One of the hoped for outcomes from the upcoming 12th Ministerial Conference in Geneva June 12-15, 2022 is a possible agreed outcome on the WTOʼs response to the COVID-19 pandemic including some action on intellectual property issues.
I have previously reviewed the possible elements of the response to the pandemic and a not finalized draft intellectual property document among the European Union, United States, India and South Africa.
Equitable access to vaccines has been a matter of concern to many countries and the focus of the effort by India and South Africa to obtain a waiver from TRIPS obligations for vaccines, therapeutics and more for a period of years to address the pandemic.
There has been dramatic increases in production capacity for existing vaccines with significant efforts to expand production in developing countries including low income countries.
The WHO has set the objective of getting 70% of the worldʼs population vaccinated by this summer, a goal that should be achievable based on production capacity. Unfortunately, it is clear that for low income countries generally and for Africa as a continent, the 70% target will not be met. It is also not likely that lower middle income countries will reach the target either. The WTO-IMF vaccine information available from the WTO webpage is currently updated through the end of March 2022. Specifically when examined on an income level basis (World Bank definition), low income countries have only 12.0% of their population fully vaccinated (15.2% with at least one dose); lower middle income countries have 48.4% of their population fully vaccinated (57.3% with at least one dose). These rates compare to 72.6% of Upper middle income countriesʼ populations being fully vaccinated and 73.2% of high income countriesʼ populations. On a continent-wide basis, Africa has only 15.3% of its population fully vaccinated; Oceania is at 62.3%; North America is at 62.7%; Europe is 65.1%;, Asia is 67.8%; and South America is 73.0%.
Shockingly, data on a monthly basis show total supply declining in each of the first three months of 2022 compared to December 2021 and, in fact, below every month since June 2021. March 2022 appears to be roughly 1/3 of supply from December 2021. WTO-IMF COVID-19 Vaccine Trade Tracker, at Table 4. This decline in volume is despite new vaccine producers of vaccines being approved and UNICEFʼs tracking of capacity showing 2022 ranging from 16.8-20.9 billion doses versus the 2021 rate of 11.5 billion.
Since last fall, there have been news stories about countries with low vaccination rates not being able to accept all deliveries scheduled.
The causes can vary from vaccine hesitancy (which can be higher in countries with low death rates such as much of Africa), to challenges with distribution (particularly to rural parts of countries), to weak health care infrastructure and more.
Moderna, one of the major mRNA vaccine producers, had its annual shareholders meeting on April 28, 2022. One of the shareholder initiatives voted on was whether the company should generate a Report on Feasibility of Transferring Intellectual Property. The proposal was rejected by over 3/4th of the votes. But in a document released by the company, there is a description of the large volume of production that has not been accepted or delayed and the resulting reduction of production that Moderna is going through because of a lack of demand.
“Committing Vaccines to COVAX and the African Union
“Beginning in the summer of 2020, the Moderna team was engaged with Gavi, the Vaccine Alliance, on behalf of the COVAX Facility, hoping to secure a commitment from them to procure a significant number of Moderna COVID-19 vaccines. An agreement was not reached until April 2021, though we were pleased to commit up to 500 million doses to COVAX – a number that was subsequently increased to 650 million doses. Similarly, we were proud to reach an agreement with the African Union to supply 110 million doses, which we were prepared to start delivering as early as the fourth quarter of 2021. In each case, we offered these vaccines at our lowest price, and in the latest agreements the price for each of these organizations was $7 per 100 μg dose.
“Despite our efforts, ultimately COVAX and the African Union deferred or declined hundreds of millions of doses of Modernaʼs vaccine. While we were prepared to deliver tens of millions of doses to the African Union in December 2021, they asked us to delay delivery, noting that they did not have the means of distributing them. They also declined to exercise an option for 60 million doses that were available to them in the second quarter of this year.
“Similarly, COVAX has declined options for over 320 million doses that Moderna was prepared to deliver in 2022, noting that they have ample access to vaccines. And even for those doses where COVAX submitted a firm order covering the first and second quarters, they have asked to defer delivery. As a result, Moderna is incurring significant costs as it winds down relationships with outside manufacturers who were engaged to produce these declined doses.
“Asking Moderna to transfer intellectual property to local manufacturers—as the Oxfam America proposal suggested—when hundreds of millions of doses are being declined and already operating manufacturing plants are being idled will do nothing to accelerate the end of the pandemic. It would also require diverting Moderna personnel already engaged in manufacturing with other partners, or who are working on other initiatives, including the companyʼs Global Health strategy as described below.
The WTO-IMF COVID-19 Vaccine Trade Tracker in its table 4 on total supply shows that supply by all or nearly all major COVID vaccine producers has declined on a monthly basis since December 2022 including for Sinovac, AstraZeneca, Pfizer, Sinopharm, Moderna, J&J, Sputnik and other. Thus, the reduction in production is not limited to mRNA products or to just Moderna.
So the challenges of vaccinating the world against the COVID-19 pandemic continue but are not driven in 2022 by availability of the vaccine or even access to the vaccine. Neither waiver of TRIPS obligations nor easier compulsory licensing of the COVID-19 vaccines will solve the underlying ongoing issue of vaccinations.
The draft intellectual property document being worked on by the EU, U.S., India and South Africa that when signed o on by those four will need to be considered by the WTO Membership as a whole, is limited to vaccines, with therapeutics and other elements of goods needed to address the pandemic potentially addressable in six months after an agreement. If the draft agreement among the four (actual language has not been finalized and reportedly has not been signed o on by the U.S., India and South Africa) is the intellectual property part of the WTOʼs response to the pandemic, its relevance, if any, will be how Members might look at future pandemics and actions by WTO Members. Its utility for the COVID- 19 pandemic is at the most very limited with more capacity than demand in 2022 and with the major drivers of nonvaccination this year not being availability of vaccines. This means that while there will be potentially symbolic relevance to the IP portion of the package, the meat of the response will be in the areas of keeping markets open, limiting export restraints, improved transparency, etc.
Terence Stewart, former Managing Partner, Law Offices of Stewart and Stewart, and author of the blog, Current Thoughts on Trade.
To read the full commentary from Current Thoughts on Trade, please click here.