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

By Eva Bishwal
May 5, 2021

“The real blockades to vaccine access [in India] are state inaction, dearth of raw materials and low production capacity…. 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.”

India, COVID-19 - https://depositphotos.com/362603228/stock-illustration-medical-mask-national-flag-india.htmlThe 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.

Image Source: Deposit Photos
Vector ID:362603228
Copyright:10comeback 

The Author

Eva Bishwal

Eva Bishwal is a Senior Associate in the litigation and enforcement team at Fidus Law Chambers. She is a graduate of the Symbiosis Law School, Noida. Her areas of practice include trademark litigation, anti-counterfeiting actions, domain disputes, copyright litigation, designs litigation and trade secrets litigation. She regularly appears before the Delhi High Court and Delhi district courts, and coordinates matters in several courts across the country.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments.

  1. Anon May 5, 2021 12:28 pm

    Quick post of a link to a prior chain (that contains several outstanding links) to make retrieval easier:

    https://www.ipwatchdog.com/2021/04/19/waiving-ip-rights-during-times-of-covid-a-false-good-idea/id=132399/

  2. A non May 5, 2021 5:24 pm

    Really well done. Kudos. Absolutely agree that the patents are not the problem here. I know there are some government manufacturing sites on India but to me “equip the governments to produce as per demand” really means grant Dr Reddy and Ranbaxy huge lucrative contracts and then they retain the know how forever. You cannot un-ring a bell.

  3. Anon May 5, 2021 9:04 pm

    A non – yes, you alight upon one of the deeper drivers.

  4. Rakesh Anand May 6, 2021 4:26 am

    Great analysis of the current situation. Nicely described.

  5. Amiya Patnaik May 6, 2021 4:35 am

    Very well articulated. Government n manufacturers have to move proactively with speed

  6. VRINDA PATHAK May 6, 2021 4:43 am

    Very well articulated, eva. Very proud of you.

  7. Damon May 6, 2021 7:37 am

    Quite a wrong understanding of the situation and failed attempt write anything anyhow? When did the India asked for IP waiver for itself – for vaccines or pharmaceuticals? Also many factually incorrected information – Maharashtra and Delhi – never stopped the immunization, rather ramped up with some exceptional slow down here and there! Author should also have taken care about the representation of the flag – which seems in conflict with the relevant laws!

  8. Xtian May 6, 2021 8:37 am

    Informative article. Can you provide more details on ” India’s indigenous vaccine by Bharat Biotech is also being produced in great numbers.”

    How many vaccines are being produced by Bharat?
    Are they not effective?
    What is Bharat’s limiting factor in not being able to satisfy the demand?
    Why isn’t the Indian gov’t doing more to help Bharat rather than trying to import foreign technology and “start from scratch” on a new vaccine?

  9. shirish arya May 7, 2021 12:20 am

    This is heavily one sided commentary. To believe “market forces” alone will relieve us out of this situation would truly be a grave mistake. The are multiple stumbling blocks in the race to vaccinate the world, but to say IP has no relevance at all is balooney. The joint global production capacity is it being fully and completely being leveraged – simple answer is NO. How can we create 10 bn+ vaccines when the production capacity is only in few millions. UN and WHO in particular should create a framework where IP is not a stumbling block, long term protection to IP creators are given (even though it may still not be fool proof) but creates some safety and global production capacity and distribution is fully leveraged. Non-action is not an option even if all parties are not completely happy.

  10. Ishan May 11, 2021 1:56 pm

    When patent waiver would happen, of course it would be a combination of waiver plus technology transfer. Most of the patents would in fact have the details of know how and how to manufacture the vaccine. So, a waiver (including tech. transfer) would obviate the need for any requirement of reverse engineering. Do not really agree with the author’s understanding of the parent waivers or compulsary licensing. To sum up, further issues of reverse engineering with patent waivers is not correct, as pointed out by the author.

  11. Anon May 11, 2021 5:15 pm

    Ishan,

    May I correct your writing and note that the larger term of IP waiver is distinct from (and includes) patent waiver.

    You seem to be aware that it is NON-patent IP that is important, so understanding the distinction between patent waiver and IP waiver does not undercut any concerns you may have, and merely makes the dialogue more precise.

    I would add that many have made a similar error in judgment in thinking that “patent waiver” is the be all and end all, and the larger attempted conversion goes well beyond patents.

  12. Ishan May 11, 2021 6:11 pm

    @anon : well, for the first thing, please do note that the article does not talk about IP waiver. It only references to patent waivers, and never goes on to make a distinction between IP and patent waivers. That is your and my understanding about the IP vs patent waivers – and I think we are on the same page with respect to IP waivers. That’s the only reason I mentioned about technology transfer in combination with patent waivers (that covers your point of non-patent IP). Hope it makes sense. I welcome your additional thoughts on this.

  13. Anon May 12, 2021 4:56 pm

    Ishan,

    yes – you are correct, It is in the story that incorrectly focuses ONLY on “patent waiver” (particularly, “Last October, India and South Africa made a motion before the World Trade Organization (WTO) for waiver of patents related to COVID-19 technology. ” that the LINK is correct in pointing out that the waiver is in fact more than merely a patent waiver).

    However, everyone should be abundantly clear that “patent only” is simply NOT the aim here. (as I mentioned – I do believe that you personally understood this)