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• GS 3 || Economy || External Sector || World Trade Organization

Why in the news?

The United States has stated its support for the waiver of Covid-19 vaccine’s intellectual property (IP) rights.

Present Context:

The decision marks a significant step forward in India and South Africa’s efforts to persuade WTO members to consent to such a waiver in order to battle the pandemic in proper manner.

What is Patent?

• Patent is the right which is given to me member organization and person called as the patent waiver of patent right Covid-19 vaccine de aught over the Covid-19 vaccine by developing nation by the wave of patent least developed countries could use these tech to use of meeting vaccine and ramping up their vaccine production.
• Recently India and South Africa requested world made Organization (WTO) to waiver of patent under 1995 agreement

About TRIPS:

• TRIPS (Trade-Related Aspects of Intellectual Property Rights) – It was negotiated in 1995 at the WTO. TRIPS Agreement requires all its signatory countries to enact domestic law, which guarantees minimum standards of IP protection.
• What’s the use of TRIPS?
  • Clear legal consistency enables innovators to monetize their intellectual property in multiple countries.
  • India and South Africa have sought waiver of IPR regulations suggesting that the vaccine manufacturing process is complex and exercising all existing flexibilities in TRIPS will still be insufficient to enhance production.
• If the waiver is granted, WTO member countries will be relieved of their duty to grant or enforce patents and other IP-related privileges for Covid-19 medicines, vaccines, and other treatments for a limited time.
• This will protect countries’ efforts to immunize their citizens from accusations of illegality under WTO rules.

Indian pharmaceutical industry:

• The Indian pharmaceutical industry: It is a thriving, high-tech industry that has experienced steady growth over the last three decades.
• Favorable government policies: The current industry players include a number of privately held Indian firms that have carved out a significant share of the domestic pharmaceutical market as a result of favorable government policies and restricted international competition.
• Revolutionizing Indian industries: Indian industries are undergoing a transformation as a result of the Indian economy’s liberalization, as they continue to emerge from domestic markets and prepare for foreign competition.
• India an open market for global trade: As India’s markets open up to foreign trade, the pharmaceutical industry in India is a prime example of an industry that is being forced to reconsider its long-term strategies and business models.
• Protection of intellectual property: Factors such as intellectual property rights are becoming more important as the need to protect valuable investments in research and development becomes more apparent (R&D).
• Curb problems of weak enforceability: In India, efforts are being made to address issues with the enforceability of existing intellectual property laws, and the government is working to create a patent regime that is conducive to technological advancements and in line with its international commitments.

Product and patent:

• A patent is outlined as a statutory privilege granted by the govt to inventors, and to different persons derivation their rights from the discoverer, for fastened years, to exclude different persons from producing, victimisation or commercialism a proprietary product or method.
• In the case of a product patent, it’s Associate in Nursing privilege given to the first discoverer of a product.
• This means that no different manufacturer will offer identical products through identical or the other method.
• The implication is that there’ll not be a rival for the producer because it is that the product that is proprietary. Product legal system offers the next level of protection to the discoverer as there’ll not be the other patent holder. visits follow the merchandise patent regime.

Patent Law in India:

• One of the most important contributions of the TRIPS Agreement has been the adoption of product patents.
• The Patent Act of 1970 was also instrumental in bringing India into the global patent arena. Since India was a developing country, it took some time to enforce the TRIPS Agreement, which was subject to some conditions outlined in Articles 70 (7) [4] and 70 (8).
  • These two sub-clauses discuss “transitional arrangements,” with sub-clause (8) stating that India must have a way for companies to file patents.
• India’s Patent Act was amended for the first time in 1970, introducing a scheme of transitional arrangements.
• The second amendment, passed in the year 2000, saw several significant changes as well. The term of a patent was extended, the subject matter of patents was changed, and a compulsory licensing scheme was implemented.
• The Act was also amended a third time in 2005. In some cases, such as the pharmaceutical industry, this amendment established a product patent regime.
• This amendment also modified the fee structure, penalty rules, and filing process, among other things.

The Impact of Indian Patent Law on the Pharmaceutical Industry:

• Anti-competitive: The deeper ramifications of the impending product patent regime have given rise to a new range of challenges. In the pharmaceutical industry, there are a number of activities that tend to be anti-competitive.
  • Such practices may be categorized into primarily three classes: Breach of intellectual property rights, violations of antitrust laws resulting from mergers and acquisitions, as well as collusive and other anti-competitive behavior.
• Domestic pharmaceuticals industry: lack of protection for product patents has had a tremendous impact on the domestic pharmaceuticals industry in the last three decades.
• The generic companies produced the drugs at low cost which forced the big companies also to sell their product at low cost, if they wanted to survive in the market
• The competition law will also play a major role to avoid a situation of monopoly in the market. The Competition Act of 2002 seeks to prevent monopoly in any field.
• Three types of competition issues can arise in the pharmaceutical sector. They can be in the form of mergers and acquisition and mergers, collusion, and misuse of a strong market position.
  • These can increase the cost of medicines to a very high level where it will become very difficult for the poor patients to buy medicines.
• The welfare of the society, it is very crucial that balance is maintained between protection of intellectual property and competition between the companies.

Significance of waiver in handling Covid-19 Pandemic:

Significance for India:

• Increasing vaccine production: In view of patent waiver India can increase their vaccine production to fulfill demand of vaccine production to fulfill the demand of the vaccine. Only two vaccine are popular in India Covaxin and Covidshield if patent waiver happened the other vaccine too could add in the list
• Preparation of 3^rd wave: It will also help in tackling the 3^rd wave of Covid-19 because as per the study AstraZeneca and Moderna vaccine are effective in mutant virus
• Save life: By giving permission to other companies to produce Covid-19 vaccines, the production rate will increase and it will save the lives of millions of people.
• Reduces Cost: It will reduce the cost of vaccines and will make it more accessible to poor populations.
• Rapid vaccination: Up to May 2021 not only 15%, of Indian population get vaccinated allowing other companies to produce Covid-19 vaccine; production rate will increase will increase the speed of vaccination process
• Save livelihood: This initiative will not save life of people but it will also save livelihood of people by encouraging them to get back to work after getting vaccinated

Challenges for India:

• Hinder research and development: By Wavering off newly introduced technologies will hinder research & development
• Reduce margins of pharma companies: Pharma companies sell their product to the government at very low prices. Wavering off will completely reduce their margins
• Vaccine safety and quality could be jeopardized: Lifting patents would result in a loss of control over vaccine production protection and quality standards.
• Discourage Investment by pharma companies

Way ahead:

• There is a need to move towards Voluntary Licensing Agreement private companies should be encouraged to move into voluntary Licensing agreement Like AstraZeneca & Serum Institute of India
• In order to make vaccines available all over the world, IP protections must be lifted. To extend manufacturing capabilities and promote foreign vaccines, the countries must collaborate.
• To ensure that India’s vaccination drive is not jeopardized in any way, both Indian manufacturers and the government must resolve patent holders’ concerns.

Mains oriented question:

What does “waiver of patent rights” over the COVID-19 vaccine imply? Examine the importance of it as well as the practical problems it poses. (250 words)