“Once the scope is widened for waiver of TRIPS rights for COVID technologies, we will be on ‘a perilous path — one on which the investment incentives required to pursue innovative inquiries are squandered, and other countries can insist on a ‘right’ to a vast range of U.S. patented technologies.’” – from Frank Cullen testimony, C4IP
The International Trade Commission (ITC) conducted an all-day hearing today featuring a range of stakeholders with interests in the World Trade Organization’s (WTO) pending decision on extending what has come to be known as the TRIPS [Agreement on Trade-Related Aspects of Intellectual Property Rights] waiver from strictly COVID-19 vaccine technologies to COVID-19 related therapeutics and diagnostics.
The initial agreement on waiver came in June of last year and left most of those at the table unhappy. The decision presently applies only to “ingredients and processes necessary for the manufacture of the COVID-19 vaccine” and contemplates extending that to therapeutics and diagnostics no later than six months after the date of the decision, which would have been December 17, 2022. However, that was delayed in December amid concerns there wasn’t enough information to make an informed decision on extension. Instead, the United States Trade Representative (USTR) on December 6, 2022, sent a letter to the ITC asking it “to launch an investigation into COVID-19 diagnostics and therapeutics and provide information on market dynamics to help inform the discussion around supply and demand, price points, the relationship between testing and treating, and production and access.” The USTR asked the ITC to focus on issues such as identifying the specific products an extension will affect; manufacturing and production data; the global market for COVID-19 diagnostics and therapeutics, including demand, unmet need, supply and distribution; and how TRIPS is presently impacting access, including which countries have sought to use waiver thus far and which have used access under the United Nations (UN) Medicine Patent Pool (MPP). Today’s hearing was part of the ITC’s investigation.
Industry: Extension Isn’t Going to Solve the Problems
Representatives of industry groups repeatedly told the ITC Commissioners today that an extension of the waiver would not help existing problems of access, which have much more to do with infrastructure than patents. In fact, said many of the speakers, the decision affecting vaccine technology already has clouded the environment for investment and caused actual harm. “Extending the TRIPS waiver will not add more [tests or treatments] to the global arsenal,” said Frank Cullen, testifying for the Council for Innovation Promotion (C4IP) today. “An expanded waiver would, however, strike a severe blow to innovation by calling support for fundamental IP rights into question.”
This is particularly true in its “slippery slope” effect, said many of the representatives. For instance, Cullen’s written pre-hearing submission noted that in May 2022, UN Secretary-General António Guterres “hinted that renewable energy technology ‘must be treated as essential and freely-available global public goods’” and that “removing obstacles to knowledge sharing and technological transfer — including intellectual property constraints — is crucial for a rapid and fair renewable energy transition.” Once the scope is widened for waiver of TRIPS rights for COVID technologies, we will be on “a perilous path — one on which the investment incentives required to pursue innovative inquiries are squandered, and other countries can insist on a ‘right’ to a vast range of U.S. patented technologies,” said Cullen’s submission.
Patrick Kilbride of the U.S. Chamber’s Global Innovation Policy Center (GIPC) also testified and said that “debate over TRIPS waiver and waiver itself really misunderstands misrepresents and unfairly stigmatizes the role of IP.” Kilbride explained that the role of IP in the innovation process “is not something that comes after, it comes before.” It also continues throughout the lifecycle of an innovative solution and any interruption to IP rights interrupts this complex process. The current decision on waiver has compromised U.S. leadership on innovation and “will disrupt the IP ecosystem that enabled American industry’s highly effective response to the pandemic and undermine future American innovation,” Kilbride remarked.
Kilbride also noted that the U.S. decision to back waiver came “long after its ostensible purpose was mooted by a large and growing surplus of COVID-19 vaccine supplies,” and thus cannot be justified as an extraordinary measure in the face of a global health crisis.
NGOs: Industry Warnings Amount to Scaremongering
But panelists representing advocacy and access organizations hit back sharply at the industry claims. James Love of Knowledge Ecology International emphasized in his remarks that the industry talking point about current supply outweighing demand misses the point because it’s potential future therapeutics and diagnostics that matter most. Love explained:
“The BIO COVID-19 Therapeutic Development Tracker illustrates how shortsighted it is to look only at the small number of FDA-approved products while ignoring the much larger number of products in development.
Not only are the current drugs of limited efficacy for many patients, the most effective treatments for infectious diseases have often been combination treatments. Looking at today’s COVID-19 drugs is somewhat similar to looking at the HIV drugs before triple therapy, or at HCV treatments before combinations involving sofosbuvir.
This decision is not about the drugs on the market today, but should seek to ensure there is a path to expand access for any new game changing products that will enter the market in the future.”
Love also pointed to the United States’ use of TRIPS flexibilities during the pandemic, noting in his comments that the U.S. government entered into “at least 59 contracts that contained a FAR 52.227-1 authorization to use patents without consent of patent holders.” According to Love, “the beneficiaries of these government-use authorizations were well-known companies like Corning, Eli Lilly, Merck, Moderna, Novavax, Philips, Qiagen, Sanofi and Siemens, as well as many small companies and a few universities.” He added during questioning: “All of [the industry organizations’] members were asking for compulsory licenses and now they’re here today saying it’s a horrible thing,” Love said.
Sangeeta Shashikant of Third World Network likewise pushed back on the industry groups’ claims, expressing disbelief that anyone could be concerned about the scope of the waiver, which she said is extremely limited and would be difficult to extend outside of COVID-related technologies. “We believe this is just pure scaremongering,” Shashikant said. “To say it’s a slippery slope is going really far.”
The non-governmental organization representatives also said that the threat of a compulsory license can be a key tool for negotiating voluntary licensing arrangements, which they admitted are often faster and more effective/ efficient, which may explain the low statistics on actual use of compulsory licenses.
The ITC Commissioners seemed concerned in their questioning about how to properly limit the scope of a potential expansion to diagnostics and therapeutics since it’s unknown what types of solutions may prove effective in the future. They also asked about the number of jobs associated with manufacturing COVID-19 diagnostic/ therapeutic tests and what types of companies are involved. One industry representative explained that many companies doing the most innovative work are small and medium enterprises, rather than big pharma companies.
The ITC’s Investigation is No. 332-596 COVID-19 Diagnostics and Therapeutics: Supply, Demand, and TRIPS Agreement Flexibilities. The report is expected to be submitted to the USTR by October 17, 2023. Written submissions for the record must be submitted by 5:00pm on May 5, 2023 through the Commission’s Electronic Document Information System.
To read all of today’s testimony, visit the EDIS site and enter investigation number 332-596.