With the United States agreeing to text-based negotiations on the revised Intellectual Property Rights waiver proposal jointly submitted by India and South Africa at the World Trade Organisation, the European Union remains the last major power opposing this proposal.
While we await the results of possibly lengthy text-based negotiations, it is necessary for the government of India to come out with a white paper explaining how exactly it intends to operationalise a possible IP waiver for vaccines, if and when such a waiver comes into effect.
The aim of such an exercise should be to explain to the world the manner in which this waiver will translate into the mass production of vaccines to meet the immediate medical needs of the developing world.
The initial wisdom among the proponents of the waiver is based on an assumption that a waiver will remove the legal barriers to production of vaccines. But as is widely acknowledged by most experts, developing countries will not be able to reverse-engineer these Covid-19 vaccines on their own. They will require active technology transfer from vaccines developers in the West before they can begin manufacture of any vaccines. These challenges are more practical than legal.
For starters, even if the IP waiver does come into effect, unless the tech-owning vaccine producers residing abroad (i.e. beyond India’s legal limits) are forced under their respective domestic law to part with critical know-how and physical inputs (for example, cell lines), a waiver in itself will not translate into technology transfer in favour of firms willing to produce vaccines in India.
Thus the Pfizer/BioNtech and Moderna’s mRNA vaccine technologies, which are currently not produced in India, may still remain inaccessible under the waiver, unless countries such as the U.S. where these firms primarily reside engage in forced technology transfer under their domestic laws.
It is very unlikely that the Biden administration will force American companies to transfer their technology to Indian companies for no remuneration. The domestic political costs of such a policy would be too high for the Biden administration.
A domestic policy option for India is to threaten Western vaccine makers in India with punitive action against their existing patents for other products if they fail to voluntary transfer technology to Indian companies. Such a move towards forced technology transfer is the policy equivalent of throwing a grenade at India’s trade relations with the West without solving the problem of access to technology.
Presuming India does enact a legislative measure to force technology transfer, it is still not clear how a legal obligation to transfer technology to new firms willing to produce vaccines will lead to actual vaccine production.
Even under the best of circumstances (i.e. where there is no force), technology transfer can be complex and requires active engagement with deep synergistic collaboration. A large part of this exercise is training human resources, which means sparing valuable staff from active production lines for the purpose. This may be particularly difficult in the absence of absorptive capabilities, state-of-the art technology upgradation, skills and human resource gap to produce on an industrial scale.
Even in case of the indigenously developed Bharat Biotech-Indian Council of Medical Research Covaxin, the absence of adequate BSL-3 facilities has contributed to significant delays in scaling up production by the limited number of public sector units that have agreed to produce. In fact, the very nature of Covaxin’s vaccine technology (i.e. Whole-Virion Inactivated Vero Cell) produces additional constraints in scaling up due to the conventional nature of its technology platform.
Dealing in live viruses has turned out to be a huge dampener in Covaxin vaccine production, which also is a reason for its higher price point as the economies of scale present in other less conventional and modern vaccine platforms cannot be easily achieved. This is possibly the reason that none of the Western countries chose this outdated vaccine technology as the basis of their Covid-19 vaccines.
Thus, the need of the hour is a clear-eyed assessment, by experts in the field of vaccine manufacturing, of the capacity of domestic manufacturers to absorb such technology in a time-frame that helps India meet its vaccine commitments.
Apart from technology transfer issues, financial incentives for vaccines producers are very important. Since the global vaccines market is largely monopsonistic (government usually being the single largest buyer), the kind of financial incentives needed may involve both capital expenditure for setting up new production lines at existing facilities and irrevocable upfront purchase commitments. Such risks were significantly underwritten by governments in the US, UK and the European Union through advance market commitments even before the vaccines were approved.
In India, vaccine manufacturing in today’s age is exceptionally risky from a political perspective. Be it allocation, negotiations or pricing, every aspect is uncertain. Apart from abruptly imposing an export ban on the Serum Institute of India’s export of vaccines, the government’s decentralised vaccine policy has meant that private manufacturers have to potentially deal with more than two dozen state governments, raising their own transaction costs.
Private capital is averse to such political risk. This is perhaps one of the reasons the government has not received any interest from the private sector for its offer to lease out its Integrated Vaccine facility in Chengalpattu, Tamil Nadu, in the middle of one of the deadliest pandemics in recent history.
Against this backdrop, the only option is for the government of India to invest more public funds in vaccine manufacturing. This will be a complicated and possibly expensive process for which the government needs to draw up a viable plan. It needs to let the general public know the volume of investment as well as the timeline for this investment to actually start generating Covid-19 vaccines.
Buying vaccine technology
Any policy making exercise involves evaluating trade-offs between different options. In context of the present crisis, rather than wait for a final decision on a waiver of the World Trade Organisation’s Trade Related Intellectual Property Rights (or “TRIPS”) agreement, the question that should be asked of the government of India is if it made any serious effort to enter into technology licensing deals for Covid-19 vaccines?
If China’s Fosun Pharma was able to sign a technology licensing deal with BioNTECH for mRNA vaccine technology and various private Indian manufacturers like Serum Institute of India and Biological E were able to purchase technology licenses from Astra Zeneca, Novovax and Johnson & Johnson, it is guaranteed that that the technology licences are available for purchase. When evidence on the ground shows that most countries are doing what best serves the cause of vaccine production, why is the Indian government pursuing a policy outcome as uncertain as the TRIPs waiver?
If the government is committed to transparent policymaking it should explain to the general public the trade-offs between simply purchasing vaccine technology for domestic manufacturing and pursuing a cumbersome TRIPs waiver that is likely to be difficult to operationalise for reasons discussed above. The government otherwise risks the possibility of a pyrrhic victory wherein India will be unable to take any real advantage of a TRIPs waiver despite having expended huge amounts of political capital in Geneva.
Yogesh Pai is an assistant professor at the National Law University, Delhi.
Prashant Reddy T is a lawyer.