08 May 2021: UPSC Exam Comprehensive News Analysis

E. Editorials

Category: ECONOMY

1. The fig leaf of patent protection has to drop

Background

• India and South Africa had asked the WTO to suspend Intellectual Property Rights related to COVID-19 for a limited period of time to help resolve the urgent issues blocking access to vaccines.
• The proposal had garnered significant support from the developing world.
• US, UK and the European Union (EU), among other richer countries, have been vocal opponents of the IP waiver proposal.
• The pharmaceutical industry fiercely opposed it and vigorously lobbied many governments. Right-wing political groups in the high-income countries sided with the industry.
• Since the WTO operates on consensus rather than by voting, the proposal did not advance despite drawing support from over 60 countries.

Specious reasons

• The pharmaceutical companies of the developed world feel the low and middle-income countries would not be in a position to assure quality vaccines as they do not have sophisticated laboratories and are limited in number. They feel this may compromise the safety of the vaccines.
  • These arguments are not valid and spell hypocrisy.
    • The pharmaceutical manufacturers have no reservations about contracting industries in those countries to manufacture their patent-protected vaccines for the global market.
    • The low labour costs in developing countries are attractive for the pharmaceutical companies which allows them to outsource their products for production. This shows they don’t mind as long as their patents and profits are protected.
  • The counter to patent waiver is an offer to license manufacturers in developing countries while retaining patent rights.
    • This restricts the opportunity for production to a chosen few.
    • The terms of those agreements are opaque and offer no assurance of equity in access to the products at affordable prices, either to the country of manufacture or to other developing countries.
  • It was also stated that developing countries could be supplied vaccines through the COVAX facility, set up by several international agencies and donors.
    • While well-intended, it has fallen far short of promised delivery.
    • Some U.S. states have received more vaccines than entire Africa has from COVAX.
    • The trickle-down has not worked well in the global vaccine supply.
  • An argument put forth by multinational pharmaceutical firms is that a breach in the patent will allow China to steal their technologies, now and in the future.
    • The original genomic sequence was openly shared by China, which gave these firms a head start in developing vaccines.

Concerns

• Countries like Canada and South Korea whose industries have the capability to manufacture, are ready to avail of patent waivers are not being allowed to enter a restricted circle.
• Patent waivers are also dismissed as useless on the grounds that the time taken for their utilisation by new firms will be too long to help combat the present pandemic.

Context

• The Biden administration has now backed the initiative by India and South Africa at the WTO to temporarily waive patent rules on COVID-19 vaccines.

Impact

• The Biden administration took such a major decision despite stiff opposition from major pharma companies and US Chambers of Commerce, which argued that this will impact their intellectual property.
• The Biden administration’s decision will make it easier for the WTO’s General Council to approve the proposal.
• The waiver would allow the production of vaccines to be ramped up and provide more affordable doses for less wealthy countries.

How have countries reacted?

• France and Russia have declared support.
• Germany has voiced its opposition.

Significance

• Patent waivers will benefit by increasing access not just to vaccines but also to essential drugs and diagnostics.

Way forward

The World Trade Organization resolves debates by consensus and not by voting. The process may drag on, despite U.S. intervention.

• Developing countries must start issuing compulsory licences. The Doha Declaration on TRIPS permits their use in a public health emergency.
• National governments must be trusted to promote credible companies and not permit businessmen who want to make money very quickly, without caring about the quality.
• High-income countries and multilateral agencies should provide financial and technical support to enable the expansion of global production capacity. That will reflect both altruism and enlightened self-interest.

I. UPSC Mains Practice Questions

1. The U.S.­-supported patent waiver in the fight against COVID has the potential to bring in much­ needed global health equity. Evaluate. (250 words; 15 marks) [GS-2, International Relations]
2. The second wave of the pandemic has amplified the issue of rent which does not draw as much attention as food and income support do. Elucidate. (250 words; 15 marks) [GS-3, Economy]