Countries Like the Philippines are Unable to Utilize IP Flexibilities to Fight COVID-19

“As of writing, the world has suffered almost 3 million fatalities from COVID-19. At this stage, arguing in favor of innovation, without entertaining any compromise between the right to health and pharmaceutical patent rights, appears insensitive and out of touch with reality.”

https://depositphotos.com/457883132/stock-illustration-global-program-fight-coronavirus-planet.htmlThe Philippines has so far relied on donations and direct purchase to obtain vaccines to address the pandemic. As of March 2021, the Philippines received 2 million Sinovac doses from China and about half a million doses of AstraZeneca vaccines from the COVAX facility. However, these doses could only vaccinate 1% of the country’s more than 110 million people.

Concerns regarding access to COVID-19 vaccines are also looming in other developing and least developed countries. It is reported that due to a supposed vaccine hoarding by wealthy countries, low-income countries have minute chances of getting their populations vaccinated against COVID-19 in the coming year. On the contrary, wealthier nations have already been able to secure nearly three times the doses needed to vaccinate their entire populations. As the United Nations Secretary General lamented back in February, progress in COVID-19 vaccinations has been “wildly uneven and unfair.”

Waiver of Pharmaceutical Patents

In view of the inequitable access to vaccines, India and South Africa have called for waivers on provisions of the TRIPS Agreement for the prevention and containment of COVID-19. Although the head of the World Trade Organization (WTO) has expressed optimism that countries will come to an agreement on this issue, so far no concrete steps have been achieved. Meanwhile, the World Health Organization (WHO) has advocated for a COVID-19 Technology Access Pool (C-TAP), which would allow the free licensing of technology for vaccine production. However, it seems that no technology has been included in the pool thus far.

Considering the call for patent waivers and for the setting-up of a C-TAP program have remained unheeded, developing countries like the Philippines have to explore other ways of supplying their populations with the much-needed vaccines. For this purpose, taking advantage of intellectual property (IP) flexibilities is a must.

Flexibilities Available to the Philippines

Despite the availability of flexibilities in international law, and even in local legislation, it increasingly appears that the Philippines will be unable to take advantage of any of them. Global and domestic factors make it difficult for the country to put these flexibilities into operation.

To begin with, manufacturing one’s own vaccines would have been an effective way of making COVID-19 vaccines readily available. This appears to be the strategy adopted by India, whose Serum Institute partnered with AstraZeneca in order to locally manufacture vaccines. The vaccines produced from this partnership are currently being used to quash the surge in COVID-19 cases in the country. In another example, Group 42, a technology company based in the United Arab Emirates (UAE), is set to produce Sinopharm’s COVID-19 vaccine in its newly constructed plant in Abu Dhabi. With its factory expected to produce about 200 million doses per year, the company seeks to provide not just the UAE but also other states in the region with COVID-19 vaccines.

Unfortunately, manufacturing its own COVID-19 vaccines is still a remote prospect for the Philippines. Engaging in this endeavour will require the cooperation of pharmaceutical companies, many of whom have spent their own resources on the development of vaccines. Moreover, even if a voluntary license is obtained, it is questionable if the country would be able to take advantage. The Philippines has an underdeveloped local manufacturing capability, and over the years it appears to have produced only a limited number of vaccines. With the national government slashing the budget for research and development, including some allocations for COVID-19 research, it is difficult to see how the country’s manufacturing system will be able to catch up with international standards. Notably, at least four Philippine companies are currently interested in investing and setting up a local vaccine industry, aiming to initially establish a fill and finish manufacturing facility. However, this project will take around 18 months to three years to set-up.

Another option that is available to the Philippines is to pursue parallel importation, as espoused in its Universally Accessible Cheaper and Quality Medicines Act. The Philippines adopted an international patent exhaustion regime for pharmaceutical products, allowing it to purchase vaccines at lower rates from licensees abroad. Parallel importation is an attractive option since pharmaceutical companies usually engage in the practice of tiered pricing. To illustrate, when Pfizer launched its COVID-19 vaccines, it committed to impose a non-profit price for low-income countries, and a GDP-based price for developed countries.

Nevertheless, parallel importation has encountered challenges of its own. To begin with, as illustrated earlier, patent holders may refuse to license out their patents, making it unlikely for low-cost manufacturers to come up with cheaper vaccines. Moreover, even if patent holders are generous enough to grant licenses, they will still have the option of retaining the final say on how the vaccines will be distributed. This appears to be the case with the agreement between AstraZeneca and India’s Serum Institute, wherein it is believed that control over who will be the ultimate recipients of India’s locally manufactured vaccine remains with the former. As a matter of fact, factors like the limited supply of vaccines, as well as active lobbying by governments, may have already prevented the implementation of Pfizer’s tiered pricing. Recently, a senior health official in South Africa revealed that AstraZeneca’s vaccines were procured by their country at the price of $5.25 each. This is about 2.5 times higher than the amount paid for by most European countries. The sudden reversal of the planned tier pricing is being attributed to the contributions of European countries to AstraZeneca’s research fund.

Finally, the Philippines may also avail of a compulsory license that will allow it to import a generic COVID-19 vaccine. This is the same mechanism used by Canada in 2007 when it issued a compulsory license on the drug, TriAvir, in favour of Rwanda, allowing the latter to meet urgent domestic demands for a drug that will combat AIDS. Availing of this type of flexibility under the TRIPS agreement appears realistic, since unlike patent pools or TRIPS waivers, compulsory licensing imposes strict limitations on the use of patents, which are favourable to patent holders. In fact, the Philippine government, through the Department of Health (DOH) and the Intellectual Property Office of the Philippines (IPOPHIL), has already released draft guidelines on how to avail of special compulsory licensing for the importation of generic versions of patented pharmaceutical products.

Again, this option is not free of entanglements. For compulsory licensing through importation, the difficulty lies in the acquisition of technology and know-how for the manufacture of existing vaccines. A successful application for a compulsory license does not necessarily entitle the licensee any access to the technical knowledge and trade secrets that accompany a certain technology. Furthermore, availing of such licenses may lead to threats of retaliation and trade sanctions from the pharmaceutical companies and developed countries. Last year, the United States Trade Representative issued its annual Special 301 watch list, which effectively warned countries like Chile, Indonesia and Russia for using or promoting the use of flexibilities, including compulsory licenses, under international intellectual property norms. The biggest problem would be the prolonged time that it would take to complete the process for compulsory licensing. Such an endeavour may take years, as it requires extensive negotiation among the involved parties. If we learned anything from the past year, it is that time is critical in dealing with the pandemic.

Call for Cooperation

The illustrations above show that the Philippines remains unable to utilize IP flexibilities in dealing with the pandemic. Issues such as deficient logistical and research capabilities, lack of time and resources, and external threats and sanctions, make it difficult for the country to take advantage of the flexibilities. Sadly, the case of the Philippines is not unique. Many other developing and least-developed countries suffer from same limitations that render them unable to gain greater access to COVID-19 vaccines.

The international community needs to realize that helping these countries, which have less purchasing and manufacturing powers, to secure COVID-19 vaccines, is beneficial to the entire world population. As the virus continues to spread, the possibility of mutations also remains. These mutations threaten the efficacy of the vaccines that we currently have. Notably, the recent surge of COVID-19 cases in the Philippines has revealed traces of the variants from South Africa and the United Kingdom. To make matters worse, a third generation variant has recently been detected in the country.

As of writing, the world has suffered almost 3 million fatalities from COVID-19. At this stage, arguing in favor of innovation, without entertaining any compromise between the right to health and pharmaceutical patent rights, appears insensitive and out of touch with reality. This rings especially true in countries like the Philippines, wherein fatalities continue to rise at exponential rates. Over 15,000 deaths from the pandemic can be traced back to the Philippines, with the number of active cases only reaching its peak these past few weeks. In fact, the figure would probably be much higher if not for the lack of mass testing in the country.

Whether the solution comes in the form of TRIPS waivers, patent pools, or compulsory licensing, it is clear that the international community has to implement immediate changes in order to prevent further unnecessary loss of life. At the end of the day, greater access to vaccines remains a global concern that necessitates the cooperation of all countries – rich and poor. Together, we must act now.

Note: This opinion piece has built upon the theories presented in a previously written conceptual paper by the authors.

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The Author

Mario C. Cerilles, Jr.

Mario C. Cerilles, Jr. is the co-founder and managing partner of Cerilles & Fernan Intellectual Property Law (CFIP Law). He is an experienced professional in the fields of Intellectual Property, Immigration, and Litigation. His wide-ranging practice and extensive network allow him to advise clients on various areas of Philippine law. Recently, he was named as one of the Top Emerging IP Players by the IPR Gorilla.

For more information or to contact Mario, please visit his firm profile page.

Mario C. Cerilles, Jr.

Harry Gwynn Omar M. Fernan is a co-founding partner of Cerilles & Fernan Intellectual Property Law (CFIP Law). As an IP lawyer, He has an extensive experience in trademark and patent prosecution, intellectual property litigation, Patent Cooperation Treaty (PCT) Applications, trademark applications through the Madrid Protocol, copyright protection, and the foreign prosecution of patent and trademark applications.

For more information or to contact Harry, please visit his firm profile page.

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Discuss this

There are currently 2 Comments comments. Join the discussion.

  1. Francis G. Rushford April 19, 2021 7:08 am

    How about incentives, instead of coercion?

    Provide that the licensing of the IP to various country designated manufacturer is considered a tax credit or deduction for each dose in the home country of the Licensor and in the Licensee Country.

  2. BP April 19, 2021 11:52 am

    Thanks for elaborating on the situation in the Philippines. It is in our best interest: “that the international community has to implement immediate changes in order to prevent further unnecessary loss of life”. Governments/taxpayers have funded an incredible amount of the research, unfortunately, we lack transparency/accounting as to what IPRs have government rights. But even then, at least in the US, lobbyists control the government.

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