WTO to Pull the Plug on Extension Decision on COVID-19 Tests & Treatments. TRIPS Chair Calls for “Conclusion” as Talks "Exhausted"

Newsletter Edition #211 [The Files In-Depth]

Jan 31, 2024

Hi,

Curtains and Light Out. No Mic Drop here.

This could well describe WTO’s efforts to address health emergencies.

A long chapter of the “Trade Beats Health, Yet Again Game” might soon be coming to an end. Countries are veering towards concluding the TRIPS waiver discussions, deciding against extending an earlier decision clarifying IP rules to COVID-19 tests and treatments, going beyond vaccines.

Our story today brings our readers an update on the discussions at the WTO TRIPS Council in Geneva this week.

As usual, we try to put these developments into a wider context and attempt to understand the significance of this development in global health.

We will update our previously released book on the TRIPS waiver talks at the conclusion of these discussions.

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Until later.

Best,

Priti

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I. STORY OF THE WEEK

WTO to Pull the Plug on Extension Decision on COVID-19 Tests & Treatments. TRIPS Chair Calls for “Conclusion” as Talks “Exhausted”

Developed countries have managed to push the TRIPS waiver talks over the precipice.

After an arduous push uphill since the time developing countries led by South Africa and India, first brought the proposal to the WTO in October 2020, the “waiver” talks will soon be concluded, failing to reach consensus among members. (The original proposal had sought a time-bound temporary waiver of certain IP rules boost production of COVID-19 medical products.)

In its wake, however, the long-running “Waiver” discussions have revitalized, and brought under the scanner the relationship between intellectual property and public health. It has also entrenched further, the turf wars in the policy spheres of health and trade.

WTO members will draw the curtains on “the TRIPS extension decision” – a Ministerial mandate to extend certain clarifications of existing intellectual property in the TRIPS agreement to boost access to COVID-19 tests and treatments. This decision currently only applies to COVID-19 vaccines as adopted in June 2022.
The decision to conclude these discussions also shows that developing countries, as many as 65 co-sponsors who supported the proposal, are also now backing away from this unmet demand, after effectively more than three years of persuasion.
At an informal meeting of the Council for Trade-Related Aspects of Intellectual Property Rights held at the WTO in Geneva this week, members considered a proposal from the Chair, Ambassador Pimchanok Pitfield from Thailand, to essentially conclude the discussions on the extension decision. This follows many months of gathering evidence and consultations among WTO members steered by the TRIPS Chair.

This story captures the state of play on how these discussions will be winded down next week, ahead of WTO 13th Ministerial Conference during 26 to 29 February 2024 in Abu Dhabi, UAE.

Image Credit: Photo by Codioful (formerly Gradienta) , Pexels

THE TRIPS COUNCIL MEETING: January 30 2024

At the meeting this week, TRIPS Chair put forth two proposals, both related to earlier ministerial decisions on addressing the production of COVID-19 medical products and the WTO response to future pandemics, according to Geneva-based sources.

Countries were unable to reach consensus on the language in these draft reports, ostensibly because these issues are related, sources familiar with the dynamics told us.

Sources said that the TRIPS chair consulted with members earlier this month to come up with the proposals that were put forth this week.

The Extension Decision: No Consensus, Conclusion By Default

That WTO members are willing to conclude these discussions ahead of the Ministerial just a few weeks away is significant – showing the utter lack of appetite to expend more energy on this discussion.

But even in the decision to conclude there is disagreement between members, on basically how the obituary to this process should be written for consideration at the General Council meeting on February 14, ahead of the Ministerial later in the month.

Countries have now sought additional time over the coming days to finalize the text of a report that will be submitted by the TRIPS Council to be considered by the General Council.

Sources said that developing countries are keen to explicitly state that the WTO failed to reach consensus on the extension decision. Supporters of the extension decision, want “the failure to reach consensus” to be formally represented in the MC13 outcome document.
“The TRIPS Council should to report back to the Ministerial that there has been on consensus on the extension decision. This must be reflected in the outcome document,” an observer tracking these discussions told us.

Some suggest that developed countries would not want to be assigned blame for blocking the decision to extend the rules to COVID-19 tests and treatments. Therefore, the efforts have been to massage the language on how this policy paralysis has been effectuated since December 2022, when the deadline to extend the decision effectively collapsed.

Members including European Union, Switzerland, Japan, and the US have not been in favour of an extension.

(Para 8 of the June 2022 Ministerial decision said thus: “No later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics.”)

Some countries want to acknowledge that the process so far also involved efforts to gather evidence and “assess the facts”. Such efforts also included, notably, domestic consultations in the US that effectively delayed decision on the extension by nearly one year.

WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics

Countries also discussed the work on the lessons learned on the COVID-19 pandemic, a mandate flowing from paragraphs 23-24 of the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics. A draft report based on these discussions is expected to be finalized in the coming days.

Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics:

“24. Relevant WTO bodies will, within their fields of competence, and on the basis of proposals by Members, continue or initiate work as soon as possible, to analyze lessons that have been learned and challenges experienced during the COVID-19 pandemic. A stocktaking exercise will be taken of the work by WTO bodies under this declaration yearly at the General Council until the end of 2024, based on the reports of those relevant bodies.

25. Areas of discussion and focus will include, but not be limited to, the topics set forth in Paragraph 23 and other topics raised by Members reflecting their varied experiences during the COVID-19 pandemic.

Sources said that members are keen on the discussions on preparedness for future pandemics to constitute an on-going stream of work at the WTO. This is in addition to the compilation at the secretariat on the exchange on domestic IP-related measures taken during COVID-19.

UK’s proposal (IP/C/W/704/Rev.1) on technology transfer is also gaining currency in the context of these discussions, sources said.

Next steps:

The TRIPS chair has suggested a drafting session to finalize these reports. A new meeting of the TRIPS Council is expected to be convened on 6 February to decide on the reports for consideration at the General Council.

In addition, the lack of consensus among members is also seen on efforts to extend the moratorium on non-violation complaints under the WTO dispute settlement system. NVCs under TRIPS is not admissible because of the moratorium. Without such a moratorium countries can come under pressure to provide higher IP protection. The moratorium was extended during the previous Ministerial, but now stands contested. The moratorium on NVCs at TRIPS has often been used a bargaining chip across other trade disciplines at the WTO, observers point out.

Article 64.2 of the TRIPS Agreement provides for a “moratorium” (i.e. the agreement not to use TRIPS non-violation cases). This was to last for the first five years of the WTO (1995–99). It has been extended since then.

TRIPS Chair proposal on the Extension Decision

The Chair’s proposal charts out all the efforts undertaken since June 2022 with respect to the extension discussions.

The text proposed by the Chair says the following:

(Excerpts)
“While delegations remain committed to the common goal of providing timely, equitable and secure access to high-quality, safe, efficacious and affordable medical technologies for all, disagreement persists on whether an extension of the Decision to cover the production and supply of COVID-19 diagnostics and therapeutics is necessary or appropriate to address any inequitable distribution of such COVID-19 related products….
…The Council acknowledges that discussions are exhausted and that there is no consensus on an extension of the Decision to COVID-19 diagnostics and therapeutics. It therefore recommends the conclusion of the discussion under paragraph 8 of the Decision.
The Council recognizes the considerable efforts Members have made during this debate to gather and assess facts and evidence on the role of IP, and on the market situation of the relevant health products. This has provided an improved factual basis and an increased level of policymaker understanding and engagement which can support the ongoing work under the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics (see document JOB/IP/74) as well the domestic work of governments when facing future health crises.”

Thiru Balasubramaniam, from Knowledge Ecology International, said: “Nineteen months after the passage of the June 2022 Ministerial Decision on the TRIPS Agreement for Covid-19 vaccines, the WTO has sounded the death knell of the extension of this decision to diagnostics and therapeutics.”

DISAPPOINTMENT FROM CO-SPONSORS OF THE TRIPS WAIVER PROPOSAL

In a communication dated 19 December 2023, South Africa on behalf of the 65 Co-Sponsors of the IP/C/W/669/Rev.1 proposal, articulated their disappointment in the TRIPS waiver talks.

Published in full:
“1.1. The most solemn obligation of every government is to protect the life and health of its people.
1.2. The Director General of WHO declared the situation a Public Health Emergency of International Concern (PHEIC) on January 30, 2020. The need for scaled-up access to diagnostics, treatments, vaccines and personal protective equipment (PPE) ("health products") was manifest.
1.3. The co-sponsors approached Members of the World Trade Organization (WTO) with a straightforward request to temporarily waive certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to support the global COVID-19 pandemic response. This was in recognition that the intellectual property system is meant to provide a balance between providing incentives for bringing about innovation and rewarding creativity and promoting the broader public interest.
In the area of public health, intellectual property objectives must also be balanced against realising the right to health, of which access to medicines and other health products is a central part. It was also in recognition that allowing legal monopolies may delay access to the requisite health products becoming available, as evidenced by disputes on infringement of intellectual property rights even at the height of the pandemic and that health products would be in global short supply drawing from the experience of previous pandemics and health emergencies. The co-sponsors believed that pooling financial and scientific resources is the only option for accelerating progress towards new vaccines, treatments and diagnostics.
1.4. Developing countries including the LDCs were gravely concerned. Much of the latest technology used to develop and manufacture necessary health products was owned and controlled by companies, governments and other institutions based in developed countries. Without access to this technology, the prospects for manufacturing and distributing health products would be restricted. Access to health products would be at the discretion of pharmaceutical companies from a handful of high-income countries.
1.5. The COVID-19 pandemic offered WTO Members an opportunity to act in solidarity by adopting a multilateral solution to help bolster the capability of developing countries to respond to a health crisis. Co-sponsors advocated for a multilateral solution so as to restore faith in multilateralism and avoid Members adopting self-help measures, thereby fragmenting the intellectual property system. An undesirable outcome that a time-bound and limited waiver could have helped prevent.
1.6. The WTO failed to deliver comprehensively on the pandemic and even when it delivered on COVID-19 vaccines, this was too little too late. Rather than heed the call of the co-sponsors, opponents advocated for voluntary arrangements and donations as the solution to equitable distribution. In reality, however, an inconsequentially small number of voluntary licenses was availed and had strict conditionalities that did not assist to respond to the global crisis. And there were no voluntary licenses or any licensing arrangements when it came to the most-used vaccines in developed countries.
1.7. In addition, waiver opponents indicated that COVAX would deliver equitable access. By the end of 2021, when vaccines were needed the most, COVAX only delivered about 500 million vaccines, i.e, approximately 25 per cent of what it was expected to deliver in 2021. Notably, COVAX then cut its vaccine delivery forecasts by 25 per cent (from 2 billion doses to 1.4 billion doses). This pattern continued through 2022, until the effort wound down, falling far short of its promises on total quantity of vaccines delivered. Furthermore, these vaccines were received long after they were useful for developing countries.
1.8. The countries of the African Union (AU) collectively have a population that is three times larger than the countries of the EU. Yet the African Union Vaccine Acquisition Trust, a vaccine procurement platform, had only been able to purchase 100 million doses from Pfizer/BioNTech and Johnson and Johnson in the initial phase of the pandemic. By contrast, the EU, in the same period, had been able to purchase nearly 1.5 billion doses from AstraZeneca, Pfizer/BioNTech, Moderna, and Johnson and Johnson, or approximately 15 times the number of doses compared to the AU. In addition, countries that have robust genomic sequencing and epidemiology were faced with travel bans and punished for their transparency.
1.9. The COVID-19 virus is still with us and this is the time the world needs therapeutics and diagnostics to ensure better management of its impact. Yet again the WTO is failing, it has delivered a limited TRIPS decision that covers vaccines, that came too late and offered too little to be useful. If WTO Members were serious about providing an effective solution in the context of global solidarity, they needed to extend the TRIPS decision to diagnostics and therapeutics within six months as promised. However, over a year after the deadline, the key countries are further stalling any possible outcome, ensuring that the world remains vulnerable not only to this pandemic but future pandemics. Resilience for future pandemics can only come through addressing concentration of production, and building adequate manufacturing capacity, especially in regions with limited production.
1.10. Failure to agree on a multilateral outcome to address intellectual property barriers, cast a dim light on the ability of the WTO to act in solidarity during an international emergency as recognized by the WHO. The fundamental global barriers that prolonged this pandemic remain in place, threatening us in the next pandemic. The co-sponsors remain committed to addressing the concerns of developing countries including LDCs in the context of health emergencies such as pandemics by advancing policy space for Members, along with full utilization of existing flexibilities in the TRIPS Agreement.”

IMPLICATIONS OF “NO-EXTENSION” AT THE WTO

Some believe that this kind of policy paralysis at the WTO erodes its credibility.

Sangeeta Shashikant, a legal advisor with Third World Network said, “The COVID-19 pandemic posed an unprecedented challenge to humanity and remains a serious public health concern in most countries. Unfortunately, the WTO failed to provide meaningful policy options for tackling intellectual property barriers hindering access to pharmaceutical products. The TRIPS Decision on June 17, 2022, was both belated and insufficient. The decision's limited focus on vaccines was unjustifiably narrow, and even after more than 1.5 years, there remains a lack of consensus regarding its extension to cover COVID-19 diagnostics and therapeutics. This prolonged indecision has significantly eroded the credibility of the WTO. Ahead of the 13th Ministerial Conference, the organization has demonstrated that it is incapable of meeting the needs of the people in developing countries.”

By preventing a temporary waiver of IP rules to boost the production of therapeutics and diagnostics, members will effectively prevent setting of a precedence. This will be significant not only for global health, but also in the context of technologies associated to address climate change.

But the most immediate impact will be at the on-going discussions at the WHO towards a new Pandemic Accord where IP related language has divided countries in the course of three years of discussions. Developing countries are keen on having language on “waiver” to be used in the context of health emergencies including pandemics.

THE CHANGE OF TUNE AT WHO

The direction of the wind in these discussions has already been set at WHO.

We reported in December 2023, on the distinct shift in the position of WHO DG Tedros Adhanom Ghebreyesus, on using existing flexibilities in the intellectual property system to respond effectively to COVID-19.

Tedros, a former “Waiver-Champion”, rung a note of caution against undermining IP, and called for being measured while dealing with such rules, when asked about the extension decision.

In his response, Tedros said: “I think the IP issues, they are part of the negotiations now in the pandemic accord. And I hope the Member States will have a common ground. If you take IP, you know, we have to be careful because they should not be undermined…should not be undermined because it helps innovation. And if we're going to use it, we should also use it responsibly and in a very measured way. So, we need to strike a balance and I hope during the current negotiations, Member States will do that, to refrain from undermining it, but at the same time also find the common ground to use it in a measured [way]. And, you know, in a responsible way, and that's what I expect.”

(See full story here: WHO DG's Marked Shift on Intellectual Property: Cautions Against Undermining IP on Access to COVID-19 Tests & Treatments at WTO. Implications for "Equity" in Current Negotiations)

At the WHO Executive Board Meeting last week, the UK lapped by the remarks by the WHO DG:

"We would like to take this opportunity to align ourselves with recent remarks made by Dr. Tedros and underscore the need to avoid undermining the international intellectual property rights framework. IP helps to fuel innovation and enable better health outcomes. The UK believes that the IP framework contributed to the rapid development of Covid-19 products and that incentivizing innovation is vital to being prepared for future crises."

The UK made these comments during a discussion on the recommendations of the independent WHO Council on the Economics of Health for All.

This WHO-commissioned report called for “A new end-to-end health innovation ecosystem is needed for the common good – one that prioritizes health needs from all regions of the world, including LMICs. This requires a major shift from a model where innovation is (falsely) seen as led by market forces to one that: harnesses and rewards collective intelligence by shaping public and private alliances to meet public health goals; ensures global knowledge sharing and reforms intellectual property rules; and applies mission-oriented industrial strategies to galvanize cross-sectoral innovation to achieve Health for All- related missions.”

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