Trade and Access to Medicines in the COVID-19 Era: GDP Center Roundup

By Rachel Thrasher

The COVID-19 pandemic has brought the existing challenges of equitable access to affordable medicines into sharp relief. With almost 3 million deaths globally, every country in the world is dealing with an unprecedented disease burden on the health care system, the economic impacts of mandated public and private sector shut-downs and increasingly unmanageable public debt.

Some countries are struggling much more than others. Research has shown gross inequity in access to testing, personal protective equipment, medical technologies, treatments and vaccines all over the world. This gap is even more disconcerting when considering that there is still a long way to go to reach full, global vaccination from COVID-19.

The pandemic has also brought to the forefront the ways in which the international trade and intellectual property architecture, as it is currently designed, presents a major barrier to equitable access. On April 30, the WTO TRIPS Council will hold a formal meeting, on the heels of two weeks of closed-door meetings and informal open-ended discussions between pharmaceutical industry stakeholders and WTO representatives to address the shortages and production bottlenecks in the global vaccine rollout.

While world and industry leaders meet to discuss these challenges, members of the Boston University Global Development Policy Center’s Working Group on Trade and Access to Medicines has published a suite of research on the intersection of international trade and investment commitments and access to medicines in a COVID-19 era. The research examines how the WTO’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) and additional expanded protections of intellectual property rights under free trade agreements (TRIPS-plus) may impact countries facing domestic and global public health crises both now and in the future.

See highlights from our latest research below:

TRIPS-plus Rules in International Trade Agreements and Access to Medicines: Chinese Perspectives and Practices

Since 2001, when China acceded to the WTO, it has focused extensively on increasing protection for intellectual property rights. More recently, in 2019, China signed a Phase One agreement with the United States to accelerate that process even more. As Han Bing demonstrates, China has now implemented several of the TRIPS-plus legal standards demanded under free trade agreements today, partly due to external factors and partly due to a desire to foster its own innovation in pharmaceuticals. The most important and long-standing of such standards is China’s data exclusivity law, which keeps generic manufacturers from relying on the underlying test data from the innovative product to gain marketing approval for at least six years (12 years for biologics).

Although the outcomes of these policies are mixed, the data on data exclusivity has had some decidedly negative consequences. Chinese pharmaceutical companies continue to struggle to break into the global market and, at least in one case, data exclusivity kept a key treatment for Hepatitis C (Sovaldi) out of the domestic market, even though the product was not patentable under Chinese law. China’s example demonstrates the complex relationship between IP protection and access to medicines. As Han Bing notes, at an international level, the focus of these regimes needs to shift away from a concern about free riders and move towards offering a return, in the form of affordable access, to the consumers who share in the innovation costs. Read more.

Evaluating the Impact of Data Exclusivity on the Price per Kilogram of Pharmaceutical Imports 

The US free trade agreements (FTAs) signed in the past 20 years have all required trading partners to enact stronger IP laws than are required by the World Trade Organization, including trade agreements in low- and middle-income countries where individuals and health systems cannot afford higher prices. In pharmaceutical markets, stronger IP enhances the monopoly power of branded pharmaceutical producers, extending time on exclusive markets, free from generic competition.

Michael Palmedo focuses on a key TRIPS-plus provision required by all of the United States’ FTAs – data exclusivity. He demonstrates that it has been associated with faster inflation of imported pharmaceutical import prices in a set of 42 countries and that the price of drug imports rose on average between 2.4 and 4.5 percentage points faster in the countries that had implemented data exclusivity than in those without it, linking American trade policy to higher medicine prices abroad.

The US will has begun FTA negotiations with Kenya, a country with a GDP per capita of $1,856. Palmedo explains why it is clearly not in Kenya’s interest to pay more for drug imports, but US industry groups are advocating for the inclusion of rules requiring stronger patent and test data protection in the FTA. Read more.

Future Trade & Investment Commitments and Access to Medicines: US-Kenya FTA and Safeguarding Public Health 

Amid the US-Kenya FTA negotiations, Paul Ogendi explores the likely contours of the IP commitments within the proposed FTA. Predicting that the United States will seek to maximize provisions protecting and enforcing IP rights, as it did within the United States-Mexico-Canada Agreement (USMCA), Ogendi argues that Kenya should push for a treaty model that more closely resembles the provisions of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).

Ogendi highlights six problematic IP provisions likely to appear in the US negotiating drafts of the agreement: expanded patentability criteria, patent term extensions, restrictions on issuing compulsory licensing, traditional data protection and exclusivity, biological data exclusivity and patent linkage. In each case, introducing these standards would require a substantive change to Kenya’s Industrial Property Act.

Ogendi urges Kenya to omit these problematic provisions and demand exceptions for early working of patented ideas and patent term opposition and revocation. He also encourages Kenya to adopt national laws that make public health concerns a clear priority. Read more.

Making International Intellectual Property and Trade Regimes Work to Address the Health Response to COVID-19 – The Burdens of Exclusivity

Brook Baker highlights key problems in the global pandemic response, noting that what began as an opportunity for global cooperation has disappointingly reverted to business-as-usual, resulting in wasted and inefficient research, delayed access to COVID-19 diagnostics, treatments and vaccines, insufficient supply through the lack of manufacturing capacity, higher prices and generally a grossly inequitable distribution.

To address the current state of affairs, Baker points to the various efforts at national, regional and international levels. Some efforts focus on encouraging vaccine innovators and manufacturers to pool their research, technology and technological know-how, as is promoted through the COVID-19 technology access pool (C-TAP). Other efforts focus on the demand side, typified by the COVAX facility and regional cooperation in Southeast Asia and Africa, allowing countries to join together in negotiating for affordable prices and pharmaceutical access. Many solutions would require individual countries to implement new laws to suspend intellectual property protection for COVID-19 products, either on a general basis (like the TRIPS Waiver proposal, or the Article 73 National Security waiver), or on a drug-by-drug basis (deploying compulsory licensing).

According to Baker, these solutions are not ambitious enough, nor feasible for countries facing a pandemic. Instead, he advocates for a collaborative and open-science approach in which originator companies are given incentives to offer open-patent licensing and transfer technology to capable pharmaceutical manufacturers worldwide. He also urges policymakers to treat COVID-19 health products as a “global public good,” such that medicines and other products are effectively free for the poorest populations and that global mechanisms for equitable distribution be established. Read more.