In October 2020, two countries, India and South Africa, that had been hit particularly hard by the COVID-19 virus and its variants and by inadequate supply of personal protective equipment, diagnostic tests, and medicines, requested a waiver of intellectual property protections covering COVID-19 vaccines. Specifically, these countries sought a waiver that would exempt World Trade Organization (WTO) member countries from obligations related to patents, copyrights, industrial designs, and trade secrets under TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights). Among other things, TRIPS requires member countries to provide minimum intellectual property protections and enforcement mechanisms that support these intellectual property rights.
In a move that surprised many, on May 5, 2021, United States Trade Representative Katherine Tai issued a statement announcing the current administration’s support for this waiver, but initially for vaccines only rather than the additional COVID-19 health technologies covered by the waiver proposal. In Tai’s announcement, she stated that “The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines.” The purpose of the waiver, as Tai noted, was to “get as many safe and effective vaccines to as many people, as fast as possible.”
Since Representative Tai’s statement, there has been much commentary in favor and against the waiver and the US support for it, but after the most recent TRIPS Council meeting, text-based negotiations have begun on the India/South Africa proposal and a European Union communication emphasizing elimination of trade barriers, voluntary agreements, and clarifications of the TRIPS Agreement’s compulsory licensing rules. In this webinar, experts in intellectual property and international trade helped to explain the pros and cons of the waiver proposal, what effects it may have on the pandemic, and what other impacts the waiver may have long term.
- Jorge Contreras, Professor of Law, University of Utah College of Law
- James Bacchus, Distinguished Professor of Global Affaris and Director, Center for Global Economic and Environmental Opportunity, University of Central Florida
- Ana Santos Rutschman, Assistant Professor, Saint Louis University School of Law
- Brook K. Baker, Professor of Law, Northeastern University School of Law
- Moderator: Steven M. Tepp, President and CEO, Sentinel Worldwide
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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.
Dean Reuter: Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at fedsoc.org.
Evelyn Hildebrand: Welcome to The Federalist Society’s virtual events. This afternoon, June 29, we discuss COVID-19 Vaccines and Intellectual Property. Today’s event is sponsored by the Administrative Law and Regulation Practice Group, the International Law Practice Group, and the Intellectual Property Practice Group. My name is Evelyn Hildebrand and I’m an associate director of practice groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s call.
Today we are fortunate to have with us a really fantastic panel. I will introduce our moderator who will then introduce our speakers. Mr. Steven Tepp will be moderating the discussion this afternoon. Steven is the President and CEO and the founder of Sentinel Worldwide. He’s also a professorial lecturer in law and teaches intellectual property at George Washington University. Steven is also a member of The Federalist Society’s Intellectual Law Practice Group.
After our speakers give their opening remarks, we will turn to the audience for questions, so be thinking of those as we go along. In the event you do have a question, please enter it into the Q&A feature at the bottom of your screen. With that, thank you for being with us today. And Steven, the floor is yours.
Steven M. Tepp: Thank you very much, Evelyn, and thanks to The Federalist Society. In less than a year, after the COVID pandemic hit, not one, but three different vaccines were invented led by three American companies whose names are etched in the public consciousness: Pfizer, Moderna, and Johnson & Johnson. Each of these vaccines boast phenomenal levels of effectiveness.
Last October, before any of these vaccines were available to the public, the nations of India and South Africa proposed to the World Trade Organization that they suspend requirements of member countries to provide protection to not only patents, but also trade secrets, industrial designs, and even copyrights, all of which are provided for in the TRIPS Agreement.
To be clear, this was not a proposal to take advantage of the agreed flexibilities that had already been negotiated into the text of TRIPS. This TRIPS Waiver Proposal, as it’s known, would allow nations to suspend all protection and enforcement of intellectual property rights covered by the waiver. Few were surprised to see long-time anti-IP governments and like-minded activists rally around the proposal. But on May 5 of this year, in the face of ballooning infection rates abroad, an increasingly sharp criticism from the far-left, the Biden administration announced it was open to text-based negotiations on a TRIPS waiver. By all accounts, this decision was made without consultation with foreign allies, Congress, or even the relevant expert agencies within the Executive Branch.
Since that announcement, Republicans have criticized the decision for risking emboldening IP theft by countries like China and Russia, and there’s even been a backlash, to some degree, on the left with experts noting that extensive international licensing agreements already in place have essentially maximized global vaccine production.
Meanwhile, a variety of other nations, that some expected to fold with the reversal of the U.S. position, have, in fact, held firm in their skepticism of the waiver proposal, focusing on the practicalities of the supply chain for vaccine ingredients, global distribution, and far countries’ own regulatory barriers to importing vaccines. Meanwhile, the private sector forecasts they could produce as many as ten billion vaccine doses by the end of the year.
We all want to put an end to COVID everywhere as soon as possible. Would a waiver of IP obligations help end the pandemic sooner? Or is the private sector moving faster than governments? What would be the long-term fallout from waiving whole sections of the TRIPS Agreement? Even if there is no waiver, what are the long-term implications of the Biden administration’s embrace of the concept?
We have an all-star panel to address these and other questions. I will give brief introductions now in the order that they’ll be speaking. More extensive biographies are available online on The Federalist Society website.
Jim Bacchus is a member of the Herbert A. Stiefel Center for Trade Policy Studies, the Distinguished University Professor of Global Affairs, and Director of the Center for Global Economic and Environmental Opportunity at the University of Central Florida. He was a founding judge and twice the chairman—the chief judge—of the highest court of the world trade, the Appellate Body of the World Trade Organization in Geneva, Switzerland.
Jorge Contreras teaches in the area of intellectual property law, property law, and genetics and the law. He’s recently been named one of the University of Utah’s Presidential Scholars and won the 2018/19 faculty scholarship award in the S.J. Quinney College of Law. Professor Contreras has previously served on the law faculties of American University Washington College of Law and Washington University in St. Louis, and he was a partner at the international firm of Wilmer, Cutler, Pickering, Hale, and Dorr, where he practiced transactional and intellectual property law in Boston, London, and Washington D.C.
Brook Baker teaches disability discrimination law, and negotiations on a new course on human rights, intellectual property, and access to medicines at the Northeastern University School of Law. Professor Baker is an honorary research fellow at the University of KwaZulu-Natal in Durban in South Africa. He’s also a senior policy analyst for Health GAP, Global Access Project, that is actively engaged in campaigns for universal access to treatment, prevention, and care for people living with HIV/AIDS, especially expanded and improved medical treatment.
Ana Santos Rutschman is an assistant professor at St. Louis University School of Law. She’s published and presented widely on topics relating to health law, food and drug regulation, intellectual property, innovation in the life sciences, and law and technology. In 2020, Professor Rutschman was selected as the featured young scholar at the VATS roundtable at the annual meeting of the American Society of International law.
So, we begin with you, Professor Bacchus, please.
Prof. James Bacchus: Thank you so much, Steven, and thanks to The Federalist Society for inviting me to participate today. This is the first time I’ve been asked by The Federalist Society to participate in an event. I look forward to doing more in the future.
I thought I might begin with a bit of history leading up to this COVID-19 quandary about intellectual property in the WTO. Among my other sins -- it was not mentioned -- I’m both a former trade negotiator for the United States and a former member of the Congress of the United States, and I was one of those who was most intimately involved in the congressional efforts in support of concluding the Uruguay Round Trade Agreements back in the early 1990s that, among other things, established the WTO and introduced the TRIPS Agreement on trade-related intellectual property rights into the trading system.
We did so at that time because increasingly more and more of the value of every traded good was to be found in the intellectual property contained in it. In the United States, of course, there are millions upon millions of jobs that depend on the protection of intellectual property rights. And increasingly -- this is so worldwide—not just in developed countries but in the developing world, as well.
In the 25 years since the conclusion of the TRIPS Agreement, this has not changed, but we’ve had 25 years of battling over what the TRIPS Agreement means in the interim. Significantly, at the outset, the WTO members who concluded the agreement -- developed and developing countries together -- established a balance within the agreement between the exclusivity sought by intellectual property right holders and the access sought by people throughout the world in need of new knowledge who wanted to speed innovations more quickly throughout the world and share them among all the people of the world.
If you look at the intellectual property debate on the extremes -- on the one hand, you find IP right holders and advocates who really would prefer absolute IP rights without any limitation during the time in which they exist. On the other extreme, you will find those --and you saw them in NGOs, others elsewhere -- who don’t really accept the concept of intellectual property rights, who don’t really feel that innovations and creations that are subject to IP rights should be eligible to be treated as property. Rather, they see all these innovations as, in their nature, something that ought to be treated as public goods. And this is especially the case in terms of medicines. These are the extremes. Neither of these extremes is represented in the TRIPS Agreement.
Now, the TRIPS Agreement strikes a balance, as I said, between exclusivity and access, and it does so, basically, by, on the one hand, establishing a global minimum expected as a standard for the protection of patents, copyrights, trademarks, trade secrets, and other IP rights, and on the other hand, providing -- since you’re all lawyers, this is in Article 7 or Article 8 of the TRIPS Agreement and also in the preamble -- that countries can, in pursuit of their own domestic policies, limit IP rights when they feel it’s needed for social-economic reasons, including health and nutrition.
So, we’ve had this debate that has been ongoing, within the system, for a quarter of a century. The last time we had such controversy was in the HIV/AIDS crisis, and that’s not a debate we want to repeat because that struggle, legally, went on for years. It was ultimately resolved, and I think in the right way, but not until after some years had gone by when a lot of people who needed those HIV/AIDS drugs in the developing world were not able to get them because they were so costly.
That was a discussion over compulsory licensing. And there are now clear WTO rules that established that compulsory licensing is permissible under the TRIPS Agreement. That’s the one amendment we’ve made to the agreement, I would've argued under the existing rules that it was permissible, but now it’s clearly permissible.
Yet, as Steve mentioned, what’s being suggested now in the waiver proposal, that was originally put forward by South Africa and India and has since been joined by many countries around the world, including the United States in one of the most interesting actions of the Biden administration, would go beyond just the quest of compulsory licensing. With compulsory licensing, of course, there continues to be compensation of the right holder. But we’re talking -- at least, as this waiver was originally proposed and going beyond that -- to simply waive a whole array of IP rights with respect to these COVID vaccines.
Now, negotiations are ongoing, and I think that if we are able to reach a consensus on some type of WTO action, it will not be framed, by any means, as extensively as originally proposed. The Indians and the South Africans, for example, initially said, “Well, we’ll decide later when this waiver ends.” Now they’re talking about a specific time limit. And other details are still to be discussed.
But the fundamental question that is not really being asked, in my view, is will, in fact, this waiver actually do something to help accomplish a speedier end to the pandemic and also do something effective to counter, what I consider, the shameless global outpouring of vaccine nationalism that we’ve seen over the past 15 months and more. That really is not a question that’s been answered.
As I’ve looked at this issue, it seemed, to me, to be an issue relating not to IP rights but to production and distribution. And in my view, the political capital that’s being spent on the waiver would better be spent on encouraging much more in the way of international cooperation to increase production in some of these developing countries and also in the developed countries as well, and also do much more to speed distribution.
With the coming of the Biden administration of the United States, the attitude has changed some. Also, with respect to the fact that we’ve reached certain vaccination levels, it becomes easier to advocate sending vaccines overseas. They’re doing more. I don’t think nearly enough is being done. And I don’t think nearly enough is being done all over the world by developed countries to do things that are needed to end a pandemic, and especially to make certain that these medicines are available to those who most need them in the poor countries of the world. I’ll stop here.
Steven M. Tepp: Great. Thank you very much. Professor Contreras, please.
Prof. Jorge Contreras: Great. Thanks very much. And thanks for inviting me to speak with you today. I won’t add much to what Professor Bacchus has said, much of which I agree with very much. But I want to draw out just a couple of the misperceptions that I see floating around in the news, particularly, when this topic is raised.
So first, as Professor Bacchus mentioned, this is not really a new concept. The TRIPS Agreement, which dates to 1995, did contain flexibilities that allowed countries to grant compulsory licenses to ensure the adequate supply of patented products in their countries, subject to adequate remuneration.
In 2001, the Doha declaration, which a number of countries exceeded to add aspects of public health protection to that, and in the two decades since those instruments came into effect, a number of countries, over the years -- Thailand, South Africa, India, Brazil -- have imposed compulsory licensing regimes for diseases, including AIDS/HIV, cancer, heart disease, and drugs.
At the outset of the COVID-19 pandemic in February/March of last year, a number of countries reacted quickly to impose measures that also sounded in compulsory licensing. Israel, Canada, Chile, Ecuador, and a couple later, Indonesia and Brazil, also imposed those sorts of measures. And all that already allowed, under the TRIPS Agreement, flexibilities. And so, the addition that we see here, the possible extinction of this with the October 2020 India/South Africa proposal, is twofold.
First, it would dispense with the compensation provisions that exist under TRIPS, but more importantly, to some degrees, it expands the scope of the waiver of beyond the traditional compulsory licensing rights which relate to patents, to trade secrets. And trade secrets are the most important of the rights that are subject to the new proposal. And what does that mean? Interestingly, a lot of the discussion around this waiver hasn’t really focused on trade secrets.
Patents are not that difficult, from an implication standpoint, to license on a compulsory basis, right? A patent in a particular country gives a legal right to exclude within that country. If the patent rights are licensed a compulsory basis or they are waived, then operators in that country can manufacture and sell the patented article. It doesn’t require the holder of the right to do anything.
But a requirement to trade secrets being licensed, or made available, or transferred actually requires effort on the part of the rights holder, generally, from potentially small amount of effort, as in handing over data from clinical trials, or factory layouts, or manufacturing processes that are written down, to much more extensive disclosures, technical training, and technical assistance, that, as I think we’ll hear from our next two speakers, are much more important in the world of vaccines than they are in the small molecule world and, certainly, with respect to non-drug-related, or mechanical devices, right?
So, this would be an interesting move and really somewhat unique and novel in this area. There have been attempts by countries to require technology transfer—the disclosure of trade secrets. And a fair portion of the U.S. trade disputes with China over the last several years have related to, what’s been called, forced technology transfer, or FTT, requirements that the U.S. alleged the Chinese government imposed in order to permit U.S. and other foreign companies to do business in China. You have to enable either Chinese partners or Chinese companies or disclose secrets to the Chinese government in order to get that break. And the U.S. opposed those measures strenuously over the last few years.
Today, we’re seeing a very interesting reversal of position, as Professor Bacchus mentioned, with a potential support of that type of transfer. This switch was forecasted, actually, in what’s called the “Special 301” Report that the U.S. government issues every year relating to the trade status of various countries around the world. In the 2020 “Special 301” Report, and pretty much every one before that for many years, there was a pretty clear condemnation of compulsory licensing measures taken by countries.
Whereas this year, in 2021, just a few weeks before the support that the USTR gave to the South Africa-India proposal, you see an affirmative endorsement of compulsory licensing. And that was little noticed in the community. I didn’t notice it up until May 5 when we got the announcement from the USTR. But it will be really interesting to see what the U.S. ultimately comes out supporting.
It is not a cosignatory or cosponsor as far as I’m aware, yet, of the India-South Africa proposal, which has over 60 cosponsors, but the U.S. is supportive. And so how this will actually be implemented in a waiver with the WTO remains to be seen, and I think will be quite interesting to watch unfold. So with that, I’ll turn the floor back over to my colleagues.
Steven M. Tepp: Great. Thank you very much. Professor Baker, please.
Prof. Brook K. Baker: Well, it’s great to be on the panel and also to have two presentations already set the stage so well with respect to some of the key issues that are before us. I’ll be honest and clear, I’m probably the most IP-skeptic person on the panel, maybe, by a considerable degree.
And my work primarily in the past, has focused, as stated in the introduction, on trying to overcome the intellectual property barriers that had access to life-saving antiretroviral therapy for HIV and AIDS, and in the current context have witnessed the -- I would actually say, grotesque vaccine nationalism and inequitable supply of COVID vaccines, but also personal protective equipment, diagnostic tests, the first therapies that we have available to people around the world who have as much need for those technologies as we do here in the United States.
And so when I look at the current situation, I do analyze it quite differently. One thing I’d like to emphasize at the beginning is that the U.S. -- and actually many other governments and private foundations -- invested massively in the research and development and a clinical trial of some of the promising technologies that have been developed, including virtually all of Moderna’s R&D costs were actually funded -- and clinical trial cost were funded by the U.S.
Pfizer’s actually the inventor of the product -- were Turkish inventors, but they were working at a German biotech which then partnered with Pfizer. But BioNTech got substantial resources from Germany. And so there has been major investment and de-risking of the R&D effort, which I think needs to be taken into account in thinking who should receive the benefits and should the global population receive the benefits of scientific progress.
We have learned in this pandemic, what -- in the AIDS pandemic, we focused mainly on the impact of exclusive patent rights on crisis. We now realize that inclusive rights also give the right to control supply, price, and distribution. And what we have at present is inadequate supply, needlessly high prices several times over the cost of production, and completely inequitable supply where the people in rich countries have 60-plus times the access to COVID vaccines than people in low-income countries have.
The companies who have inclusive rights have tried to increase internal capacity somewhat, and they’ve entered into contract manufacturing again with other producers, but largely within the existing big pharma cartel. And they’ve also faced some barriers, which need to be overcome. I think there are proposals that address these -- the supply bottlenecks and shortfalls, the impact of export controls and prioritization of certain producers, for example, under the U.S. Defense Production Act, which, at least, temporarily interfered with supply of key vaccine components to manufacturers elsewhere in the world, including in India.
But what we’ve seen has largely been a case of vaccine manufacturers and right holders being unwilling to engage in large-scale technology transfer to all capable producers that have existing capacity or re-purposeful capacity to massively scale up vaccine manufacturing in the short term. The U.S. made the investments in expanded manufacturing capacity, and companies began to manufacture at risk over a year ago. And we see many news stories about that. And they did begin to enter into these more restrictive partnerships. What they weren’t willing to do, despite the foreseeable need for vaccination that would reach the entire world -- what they didn’t do is really sharing the technology broadly.
And so, in the face of that, it is certainly true that the waiver proposal in October preceded actual authorization or vaccine introduction anywhere in the world. But at that point in time, India and South Africa and other supporting countries had seen that the U.S., Europe, and U.K. had rushed to the front of the line and procured disproportionate access to first products through advanced purchase agreements and options such that we get exactly what we see now.
It has been a supply that wasn’t quite quick enough but, essentially, is now adequate for needs in the U.S. and Europe. And yet, in Africa, less than two percent of the population has received even a first dose of a COVID vaccine and they’re suffering a third wave of infection because of the new Delta variant which has entered their populations.
So, the question is, “Well, what should we do in the face of massive undersupply and inequitable distribution when companies have not voluntarily agreed to expand production on their own and to share technology?” Should we sit idly? Should government sit idly, should populations and public sit idly, or should we put pressure on drug companies?
To me, the waiver is a method of pressure on drug companies to do more—to expand production and equitably supply. If we were forced to rely solely on the waiver, it would take a period of time for it to be realized. I think it’s important to pursue because I think it’s important as a pragmatic measure to bring the drug companies to the table in a different way, to engage in more proactive licensing and technology transfer.
And I think contrary to what was suggested early on is -- this does not have to be without compensation. Jorge is right that the waiver itself says nothing directly about compensation, though the revised waiver that’s been submitted does acknowledge that there needs to be incentives for research and development and for introduction of new products and for innovation. And in my personal discussions with the proponents, they have admitted that countries may well want to, and should, include some incentives and compensation to right holders with respect, not just to patent rights, but with respect to trade secrets rights as well.
And I think it’s correct that trade secrets are really the center of what’s at dispute here, and in a way, we are left in a world where trade secret rights seem more absolute even than the patent rights. We have an elaborate system, at present, for compulsory licensing that reply to patents. But patents are insufficient, at this point in time, to transfer the technology and the know-how that’s needed to manufacture new vaccines in a reasonable period of time.
This is knowledge that was developed relatively quickly in the U.S. in a matter of months. It’s actually been submitted to regulatory authorities who have a lot of that information sitting at the FDA in the Emergency Use Authorization dossiers that have been submitted, that give information on good manufacturing practices and quality control measures and the industrial process that is used to manufacture the vaccines.
And I can’t think of a good reason why governments shouldn't begin to try to force companies, if they can’t be persuaded to do so voluntarily -- to force companies to begin to share that information or, actually, to open the vaults of information they have. Admittedly, it’s true in the United States, at this time, that there’s no provision that will allow FDA officials to share that information with other producers at this time. I think that’s regrettable. I think we need a world in which we can move with greater speed and greater solidarity to respond to the global pandemic crisis that we are currently facing.
So, I think that the idea of the waiver is important as both symbolically and, regrettably, if needed, to actually be implemented. And I’m glad that the U.S. government has supported it. So far, its support is only for vaccines. I don’t think there’s any question that other technologies are needed.
And I think the one thing I kind of disagree with on the focus that the TRIPS Agreement was well balanced and sufficient to task is that it didn’t really address the trade secret problem because we just simply did not have the number of biologic medicines and complex vaccines that we now realize we need, and how much of the technological knowledge that’s required to actually produce those medicines now rests in trade secret, confidential information, intellectual property regimes, not in the patent regime.
And if we think it’s important to waive patents for small molecules so that we can actually have generic production and increase supply and lower price, I can’t think of any compelling reason that we shouldn't have a system that’s equally effective to allow, essentially, generic production of vaccines when they’re needed. I’ll stop there.
Steven M. Tepp: Thanks very much. And to clean up, Professor Rutschman.
Prof. Ana Santos Rutschman: Thank you very much for this invitation. It’s also my first time participating in an event hosted by The Federalist Society. And I’m really glad we get a chance to discuss this very polarizing topic. Let me just situate my background in this discussion because never, until I wrote an article essentially opposing the U.S.’s support for the waiver, did I ever get called an IP maximalist. And I don’t think that my views would accurately be described as such; although, I’m obviously biased there. But although I recognize some of the strategic and PR value of the waiver, I don’t like it as a legal tool. And partly, I think it’s because my brain has been formatted to think of things very often as legal problems. And in my mind, if we are trying to use a particular legal tool, that tool has to first match some type of legal problem and has to be effective in solving that legal problem.
I have a slightly different read on the underlying problem. It’s, I think, a read that matches many of the things that have been said before, emphasizing the idea that we have an infrastructural- and production-related problem. I think those are facts, right? From all the numbers available to us, we know those are facts.
I am not sure we have a legal problem. In my view, this is a fundamentally different situation from the one that we faced during the HIV/AIDS crisis, which is ongoing. But the one that really triggered the application of a legal solution in the form of compulsory licensing a few years ago -- I do see that match up there. Why? Because we have a small molecule drug -- an area where trade secrets is not going to be much of a de facto barrier.
So, what was the problem, in end of day—the problem standing between the available production -- the available supply of those drugs and those drugs actually getting to the populations in need? It was not an infrastructural problem. It was an artificial creation stemming from the application of a certain laws or behaviors, sanctions, or enabled by laws. So, we had an artificial pricing problem and availability problem tied to an exclusive right.
And to the very important work of many people, including Professor Baker, we were able, either directly or through the pressure, who brought about the threat of compulsory licensing -- match the legal intervention to the underlying problem. Here, we have products that are utterly different. These are products -- so small molecule drugs much more simple, much less path-dependent than vaccines.
So, biologics are macro-molecular products, and to this day, we don’t have -- first, it’s impossible to have a generic version of a vaccine, but we don’t have biosimilar vaccines. It’s not something that we have really even developed. And even if we were to magically lift, today, all sorts of legal protections that are in place in the form of intellectual property proper, we would have to contend still, as has been said over and over, with trade secrecy provisions. The waiver doesn’t do that.
So, I see a fundamental mismatch here that I find somewhat worrisome. Although, I do recognize that in terms of applying pressure at the negotiable table so that those with decision-making power come together faster to seek solutions to address the underlying problem -- I recognize the value of the waiver there, but I see this mismatch in terms of the legal intervention in question.
Further to that, the article that I wrote saying this is not the right legal tool for the problem that we are facing, I did so in co-authorship with a lawyer who works currently for SAPI, one of the public-private partnerships that has been involved in the funding and coordination of the development of COVID-19 vaccines. And as many of you probably know, SAPI is precisely one of the entities right now leading the survey on production capabilities around the world. So, we have some insight into what facilities throughout the world have been reporting in terms of what they can do within the next couple weeks, couple months, even a year or so.
And the outlook on this is far from encouraging. So, even if there were no practical constraints whatsoever, including the trade secrecy issues that I’ll get to in just a second -- and on the reports that we’ve seen so far indicate that there is no capacity to scale up production of these vaccines, even if we did not have a trade secrecy problem, even if were voluntary paid-for transfer of technology.
So again, we have a legal intervention that I see as a mismatch. And if we are worried, really, about trade secrecy being what’s impeding the faster development of these vaccines, I personally don’t see the pharmaceutical industry absent from the negotiating table in this particular issues. I can talk at length about many of my grievances about how innovation policy in this area often works, but this is not one of those cases.
So, I think they lack that capacity. And the PR function of the waiver pressuring things or applying pressure on negotiations covering things, like the sharing of existing doses of vaccines -- I see the waiver as important, on the one hand, to do that, but I also see us stealing a lot of attention on fronts like that. So, a couple of days ago -- and we’ve all heard the cry, vaccine nationalism -- and I think, personally, the U.S. and many other countries have been very light in committing to donate orders that they have and they’re not using straight away -- the U.S. just ordered a significant amount of vaccines anticipating the possibility of boosters.
The discussions about vaccine nationalism have, in my reading of the situation, dimed down in tone and frequency since we’ve started talking about the waiver. So, I think there is some PR effects about the waiver that might detract from the fundamental and ultimate goals that we’re all, I think, here trying to achieve, which is get the vaccines to the arms of those most in need.
I’ll end with a quick comment on the trade secret issues because imagine that by doing things, like making the information that has been submitted to the FDA, the many other agencies around the world, available and imagine that were possible and that somehow the infrastructural problem has been sorted out, I’m still not convinced that is going to be necessary.
I share with Professor Baker the view that is regrettable -- the stance that FDA, for instance, has taken since the ‘70s interpreting the code of federal regulations in a way that I find not very convincing to say that information submitted to the FDA. A lot of this information is protected as a trade secret. But I don’t think that, conversely, that means that all information that is currently held in some sort of trade secret, or trade-secret-like mode and not made public, is actually accessible just by reading the information that’s part of a regulatory submission.
So, we might be able, with the intervention proposed by Professor Baker -- and I would actually gladly support -- solve some of the trade secrecy issues, but we still don’t have all the information, all the ingredients we need to put together in addition to the patent information, the regulatory information. There are other ingredients in the recipe tacit knowledge that you still don’t catch from those submissions. And in the case of such a complex and path-dependent product, I do see that as also a problem that we have to contend with. And I’m going to stop here. And I look forward to our discussion.
Steven M. Tepp: Great. Thank you all very much. Maybe I’ll kick things off a little bit. As I understand it, there’s not a lot of dispute that the patent owners in the vaccines have licensed those around the world to facilitate production of vaccine in facilities that are capable of that. I believe Moderna may be, the most in-front example -- actually has a statement on their company website that they will not enforce their vaccine patent against anyone. So, two-part -- does anyone disagree that that’s the case? And if that is the case, what benefit comes from a waiver of patent rights- allowing countries to suspend all patent rights related to the vaccines or anything else? Anyone who wants to jump in.
Prof. Brook K. Baker: Well, I’ll say as I understand it, that Moderna has done that, but not all the manufacturers have, and there are literally now hundreds of patent applications filed, and some published, but a lot more that are not published yet on vaccine technologies. And so we know that there’s going to be a patent thicket in many countries. Of course, the patents aren’t filed in every country, but they are in key-producer countries.
So, Moderna has put those on the table. But I think, as we heard in the discussion from, at least, the last three of us who spoke, the big issue is not necessarily just patents and the vaccines, it’s much more the technical know-how, the biologic resources, the data knowledge that’s needed to actually produce these more complex products, and --
Prof. James Bacchus: And I agree with that too. [crosstalk 42:40].
Prof. Brook K. Baker: Yeah. And so it doesn’t -- I don’t think it helps to frame this as, well, if there’s a non-assert promise on patents that the problem has solved. Moderna’s also made it clear that it’s not willing to do technology transfer across the board at this point, though, we also understand that it’s in discussions now with the WTO technology transfer hub being set up in South Africa. And we can all hope that Moderna, or Pfizer, or anyone else will actually begin their share to technology more broadly. And I think if that happens, it will be partially as a result of the waiver discussions that have forced the issue a bit.
Prof. Jorge Contreras: Yeah. I would throw in the vaccine -- this is not a monolithic vaccine technology, right? The mRNA technology that Moderna and Pfizer are using is probably the most difficult, technologically, of the solutions to reproduce. So, to think that somebody could reproduce it on a generic basis, just with Moderna’s patents, without Pfizer’s patents, and without any of the know-how is, I think, just overly optimistic, right? There are other approaches to making vaccines that other manufacturers—Sinovac and others—are using that are probably easier. So, it’s quite partial.
To Professor Baker, Moderna’s message has been a little bit mixed, right? In their public pledge, they did—at least, on their website—commit that they would try to effect some knowledge transfer, but again, I think it’s a much bigger endeavor than turning over some documents, especially with this technology.
Prof. Ana Santos Rutschman: And I would just quickly add to that, that even if we’re just considering IP protected components of a vaccine or processes, the waiver and the type of technology coverage in Moderna’s pledge or similar pledges, I think that’s a fragment of the patented technology itself.
Even if we set aside the know-how or trade secret problems, a lot of the things that you need to put together a vaccine are not COVID-19 vaccine specific. They might adjuvant specific, or you name one of the many, many components of a vaccine and there’s a host of intellectual property rights covering those and makes things that are licensed. And so a lot of companies use and share among one another. So, that’s a concern to me.
When we say we are going to waive COVID-19-related patented technology for vaccines, what does that mean? What is that line there, right? And that’s a legal question, right? And I’m not sure we know the answer to that. And also, I would not dare say anything other than the fact that I have many doubts about any voluntary pledges of nonassertion that are as scarce as the one that Moderna has made in the sense that it’s a very brief statement. And I’m not sure of it’s legal on status, even after having read pretty much everything Professor Contreras has written on the topic. So, that’s an additional concern in my view, that we don’t really know what it means.
Steven M. Tepp: Professor Bacchus, please.
Prof. James Bacchus: Returning to the TRIPS Agreement, which is what is before the members of the WTO, I wanted to add to something Professor Baker said. He’s right. The TRIPS Agreement doesn’t go nearly far enough in setting out the lines between exclusivity and access on trade secrets.
And that said, when the TRIPS Agreement was concluded in the early 1990s, it was revolutionary in including the topic of trade secrets, as I’m sure he knows. Where we’ve been remiss is in not updating that and improving those provisions through the years. We’ve been remiss generally in the WTO and not updating a whole slew of existing roles to make them bid for purpose here in the 21st century and, especially, in the pandemic world in which we find ourselves.
In a paper I published last week, that’s online from CIGI, I proposed a whole long list of updates that we need to make to move from TRIPS past to TRIPS plus, and one of them was -- that I proposed exactly -- what I think Professor Baker has suggested -- that we need to deal with the issue of biologics in the WTO and figure out how best to draw those lines in a way that it continues to promote innovation but also make certain that these innovations are made available to the people who need them when they need them. We’ve not done that.
There have been some efforts in some piecemeal, plural-lateral, non-WTO, free trade agreements, and other regional agreements on this issue, but they’ve not been very helpful nor have they approached the global multi-lateral standard that we actually need.
One point for those who are not WTO people, who are in the audience, it’s important to understand that in contrast to some respects to, say, the World Bank or the IMF, there is nothing called the WTO that has any authority whatsoever to act on its own. And the WTO is only the 164 countries that are members of the WTO acting together who may choose to call the WTO. And if they can’t agree to do something, they won’t get done. It’s not that the director general can intercede and demand forced technology transfer. No. The WTO is not the IMF.
Steven M. Tepp: Thank you. Yes. So, we have a question from the audience. And let me set this up just a little bit. What we’re focusing on here in the discussion, particularly in the last few minutes, is, okay, we’ve got these vaccines, they work really well, let’s get them to as many people as possible as fast as possible and various ways and techniques necessary to do that -- questions about whether that’s already being maximized, so on and so forth. But of course, the other side of the equation in any IP policy discussion is to think about the incentives for future innovation because that’s, at least, half the game in intellectual property.
If you don’t have new innovation, no one gets it. So, the question from the audience is, does anyone on the panel think that there would be as rapidly and successfully produced new drugs and treatments in the future if this IP -- and I’ll wrap both patents and trade secrets into the phrase IP -- is made publicly available, clearly setting a precedent? Put differently, how much would people invest in new drugs and treatments if they know that there’s at least some risk that it’s going to be taken from them, perhaps against their will, if someone perceives the need is great enough? Anyone want to go for that one?
Prof. Jorge Contreras: I see Brook making motions, but I’ll jump in very briefly. So, I don’t think that this would have a huge effect on innovation incentives, for a number of reasons. As Professor Bacchus just mentioned, the WTO is not a world patent-granting agency. It’s up to individual countries what they do after this waiver is adopted. Or even if it’s not adopted, countries then still have to enact some kind of national legislation to waive, in some way, their own national patent trade secret laws, with or without compensation.
And there hasn’t been a rush of countries showing that they’re interested in doing that. In fact, on the trade secret front, there’s been just one, which is Brazil, which is an interesting case in that Brazilian legislation is still working its way through their approval process. But you have to remember that even if the United States supported whatever the final waiver proposal is, that really doesn’t mean that the United States is going to waive or suspend IP rights in the United States. And I think that’s highly unlikely that that would ever happen. The U.S. trademark representative has no authority over patents in the United States. It’s just a very different sphere, and I think it would probably never happen in the U.S., Europe, or most other developed countries.
So, you’re talking about developing countries primarily. The least developed countries, even if they did enact legislation that required trade secret transfers, they have no authority over the companies that are not based there, and they have no leverage to require that to happen. So, there’s only this narrow band of countries in the middle in which companies have assets—such as patents—that a country can leverage to force them to then comply with some sort of FTT biotechnology transfer requirement.
Brazil is -- probably, India and South Africa -- that’s probably the group and maybe a few others. So, it’s a small group. And just based on the procurement dollars that we’ve seen so far, I think companies can make a very handsome profit by selling the vaccines and therapeutics and whatnot in the United States, North America, Europe, and the developed Asian countries. But I think there’d be very little impact on incentives to innovate.
Prof. Brook K. Baker: I would just say, there have to be incentives to innovation. But the IP system and the monopoly and high prices associated with monopolies and scarce supplies need not be the only way to fund it, and in fact, we saw that in this case. We see that most of the background research on vaccines, over the past two decades, has come from governments more so than from private industry.
For quite some time, private industry has shied away from vaccines and there’s been disinvestment in vaccines by major pharmaceutical companies for many years now. They’re getting interested now, especially, with this experience, but most of the background research has been NIH-supported in the recent past.
Prof. James Bacchus: Well, one option, Brook, would be simply for governments, including our own, to get serious about helping other countries in handing out billions of dollars to ramp up production and pay for distribution and get these vaccines to where they’re needed, which is the opposite of what we’ve been doing up until now.
And to the extent some IP holder has benefitted from public largess -- well, the price can be adjusted for the public purchase. But the best thing the United States can do to protect people in the United States—the citizens of the United States—is to make sure that we end the pandemic worldwide. But what have we been doing? We’ve been trying to convince people, many of whom refuse to be convinced, that they need to take the vaccine, when they may not necessarily be the people who are most at risk, and the people who are most at risk and the rest of the world have no chance to get it.
That two percent in Africa, that you mentioned, is perfectly accurate. And that is shameful in terms of thinking about the supposed generosity of the United States of America, not to mention a few other countries. But one option is simply to pay for what’s needed, and no one’s even considering that, so far as I can tell. The little dips and drabs that the global efforts that have been put in place to try to deal with this in that type of multi-lateral way—COVAX and others—have been poorly funded by the rich countries of the world. That is just shameful.
Prof. Ana Santos Rutschman: And I would just quickly add, one of the I think most viable blueprints going forward is what we’ve learned from the Serum Institute in India, right? They perceived the infrastructure problem, and to some degree, they addressed that before this pandemic, right, which puts us at the marginally better place globally, in terms of access and production than we would have been otherwise.
Now, I think this is a big wake-up call. And I think countries in Africa and Latin America might consider a similar attempt. I think the incentives coming for all of this are not intellectual property incentives, are not market incentives. I think they’re completely detached here from traditional IP incentives. It’s the need that we’ve seen over and over and over to produce vaccines against emerging pathogens.
Now we have a global one. The next one might not be global. So, I think that regional production of vaccines is going to be a big key in the future. I can’t make predictions on how much discussions related to the waiver will impact or speed up the formation of those regional hubs, but I think that’s where we are either headed or should be headed in the near future globally. And I don’t think I have time to go into the domestic scene, but globally I think it’s a big and important development that needs to happen.
Steven M. Tepp: So, we just have a minute or so left. And I personally have a background in copyrights. And so -- we haven’t talked about that yet, and I want to put that out there, at least for the last minute. The proposed waiver, both the original and revised versions, apply to not only patents of trade secrets that we spent a lot of time discussing this afternoon, but also to copyrights which apply to things like music and books and movies and so on.
Now, I’ve seen some justifications that, well, when people are in quarantine, they need to be able to stream their entertainment for free. That wasn’t particularly convincing to me, but let me throw it out there for all of you. Is there a reason related to vaccines that we would want to allow countries to suspend copyright protection?
Prof. Brook K. Baker: It’s more in the means of production and some of the codified information that’s available. No one’s talking about records and movies and entertainment-related IP. And I think the proponents have tried to make that as exquisitely clear as they can, but they’re industrial blueprints.
Software is supported and protected in some -- operational software is supported in some countries or protected by copyright manuals. Formula data collections can all receive various kinds of protection and I think that’s what people are talking about. They’re really talking about what is needed to make a medical technology that responds to COVID, that helps prevent treating -- contain the diseased. Those are the rights that are being referred to.
So, I know the industry was quite concerned, “Well, does this mean, as you say, they want streaming while they’re sitting in a hospital bed?” I don’t think that’s -- anyone who’s really seriously suggested on the proponent side that that’s what they’re talking about. But they are talking about the means of production and the embedded copyright material that’s in a lot of diagnostics, in particular -- not as much in vaccines, except in production methods.
Prof. James Bacchus: I think that’s right. I think his description is right. Right on, in fact.
Steven M. Tepp: Okay. Well, for what it’s worth, I’ve seen things that do indicate a broader application from proponents, but I guess to each their own. Anyhow.
Prof. James Bacchus: I would oppose that. But I don’t think that’s really what they’re contemplating.
Steven M. Tepp: I hope not.
Prof. James Bacchus: Look, I’m a reformed politician. That’s some of the rhetoric you use, and they’re using it on both sides, of course. I don’t think the pharmaceutical industry is evil. I think it’s done a wonderous thing here, from what you are all benefitting. The question is, how long they should have these exclusive rights and what types of profits should they be allowed to make and for how long?
Steven M. Tepp: Well, I guess that’s our last note for this afternoon. Thank you all very much. This issue will continue to be discussed and debated, both within the United States, and in Congress, and at the World Trade Organization among 160 -- was it 164 countries? So, we’ll see what happens. Certainly, we all hope that COVID’s defeated one way or the other very soon. Thank you all for your participation.
Prof. Brook K. Baker: Thank you very much.
Evelyn Hildebrand: Thank you very much. And on behalf of The Federalist Society, I want to thank our experts for the benefit of their very valuable time. It was a great discussion this afternoon. And I want to thank our audience for participating and sending in questions. We welcome listener feedback by email at email@example.com. Please keep an eye on your emails for upcoming announcements about teleforums and virtual events. Thank you all for joining us today. We are adjourned.
Dean Reuter: Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.