On COVID treatments, it’s Big Pharma vs. everyone else

World-class Kabuki theatre took the stage at the U.S. International Trade Commission (USITC) last week. Big Pharma interests raged en masse:  Death and misery would befall us all if the U.S. government supports temporarily waiving intellectual property rules so people in poor countries can also access COVID-19 tests and treatments.

There is just one problem: The proposal they were dramatically trashing doesn’t exist.  

It is true that most people in developing countries have no access to the tests and treatments that allow many of us to return to pre-pandemic life. It’s also true that in October 2020, South Africa and India proposed a broad, if temporary, waiver of certain World Trade Organization (WTO) intellectual property monopolies that limit global access to COVID-19 vaccines as well as tests and treatments.  

The Biden administration initially announced it would support a waiver for just COVID-19 vaccines. But that proposal was ultimately killed after pharmaceutical companies launched a lobbying onslaught in London, D.C., Berlin and Brussels.  

Despite support for a broad COVID meds waiver by most WTO member countries, in June 2022 WTO members only agreed to a very cynical deal: Restrictions that limit developing countries from exporting generic versions of COVID vaccines to other poor countries would be lifted, but not the intellectual property barriers blocking those countries’ ability to make generic vaccines. 

The only upside to the deal was a requirement that WTO countries had to decide within six months to extend the exporting permissions to COVID treatments and tests. And that could make a life and death difference for literally hundreds of millions of people who now have no access because the tests and treatments controlled by the brand name firms are too expensive.  

Generic versions of many existing COVID treatments, which are simpler to make than the vaccines and subject to fewer IP barriers, could be made under existing WTO rules. More importantly, that is also true for hundreds of COVID treatments in the pipeline that will prove even more effective. 

That is because the WTO’s Trade Related Aspects of Intellectual Property (TRIPS) agreement allows countries to issue what is called a “compulsory license.” This allows a generic producer to make a medicine without permission from, but with compensation to, a patent holder. But under these existing WTO rules, a country that can make generics cannot export more than half of the doses. That means countries that can produce cannot achieve the economies of scale needed to gear up manufacturing and those that cannot produce won’t have any supply. 

The only proposal on the table is whether to extend the permission for a developing country that the WTO rules already allow to produce generic treatments and tests to export those to other developing countries. That’s the subject of the current ITC investigation. 

Obviously, the U.S. government should support this. It would allow affordable generic COVID-19 treatments and tests to go to people who are too poor to be interesting to pharmaceutical companies. Now they have no access and it’s costing lives and livelihoods worldwide.  

The voluntary licensing deals pharmaceutical firms have made with health agencies for some treatments, only covered countries they selected. Monopoly control means they had the power to simply exclude 100 developing countries with almost half the world population and a high percentage of COVID cases. 

Because this proposal only applies to developing countries that cannot afford to buy Paxlovid at the $250/dose “developing country” rate or other treatments with similarly unaffordable monopoly prices, it won’t impact pharmaceutical sales and profits in high-income countries, where the industry makes its money.  

Is this mechanism a means for hostile governments to injure the United States, as industry lobbyists claim? Actually, the United States was the number one user of compulsory licenses during COVID. The U.S. government granted Moderna, Eli Lilly, Merck, Sanofi and Siemens access to other firms’ patented technologies, a Knowledge Ecology International study revealed. 

Developing countries have been battered by the pandemic. And they feel they have had to face it alone, with rich countries blocking access to medicines widely available to their populations.  

In its attempt to secure an absolute monopoly on the next generation of COVID-19 treatments, the pharmaceutical industry has seemingly embraced post-truth politics. The industry is shadowboxing with a phantom. The only threat is to lives and livelihoods around the world, and thus to the reputation of the United States around the world. And the way to avoid it is for the United States to support the modest, temporary WTO permission to export generic COVID-19 treatments and tests. 

Lori Wallach is the director of Rethink Trade at the American Economic Liberties Project and is the founder and previous director of Public Citizen’s Global Trade Watch.