Indian Vaccine Economics: IP Rights are Not the Real Villain in India’s COVID-19 Emergency

The horrific second wave of COVID-19 in India has compelled the government to introduce an expedited vaccination drive from May 1, 2021, where all citizens above the age of 18 (and not just priority groups) will be eligible to register. The program also came with the promise of an introduction to several new vaccines in the market. A majority of the states also decided to roll out the vaccine for free.

Unfortunately, reports that stock had run out followed shortly in several states. States like Maharashtra and Delhi had to keep the drive on hold. Bengaluru also faced supply problems ahead of the drive.

A popular proposition is that patent restrictions and exclusivity of “know-how” are a barrier to adequate production of vaccines.

What is the Blockade to Vaccine Access in India?

Last October, India and South Africa made a motion before the World Trade Organization (WTO) for waiver of patents related to COVID-19 technology. Government and non-government stakeholders such as the World Health Organization (WHO) and Medecins Sans Frontieres (MSF) have also been advocating and lobbying for waiver. This was also a significant talking point in the telephonic conversation between Prime Minister Narendra Modi and U.S. President Joe Biden (as per the Indian government’s transcript), which was in the backdrop of the Biden administration’s trade restrictions on export of raw materials for the vaccines. This motion before the WTO has faced opposition from several members, including the United States and Europe.

The idea behind patent waiver is to take away control over manufacture and pricing from private entities and equip the governments to produce as per demand. However, critics of patent waiver argue that the waiver hinders expansion and production by private entities, as they miss out on their incentive to invest in R&D and production. This is particularly relevant in the case of the COVID-19 vaccines, where the healthcare systems are entirely dependent on the ingenuity of private entities. Given that there are reports that the vaccine may require periodic “tweaking” due to the mutations, it is crucial that the private entities are equipped and motivated to continually invest in R&D.

In response to the proposal for patent waiver, WTO Director General Ngozi Okonjo-Iweala has proposed a “third way deal,” which is an industry driven voluntary licensing system. So far, this system has met with great success in India. The Serum Institute of India, which is manufacturing Oxford/Astrazeneca’s vaccine, is currently the largest COVID-19 vaccine manufacturer in the world and is working on alliances in the international market. Several other leading manufacturers, such as Dr. Reddy’s, Zydus Cadilla and Panacea Biotech, are also racing to collaborate with international private entities to manufacture the vaccine and boost access. India’s indigenous vaccine by Bharat Biotech is also being produced in great numbers.

However, the projections of vaccine production have not been realized and supply is evidently falling short of demand.

The other reason for the proposal of patent waiver is to allow local manufacturers to reverse engineer the product/process. Vaccines are complex biologicals which are known to be difficult to reverse engineer. There is no academic evidence to suggest that COVID-19 vaccines can be reverse engineered by a manufacturer without access to the proprietary know-how of the innovator. A group of researchers from Stanford University attempted to reverse engineer the Moderna vaccine from a sample. As per reports, although they were able to extract the mRNA sequence of the vaccine, they were unable to reverse engineer it in finished form, as the recipe is Moderna’s confidential know-how. Further, reverse engineered vaccines would also have to undergo their clinical trials and regulatory compliances, which is not conducive to creating expedient access. Therefore, mere waiver of patents cannot be the solution to the issue of access to vaccines.     .

Several proponents have also argued that since India is experiencing a national emergency, warranting an urgent vaccination drive, the Controller of Patents should suo motu grant a compulsory license for manufacture of vaccines under Section 92 of the Patents Act. But this becomes unnecessary when India has its own indigenous vaccine and prominent vaccine owners of the world are collaborating with multiple licensees in India.

Identifying the Real Problems

The real blockades to vaccine access are state inaction, dearth of raw materials and low production capacity. Vaccine raw materials are currently being imported from the United States. With the increase in global demand for vaccines, demand for suppliers has also increased. Experts from the United States argue that trustworthy vaccine suppliers cannot spring up in such a small span of time. However, a logical corollary that arises from this is that the current government and vaccine manufacturers have failed to accurately project the production capacity and have over-promised.

India’s vaccine market is almost entirely dependent on bulk government orders. There is criticism that the current government did not iron out the details of regulatory requirements or commit orders for the private vaccine manufacturers ahead of time, and therefore, the manufacture did not commence until the end of 2020. By this time, most countries were ready to place orders and stock. This put us behind schedule, and eventually unable to keep up with a national emergency.

A correct assessment of the production capacity is crucial to plan social distancing at macro levels,      investments in healthcare, infrastructure and medical resources. The current government’s failure to communicate realistic potential of the vaccination drive and the need for social distancing led to giving a false sense of confidence to the public, which aggravated the outbreak to the point of systemic collapse.

As a side note, discrimination in the vaccine drive is evident from the fact that registrations are only being accepted online, which is clearly disadvantaging people who are illiterate or do not have access to the internet. On April 30, 2021, the Supreme Court of India also raised concerns on this point in the course of the hearing in the suo motu case pertaining to all issues in the second wave.

The Way Forward

In today’s atmosphere, where there is a desperate need for a strategic solution to the second wave in India, the vaccination drive is being pitched as a quick fix for the catastrophe. The predicament is much more complex and requires a holistic assessment. As the first priority, the government needs to act fast to address the dearth of raw material supplies. It also needs to come to a realistic assessment of timelines for the drive, accept international help to be able to cope with the shortage of basic treatment necessities and testing facilities (in addition to boosting in house production and supply chain), and take stricter measures to control the spread and impose social distancing.

So far, the current government has only shown a tendency to pat itself on the back for declining numbers in 2020 and gloss over the negative state of affairs thereafter. It is important to steer conversations from high-level political debate on IPR limitations (which are not helpful or even relevant to the issue at hand) and work on the concerns on the ground, which urgently need attention.

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