by Francesca Romana Giannini
07/2020
In collaboration with the Students of ALTIS, Alta Scuola Impresa e Società dell’Università Cattolica del Sacro Cuore (ITA) o ALTIS, Graduate School Business & Society - Università Cattolica del Sacro Cuore
The very unpredictable, extraordinary event that is COVID-19, and global health crisis that ensued, has inexorably highlighted the fragility and paradoxes of our socio-economic model. In light of the current situation, the historically controversial relationship between the legal system of intellectual property, as a stimulator of research, development, investment, and progress, and the public interest connected to the right to health is back in the spotlight. This is very much the case in developing countries but could still be an issue in developed countries.
The goals of this short article include:
- Describing the current situation on access to medicines worldwide and the relationship of this issue with the need for protection of intellectual property rights;
- Looking at the efforts of the World Trade Organization in balancing the need for the development of innovation with the defense of the right to public health in developing countries through the lenses of the TRIPs Agreement and the Doha conference;
- Discussing the possible scenarios that would help guarantee universal access to the future vaccine COVID-19 vaccine.
The right to health is an integral part of internationally recognized fundamental human rights. The first reference to aright to health is found in the Constitution of the World Health Organization(WHO), written in 1946, whose Preamble states that: "The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition"[1] . Also, the Universal Declaration of Human Rights of 1948 [2] and the International Covenant on Economic, Social and Cultural Rights of 1966 [3] also both affirms the right to health as an inalienable right of the individual, respectively, in articles 25 and 12.
Since the access to medication is crucial to the health of individuals and populations, ease of access to medicine is deeply embedded in the issue of the right to health.
In 2015, the UN Member States set, as part of the Sustainable Development Goals (SDGs), one goal dedicated entirely to health: "Ensure healthy lives and promote wellbeing for all at all ages" [4]. This goal is known as “SDG 3.” SDG 3 sets several concrete objectives that governments must aim to achieve by 2030, and some of these are directly linked to the problem of access to medicines. In fact, objective 3.8 is focused on achieving "universal health coverage" and "access to safe, effective, quality and affordable essential medicines and vaccines for all". SDG 3b establishes, in more detail, objectives in support of the research and development of vaccines and medicines for communicable and non-communicable diseases that mainly affect developing countries.
In November 2015, the then UN General Secretary Ban Ki-moon, pursuing the mandate set by the SDG's, established the High-Level Panel (HLP) on Access to Medicines to examine issues related to innovation and access to technologies in the health field. The HLP published its results in September 2016. The report highlights that access to medicine has remained an important problem throughout the new millennium and identifies numerous factors among the causes of the phenomenon. These include low income levels, the weakness of effective health systems and, above all, unsustainable drug prices.
The problem related to drug prices has been confirmed in research conducted in 2018 by Oxfam. According to the results, in 2017 over 3 million boys and girls under 15 died from lack of access to basic medicines and vaccines. Also, 3 billion people do not have access to essential medicines [5]. In South Africa, for instance, three thousand women lose their lives each year from diseases, such as breast cancer, simply because the cost of treatment is too high for the public economic resources: about 38.000USD for a12-month course of Herceptin, equivalent to about 5 times the average yearly income of the country. The topic also concerns middle-high income countries. For instance, just think of the costs of treating Hepatitis C in Italy. To treat over 200.000 Italian patients, between 2015 and 2020, the government spent about one and a half billion euros, about 6.000€ per patient [6]. It may seem a very high price, but it is a fact that other countries have spent much more in recent years: treating hepatitis with the same pills in the US costs over 80.000USD. Even in Italy, until 2014, the price of the therapy exceeded 40.000€ [7].
When a drug reaches such high prices, there is almost always a patent involved. In fact, the active ingredients can be patented by their inventor. Most essential medicines are subject to patents for a period of twenty years, which effectively guarantees a temporary monopoly on the product; it follows the prohibition of the production, use and trade of equivalent products (except in the case of the purchase or release of an authorization from the owner of the patent), and the possibility for the seller to impose a very high price on the market.
However, if the price is set too high, should the government give up the citizens’ right to treatment?
It is easy to understand how the most impacted countries are the developing ones, where the vast majority of people live below the poverty line and where there is a lack of infrastructure and know-how. The lack of the ability to produce medicines, and the possibility of having a sufficiently developed physical and medical infrastructure, obviously impacts the level of access to medicines. Another aspect to consider is the fact that government of a developing country often lacks bargaining power when it comes to negotiations with major pharmaceutical companies. The latter has enormous financial capabilities, with revenues exceeding the Gross Domestic Product (GDP) of many developing countries. This financial strength often leads to pharmaceutical companies being in very favorable trading positions, leaving the developing countries in unfortunate situations.
In the Global South we are witnessing serious health emergencies, to which urgent and effective responses must begiven. Therefore, it becomes necessary, despite the recognition of the importance of an intellectual property protection system as an incentive for innovation, to limit monopolies in the health sector. It is also very muchimportant to support flexible solutions so that patents and prices do not hinder a more equitable access to treatments.
In response to the progressive integration of the markets and the development of multinational companies in the second half of the twentieth century, a historic agreement named “TRIPs” (Trade Related aspects of Intellectual Property Rights) was signed in 1994 within the World Trade Organization [8]. The agreement was intended to fill the gaps in the system of intellectual property rights worldwide which created a framework of common international standards. The TRIPs agreement constitutes, in essence, the greatest attempt at harmonization in the world of Intellectual Property. The introduction of the provisions of the TRIPs agreement, however, has placed the world in a political dilemma. On one hand, thanks to the economic benefits deriving from the increase in trade, the governments of the more developed countries look very favorably at the agreement and see few issues; on the other hand, despite the introduction of some forms of flexibility in emergency cases, this meant the obligation to grant and protect patents on medicines and other health technologies all over the world, with the unfortunate risk of compromising access to health for poorer populations.
This dilemma turned into a vivid debate in 1997 when Nelson Mandela, the then president of South Africa, introduced are form of the health system to address the AIDS emergency [9] . At the time, 20% of the adult South African population was HIV positive, and anti-retroviral therapy cost about 6.400USD a year. This is an issue in a country whose average annual per capita income did not exceed 3.600USD. With the reform, South Africa authorized the possibility of carrying out "parallel imports" of drugs from countries where they were marketed at more favorable prices. It did not take long for the pharmaceutical companies to figure out what has happening:. Thirty-nine of these pharmaceutical companies jointly sued the South African government at the WTO. This happened because the Medical Act (which is the name of the reform promoted by Mandela) violated international agreements on IP.
In the end, thanks to the pressure of public opinion, the case was abandoned and there was no need to call a jury to settle the dispute. However, the following questions remained unresolved: could the right to health justify the violation of international economic agreements? Were the forms of flexibility laid down by TRIPs sufficient? Would developing countries have actually been allowed to use the flexibilities described in the TRIPS agreement, or would each attempt have been subject to a lengthy and costly legal recourse?
In November 2001 the members of the WTO met in Doha, Qatar, with the intention of answering these questions. The result of this meeting was the "Doha Declaration on the TRIPS Agreement and Public Health" through which the WTO strongly reaffirmed the right of governments to use the exceptions and forms of flexibility provided by the TRIPS agreement to protect public health. This document made it clear that each member of the WTO has the freedom to determine what constitutes a national emergency, and in the eventuality, to assess the need for the use of compulsory licenses (Article 31) and the instrument of parallel imports [10].
Compulsory licenses occur when the use of a patent is authorized without the owner's consent, with the aim of safeguarding the general interest and, in the case of pharmaceutical products, protecting public health. However, their use is subject to the following conditions: before it can become available to them, unless there is an emergency situation, the State must attempt to negotiate with the holder of the patent to seek the granting of a voluntary license. If the negotiation does not go well, and the voluntary license is denied, the use of a compulsory license may be used in order to protect public health. Furthermore, paragraph fof Article 31 requires the licensee to produce and distribute the goods exclusively within the country that activates the license. This makes the tool of little use to less developed states where the production capacity of health technologies is absent or insufficient.
For this reason, they generally prefer to use the parallel import system. The parallel import system is the term for importing goods from another country, which is the country where the patent holding company is based, that are produced and marketed by the patent holder. This practice is justified by the principle of exhaustion, according to which the exclusive right held by the owner of the patent is exhausted with the first sale of the asset which, therefore, once purchased by a third party, is freely resalable by the third party. National legal systems differ on the lawfulness of this practice. However, the TRIPS Agreement clearly states that governments cannot bring any dispute to the WTO regarding this matter. In other words, even if one country believes that another has violated the TRIPS agreement regarding parallel imports, this cannot be the subject of a dispute in the WTO, unless there is a violation of the principles of non-discrimination.
Despite the declaration resulting from the Doha Conference, and the attempt to reaffirm the superiority of the right to health over the economic interests behind intellectual property rights, the use of the flexibility instruments has often been hampered by threats of retaliation from governments and companies. More precisely, developing countries, wishing to benefit from the flexibility of the agreement, have been deterred from doing so by developed countries through threats of trade block. A notable example is the case of 2006 Thailand, whose government decided to resort to a compulsory license that would allow it to produce generic versions of the anti-retroviral drug Efavirenz[11] . This decision was received with hostility by the pharmaceutical manufacturer Merck, who questioned the legality of the compulsory license and prompted Thailand to revoke its decision. Subsequently, the Thai government decided to issue two more compulsory licenses [12] for other HIV drugs which led to new retaliatory measures. These include Abbott (the manufacturing company) withdrawing all the pending drugs from the Thai market and refusing to register any new pharmaceutical products in the country, thus denying patients access to the Lopinavir/Ritonavir drugs for which there was no generic equivalent. Fortunately, the company later overturned its decision. Also, the US government and the European Commission, despite having signed the Doha Declaration, have tried to exert political pressure on Thailand through various means, including the threat of trade sanctions [13].
Another example is Colombia[14] . In early 2016, the Columbia Ministry of Health said that access to Imantib, a medicine on the WHO List of Essential Medicines, was in the public interest for the treatment of leukemia. This resorted to Columbia issuing a compulsory license. Letters sent to the UN by the Permanent Mission of Colombia in the United States and some civil society groups recount the attempts of various national and foreign parties to dissuade the Colombian government from pursuing this decision.
These instances of pressure from some governments on Colombia and Thailand are striking examples of the discrepancy between political rhetoric at the international level and practical application at the bilateral level. This appears even more evident in the TRIPs-plus system [15]: bilateral clauses signed between developing countries and the United States, or the European Union, with the aim for the latter to further strengthen patent protections compared to the requirements of the TRIPS agreement.
Common examples of TRIPS plus provisions include extending the term of a patent beyond the minimum of twenty years or introducing restrictions of the use of compulsory licenses. They spread simply for economic reasons, in contrast to an authentic idea of the right to health and in the total lack of international cooperation for the protection of this right.
How can we ensure access to COVID-19vaccines and therapies, and therefore guarantee the human rights related to health, for all? In recent months, countless declarations and promises have been made: European governments, Australia, Canada, Japan, Saudi Arabia and others have promised to invest billions of dollars in the development of vaccines and drugs against the virus[16]. Even some world leaders have declared that these products will be treated as "global public goods"[17]. However, it is still not clear how this will be achieved. Although everyone states that they are planning to share their research results, the headlines make it seem like everyone is in a competition, whether that be in attempting to grab therapies (in the case of governments) or in the case of funding (pharmaceutical companies). At the forefront of this race is the US. In wake of the slogan "America First", "Operation Warp Speed"[18] , and the exit from the WHO[19], the United States does nothing but confirm its willingness to run alone in the development of a vaccine. In addition, in July of 2020, the US Department of Health announced that it had purchased five hundred thousand doses of the anti-viral drug Remdesivir, patented and produced by the pharmaceutical company Gilead [20] , which is the only drug authorized in the US and in Europe for the treatment of Covid-19 so far. The maxi-purchase represents the entire production of the drug scheduled for the month of July as well as 90% of the production coming in August and September. Gilead then entered into licensing agreements to make generic versions of Remdesivir accessible in 127 low-income countries[21] (https://www.gilead.com/purpose/advancing-global-health/covid-19/voluntary-licensing-agreements-for-remdesivir ) - a positive move, if it were not for the exclusion of 70 countries. These countries included most of Europe and the South America (currently the new epicenter of the pandemic). What pricescan patients expect in these countries, including severely affected ones likeItaly, Ecuador and Brazil?
China is also engaged in an individual effort, with Xi Jinping determined to turn China from the cradle of the virus, to the killer of the virus [22].
In between is the European Union and the WHO. On May 2020, following Costa Rica's Call To Action[23], the World Health Organization took an encouraging step by launching the “COVID-19 Technology Access Pool” (C-TAP) [24]. The idea is to develop a sort of sharing platform designed to guarantee access to diagnostic tests, drugs, vaccines and medical devices to participating countries at a fair price, thanks to the payment of "royalties" to developers.
Contrary to compulsory licenses, which only concern the diffusion of vaccines and are regulated unilaterally at a national level, the pool can be used by governments and research centers to collaborate, test, and develop vaccines together in a context of "Open Innovation." This context has the aim of achieving results and spreading access to these results at reduced costs and times. In fact, in order to ensure a widespread vaccine delivery, individually developed vaccines require different marketing and manufacturing approvals in each country. These transaction costs are significantly reduced in a patent pool, which makes all information available for all countries equally. However, these advantages are to be offset against the interests of patent holders, who are likely reluctant to share their progress with competitors. In fact, some pharmaceutical companies have already condemned the concept of “pool”, arguing that it is a disincentive to innovation[25]. Also, it is no coincidence that the powers of the pharmaceutical sector are missing from the list of supporters of the pool (USA, UK, Switzerland, France, Germany , as well as China, Israel, Japan and India where the world's big pharmas are based). The current list therefore includes many developing countries, where the technological and production capacity to cope with the problem is lacking.
Change is needed in the current world we are in. There needs to be a paradigm shift, or at least a temporary one. Under normal circumstances, intellectual property rights are meant to be an incentive for long-term innovation, but these aren’t normal circumstances. We are currently in the midst of a pandemic where there is a great risk that these intellectual property rights and laws can have the opposite effect, leading to nationalism, the race for profit, and individualism. Covid-19 is a global challenge and, as such, requires coordinated global solutions and international cooperation. Unfortunately, it seems as if that hope for a global solution is a far-fetched one, and the hope for international cooperation is very much lacking.
References:
[1] World Health Organization. (1946). Constitution of World Health Organization. https://www.who.int/about/who-we-are/constitution
[2] https://www.un.org/en/universal-declaration-human-rights/
[3] https://www.ohchr.org/en/professionalinterest/pages/cescr.aspx
[4] https://www.who.int/sdg/targets/en/
[5] OXFAM. (2017). Accesso ai farmaci una sfida globale contro ladisuguaglianza https://www.oxfamitalia.org/wp-content/uploads/2017/09/Report_ACCESSO-AI-FARMACI-UNA-SFIDA-GLOBALE-CONTRO-LA-DISUGUAGLIANZA_22_09_2017.pdf
[6] Americo Cicchetti at the press conference for the presentation of the document “Therapeutic equivalence of anti-HCV drugs: pharmacological and pharmaco economic considerations”, 19/02/2020, Senate of the Italian Republic, Rome. https://www.youtube.com/watch?v=_V004T2IVVs
[7]Minerva D. (2015). Epatite C: il farmaco c’è ma costatroppo. L’Espresso https://espresso.repubblica.it/visioni/scienze/2015/02/27/news/quel-farmaco-costa-troppo-1.201536
[8] https://www.wto.org/english/tratop_e/trips_e/trips_e.htm
[9] Huddart S., Nash M., Abdelrasoul A. etal. (2017). The Doha declarationin action: An examination of patent law flexibilities in the South Africanacquired immunodeficiency syndrome epidemic. Journal of Health SpecialitiesVol.5 Pag. 30-35 http://www.thejhs.org/text.asp?2017/5/1/30/198802
[10] Jayashree Watal. (2016). Public Health,Intellectual Property Rights, and Developing Countries’ Access to Medicines inPaolo Farah and Elena Cima (eds), China’s Influence on Non-Trade Concerns in InternationalEconomic Law (Routledge 2016);
[11] http://www.cptech.org/ip/health/c/thailand/thaicl4efavirenz.html
[12] http://www.cptech.org/ip/health/c/thailand/thai-cl-kaletra_en.pdf
[13] Wibulpolprasert, S., Chokevivat, V., Oh, C.,& Yamabhai, I. (2011). Government use licenses in Thailand: The power ofevidence, civil movement and political leadership. Globalization andhealth, 7, 32. https://doi.org/10.1186/1744-8603-7-32
[14] High Level Panel on Access to Medicines. (2016). Report of the UnitedNations Secretary-General’s High-Level Panel on access to medicines http://www.unsgaccessmeds.org/final-report
[15] https://msfaccess.org/spotlight-trips-trips-plus-and-doha
[16] https://global-response.europa.eu/index_en
[17] https://ec.europa.eu/commission/presscorner/detail/en/ip_20_952
[18] Cohen J. (2.07.2020). Operations Warp Speed’s Opaquechoices of COVID-19 vaccines draw Senate scrutiny in Science Mag https://www.sciencemag.org/news/2020/07/operation-warp-speed-s-opaque-choices-covid-19-vaccines-draw-senate-scrutiny
[19] https://www.bbc.com/news/world-us-canada-53327906
[20] https://www.hhs.gov/about/news/2020/06/29/trump-administration-secures-new-supplies-remdesivir-united-states.html
[21] https://www.gilead.com/purpose/advancing-global-health/covid-19/voluntary-licensing-agreements-for-remdesivir
[22] Bonadio, Enrico & Baldini, Andrea. (2020).COVID-19, Patents and the Never-Ending Tension between Proprietary Rights andthe Protection of Public Health. European Journal of Risk Regulation. 1-6. doi:10.1017/err.2020.24.
[23] https://www.who.int/emergencies/diseases/novel-coronavirus-2019/global-research-on-novel-coronavirus-2019-ncov/covid-19-technology-access-pool/solidarity-call-to-action/
[24] https://www.who.int/emergencies/diseases/novel-coronavirus-2019/global-research-on-novel-coronavirus-2019-ncov/covid-19-technology-access-pool
[25] https://www.telegraph.co.uk/global-health/science-and-disease/patent-pool-potential-covid-19-products-nonsense-pharma-leaders/
The views and opinions expressed in this article are those of the author. They do not reflect the opinions or views of gLAWcal or its members. Responsibility for any errors in the article remains of the author.
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