A fact-based analysis of the TRIPS Waiver extension

New data published today reveals the impact of a proposed TRIPS waiver extension to therapeutics and diagnostics - on patient care and on the future of the research-based pharmaceutical industry. WTO members are currently discussing an extension of the TRIPS COVID-19 vaccine waiver to try to increase production of therapeutics and diagnostics and see more patients benefit from treatments. This effectively means removing the Intellectual Property from a company who researched, developed and manufactured treatments, allowing anyone to reproduce it. The answer to COVID-19 therapy access or a nail in the coffin of access initiatives and future pandemic preparedness?

Background to the TRIPS waiver

The pandemic saw industry and partners produce over 15 billion doses of COVID-19 vaccines from scratch in under two years – more than enough to vaccinate the world. Despite this achievement, ahead of the June 2022 WTO Ministerial, advocates of a TRIPS COVID-19 vaccine waiver argued that it was needed to increase production and achieve more equitable global access. Today, just three months later, production capacity for COVID-19 vaccines is being scaled down amid decreasing demand, while only 25% of low-income country populations have been vaccinated. This suggests that the WHO’s 2020 analysis of the key bottlenecks for access were correct: That it is healthcare capacities, distribution barriers and vaccine hesitancy, not IP which is the problem.

Why extend the waiver?

There is no shortage of COVID-19 therapeutics: production exceeds contracted demand for all variants, disease severity levels and in all patient settings. And with global testing declining rapidly, demand for treatments will decrease and become unpredictable. Partnerships with multilateral organisations and 138 voluntary licensing partnerships (Fig. 1) made it possible to ramp up production of therapeutics and, combined with tiered pricing and not-for-profit arrangements for low- and middle-income countries,  mean that – for example – 99.9% of Africa and all of South Asia currently have access to the key therapeutics. A waiver would put the legal basis for these initiatives at risk including those under the Medicines Patent Pool (MPP).

Koen Berden

Dr Koen Berden is the Executive Director of International Affairs for EFPIA. He is part of the EFPIA senior Leadership...
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Figure 1: 138 voluntary licensing agreements (VLAs) for therapeutics have been signed

What is the impact of a waiver extension?

A COVID-19 TRIPS waiver extension can harm patients

While voluntary licence producers must report adverse events to support patient safety data obligations, a compulsory licence (CL) precludes the strict regulatory reporting framework that keeps patients safe. In addition, while originator company, and MPP medicines must follow WHO pre-qualifications or quality standards of one of the stricter regulatory authorities, under a CL adulterated, sub-standard or even counterfeit medicines are able to enter the supply chain.

A TRIPS waiver extension will jeopardise R&D for innovations across multiple industries

37 treatments – just 2.0 % of COVID-19 treatments in development – have been approved so far (Fig. 2) which means that most R&D into COVID-19 treatments is still ongoing. 75% of these investments are private sector funded. Without the certainty provided by patent rights many of these research projects could simply stop. The waiver extension will broaden the scope from 4,303 to 135,627 patents, across pharmaceuticals, chemicals, machinery, rubber, glass and other industries, beyond healthcare.
Figure 2: COVID-19 treatments pipeline

Figure 3: Number of other indications impacted by a waiver extension
Figure 4: Current global production and companies active in other therapy areas impacted

A COVID-19 TRIPS waiver extension will hurt innovation and will come at the expense of future global pandemic preparedness

With 87% of patents registered in the EU and US, 94% of the costs of the TRIPS waiver extension will be borne by high-income countries. The impact of a 3-year COVID-19 waiver will lead – in high-income countries – to a drop in R&D in pharmaceutical products of 25% and a drop in patent value of 28% in the long-run. The latter means that GDP in high-income countries will decline, high-quality R&D jobs will be lost, export values will go down and so will investments. Countries that benefit will be those who have not invested themselves in R&D but can now make use of the waiver for domestic industrial policy purposes. Future innovation will also be hurt, not only in healthcare, but also potentially in digital or green technologies. For example, for the EU where patent-intensive industries contribute 16.1% to EU GDP.

Way forward

Based on these facts, WTO members should firmly reject a TRIPS waiver extension and instead focus on removing trade and regulatory barriers, strengthen the health workforce, increase public awareness regarding treatments, improve logistics processes for treatments, and scale up innovation through voluntary licensing.