How The EU Prepares For the Next Global Pandemic Domestically: An Examination of the Union Compulsory Licence [Guest Essay]
Newsletter Edition #214 [The Files In-Depth]
Hi,
The European Union has cast itself as a leader in global health at a time of swiftly changing geopolitics. From incubating the ACT Accelerator at the beginning of the COVID-19 pandemic, to germinating the idea for a new Pandemic Treaty, the EU has been a decisive player in also shaping WHO finances, and its key strategic health investments across the African industry and institutions.
The EU’s aspirations are also striking in the context of a retreating United States where globalization is under attack.
And yet, the EU’s resistance to alter the status quo in the response to health emergencies, whether at the TRIPS Waiver discussions at the WTO, or its positions on many health and trade related matters at WHO, suggests a lack of coherence in its overall goal towards leadership in global health.
In today’s edition, we look at policy discussions within the EU on some of these difficult matters. Our guest authors from Health Action International [HAI], have tracked the evolution of the recent processes on IP related matters, particularly the proposal for the use of a region-wide compulsory license, through the institutions in Brussels.
We hope you find this guest essay useful, also in the light of the ongoing global health negotiations in Geneva. We are grateful to HAI activists, Jaume Vidal and Alice Beck for charting this out for our readers.
Apart from providing our readers with original reporting, we are keen on bringing diverse perspectives from global health experts. Get in touch with us if you wish to access our audience of diplomats, decision-makers, scholars, the private sector and other experts who shape global health policy.
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Until later.
Best,
Priti
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I. GUEST ESSAY
How The EU Prepares For the Next Global Pandemic Domestically: An Examination of the Union Compulsory Licence
By Jaume Vidal and Alice Beck
Vidal is Senior Policy Advisor at Health Action International [HAI] you can reach him at Jaume@haiweb.org; Beck is a Policy Officer at HAI you can reach her at Alice@haiweb.org
The discussions in Brussels on the proposed European Union-wide Compulsory Licence (Union Licence) are interesting to follow as it is the first time the lessons from the COVID-19 pandemic are being brought into legislation.
This is a part of the Intellectual Property package, which also addresses essential patents and the reforms on the Supplementary Protection Certificates regime.
The deliberations are even more compelling as they are taking place at the same time as new reforms for Pandemic Prevention Preparedness Response (PPPR) are being discussed and negotiated.
For both processes, the EU has a different negotiation position and strategy. Further, pre-COVID elements which greatly underlined the EU response and stance remain very much present in both, including the role of the flexibilities of the Trade-Related Aspects of Intellectual Property Agreement (TRIPS) agreement, the balance between internal needs and global commitments and, more importantly, the role of governments in responding to pandemics and health emergencies.
At different phases of the COVID-19 pandemic, some EU Members were faced with difficulties in accessing crucial life-saving health goods such as personal protection equipment.
These obstacles cast doubt over one of the most cherished features of the EU: the single market which became strained under the scramble for health goods by Member States. Other tenets of the single market were re-examined, with several EU members reforming (or attempting to reform) their domestic IP protection framework to expedite access to medicines and vaccines.
These are momentous times for pharmaceutical policy in the EU, from the revision of the EU pharmaceutical legislation to the Intellectual Property Package (originating from DG GROW).
There has been a long-awaited overhaul of the incentives system and wide-ranging proposals on shortages and regulatory oversight. This is being discussed in parallel, albeit in different committees.
Twice delayed, the proposal for revision of the pharmaceutical strategy was to be one of the milestone legislative acts of the outgoing Commission, especially of DG Sante.
The Proposal
The idea of an Union Compulsory Licence was intended as a response to challenges to the single market posed by pandemics or health emergencies, designed to co-exist with national instances. Thus, this would form a domestic tool that would offer expedited access to EU Member State markets on the same grounds as those established in the TRIPS agreement with some additional requirements (most notably the identification of rights holders) and inaccuracies (need for an agreement from rights holders to proceed with the compulsory licence).
The external component of the proposal, namely the possibility of exports under the Union Compulsory Licence, is covered by Regulation 816/2006. This regulation essentially incorporates Art.31 bis of the TRIPS agreement to the EU framework. It is this regulation which is to be updated and become part of the future Union Compulsory Licence.
The Process
The first hurdle to clear for the proposed Union Compulsory Licence was the International Trade Committee (INTA) with MEP H. Scholz as rapporteur. His report reaffirmed the grounds and scope for issuing a compulsory licence, proposing amendments to the original regulation but staying within TRIPS-aligned text. The report examines the rest of the Commission’s proposal - arguably beyond its mandate limited to the implications for international trade of the proposal. The resulting report was approved with the combined votes of progressive forces in a surprise result considering the alignment of forces opposing the amendments.
The proposal was subsequently examined by the Legal Affairs (JURI) Committee with its Chair MEP Vázquez as rapporteur. He presented a report which was much closer to the original proposal from the Commission. The report dismissed the opinion approved in INTA, reaffirmed the ‘last resort’ nature of the compulsory licence, and, even more importantly, doubled down on the domestic application of the tool by explicitly banning the export of products manufactured under the compulsory licence besides those covered by Regulation 816/2006. On this occasion, the report was approved by a combination of the European People's Party (EPP) and Renew (a liberal, pro-European political group of the European Parliament), although with smaller margins than expected.
The proposal’s final parliamentary hurdle was a plenary session, marked by the submissions of a number of amendments, a telltale sign of a contentious issue. The session involved strong civil society mobilisation (including groups from Ukraine, Moldova and other non-EU countries) spearheaded by MSF Access Campaign and Health Action International and bolstered by accrued public interest.
The Result
The vote in plenary mostly endorsed the proposed JURI amendments with notable changes to the Commission’s proposal closely aligned with pharmaceutical companies’ concerns.
Amendments that had been submitted by INTA (denoting an institutional stance and cross-party support) were dismissed, as were proposals from the Greens, United Left and SD involving the removal of the ban on exports or the elimination of the ‘last resort” nature of the future Union Compulsory Licence.
More importantly, some amendments that civil society, most notably European Consumer Organisation (BEUC) and Medicines Law and Policy (MLP) had spotted and identified as problematic made the final cut. Namely, additional requirements such as identifying all patent and rights holders before issuing the Union Compulsory Licence, extending the period under which the rights holder may submit allegations or allowing for a wider definition of trade secrets. These measures, in essence, contravene the spirit of the Commission’s proposal and may potentially hinder its ultimate implementation.
The Outcome
Next steps include examination of the dossier and proposing amendments by the Council of the European Union, made up of representatives of the 27 Member states and presided over by Belgium until the end of June. Even though it is rare for the Council to contradict or oppose what has been previously discussed and approved in the European Parliament, it is possible that the legal services of the General Secretariat of the Council is asked to intervene to ensure the consistency of the draft report could be invoked.
In any case, the final process called ‘trilogues’ which brings together representatives from the European Commission, European Parliament, and the Council of the European Union, will not be completed until right before the end of the year. In the meantime , a new Parliament will be elected, and the Council will be under a different presidency (Hungary).
These changes could affect the tone and results of the discussions. While no big changes are expected in trilogues, alterations in the political spectrum in Parliament and the very specific policy positions of the current Hungarian government could affect the final form of the Union Compulsory Licence.
Civil society will remain to make sure lawmakers and public officials are aware of the implications of all the articles under consideration.
Slow But Sure Progress
The Union Compulsory Licence was a bold proposal from the European Commission that, similar to the proposed changes in the EU pharmaceutical legislation, was gradually watered down almost beyond recognition.
Strong opposition and, in some cases, fear-mongering from the pharmaceutical industry lobby, was effective in shaping a discussion that began with a very clear imperative of enhancing access to health technologies during pandemics and evolved into the sadly traditional trench war of intellectual property politics.
However, despite the results, the discussion has evolved, with many government officials and public office holders more aware of the artificial constraints affecting supply, trade and ultimately access to medicines and other health goods.
It is undoubtedly symbolic that the discussions on the Union Compulsory Licence at the EU reached tipping point at the same time other global initiatives reached a similar impasse. The 13th Ministerial Conference of the World Trade Organisation acknowledged the failure to reach the necessary consensus regarding the TRIPS decision, and elsewhere, the ongoing discussions of the Intergovernmental Negotiating Body (INB) at the World Health Organisation (WHO) towards a new pandemic instrument. This purportedly final INB session is marked by a wide divide between the EU, US, UK, Japan and Switzerland, and a majority of African, Latin American, and Asian governments and by the increasingly looming deadline to reach an agreement on an international instrument to prevent and respond to the next pandemic.
(In a departure from its previously held position, the EU, in the ongoing INB discussions, seems reluctant to acknowledge the role and opportunities of TRIPS flexibilities in responding to pandemics and health emergencies; a concerning turn.)
While it would seem like history repeats itself when it comes to IP and access to health technologies and that we are trapped in a cycle of last-minute deals, ad-hoc arrangements, and ad-(a)-eternum discussions, it is important to value the steps that governments and institutions have been taking since COVID-19 entered a new, milder phase for most of us.
TRIPS flexibilities (including compulsory licenses) are unanimously accepted as policy tools to be used at will by governments’ and public return on public investment with greater transparency and accountability on misuse and abuse of intellectual property protection tools are now high on the public agenda and in discussions.
The two intertwined patterns will inform developments in the EU and globally in the immediate and mid-term future. We will work hard to make it happen.
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