IP waivers mean waving goodbye to medical innovations - Business Day

24 May 2022 - Despite the unprecedented speed at which Covid19 vaccines were successfully developed, a number of countries, SA among them, remain committed to pushing for the dilution or removal of intellectual property IP rights in the pandemic prevention, preparedness and response instrument at the World Health Organization (WHO).

Chris Hattingh

Despite the unprecedented speed at which Covid19 vaccines were successfully developed, a number of countries, SA among them, remain committed to pushing for the dilution or removal of intellectual property IP rights in the pandemic prevention, preparedness and response instrument at the World Health Organization (WHO).

Such a move would in no way guarantee increased access to current and new vaccines in future, and most importantly, it would divert necessary attention and resources away from the structural reforms SA especially should be pursuing to ensure fostering new investments and medical innovations.

Vaccines and medical therapeutics development require serious investment in terms of expertise, skills, time and capital. Much as undermining property rights through introducing expropriation without compensation into the constitution would discourage capital formation and risktaking in terms of starting new businesses, so too would diluting IP rights disincentivise medical innovation.

The negative effects would be felt across the world, affecting emerging markets worst. Undermining IP as a whole is not the correct route to unlock increased vaccine access, and will place SA in a weakened position in future. The country was ranked 44th on the 2021 trade barrier index of the Property Rights Alliance.

By improving its score on the index and removing barriers to trade along with meeting basic necessities such as upgrading rail and road infrastructure and easing border operations , SA would be doing much more to encourage an environment conducive to trade, skills development and medical innovations.

More urgently, SA must accelerate competition in the electricity-generation and distribution spaces; without a reliable, cheap energy supply, all the IP waivers in the world will do nothing to bring about increased vaccine manufacturing capacity. Aspen Pharmacare completed a deal in March to package, sell and distribute Johnson & Johnson's Covid19 vaccine. Yet the predicted high demand in the wake of global "vaccine apartheid" has not materialised. CEO Stephen Saad warned in early May that the company would be forced to repurpose about half of its vaccine-production capacity if orders did not pick up.

This particular example indicates that IP rights are not the problem when it comes to Covid19 vaccine manufacturing and distribution Governments need to do the work of examining what they can do to resolve distribution bottlenecks before seeking to undermine global IP.

Strong property rights and respect for contract law, especially by governments, are crucial ingredients of the economic growth mix. Without them, countries have little prospect of attaining increased growth, job creation and technological advancement. Without strong IP rights, it becomes ever less likely that voluntary technology transfers will take place between companies in different countries. Such voluntarism is based on cooperation, appropriate training and resource-sharing.

Without investing in and building the infrastructure needed to manufacture vaccines and other medical therapeutics, waivers of IP ultimately mean little to nothing positive in practice. More trade barriers are not the solution to countries' vaccine supply worries. Rather, governments must realise that it is within their power, through introducing reforms, to ensure the easier sharing of information and innovation. 

In April 2021, India imposed export restrictions, which meant global pooled vaccine procurement mechanism Covax was about 190million doses behind schedule by June 2021. This delayed the response to the pandemic in low and middle-income countries. That hurdle, and many similar ones, could have been avoided.

A possible path towards a more secure and stable global IP framework would be for governments to commit to keeping global supply chains for vaccines and disease treatments flowing freely during pandemics. Were the World Trade Organization to take the lead on such a new, legally enforceable mechanism, this would help re-energise the organisation.

As more countries head out of Covid, it is imperative that pro-trade and pro-innovation policies be adopted. Those countries that protect IP and the rule of law will foster and attract the new companies, skilled people and risk-taking that will ultimately result in medical benefits. On the other hand, countries that pursue more protectionist policies and push for policies that undermine ease of trade and investment globally are likely to suffer negative consequences down the line.

Hattingh is deputy head of campaigns at the Institute of Race Relations.

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