the WTO Secretariat, known as quad process, India accepted a solution that was impractical and imposed an onerous condition on the country.

“India has fallen in the trap of TRIPS. As a result of the special circumstances, which rose as a result of the Covid-19 pandemic, India and South Africa had put forward an equitable demand in front of WTO. But, instead of standing strong on the demands, Indian government has capitulated in front of extremely unjust demands of EU,” said Prathapan.

The Thrissur MP observed that the compulsory licensing clause included in the compromise text is even more stringent that the existing laws. “This is a grave mistake which occurred when the four ministers met. I’m not sure if the union government is aware of the consequences of agreeing to such demands. India should strike to get the IP waiver and if the government is careless in these inter-country meetings, it will affect the health of millions in this country,” remarked Prathapan. He added the government should be backing the generic pharmaceuticals in the country and one doesn’t know if the minister has understood the seriousness of the issue.

Realising the importance of the issue, Nobel Prize winner Joseph Stiglitz, Jawaharlal Nehry University Economics professor Jayati Ghosh and Oxfam director Peter Kamalingin wrote to the South African President requesting him to reject the compromise proposal. They highlighted that the compromise text protected only the interests of multinational pharmaceutical companies in preserving the deadly status quo.