GAVI

WTO’s April 14th virtual meeting to review COVID-19 vaccine availability

WTO’s Director-General Ngozi Okonjo-Iweala had indicated when she took office that she would be gathering industry, multilateral groups, and some governments to look at how vaccine production could be expanded and the role the WTO could play in that effort. At the same time, with the proposal from India and South Africa for waiver from most TRIPS obligations on medical products relevant to addressing the COVID-19 pandemic still under consideration in the TRIPS Council, with opposition from a number of important Members, DG Okonjo-Iweala has been seeking an approach that in fact expands production in developing and least developed countries and greater distribution to low- and middle-income countries. without needing an all or nothing resolution to the proposed waiver.

I have previously reviewed the issue of vaccine availability and prior DG Okonjo-Iweala statements in a number of posts. See, e.g., April 13, 2021, April 15, 2021 — U.S and Gavi co-host event for additional funding for COVAX amid concerns about two workhorse vaccines for COVAX, ttps://currentthoughtsontrade.com/2021/04/13/april-15-2021-u-s-and-gavi-co-host-event-for-additional-funding-for-covax-amid-concerns-about-two-workhorse-vaccines-for-covax/; April 8, 2021, COVAX delivers COVID-19 vaccines to 100th country; India surge in infections likely to reduce product availability for COVAX through May and likely longer, https://currentthoughtsontrade.com/2021/04/08/covax-delivers-covid-19-vaccines-to-100th-country-india-surge-in-infections-likely-to-reduce-product-availability-for-covax-through-may-and-likely-longer/; April 2, 2021, Global vaccinations against COVID-19; developments and challenges in the roll-out for many countries, https://currentthoughtsontrade.com/2021/04/02/global-vaccinations-against-covid-19-developments-and-challenges-in-the-roll-out-for-many-countries/; March 25, 2021, Global vaccinations for COVID-19 — continued supply chain and production issues and a new wave of infections in many countries delay greater ramp up for some until late in the second quarter of 2021, https://currentthoughtsontrade.com/2021/03/25/global-vaccinations-for-covid-19-continued-supply-chain-and-production-issues-and-a-new-wave-of-infections-in-many-countries-delay-greater-ramp-up-for-some-until-late-in-the-second-quarter-of-2021/; March 12, 2021, COVID-19 vaccines – U.S., Japan, India and Australia agree to one billion doses for Indo-Pacific countries, https://currentthoughtsontrade.com/2021/03/12/covid-19-vaccines-u-s-japan-india-and-australia-agree-to-one-billion-doses-for-indo-pacific-countries/; March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit” – efforts to ramp-up production, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/; March 5, 2021, COVID-19 vaccines — France supports Italy’s blockage of a shipment to Australia; while Australia has asked the EU to permit the shipment, Australia will have its own production of AstraZeneca product by the end of March, https://currentthoughtsontrade.com/2021/03/05/covid-19-vaccines-france-supports-italys-blockage-of-a-shipment-to-australia-while-australia-has-asked-the-eu-to-permit-the-shipment-australia-will-have-its-own-production-of-astrazeneca-produc/; March 4, 2021, Italy blocks exports of COVID-19 vaccines to Australia, first blockage of export authorization by the EU or its member states, https://currentthoughtsontrade.com/2021/03/04/italy-blocks-exports-of-covid-19-vaccines-to-australia-first-blockage-of-export-authorization-by-the-eu-or-its-member-states/; March 4, 2021, The EU’s response to challenges to its actions on COVID-19 vaccine exports, https://currentthoughtsontrade.com/2021/03/04/the-eus-response-to-challenges-to-its-actions-on-covid-19-vaccine-exports/; March 3, 2021, WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/; March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/.

“COVID-19 and Vaccine Equity: What Can the WTO Contribute?”

While the virtual meeting convened by DG Okonjo-Iweala was conducted under Chatham House rules, a number of participants made their prepared comments public and there was some press coverage.

DG Okonjo-Iweala provided a wrap-up at the end of the session which was posted on the WTO website. See WTO news, DG Okonjo-Iweala calls for follow-up action after WTO vaccine equity event, April 14, 2021, https://www.wto.org/english/news_e/news21_e/dgno_14apr21_e.htm (“Director-General Ngozi Okonjo-Iweala today (14 April) called on WTO members, vaccine manufacturers and international organizations to act to address trade-related obstacles to the scale-up of COVID-19 vaccine production to save lives, hasten the end of the pandemic and accelerate the global economic recovery.”). DG Okonjo-Iweala’s summary comments are copied below. See WTO speeches, Chair Summary following “COVID-19 and Vaccine Equity: What Can the WTO Contribute?”, April 14, 2021, https://www.wto.org/english/news_e/spno_e/spno7_e.htm.

“One thing that came out of today’s discussions is that it was only through working together across borders that scientists developed safe and effective vaccines in record time. And it is only by working together, across borders, that we’ll be able to solve the problems [of vaccine scarcity and equitable access] discussed today. This is a problem of the global commons, and we have to solve it together.

“Our purpose today was to contribute to efforts to increase vaccine production and broaden access, starting with the immediate term.

“Specifically we had three goals:

“The first was to pinpoint the obstacles, particularly the trade-related obstacles, to ramping up production, and to equitably distributing and administering vaccines — and we looked at how the WTO could contribute to these solutions.

“The second was to bring together people who are able to increase and to scale up manufacturing, people in a position to share technology and knowhow, and people willing to finance additional manufacturing capacity.

“And third, to think about the road ahead, including on the TRIPS waiver and incentives for research and development, so that we get the medical technologies we need, and no country is left at the back of the line waiting. If there is one refrain we heard continuously from everyone today it is that no one is safe until everyone is safe.

“We heard first-hand from governments and vaccine manufacturers from developed, developing, and least developed countries, as well as a wide range of other stakeholders from international organizations, civil society and development finance institutions.

“And we heard good news: that supplies are ramping up and companies are learning by doing, that there have been major gains in productivity, and that there is still capacity. We also heard that there is a willingness to finance investment in vaccine manufacturing both in the short- and long-term, and there are ideas and energy to do things differently.

“However, we heard from many that we need to do more. It hasn’t really been business as usual, so we may need to move on to ‘business unusual’ to solve the problems before us.

“In the discussions today we heard a great deal of agreement. We agree that it’s not acceptable for people and countries to have to wait indefinitely for vaccines. We do not want to repeat experiences of the past.

“We heard a consensus on the urgent need to scale up production and vaccinate everyone, because every day the shortage continues, scope for dangerous new variants will increase, and the number of prevent preventable deaths will grow. The economic impact of these delays can and has been quantified by many institutions, including the IMF, the World Bank, and the WTO.

“It was agreed that production capacity needs to be expanded, particularly in developing and least developed countries and emerging markets. And that vaccine distribution needs to be more effective and more equitable.

“We heard that open cross-border trade in raw materials, and other inputs, was essential for maintaining and scaling up production, and that supply chains in these inputs must be maintained.

“Also widely shared was the view that innovation, research and development will be vital for dealing with COVID-19 variants and in other health crises.

“We had useful exchanges on issues where some perspectives were different, such as on the future shape of vaccine supply chains, on the appropriate role for intellectual property protections, on issues of vaccine contract transparency — which was pointed to by many as an important factor in appropriate pricing and distribution and a critical part of access and equity.

“Concerns expressed by some about cross-border supply chain operations, including export restrictions and shortages of skilled personnel reinforced my view, and hopefully that of members, that the WTO must and can play a central part in the response to this crisis.

“Various perspectives about the TRIPS Agreement, and whether the existing flexibilities are enough to address developing country needs were put on the table. These echoed the discussions on the waiver proposal going on in the TRIPS Council, and I want to reiterate that today is a way of contributing to that discussion.

“I agree with the view that the WTO is a logical forum for finding a way forward on these issues, and I hope that the ideas raised here will contribute to convergence in the TRIPS Council on meaningful results that can contribute to the goals that we have.

“I hope that the discussion today, listening to each other, seeing that we all share a common goal, and that we may not be so far apart, will lead to the willingness to come to the middle,  and work out something that will be acceptable to all.

“Participants were generally of the view that ramping up vaccine manufacturing capacity is a complex process. It requires large, long-term investment and sustainable business models. It relies on open international supply lines for ingredients and equipment. We heard how shortages of even a single piece of equipment, filters, can halt operations at a production facility. Vaccine manufacturing necessitates collaboration, and the movement of skilled labour, to facilitate transfer of technology and knowhow.

“Safety is a paramount consideration, and quality is the other part of safety. This demands effective regulatory capacity and stringent compliance, down to the factory floor. Indeed we heard this is a big risk companies factor in when making decisions as to where to produce, and how to produce. I hope that they’ve heard sufficient encouragement today, to enable us to move towards leveraging the existing capacities in emerging markets and developing countries mentioned repeatedly today, which could actually help to take care of the shortages talked about.

“Turning capacity around to produce COVID-19 vaccines is not only about the physical space alone. We heard repeatedly that it requires transfer of technology and knowhow, together with investment and support for quality assurance.

“We also learned about how existing licensing arrangements have operated — including an example of how skills transfer was carried out in a few as six months. We also heard calls for support to build human capital, and to help build regulatory cooperation.

“Some participants suggested more active matchmaking to connect companies that have the investment capacity with those that have potential for expanding production capacity, even in the short term.

“We also heard about ongoing efforts to build new manufacturing capacity, and the lessons that can be learned from that.

“We also began to see the aspects of the collaboration we need to make things happen. We had many international organizations show they are willing to work together to bring to fruition things like putting in place technical expertise, helping with capacity building and quality control, and investing directly in production.

“I believe that today’s exchanges have advanced our understanding of the challenges we face for scaling up vaccine production, and that working together is the only way ahead.

“In the coming weeks and months, we expect concrete follow-up action. These issues are not easy, but the political will and engagement from the private sector displayed today, suggests it is possible.

“As we move forward, I expect:

“- From WTO members:

“- Action to further reduce export restrictions and supply chain barriers, and to work with other organizations to facilitate logistics and customs procedures.  We are monitoring this as part of our regular work, and we’ll continue doing so to increase supplies and maintain robust supply chains. Trade has been underlined as a critical factor in production; it is incumbent upon WTO members to act.

‘- Advance negotiations in the TRIPS Council on the waiver proposal and incentives for research and innovation. I hope that the ideas and the open dialogue heard will move us closer to agreement. 

‘- For vaccine manufacturers:

‘- Concrete moves to scale up vaccine manufacturing, both short-term turnaround of existing capacities, milking whatever productivity gains we can from current facilities, and taking steps to invest.

“- Increased technology and knowhow transfer, which many participants stressed would be necessary to make additional production work.

“- We need transparency in contract agreements and product pricing. We hope to continue this dialogue and to help monitoring steps in that direction.

“- For international organisations and financial institutions:

“- We noted your willingness to finance, both existing and new capacity, your willingness to work on capacity building for regulatory issues, not just for vaccines, but also for therapeutics and diagnostics, which are equally important.

“I trust that we have found a good basis to deliver concrete action, and to continue this discussion that we’ve had today.

“This should not be a one-off, we should continue to talk to each other, and make sure that we can deliver.

“I hope that besides concrete action to increase capacity, this discussion has given us elements of a framework on trade and health that we can put together at the WTO, and that can be put before ministers at the 12th Ministerial Conference in mid-December. Such a framework should provide for trade-related preparedness to handle this pandemic, and the next one.”

Press accounts indicate that the United States, European Union, India and South Africa participated. Statements from USTR Katherine Tai and Executive Vice President Dombrovskis are available from government websites. See USTR press release, Ambassador Katherine Tai’s remarks at a WTO virtual conference on Covid-19 vaccine equity, April 14, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/april/ambassador-katherine-tais-remarks-wto-virtual-conference-covid-19-vaccine-equity; European Commission press release, Speech by Executive Vice-President Valdis Dombrovskis at the WTO Webinar “Covid and Vaccine Equity,” 14 April 2021, https://ec.europa.eu/commission/commissioners/2019-2024/dombrovskis/announcements/speech-executive-vice-president-valdis-dombrovskis-wto-webinar-covid-and-vaccine-equity_en.

The Biden Administration has been meeting with various interest groups on the TRIPS wavier proposal (both pro and con) and is receiving pressure from some Members of Congress and prior government officials to agree to a waiver. Ambassador Tai’s statement stresses the need for equity in vaccine availability. “These losses have been disproportionately borne by vulnerable and economically disadvantaged communities within our countries. And the significant inequities we are seeing in access to vaccines between developed and developing countries are completely unacceptable. Extraordinary times require extraordinary leadership, communication, and creativity. Extraordinary crises challenge all of us to break out of our comfortable molds, our in-the-box thinking, our instinctive habits. This is not just a challenge for governments. This challenge applies equally to the industry responsible for developing and manufacturing the vaccines. The desperate needs that our people face in the current pandemic provide these companies with an opportunity to be the heroes they claim to be – and can be. As governments and leaders of international institutions, the highest standards of courage and sacrifice are demanded of us in times of crisis. The same needs to be demanded of industry.”

The EU statement is consistent with their views that equity is necessary and that the EU has been working to contribute to that result through production ramp up and large exports in fact, including to the COVAX facility. The EU summed up what the WTO should be doing. “To sum up, the WTO can support vaccine equity through five sets of actions:
Promoting best practices in terms of trade facilitation and regulatory cooperation to maintain open supply chains; Facilitating cooperation with the private sector, both to ramp up production in the short term, and to enhance manufacturing in global regions with under-capacity, focusing in particular on Africa; Supporting Members’ use of the available TRIPs flexibilities; Continuing to seek joint approaches with the World Health Organisation and the World
Intellectual Property Organisation; and Ensuring transparency and effective monitoring of any temporary export restriction, as proposed by the Ottawa Group.”

I have not found statements from either India or South Africa but at least one publication indicated they stressed the need for a TRIPS waiver for all Members. See Washington Trade Daily, WTO’s Role in Vaccine Equity, April 15, 2021, https://files.constantcontact.com/ef5f8ffe501/63ac7508-8034-44b3-8c3c-045c1bedec43.pdf.

The World Health Organization also participated and the Director-General’s statement is available from the WHO website. See WHO press release, COVID-19 and vaccine equity panel: what can the World Trade Organization contribute?, 14 April 2021, https://www.who.int/director-general/speeches/detail/covid-19-and-vaccine-equity-panel-what-can-the-world-trade-organization-contribute (“COVAX was created, as you know, almost a year ago to avoid the same thing happening again. And although COVAX has distributed almost 40 million doses of vaccine to 110 countries and economies, vaccine nationalism, vaccine diplomacy and severe supply constraints have so far prevented COVAX from realizing its full potential. Global manufacturing capacity and supply chains have not been sufficient to deliver vaccines quickly and equitably where they are needed most.  More funding is needed, but that’s only part of the solution. Money doesn’t help if there are no vaccines to buy. We need to dramatically scale up the number of vaccines being produced. To address this challenge, WHO and our partners have established a COVAX manufacturing task force, to increase supply in the short term, but also to build a platform for sustainable vaccine manufacturing to support regional health security. We need to go beyond the traditional modus operandi to provide sustainable and effective solutions to address this extraordinary crisis. Some manufacturers have begun sharing the know-how and technologies to produce more vaccines, but only under restrictive conditions, on a very limited basis. The current company-controlled production sharing agreements are not coming close to meeting the overwhelming public health and socio-economic needs for effective, affordable and equitable access to vaccines, as well as therapeutics and other critical health technologies.  This is an unprecedented emergency that demands unprecedented measures.”).

One of the private sector participants, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) included its statement on the IFPMA website. See IFPMA, IFPMA statement at WTO event “COVID-19 and Vaccine Equity: What can the WTO Contribute”, 14 April 2021, https://www.ifpma.org/resource-centre/ifpma-statement-at-wto-event-covid-19-and-vaccine-equity-what-can-the-wto-contribute/. The IFPMA statement is embedded below but highlights the extraordinary effort of the private sector in ramping up production which is expected to be 10 billion doses by the end of 2021 with some 272 partnerships entered into and 200 technology transfer agreements.

IFPMA_WTO_Event_COVID-19_and_Vaccine_Equity_Statement_15April2021

Rising Infections; dramatically ramped up production

Last Thursday’s summary from the European Centre for Disease Prevention and Control (ECDC) shows the world going through a massive ramp up of new infections such that week 14 of 2021 is the second highest week during the pandemic of new infections with the vast majority of the cases and increase in Asia, the Americas and Europe. See ECDC, COVID-19 situation update worldwide, as of week 14, updated 15April 2021, https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases.

Distribution of COVID-19 cases worldwide, as of week 14 2021

Distribution of COVID-19 cases worldwide, as of week 14 2021
“Distribution of cases of COVID-19 by continent (according to the applied case definition and testing strategies in the affected countries)

“Cases reported in accordance with the applied case definition and testing strategies in the affected countries.”

The ECDC data show Africa as accounting for 3.18% of total infections during the pandemic, Asia accounting for 19.50% (India is 9.91%; China is 0.07%), the Americas for 43.18% (United States 22.91% and Brazil 9.90%), Europe 34.08% (the Eu is 20.79%, the UK is 3.20%, Russia is 3.4%), and Oceania 0.05%.

At the same time as new infections are ramping up, vaccinations are also increasing sharply. Bloomberg data through April 17, 2021 shows a global total of 884 million vaccinations having been given globally. See Bloomberg, More Than 884 Million Shots Given: Covid-19 Tracker, updated April 17, 2021, https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/.

While there are countries who have fewer or more vaccinations as a percent of the global total than their share of infections, considering distribution equity from that vantage point has some surprising results.

Country Percent of infections Percent of vaccinations

United States 22.91% 23.16%

European Union 20.79% 12.36%

United Kingdom 3.20% 4.76%

Japan 0.37% 0.21%

Republic of Korea 0.08% 0.17%

India 9.91% 13.85%

China 0.07% 21.18%

South Africa 1.14% 0.33%

Brazil 9.90% 3.92%

The pharmaceutical industry is projecting that 10 billion doses of COVID-19 vaccine will ship in 2021. That means that in the next eight and a half months, some nine billion doses will ship. If 10 billion doses are shipped in 2021, that is sufficient to fully vaccinate 5-6 billion people in 2021 (depending on number of doses that are for single shot vaccines). That is sufficient doses to vaccinate 63.3-75.9% of the current estimate of the global population (7.9 billion). See Worldometer, Current World Population, https://www.worldometers.info/world-population/#:~:text=The%20current%20world%20population%20is,currently%20living)%20of%20the%20world./ With the continued efforts to expand production and approve additional vaccines, 10 billion doses may be exceeded in fact by the end of the year.

This suggests, just as the COVAX and UNICEF distribution plans indicate, that low- and middle-income countries will see a large increase in supplies in the second half of 2021, just as will be true for the rest of the world.

The U.S.-Gavi event on April 15 talked about increasing funding for COVAX to go from 20% to 30% of populations the COVAX facility is serving. See U.S. Department of State, Video Remarks of Secretary of State Antony Blinken, Launch of GAVI’s COVAX Commitment, April 15, 2021, https://www.state.gov/launch-of-gavis-covax-commitment/. Moreover, the World Bank is committing billions to increases purchases of vaccines for low- and middle-income countries. And many countries are executing their own contracts with vaccine producers.

If there are issues besides assistance in resolving bottlenecks that would appear to be important to speeding up distribution and ensuring access by all, it would be to ensure that all countries with vaccine supplies greater than their internal needs, work to get those vaccines distributed to other countries later this year as their internal needs clarify.

Moreover, there are very exciting developments on the vaccine front with the start up of trials in a number of developing countries of a new vaccine where the potential exists for low costs with a vaccine that can be produced locally by many countries based on technology similar to what is already used for other vaccines. See New York Times, Researchers Are Hatching a Low-Cost Coronavirus Vaccine, A new formulation entering clinical trials in Brazil, Mexico, Thailand and Vietnam could change how the world fights the pandemic, April 5, 2021, updated April 17, 2021, https://www.nytimes.com/2021/04/05/health/hexapro-mclellan-vaccine.html.

All to say, there is considerable reason for optimism with the current efforts and progress. Efforts by governments, multilateral institutions, industry and others are helping identify challenges both to production and distribution but also to the needs for a speedy recovery once the pandemic is brought under control. While everyone needs to continue to focus on resolving bottlenecks, securing cooperation to ensure all are reached, and addressing developments as they arise, 2021 is not a repeat of the HIV situation.

The WTO has an important role in monitoring trade restrictions and looking forward to what actions Members are willing to take to advance trade and health needs and help ensure a next pandemic is handled more quickly than the COVID-19 has been. The effort to obtain a waiver from TRIPS obligations is, in this writer’s view, missing where the challenges are and seeking an outcome that will not advance improved vaccinations in 2021. While it is common for countries to continue to fight yesterday’s problems instead of addressing the current challenges, such an approach will not secure equitable and affordable access to vaccines in 2021-2022.

April 15, 2021 — U.S and Gavi co-host event for additional funding for COVAX amid concerns about two workhorse vaccines for COVAX

An important part of global efforts to vaccinate the world has been the work of the World Health Organization, Gavi, CEPI and UNICEF to provide an array of vaccines through early support of research and procurement of large quantities of doses for distribution to countries participating in the program including 92 low- and middle-income economies through COVAX. The COVAX objective for 2021 has been distribution of around two billion doses. While a large amount of money has been raised for vaccine purchases, additional needs in 2021 for COVAX are around $2 billion.

This Thursday, the United States and Gavi will co-host an event seeking additional funding for COVAX. The U.S. State Department press release from April 12 is copied below. See U.S. Department of State, United States to Host Event to Launch the 2021 COVAX Investment Opportunity, April 12, 2021, https://www.state.gov/united-states-to-host-event-to-launch-the-2021-covax-investment-opportunity/.

“On Thursday, April 15, 2021 at 8:00 a.m. EDT the United States will co-host the launch of the Investment Opportunity for the Gavi COVAX Advance Market Commitment (COVAX AMC), a virtual convening to galvanize additional resources and commitments to support global COVID-19 vaccination.

“Secretary of State Antony Blinken, USAID Acting Administrator Gloria Steele, and Gavi Board Chair José Manuel Barroso will bring together world leaders, the private sector, civil society, and technical experts to advance and accelerate global access to COVID-19 vaccines. Secretary Antony Blinken will offer opening remarks.

“Equitable access to safe and effective COVID-19 vaccines across the globe is critical for reducing the tragic loss of life, ending the pandemic, bolstering the U.S. and global economy, and keeping Americans safe at home and abroad. By pooling donor resources, the COVAX AMC provides access to safe and effective COVID-19 vaccines for 92 low-and middle-income economies, supporting the delivery of quality, lifesaving vaccines to those most in need and helping to contain the spread of COVID-19 and emerging variants.

“Thanks to Congress and the generosity of the American people, the U.S. government has already contributed $2 billion to support the COVAX AMC, out of a total planned $4 billion through 2022. The United States is currently the largest donor to COVAX, making up nearly forty percent of the COVAX AMC funding commitments announced to date.

“This event will be live-streamed on Gavi’s website, gavi.org and open to the public.  For more information email OES_PA_DG@State.gov.”

Gavi’s press release of 29 March 2021 announcing the event is copied below and provides the needs that hopefully will be met by Thurday’s event. See Gavi, United States to host launch event for Gavi COVAX AMC 2021 investment opportunity, 29 March 2021, https://www.gavi.org/news/media-room/united-states-host-launch-event-gavi-covax-amc-2021-investment-opportunity.

Geneva, 29 March 2021 – The United States government announced today that it will host the launch of the Investment Opportunity for the Gavi COVAX Advance Market Commitment (AMC). The virtual event, which will take place in April, will be co-hosted by José Manuel Barroso, Chair of the Gavi Board, and the Secretary of State and USAID Administrator on behalf of the United States. It will bring together world leaders, the private sector, civil society and key technical partners to present the case for additional resources for the Gavi COVAX AMC. 

“Country demand for COVID-19 vaccines has increased significantly in light of new COVID-19 variants, and the need for additional financing has become more urgent. In addition to committing US$ 4 billion to support Gavi’s COVID-19 related work, the United States is a long-standing supporter of the Alliance. It was one of Gavi’s original six donors and has contributed more than US$ 2.7 billion to Gavi’s core work since 2000. 

“’We welcome U.S. leadership in hosting the launch of the Gavi COVAX AMC Investment Opportunity,’ said José Manuel Barroso, Gavi Board Chair. ‘The United States has been a key Gavi partner for more than two decades, playing a critical role in helping the Alliance expand access to lifesaving immunisations for the most vulnerable around the world. Its recent contribution of $4 billion for procurement and delivery of COVID-19 vaccines for lower-income countries has made the United States Gavi’s top donor and a leader in the global pandemic response. With U.S. financial and diplomatic support, Gavi is very well positioned to mobilize the funds and the doses we need to end the acute phase of the pandemic.’

“The Gavi COVAX AMC is an innovative mechanism that seeks to provide access to up to 1.8 billion donor-funded doses of COVID-19 vaccines for 92 lower-income economies. In order to achieve that goal and build on the contributions made by donors so far, Gavi will be seeking at least US$ 2 billion in additional funding for the AMC in 2021. The Investment Opportunity will outline how Gavi will use this funding to support equitable access around the world, thus helping end the acute stage of this pandemic. The Investment Opportunity also looks ahead to the future, describing how to address the pandemic as it continues to evolve. 

“’As the United States has made clear through its Gavi partnership and commitments to global health security, no one is safe until everyone is safe,’ said Dr Seth Berkley, CEO of Gavi. ‘Gavi is thrilled to co-host the launch of the Investment Opportunity with the United States. With new donor funding, we will be able to procure up to 1.8 billion COVID-19 vaccine doses for lower-income countries. Strong U.S. support for the AMC is a reminder that COVAX offers the fastest, most comprehensive way out of the acute phase of the global pandemic.’

“’The emergence of new, more transmissible COVID-19 variants makes fair global access to vaccines more important than ever to protect the most vulnerable, reduce the prevalence of disease and slow down viral mutation.’ said Dr Richard Hatchett, Chief Executive Officer of the Coalition for Epidemic Preparedness Innovations (CEPI), which manages COVAX vaccine research and development. ‘Equitable access to COVID-19 vaccines will benefit the entire world, so I’m delighted that the U.S. will help COVAX to secure additional donor funding for lower-income countries.’

“Hon. Kwaku Agyeman-Manu, Minister of Health of Ghana, which took one the first deliveries of COVAX-supported vaccine doses, remarked that ‘this is about fairness, about justice, and about bringing a swift end to the pandemic. COVID-19 has affected all of us, and we must protect at risk populations everywhere if we are ever going to see a return to normal. We will only recover fully if we recover together and with its support for COVAX, the United States is helping set the course for a safer, more resilient world.’

“The Gavi COVAX AMC is a central part of the COVAX Facility, the global pooled procurement mechanism designed and administered by Gavi. Thanks to the support of COVAX AMC donors, coupled with the demand and resources of 191 participating economies, the Facility has already begun to deliver doses – the majority to lower-income countries – as part of the largest and most rapid global vaccine rollout in history.

“COVAX, the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, is co-convened by Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization (WHO) – working in partnership with UNICEF as a key delivery partner, developed and developing country vaccine manufacturers, the World Bank, and others. It is the only global initiative that is working with governments and manufacturers to ensure COVID-19 vaccines are available worldwide to both higher-income and lower-income countries.”

Challenges to COVID vaccines through COVAX from concerns over AstraZeneca and Johnson & Johnson

A large portion of total vaccine doses expected in 2021 through COVAX is from AstraZeneca/Serum Institute of India and from Johnson & Johnson. AstraZeneca has had early production issues and the Serum Institute of India (which licenses the AstraZeneca vaccine for production) has curtailed exports in March and April (and possibly longer) because of the large increases in new COVID-19 infections in India and a redirection of production of vaccine doses for use in India. The AstraZeneca vaccine (from AstraZeneca and from the Serum Institute) constitute the bulk of doses expected in the first half of 2021 by COVAX and the Johnson & Johnson vaccine is expected to be a major supply source in the second half of 2021 as well as Novavax (either produced by Novavax or by license from the Serum Institute. However, both the AstraZeneca vaccine and the Johnson & Johnson vaccine have seen temporary stoppage of use by one or more countries flowing from a number of serious blood cot situations for patients who have taken the vaccine (causation under investigation). The AstraZeneca vaccine, which has been available for longer and under more scrutiny, has been limited in terms of age eligibility in a number of countries at this point. The AstraZeneca vaccine is the lowest priced vaccine (Novavax has an identical price to COVAX of $3.00/dose but is not yet approved). See UNICEF, COVID-19 vaccine market dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (prices). COVAX has a $3.00/dose ceiling price, so it is assumed that the Johnson & Johnson vaccine is similarly priced because of the pricing cap used by COVAX. With options, purchase agreements with COVAX have AstraZeneca/Serum Institute supplying some 700 million doses, Johnson & Johnson 500 million doses and Novavax (if approved) 1.1 billion doses. Id (COVID-19 vaccine supply agreements).

The challenge for COVAX and the low- and middle-income countries dependent on supplies from COVAX is the cost and availability of supplies if delays in shipments from the Serum Institute of India are prolonged or if there develops hesitancy in using vaccines which, while approved by many countries, carry some additional risk of serious blood clots. The prices recorded by the UNICEF data base show all other vaccines as significantly higher cost than the three supplying large quantities to COVAX. This suggests much larger financial needs to acquire the doses needed to address the “acute stage” of vaccination — 20% of populations representing health care and those at high risk — if COVAX must change sourcing for the major part of its vaccine doses. It also raises questions about the ability of other vaccines to fill the gap volume-wise in 2021 if major vaccines from AstraZeneca, Johnson & Johnson are not widely accepted or if exports are delayed for months out of India for each of AstraZeneca, Johnson & Johnson and Novavax (if approved).

While the event on Thursday will be focused on raising funds to meet the perceived needs of COVAX at the present time, those needs may be significantly larger in the coming months depending on developments.

Other funding and supply options

While the COVAX effort has been developed to handle the acute phase through contributions, the vaccination needs to get the world fully vaccinated are a multiple of the doses that COVAX is focused on procuring in 2021-2022.

The World Bank has earmarked $12 billion for vaccines and infrastructure for vaccinations for the world’s needy. Many low- and middle-income countries are working with suppliers directly or with Individual countries to obtain doses outside of the volumes expected from COVAX. Suppliers alone or in conjunction with governments have been working to license other producers and to ramp up production so that, depending on approvals of various vaccines, global production by the end of 2021 could be 10-15 billion doses. For example, the Quad countries (United States, Japan, India and Australia) have announced a plan to expand production in India to supply around one billion doses (2021-2022) to countries in the Indo-Pacific region paid for by Quad members and distributed by Australia. The UNICEF vaccine dashboard shows 6.9 billion doses of capacity of all vaccines under development or approved in the first half of 2021 increasing to 14.2 billion doses of capacity in the second half of 2021. See UNICEF, COVID-19 vaccine market dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (capacity). Thus, there should be significant additional capacity available later in 2021 for vaccine doses needed for low- and middle-income countries.

Similarly, it is likely that as major countries like the United States, Canada, the European Union, the United Kingdom and others get their populations vaccinated, there will be significant volumes of vaccines that have been bought by these countries that can be distributed to other countries in the last months of 2021 and in 2022.

Some of these efforts may be undertaken in consultation or conjunction with COVAX.

Conclusion

COVAX is an important effort at facilitating vaccinating large parts of the world against the COVID-19 pandemic, including many low- and middle-income countries. Many countries and the EU have led efforts in 2020 to increase funding for the effort. With the Biden Administration rejoining the World Health Organization and reengaging with multilateral organizations, and with the support of the U.S. Congress in funding U.S. contributions to COVAX, this Thursday’s event co-hosted by the United States and Gavi is an important chance to help COVAX receive the additional funding needed for its 2021 objectives.

Because the pandemic continues to be problematic around the world, there are many moving parts to a successful global vaccination effort including availability of vaccines, efficacy of vaccines including against new variants, ability to overcome vaccine hesitancy among portions of the population in many countries and the evolving understanding of human reactions to some of the vaccines available.

Greater cooperation among health administrators and the WHO would seem important to ensure that safe vaccines are not derailed because of discovered risks where the balance of benefits to risks strongly supports continued availability and use of the vaccines (with appropriate warnings). Where restrictions are appropriate, greater cooperation would permit a common approach versus differing restrictions which can only serve to cause confusion to the public and encourage vaccine hesitancy. COVID-19 reported cases globally are presently 137 million with deaths approaching 3 million. Vaccination doses administered globally are 806 million with serious adverse reactions and deaths quite limited (likely in the thousands globally). Serious adverse reactions and deaths if tied to vaccines are obviously a concern that should be addressed appropriately. However, eliminating vaccine availability to large portions of populations where there are not other options available risk far greater damage.

COVAX delivers COVID-19 vaccines to 100th country; India surge in infections likely to reduce product availability for COVAX through May and likely longer

Apress release from the WHO, Gavi, CEPI and UNICEF on the COVAX facility’s success in getting vaccines to 100 countries by April 8 is impressive news for the efforts of the WHO, GAVI, CEPI, UNICEF and their supporters to get vaccines to low- and middle-income countries as part of the effort to have vaccine distribution done equitably and affordably. See Press Relase from WHO, Gavi, CEPI, UNICEF, COVAX reaches over 100 economies, 42 days after first international delivery, April 8, 2021, https://www.gavi.org/news/media-room/covax-reaches-over-100-economies-42-days-after-first-international-delivery#:~:text=The%20milestone%20comes%2042%20days,Ghana%20on%20February%2024th.&text=Of%20the%20over%20100%20economies,Advance%20Market%20Commitment%20(AMC). The press release is embedded below.

PDF Embedder requires a url attribute COVAX-reaches-over-100-economies-42-days-after-first-international-delivery-_-Gavi-the-Vaccine-Alliance

While the release indicates that there will be delays in deliveries of vaccines in March and April because of increased COVID-19 cases in India, developments in India could mean an even greater delay in supplies than announced in March. For example, the major supplier of vaccines to COVAX in the first half of 2021 is the Serum Institute of India (“SII”) which is licensed by AstraZeneca to produce that vaccine in India for distribution in large part to COVAX. Yesterday, the president of SII indicated that export shipments could resume in June depending on cases levels in India. See Financial Times, India to restart Covid vaccine exports in June if local cases fall, April 7, 2021, https://www.ft.com/content/fcdffb8f-f86e-4bd9-adec-20256aeb0a07. It doesn’t appear that SII has notified COVAX of a further delay past April, but a June resumption, if it occurs, suggests that delays will continue through May at a minimum.

The situation for SII is complicated by a need for expanded capacity. It has sought $400 million from the Indian government to ramp up production from 71 million to 100 million doses per month by May. See Fierce Pharma, ‘Very stressed’ Serum Institute asks government for $400M vaccine production boost, April 8, 2021, https://www.fiercepharma.com/manufacturing/very-stressed-serum-institute-india-asks-government-for-vaccine-production-boost.

Moreover, the refusal of SII to export doses to the United Kingdom, to COFAX and others has become the basis for a legal notice from AstraZeneca. See Times of India, Covid-19: AstraZeneca sends legal notice to SII over delays in vaccine supply, April 8, 2021, https://timesofindia.indiatimes.com/india/astrazeneca-sends-legal-notice-to-sii-over-delays-in-vaccine-supply/articleshow/81960902.cms. SII is also finding itself refunding moneys paid by countries who are not getting supplies. See Reuters, Serum Institute refunds S. Africa for undelivered AstraZeneca doses, April 8, 2021, https://www.reuters.com/article/us-health-coronavirus-safrica/serum-institute-refunds-south-africa-for-undelivered-astrazeneca-doses-idUSKBN2BV1TI.

While COVAX is looking to expand sources of vaccines, SII is the major source through June. Professor Simon Evenett has put out a one page analysis of the implications for supply to COVAX from SII if the resumption of exports is premised on India fully vaccinating all those willing to be vaccinated for whom the government of India has opened up vaccinations. While SII has not stated that resumption of exports is tied to full vaccination of Indians who are 45 years or older, Prof. Evenett’s paper is an interesting analysis of how long a delay could occur in terms of SII becoming a major exporter again. His paper entitled “Vaccine Maths 2: Will India start exporting COVID-19 vaccines again in June 2021?” is embedded below.

Vaccine_Maths_2.pd_

Conclusion

With the spread of the new variants of COVID-19 that have higher rates of transmission and higher rates of serious infection, many countries find themselves facing increased numbers of cases and increased hospitalizations and deaths even as vaccine supplies are increasing and vaccination roll outs starting in many countries. There is a lot of attention within multilateral organizations such as the World Bank, IMF and WTO and by a number of countries on the needs for increased production and distribution to all countries. See, e.g., April 6, 2021, IMF April World Economic Outlook, IMF and World Bank Spring Meetings and U.S. efforts on global access to vaccines, https://currentthoughtsontrade.com/2021/04/06/imf-april-world-economic-outlook-imf-and-world-bank-spring-meetings-and-u-s-efforts-on-global-access-to-vaccines/. COVAX is an important part of the solution but it will need more funding and greater diversity of suppliers to meets its role in the equitable and affordable access to vaccines in 2021 and 2022.

Global vaccinations against COVID-19; developments and challenges in the roll-out for many countries

Globally there have been extraordinary developments of vaccines to help against the COVID-19 vaccine. UNICEF has set up a COVID-19 Vaccine Market Dashboard which notes that at present 14 vaccines have been approved by one or more countries, that the companies in production or testing vaccines report existing or intended capacity in 2021 of 21 billion doses (depends on other vaccines being approved and companies overcoming any bottlenecks in supply), indicates that there are 10.4 billion “secured vaccine doses”, that there are 3.56 billion doses “secured and optioned for the COVAX facility” and that prices in the market range from $2.06/dose to $44.00/dose. See UNICEF, COVID-19 Vaccine Market Dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (visited April 2, 2021). The dashboard contains a great deal of information looking at information on products, capacity, agreements, price and delivery.

The COVAX facility, administered by Gavi, put out in early March the first round of allocation of vaccine doses procured for low- and middle-income countries and others choosing to participate in acquiring through COVAX to improve equitable and affordable access for all. 142 of the countries participating in the COVAX facility were identified as allocated delivery of specific quantities of vaccine from a total of 237 million doses that were expected to be available to COVAX during the February – May timeline. See The COVAX Facility, First Round of Allocation: Astra Zeneca/Oxford Vaccine (manufactured by Astra Zeneca & licensed and manufactured by Serum Institute of India), https://www.gavi.org/sites/default/files/covid/covax/COVAX-First-round-allocation-of-AZ-and-SII.pdf . 87 of the 92 countries who will receive doses at no cost or reduced cost are included in the first round allocation (“AMC” countries). The March 2, 2021 document is embedded below.

COVAX-First-round-allocation-of-AZ-and-SII

In an April 1, 2021 update, Gavi notes that to date COVAX has shipped more than 33 million doses to 74 country. See GAVI, COVAX vaccine roll-out, https://www.gavi.org/covax-facility (visited April 2, 2021). While the ramp-up of deliveries to COVAX is scheduled to occur over time, COVAX received notice in late March of delays for shipments from India (Serum Institute of India) in both March and April, which COVAX has estimated could be a delay for as much as 90 million doses and indicated the delays were due to internal needs in India for more doses to support their own vaccination program. See UNICEF, COVAX updates participants on delivery delays for vaccines from Serum Institute of India (SII) and AstraZeneca, 25 March 2021,https://www.unicef.org/press-releases/covax-updates-participants-delivery-delays-vaccines-serum-institute-india-sii-and. The bulk of the press release is copied below.

GENEVA/NEW YORK/OSLO, 25 March 2021 – Deliveries of COVID-19 vaccines produced by the Serum Institute of India (SII) to lower-income economies participating in the COVAX Facility will face delays during March and April as the Government of India battles a new wave of COVID-19 infections. COVAX and the Government of India remain in discussions to ensure some supplies are completed during March and April.

“According to the agreement between Gavi and the Serum Institute of India (SII), which included funding to support an increase in manufacturing capacity, SII is contracted to provide COVAX with the SII-licensed and manufactured AstraZeneca (AZ)-Oxford vaccine (known as COVISHIELD) to 64 lower-income economies participating in the Gavi COVAX AMC (including India), alongside its commitments to the Government of India.

“To date, COVAX has been supplied with 28 million COVISHIELD doses and was expecting an additional 40 million doses to be available in March, and up to 50 million doses in April.

“COVAX has notified all affected economies of potential delays. SII has pledged that, alongside supplying India, it will prioritize the COVAX multilateral solution for equitable distribution.

“Participating economies have also received WHO guidance on optimizing the national deployment doses of the AstraZeneca-Oxford vaccine in a constrained supply environment.

“Separately, the COVAX Facility has informed participants allocated AstraZeneca-manufactured doses of the AstraZeneca-Oxford vaccine that some of the first deliveries due in March are now set to take place in April.

“In this early phase of COVID-19 vaccine roll-out, vaccine manufacturers require time to scale and optimize their production processes. AstraZeneca, which uses a novel supply chain network with sites across multiple continents, is working to enable initial supply to 82 countries through COVAX in the coming weeks.

“COVAX retains its objective of supplying initial doses of vaccines to all participating economies in the first half of the year before ramping up significantly in the second half of 2021. To date, COVAX has shipped vaccines to over 50 countries and economies.”

While there have been various manufacturing challenges in the early months of vaccine roll-outs, the decision by India to slow distribution of vaccine doses purchased by COVAX will clearly slow distribution to many least developed and developing countries dependent on COVAX for their vaccine doses. Since as much as a third of vaccine doses that COVAX has distributed have gone to India, the Indian government has what is at least a public relations challenge at the present time. See India Today, India received one-third of vaccines made for poor countries by India under COVAX programme: Report, 30 March 2021, https://www.indiatoday.in/coronavirus-outbreak/vaccine-updates/story/india-received-one-third-of-vaccines-made-for-poor-countries-by-india-under-covax-programme-report-1785242-2021-03-30. However, with a number of variants of the virus circulating widely and with infections increasing in many countries around the world, the delays are of concern to many governments with anxious populations looking for a path past the pandemic.

In a paper from Airfinity and the St. Gallen Endowment for Prosperity through Trade on March 31, 2021, an effort is made to look at the likely damage to low income countries from the announced delays in shipments to COVAX. See Simon J. Evenett and Matt Linley, Halting India’s Vaccine Exports: The Fallout, 31 March 2021. The paper estimates that the delays in shipments will push back achieving even minimum vaccinations by 60-90 days for many of the COVAX recipient countries. The paper is embedded below.

AF-SGEPT-TL1-31-March-2021-finalised

While there is a lot of positive news being reported (e.g., expansion of capacities and expected shipments in 2021, effectiveness of some of the existing vaccines against some of the new variants, agreement between the United States, Japan, India and Australia to generate one billion doses of a vaccine in India for distribution in the Indo-Pacific area in 2021 and 2022, and the United States hosting a funding effort for COVAX later in April to help close the funding needs for 2021 (after the U.S.’s $4 billion contribution)), delays for up to 90 million doses ( 37.97% of the total doses expected in the February – May 2021 time period by COVAX) to those dependent on COVAX is a significant challenge. See, e.g., Gavi, United States to host launch event for Gavi COVAX AMC 2021 investment opportunity, 29 March 2021, https://www.gavi.org/news/media-room/united-states-host-launch-event-gavi-covax-amc-2021-investment-opportunity; March 25, 2021, Global vaccinations for COVID-19 — continued supply chain and production issues and a new wave of infections in many countries delay greater ramp up for some until late in the second quarter of 2021, https://currentthoughtsontrade.com/2021/03/25/global-vaccinations-for-covid-19-continued-supply-chain-and-production-issues-and-a-new-wave-of-infections-in-many-countries-delay-greater-ramp-up-for-some-until-late-in-the-second-quarter-of-2021/; March 12, 2021, COVID-19 vaccines – U.S., Japan, India and Australia agree to one billion doses for Indo-Pacific countries, https://currentthoughtsontrade.com/2021/03/12/covid-19-vaccines-u-s-japan-india-and-australia-agree-to-one-billion-doses-for-indo-pacific-countries/; March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit” – efforts to ramp-up production, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/.

The WTO Director-General Ngozi Okonjo-Iweala is planning a meeting on vaccines later in April that was described in a WTO press release as follows.

“DG Okonjo-Iweala also said that she plans to convene an event in mid-April to discuss ramping up COVID-19 vaccine production and how the WTO can contribute to a more rapid and equitable distribution of vaccines. 

“The event, to be held under Chatham House rules, will include all regional member groups, representatives from vaccine manufacturers from developing and developed countries, civil society groups working on access to medicine, and other relevant stakeholders.

“’The idea is to move us along on our quest to solve this unacceptable inequitable access of poor countries to vaccines,’ she said. ‘At the bottom of this is a very serious scarcity in supply. And how to solve it is to look at how we expand manufacturing in all its ways.’ 

“She stressed that the event would help advance global discussions on access to vaccines. She expressed hope both for increased vaccine manufacturing in the short- to medium-term, and a longer-term framework agreement that would provide for automatic access to vaccines and other medical products for developing countries in future health crises, including a way forward on the TRIPS waiver proposal many of them support.

“’We also need to look to the future and agree a framework where countries do not need to stand in the queue in order to get access to life-saving vaccines, therapeutics, and diagnostics,’ she said, emphasizing that this can be done while still incentivizing research and development.”

WTO, Director-General urges WTO members to deliver concrete results this year, 30 March 2021, https://www.wto.org/english/news_e/news21_e/dgno_30mar21_e.htm.

Conclusion

Governments are understandably focused on trying to end the pandemic at home as a first priority. The efforts of the WHO, Gavi, CEPI and UNICEF through the COVAX facility in recent years has provided a welcome source of hope for many nations for greater equity in distribution and in affordability of vaccines, including in the last year addressing the enormous challenge presented by the COVID-19 pandemic. Many countries and private groups have stepped up with major funding contributions to make vaccine available. Individual governments are also working to increase supplies globally. Many bottlenecks have arisen with the large number of inputs and the enormous increase in demand that has arisen over the last year. There is a need for continued efforts by governments and businesses to address the challenges and to see that the needs of the low- and middle-income countries can be met in a timely manner as well. While there will be a lot more production in the second half of 2021, there are and will continue to be challenges in the second quarter. Focus on identifying challenges and global cooperation to solve bottlenecks will do a lot to ensure greater global success in the remainder of 2021.

The EU’s response to challenges to its actions on COVID-19 vaccine exports

At the WTO General Council meeting held on March 1-2 this week, agenda item 9 was aimed at the European Union. The agenda item, entitled “Call to Prevent Export Restrictions on COVID-19,” was put on the agenda by Colombia, Costa Rica, Ecuador, Panama and Paraguay. I had reviewed this agenda item as one of 16 agenda items that was likely to draw a fair amount of attention. See February 26, 2021, WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting, https://currentthoughtsontrade.com/2021/02/26/wto-director-general-ngozi-okonjo-iwealas-first-week-on-the-job-starts-with-a-two-day-general-council-meeting/ (Agenda item 9 was added by Colombia, Costa Rica, Ecuador, Panama and Paraguay reflecting concerns by them (and presumably many other trading partners) about actions taken by the European Union to exert control over exports of vaccines from the EU in light of EU concerns about its own access to vaccines from manufacturers. See CALL TO PREVENT EXPORT RESTRICTIONS ON COVID-19 VACCINES, WT/GC/818 (18 February 2021)).

The new Director-General, Ngozi Okonjo-Iweala, has stressed the importance of the WTO doing more to address the COVID-19 pandemic and help Members recover. Equitable and affordable access to vaccines is an issue of importance to the membership and stressed by the Director-General. See, e.g., March 3, 2021, WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/; March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/

While the EU Ambassador provided comments on various agenda items, agenda item 9 was obviously one of importance to the EU. See EU Statement at the General Council of 2 March 2021 on the “Call to Prevent Export Restrictions on Covid-19Vaccines,” 02 March 2021, https://eeas.europa.eu/delegations/world-trade-organization-wto/94083/eu-statement-general-council-2-march-2021-%E2%80%9Ccall-prevent-export-restrictions-covid-19-vaccines%E2%80%9D_en. EU Ambassador João Aguiar Machado provided a detailed justification for the EU actions in imposing an export licensing/authorization regime on COVID-19 vaccines claiming lack of transparency by pharmaceutical companies and the need to ensure “fair” distribution. The EU program does not affect vaccines for COVAX low- and middle-income countries nor for various neighboring countries. Of note, for countries covered by the export licensing/authorization scheme, there have been 150 export requests all of which have been granted. The statement is embedded below.

EU-Statement-at-the-General-Council-of-2-March-2021-on-the-Call-to-Prevent-Export-Restrictions-on-Covid-19-Vaccines-–-02-March-2021-European-External-Action-Service

The EU stressed that the major problem facing the world was global capacity far below global demand. The EU is working to identify production bottlenecks and to encourage producers to license their products to maximize global production and expressed a willingness to work with other WTO Members and with the Director-General. The part of the statement covering the demand/supply imbalance is copied below.

“However, the root causes of the problem lie elsewhere: the exploding global demand is well above the global production today. As long as this global industrial challenge is not met, and the world population is not vaccinated quickly enough, we will all face a risk of a continuing health emergency including new Covid-19 variants and a prolonged economic crisis.

“The European Union believes there is an important role for public authorities to play and to drive the increase of production, and to facilitate access to the vaccines and other treatments that are in need today. Cooperation must be promoted amongst the different participants along the value chains where necessary to enhance production capacities. A closer, more integrated and more strategic public-private cooperation with the industry is needed. In this spirit, the EU has set-up a Task Force for Industrial Scale-up of COVID-19 vaccines to detect and help respond to issues in real-time. In order to ramp up production, we will, amongst others, work closely with manufacturers to help monitor supply chains and address identified production bottlenecks. Since EU vaccine production is critical for global supply, the benefits of this initiative will extend beyond the EU’s borders.

“Scaling-up of production on a global level requires further actions. It will not happen without increased global collaboration with the pharmaceutical industry, which should facilitate the transfer of the right know-how and technology for the highly complex vaccine production process. We should facilitate this collaboration, while also recognising that intellectual property provides the necessary platform for it to take place. Waiving intellectual property rights would disrupt this collaboration and the transfer of know-how. In conclusion, Mr Chairman, we believe it is legitimate to engage the sector in order to ensure that all complementary production facilities across companies and continents are actively contributing to ramp up production. Companies that have tried and failed to develop a vaccine of their own, for example, should actively consider making their facilities available for the production of vaccines of successful companies. Companies with new vaccines should consider whether they have checked all options for licensing agreements to increase production. The objective should be to ensure they enter into licence agreements with companies around the world that have the necessary production capacities and could export the vaccines to any low middle-income countries without production capacities. At the same time, we should be mindful that the manufacturing campaigns for covid-19 vaccines do not crowd out the production of other life-saving vaccines and therapeutics.

“The EU, working together with other WTO Members and under the leadership of the Director-General Dr. Ngozi Okonjo-Iweala is ready to facilitate a dialogue between the vaccine developers and companies with the production facilities that are ready to step in to help out with the production of vaccines and their delivery to the countries in need. We welcome the DG’s proposal to focus on collaboration among companies to enhance licensing in order to use all the adequate manufacturing capacity, including in developing countries. The EU is ready to facilitate this dialogue and contribute to the efforts on expanding these partnerships.

“The EU remains open to a dialogue with all WTO Members on how to facilitate the collaboration with the pharmaceutical industry on the transfer of know-how and technology. In the same manner, the EU remains open to a dialogue on how to facilitate the use of the TRIPS flexibilities, should the voluntary solutions fail or not be available. The flexibilities offered by the TRIPs Agreement are absolutely legitimate tools for Members in need, as many are in the midst of this pandemic. This includes fast track compulsory licences for export to countries without manufacturing capacity. Administrative burdens should not stand in the way of manufacturing and delivering vaccines to where they are needed.

“We believe that a successful contribution of the WTO to the current pandemic will require all WTO Members to agree on actions that will not only encompass the elements enshrined in the Ottawa Group’s proposal on Trade and Health, such as export restrictions or transparency, but also address the problem of insufficient manufacturing capacity. The EU stands ready to engage in such a dialogue.”

In my post yesterday, I reviewed some of the efforts that have already occurred where pharmaceutical companies are working with other companies to expand production and availability worldwide. See March 3, 2021:  WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/. But the articles referenced yesterday are just some of the collaborations going on as manufacturers with existing capacity work with companies with COVID-19 vaccines to help expand capacity and production and vaccine manufacturers work with contract producers to expand supply chain capabilities. An additional cooperation agreement was announced today in the press. In addition, some governments, including the U.S. and EU have also worked with manufacturers to ramp up production. See, e.g., Wall Street Journal, Novartis to Help Make CureVac Covid-19 Vaccine, March 4, 2021, https://www.wsj.com/articles/novartis-to-help-make-curevac-covid-19-vaccine-11614859271; Reuters, Poland strikes deal to produce Novavax COVID-19 vaccine, March 3, 2021, https://www.reuters.com/article/us-health-coronavirus-poland-mabion/poland-strikes-deal-to-produce-novavax-covid-19-vaccine-idUSKBN2AV19O (“Polish biotech firm Mabion has signed a preliminary agreement to manufacture Novavax’s COVID-19 vaccine with financial support from a state-run fund, as the government strives to accelerate its vaccination programme.”); PMLive, Novartis, Bayer announce separate agreements to bolster COVID-19 vaccine manufacturing, February 1, 2021, http://www.pmlive.com/pharma_news/novartis,_bayer_announce_separate_agreements_to_bolster_covid-19_vaccine_manufacturing_1362454#:~:text=Novartis%20and%20Bayer%20have%20announced,vaccine%20and%20CureVac’s%20vaccine%2C%20respectively.&text=Novartis%20will%20aim%20to%20begin,its%20site%20in%20Stein%2C%20Switzerland (“Novartis and Bayer have announced separate agreements to aid the manufacturing of Pfizer/BioNTech’s COVID-19 vaccine and CureVac’s vaccine, respectively.”); Pharmaceutical Technology, Pharmaceutical Technology-02-01-2021, Volume 2021
Supplement, Issue 1, Contract Service Tapped to Produce COVID-19 Vaccines, Page Number: s29-s30, https://www.pharmtech.com/view/contract-service-tapped-to-produce-covid-19-vaccines (reviewing actions by Pfizer/BioNTech, Moderna, Johnson & Johnson, AstraZeneca, Novavax). Expanding supply also requires vaccines being approved by governments for use. The EU recently announced it was beginning review of the Russian vaccine Sputnik V. See The Globe and Mail, Europe starts review of Russia’s Sputnik V vaccine to try to overcome shortages as new variants appear, March 4, 2021, https://www.theglobeandmail.com/world/article-europe-starts-review-of-russias-sputnik-v-vaccine-to-try-to-overcome/. And, of course, major producers are expanding where they are producing their vaccines using existing or new facilities. See, e.g., The Globe and Mail, Novavax publishes COVID-19 vaccine contract with Canada, March 4, 2021, https://www.theglobeandmail.com/canada/article-novavax-publishes-covid-19-vaccine-contract-with-canada/ (“American pharmaceutical company Novavax has published its vaccine agreement with Canada for 52 million doses of its COVID-19 vaccine. The company expects to eventually produce some of the vaccine in Canada.”).

Thus, a great deal is going on to expand production capacity globally. Strong intellectual property laws are critical to the developments and resource commitments being made. While many developing countries are pushing to start a process of text drafting for a TRIPS waiver at the WTO, such an effort would be counterproductive to global health needs over the longer term. Washington Trade Daily’s March 2, 2021 edition at pages 5-7 has an article entitled “Call for TRIPS Waiver Negotiations” which presents the views of largely developing countries on the desire to move to negotiating text even though there is not agreement on the proposed waiver. See Washington Trade Daily, March 2, 2021, https://files.constantcontact.com/ef5f8ffe501/ed93e180-7dee-4beb-8629-0e73d4d0ea5c.pdf.

The U.S. Chamber of Commerce released a statement on March 2nd characterizing the effort for a TRIPS waiver being promoted by India, South Africa and others as “misguided”. See U.S. Chamber, U.S. Chamber Statement on Proposed WTO IP Rights Waiver, March 2, 2021, https://www.uschamber.com/press-release/us-chamber-statement-proposed-wto-ip-rights-waiver. The statement is copied below (emphasis added to the third paragraph).

WASHINGTON, D.C. – The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) issued the following statement from Senior Vice President Patrick Kilbride regarding the World Trade Organization (WTO) General Council’s discussion of a proposed waiver of intellectual property (IP) commitments in the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement. 
 
“‘Vaccine distribution is critical for ending the pandemic and reviving the global economy. The U.S. Chamber of Commerce welcomes the WTO General Council’s discussion of the role of intellectual property rights in defeating the COVID-19 pandemic. During this time, transparent and predictable intellectual property rights have formed the legal and economic basis for an unprecedented level of highly successful collaborations between government, industry, academia and NGOs. 
 
“‘The Chamber supports decisive and bold action to remove regulatory and trade barriers in order to boost the global distribution of treatments and vaccines, including support of global vaccine programs such as COVAX. Proposals to waive intellectual property rights are misguided and a distraction from the real work of reinforcing supply chains and assisting countries to procure, distribute and administer vaccines to billions of the world’s citizens. Diminishing intellectual property rights would make it more difficult to quickly develop and distribute vaccines or treatments in the future pandemics the world will face.  
 
“’The ‘3rd Way’ proposed by incoming WTO Director General Ngozi Okonjo-Iweala to encourage licensing agreements is worthy of further discussion and consistent with the ongoing success of government-industry efforts to bring an end to COVID-19 as rapidly and as safely as possible.’”

Conclusion 

While there has been a lot of concern among trading partners about the EU action in imposing export licensing of COVID-19 vaccines, to date the licensing system does not appear to have caused problems in fact in the distribution of doses ordered by the group of countries covered by the new system. Moreover, with or without government encouragement, vaccine producers have been working to expand production through arrangements with other vaccine producers, through working with contract manufacturers, and by expanding facilities and internal capacities.

There is no doubt that the COVID-19 pandemic presents a once in a century global health pandemic with demand at the beginning far outstripping supply. Governments have a role to play working with producers, suppliers, those involved in distribution and applying the vaccines to address bottlenecks, to provide encouragement and incentives to rapidly expand production and to support the efforts of the WHO, GAVI, CEPI, and UNICEF to fund the needs of COVAX. While concerns in the early days of vaccine rollout are understandable, COVAX has contracts with a number of vaccine producers and others under negotiation or awaiting approval. AstraZeneca, the first vaccine producer with a contract to supply COVAX put out a press release on March 2, 2021 which is copied in part below. See AstraZeneca, AstraZeneca advances mass global rollout of COVID-19 vaccine through COVAX, March 2, 2021, https://www.astrazeneca.com/media-centre/press-releases/2021/astrazeneca-advances-mass-global-rollout-of-covid-19-vaccine-through-covax.html.

Supply to 142 countries underway as part of the unprecedented effort to bring
broad and equitable access to the vaccine

“AstraZeneca with its partner Serum Institute of India
will be the biggest initial supplier to COVAX
 

“The first of many millions of doses of AstraZeneca’s COVID-19 vaccine have begun arriving in low and middle-income countries across the world through the multilateral COVAX initiative, the first steps in fulfilling the Company’s efforts to provide broad and equitable access to the vaccine.

“First COVAX shipments were dispatched late last week to Ghana and Cote D’Ivoire, and more are due to begin arriving this week in countries including the Philippines, Indonesia, Fiji, Mongolia and Moldova. This supply represents the first COVID-19 vaccine for many of these countries.

“Further shipments will arrive in the coming weeks with the aim of supplying a total of 142 countries with hundreds of millions of doses of the vaccine in the coming months. The majority of these doses, manufactured by AstraZeneca and its licence partner Serum Institute of India, will go to low and middle-income countries.

“Pascal Soriot, Chief Executive Officer, Astra Zeneca, said: ‘These first steps towards fulfilling our broad, equitable and no-profit emergency response to the pandemic mean millions of people, irrespective of their country’s income level, will soon be protected against this deadly virus. This is a moment of great pride for us at AstraZeneca and I am extremely grateful to our partners including Gavi, CEPI and Oxford University for their hard work and dedication in order to make this humanitarian ideal a reality for many millions of people around the world.’

“Seth Berkley, Chief Executive Officer, Gavi, said: ‘Global, equitable access to COVID-19 vaccines is only possible when the public and private sectors work together. When we launched the Gavi COVAX Advance Market Commitment in June 2020, our first Agreement was with AstraZeneca. Nine months later, the first doses are already being delivered to those that need them most. This is the beginning of COVAX’s effort to end the acute phase of the pandemic, not the end, but we can all take strength from this moment and I thank AstraZeneca and the University of Oxford for their support and partnership at every step of our journey.’

“Vaccine shipments have been allocated according to the COVAX Allocation Framework which determines volume per participating country based on a number of factors, including country readiness, national regulatory authorisations and national vaccination plans in place. The supply through COVAX follows the recent Emergency Use Listing by the World Health Organization (WHO) for active immunisation in individuals 18 years of age and older, which provides a vital and accelerated pathway to enable supply.

“AstraZeneca was the first global pharmaceutical company to join COVAX in June 2020 in line with the Company’s shared commitment to global, equitable access to vaccines.

“The vaccine can be stored, transported and handled at normal refrigerated conditions (2-8 degrees Celsius/36-46 degrees Fahrenheit) for at least six months and administered within existing healthcare settings.”

The “third way” sought by the WTO Director-General has been underway for some time and is picking up speed as vaccines start to be approved. There are an increasing number of announced agreements among producers to work together to expand production of particular vaccines. Thus, collaboration and cooperation among producers has and is occurring. Governments can help by identifying bottlenecks in all areas relevant to raw materials, intermediate products, finished vaccine doses, distribution and resources to apply the vaccines and helping to resolve the bottlenecks; by encouraging increased ramp ups of capacity and production, including through licensing.

A broad waiver of TRIPS obligations as being pursued by India, South Africa and many other developing and least developed countries is unwise, unlikely to be agreed to, and if implemented, will backfire in terms of global cooperation in getting the world’s population vaccinated and will destroy the likelihood of private sector engagement to solve future pandemics. The EU’s approach as laid out in EU Ambassador João Aguiar Machado’s statement on March 2 is likely the best course forward whether through the WTO or otherwise.

WTO Director-General opinion piece in the Financial Times and recent actions by the U.S.

WTO Director-General Ngozi Okonjo-Iweala on her second day on the job in Geneva had an opinion piece in the Financial Times taking to the public her message to the WTO membership that “WTO members must intensify co-operation”. Financial Times, Opinion, Ngozi Okonjo-Iweala: WTO members must intensify co-operation, March 2, 2021, https://www.ft.com/content/0654600f-92cc-47ad-bfe6-561db88f7019. To a large extent, the opinion piece reflects her opening statement to the General Council on March 1st. See March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/. The opinion piece starts with the challenges posed by the COVID-19 pandemic and the need for equitable and affordable access to vaccines and other medical goods. The Director-General (DG) then goes through the reforms and ongoing negotiations that need to be addressed. The topics include completion of the fisheries subsidies negotiations, dispute settlement reform, updating the rule book to include topics like digital trade and other Joint Statement initiatives, restarting negotiations on environmental goods and services, various topics in agriculture (market access, domestic subsidies, removal of export restrictions on farm products purchased for humanitarian purposes by the World Food Programme) and rules to address distortions flowing from industrial subsidies to state-owned enterprises.

For this post, I will focus on the access to vaccines issue and recent actions by the United States (but also others) on this topic.

Two paragraphs from the opinion piece lay out the views of the Director-General on access to vaccines. They are copied below.

“However, for the global economy to return to sustained growth, we must intensify co-operation to ensure equitable and affordable access to vaccines, therapetics and diagnostics. The WTO can and must play a more forceful role in encouraging members to minimise or remove export restrictions and prohibitions that hinder supply chains for medical goods and equipment.

WTO members have a further responsibility to reject vaccine nationalism and protectionism while co-operating on promising new treatments and vaccines. We must find a ‘third way’ on intellectual property that preserves the multilateral rules that encourage research and innovation while promoting licensing agreements to help scale-up manufacturing of medical products. Some pharmaceutical companies such as AstraZeneca, Johnson & Johnson, and the Serum Institute of India are already doing this.”

While India and South Africa have sought a waiver for all WTO Members from most TRIPS Agreement obligations during the pandemic, that proposal has not received the backing from various developed countries with pharmaceutical industries, a fact the new DG saw first hand during the General Council meeting of March 1-2 where the TRIPS Council reported that there was not yet agreement on what to recommend on the proposal. Rather through the WHO, GAVI and CEPI and the creation of COVAX to buy vaccines for low- and middle-income countries and others wishing to participate, the expectation has been that some 2 billion doses would be available through COVAX in 2021 starting in February and ramping up, with 1.3 billion doses going to 92 countries needing assistance.

In her opening statement to the General Council, DG Ngozi Okonjo-Iweala indicated that COVAX would not be enough even though shipments had started. The latest COVAX interim distribution forecast is embedded below and dates from February 3 and shows the number of doses from the AstraZeneca/Serum Institute, from AstraZeneca’s own facilities and from Pfizer/BioNTech.

COVAX-Interim-Distribution-Forecast

Press accounts identify Ghana as the first recipient from COVAX, but other countries have already received the vaccines as well. See, e.g., World health Organization, First COVID-19 COVAX vaccine doses administered in Africa, March 1, 2021,https://www.who.int/news/item/01-03-2021-first-covid-19-covax-vaccine-doses-administered-in-africa; Pan American Health Organization, Colombia receives the first vaccines arriving in the Americas through COVAX, March 1, 2021, https://www.paho.org/en/news/1-3-2021-colombia-receives-first-vaccines-arriving-americas-through-covax. The Financial Times vaccine tracker shows that by March 3, 2021, 268.6 million doses had been administered in 128 locations/countries. Financial Times, Covid-19 vaccine tracker: the global race to vaccinate, March 3, 2021, https://ig.ft.com/coronavirus-vaccine-tracker/?areas=gbr&areas=isr&areas=usa&areas=eue&cumulative=1&populationAdjusted=1.

In recent weeks, the United States confirmed it was contributing $4 billion to COVAX ($2 billion immediately and $2 billion over the rest of 2021 and 2022). Other countries and the EU increased contributions as well and some countries have agreed to send some vaccine doses as well. See February 19, 2021, COVAX’s efforts to distribute COVID-19 vaccines  to low- and middle income countries — additional momentum received from G-7 virtual meeting, https://currentthoughtsontrade.com/2021/02/19/covaxs-efforts-to-distribute-covid-19-vaccines-to-low-and-middle-income-countries-additional-momentum-from-g-7-virtual-meeting/

From a recent WHO release it is clear that GAVI and the other COVAX partners are working at expanding available vaccines and seeking additional funding beyond what has already been provided or promised. Vaccines from Johnson & Johnson and potentially from Novavax were identified. See UN News, Equitable vaccine delivery plan needs more support to succeed: COVAX partners, March 2, 2021, https://news.un.org/en/story/2021/03/1086142. The release is embedded below.

Equitable-vaccine-delivery-plan-needs-more-support-to-succeed_-COVAX-partners-_-_-UN-News

“intensify co-operation”

There have been efforts at co-operation from the beginning as AstraZeneca’s licensing of its product to India’s Serum Institute demonstrated.

In the United States, President Biden on March 2 announced co-operation between Merck and Johnson & Johnson where Merck will convert two facilities to help in the production of the Johnson & Johnson vaccine. This has been supported by the United States through use of the Defense Production Act to speed access to equipment needed for the conversion. Merck is a major vaccine producer but doesn’t have a viable COVID-19 vaccine of its own. See NPR, How The White House Got 2 Pharma Rivals To Work Together On COVID-19 Vaccine, March 3, 2021, https://www.npr.org/2021/03/03/973117712/how-the-white-house-got-2-pharma-foes-to-work-together-on-covid-19-vaccine. This is the type of co-operation that DG Okonjo-Iweala referenced in her opinion piece yesterday.

Johnson & Johnson in late February had struck an arrangement with Sanofi in France for similar cooperation at one of Sanofi’s facilities in France. Similarly, Sanofi had earlier struck a deal with Pfizer-BioNTech. See Sanofi, Sanofi to provide manufacturing support to Johnson & Johnson for their COVID-19 vaccine to help address global supply demands, February 22, 2021, https://www.sanofi.com/-/media/Project/One-Sanofi-Web/Websites/Global/Sanofi-COM/Home/media-room/press-releases/2021/20200222-Sanofi-statement-EN.pdf.

The world’s largest vaccine producer, GlaxoSmithKline, has entered an agreement to help produce CureVac produce some of CureVac’s first generation COVID-19 vaccine in 2021 and “to jointly develop next generation mRNA vaccines for COVID-19 with the potential for a multi-valent approach to address multiple emerging variants in one vaccine.” See GSK, GSK and CureVac to develop next generation mRNA COVID-19vaccines, 3 February 2021, https://www.gsk.com/en-gb/media/press-releases/gsk-and-curevac-to-develop-next-generation-mrna-covid-19-vaccines/.

There are, of course, other vaccine producers — China has multiple vaccines developed, Russia, India, Cuba has two in development — including companies who do not have a COVID-19 vaccine in development. Thus, additional opportunities for co-operation should exist for those producers as well.

Conclusion

There is understandably great focus within the WTO and its Members in getting past the COVID-19 pandemic and getting economies back on growth paths. The rapid development of vaccines has been critical and has seen extraordinary success in the 15 months since COVID-19 was first identified. The R&D efforts globally have been stunning and have received some government support which has undoubtedly been important particularly in giving pharmaceutical companies an assist in early efforts to ramp up production. There is no question that the R&D efforts would not have occurred at the level that has taken place without strong intellectual property protections.

There has been great efforts by the WHO along with GAVI and CEPI to prepare to be able to get large quantities of vaccines to low- and middle-income countries when vaccines are available including by contracting with multiple companies pursuing a vaccine, reserving capacity, etc. There have been efforts by many countries to help build support for the COVAX approach and to provide funding for the purchase of vaccines for those in need. The effort is having success and can be more successful as 2021 moves into the second quarter and as countries, NGOs, businesses and individuals contribute to see that there is adequate funding for the effort being undertaken.

In addition to COVAX, a number of countries have been sending some of their production of vaccines to other countries. These include China, Russia and India. The U.S. has been in discussions with Japan, Australia and India for helping in getting vaccines to some countries as well. See Financial Times, US and Asia allies plan Covid vaccine strategy to counter China, March 3, 2021, https://www.ft.com/content/1dc04520-c2fb-4859-9821-c405f51f8586. These efforts are likely to accelerate as 2021 moves into the 3rd and 4th quarters.

Moreover, many of the major Western pharmaceutical companies engaged in vaccine production have partnered with other companies around the world to expand capacity and production of vaccines that have proven successful. So cooperation is already occurring. The Biden Administration’s efforts in recent weeks with Johnson & Johnson and Merck show that government involvement to encourage cooperation for expanding capacity and production and providing assistance in terms of availability of supplies can be an important assist to ramping up production.

Thus, the track record to date does not support a waiver of most TRIPS obligations as has been requested by the world’s largest producer of vaccines (India) and South Africa. Private companies have worked with partners on developments and in a number of cases on producing vaccines. Early success vaccines like Pfizer/BioNTech and Moderna have led to significant increases in plans for production by those companies through their own operations or through partnering with others. A number of other vaccines are now approved in major markets or are close to being approved. Significant funding has been provided or promised to make vaccines available to those in need at no cost.

All of the above is “the third way” sought by the new Director-General. It is already working. The WTO should focus its efforts on export restraints on medical goods and collaborate with other multilateral organizations to understand bottlenecks in capacity expansions, supply chain issues, distribution challenges and other aspects to determine if there are matters requiring WTO attention.

WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting

While the WTO’s General Council, in special session, appointed Dr. Ngozi Okonjo-Iweala to be the next Director-General on February 15, 2021, her term starts on Monday, March 1. The challenges facing the WTO membership and the incoming Director-General are many and complex. At the same time, there is a lot of useful work that is done within the WTO including efforts of non-members to join the WTO (accessions).

In speaking to an informal Trade Negotiations Committee and Heads of Delegation meeting on February 25, Deputy Director-General Alan Wolff spoke in part on “The Ngozi Okonjo-Iweala Era”. See WTO, DDG Wolff calls on members to work with new Director-General to reform WTO, 25 February 2021, https://www.wto.org/english/news_e/news21_e/ddgaw_25feb21_e.htm. Part of the section of his statement on the new DG’s era is copied below.

“The Ngozi Okonjo-Iweala Era

“The landmark event of the last six months was the appointment of the new Director-General ten days ago after what turned out to be a lengthy process.  91 member delegations spoke last week to congratulate the new Director-General. The DDGs and the Secretariat join you in welcoming Dr Okonjo-Iweala’s appointment with great enthusiasm.

“Of course, member enthusiasm, optimism and hope need to be translated into concrete action.  

“There is much that needs to be done at this critical juncture for the WTO. World trade must contribute to a more effective pandemic response as well as a strong and sustainable economic recovery. Climate issues are demanding more urgent attention. WTO reform is overdue, having been called for repeatedly by you, by your ministers and by many heads of government. 

“The challenges are many but so are the opportunities. Dr Ngozi’s remarks at the Special General Council meeting last Monday, subsequently circulated to delegations in document JOB/GC/250, presented a worthy and ambitious agenda for the members of this organization.

“What did she say?

“To act with a sense of urgency to assist in controlling the COVID-19 pandemic through the nexus of trade and public health:

“First, by playing a more forceful role in exercising the WTO’s monitoring function. Part of this would involve encouraging members to minimise or remove export restrictions that hinder supply chains for medical goods and equipment. WTO monitoring suggests that as of yesterday, 59 members and 7 observers still had pandemic-related export restrictions or licensing requirements in place, mostly for personal protective equipment, disinfectants and to a lesser extent, for medicines and food. This represents a significant level of rollback compared to the 81 members and 10 observers that had implemented such measures over the past year. A welcome development — but there is much room to improve this record.  

“And second, by broadening access to new vaccines, therapeutics, and diagnostics by facilitating technology transfer within the framework of multilateral rules.

“Beyond these immediate responses to the pandemic, Dr Ngozi set out a number of other, also vitally important, challenges:

“To swiftly conclude the fisheries subsidies negotiations, and thus pass a key test of the WTO’s multilateral credibility while contributing to the sustainability of the world’s oceans.

“To build on the new energy in the multilateral trading system from the joint statement initiatives attracting greater support and interest, including from developing countries.

“To address more broadly the nexus between trade and climate change, using trade to create a green and circular economy, to reactivate and broaden negotiations on environmental goods and services, to take the initiative to address the issue of carbon border adjustments as they may affect trade.

“To level the playing field in agricultural trade though improving market access and dealing with trade distorting domestic support, exempting from export restrictions World Food Programme humanitarian purchases.

“To strengthen disciplines on industrial subsidies, including support for state-owned enterprises. 

“To defuse the divisions over Special and Differential Treatment (SDT).

“And to develop a work programme for restoring two-tier dispute resolution, to be agreed no later than MC12.

“I sense from my discussions with members that you chose this leader, Ngozi Okonjo-Iweala, because she has shown herself during her career to be fearless in the face of daunting challenges — and is experienced in knowing how to work with others to make progress toward solutions. 

“Each of the challenges the WTO faces, I am sure, can be met and overcome.  Echoing Dr Ngozi’s words, the trading system that we inherited, now only three-quarters of a century old, is about people.  This is inscribed in the opening section of the Marrakech agreement: ‘to raise living standards, ensure full employment, increase incomes, expand the production of and trade in goods and services, and seek the optimal use of the world’s resources in accordance with the objective of sustainable development.”’

DDG Wolff’s summation correctly lays out many of the issues needing to be addressed by the WTO membership. The vast majority of the issues are highly controversial among at least some Members.

The first major order of business is a two day General Council meeting on March 1-2 which has several agenda items that lay out controversies on important potential deliverables by the WTO in 2021. The agenda for the two day meeting contains sixteen items. See WT/GC/W/820 (26 February 2021) embedded below.

W820

General Council meetings deal with updates on ongoing work at the WTO and address issues teed up by particular Members for consideration at the meeting. This post does not take up all agenda items but highlights a few of possible interest. Because DDG Wolff’s statement on February 25 reviews many of the activities of the WTO in the last six months which shows some of the positive developments, the full statement is embedded below.

WTO-_-2021-News-items-Speech-DDG-Alan-Wolff-DDG-Wolff-calls-on-members-to-work-with-new-Director-General-to-reform-WTO

The 12th WTO Ministerial Conference

Agenda item 4 deals with the 12th WTO Ministerial Conference. It is expected that there will be a decision on the timing and location of the twelfth Ministerial Conference at the General Council session on Monday-Tuesday. The 12th MC was postponed from June 2020 because of the COVID-19 pandemic. With the continued challenges from the pandemic the likely date will be the end of 2021. Kazakhstan which had offered to host the conference in 2020 and again in the summer of 2021 has recently indicated a willingness to host in December of this year as well. The ministerial had originally been scheduled for June because of challenging weather conditions in Kazakhstan in December. See TWELFTH SESSION OF THE MINISTERIAL CONFERENCE, COMMUNICATION FROM KAZAKHSTAN, 8 February 2021, WT/GC/229 (24 February 2021)(embedded below).

229

Report on WTO Accessions

Deputy Director-General Wolff will provide a statement on the annual report on WTO accessions. The report is WTO ACCESSIONS, 2020 ANNUAL REPORT BY THE DIRECTOR-GENERAL, WT/ACC/38, WT/GC/228 (18 February 2021). Activity on accessions was challenged by the pandemic and inability to travel/hold in person meetings. More technical assistance and virtual meetings were held. Accessions are important for acceding governments in terms of promoting reforms at home and obtaining increased certainty in their international trade relations. Accessions are also an important benefit of membership for existing Members as acceding Members reduce tariffs and various non-tariff barriers to gain accession. The first eight paragraphs of the report provide an overview of activities in 2020 and are copied below.

Overview of activities in 2020

“1. 2020 was an unprecedented year in recent history due the COVID-19 pandemic outbreak and its consequences which have touched upon every single aspect of our lives in every corner of the world. It was a challenging year for the WTO, not least because the pandemic disrupted its core activities, especially during the first half of the year, and it also disrupted the international trade of Members, except for supplies of essential goods critical to combatting the health crisis as trade in these goods expanded dramatically. The difficulties and challenges arising from the pandemic were particularly pronounced in acceding governments due to the uncertainties of being outside of the multilateral trading system. In fact, the desire and urgency to be part of the WTO was never felt stronger than in the pandemic year. This was reflected in the level of accession activities in 2020, which was sustained vis-à-vis previous years, with a significant increase in technical assistance and outreach activities.

“2. The year for accessions started with the establishment of a new Working Party for the accession of Curaçao, a constituent country within the Kingdom of the Netherlands (WTO Member), following its application for an independent membership as a separate customs territory pursuant to Article XII of the Marrakesh Agreement. This constituted the 59th request by a state or separate customs territory for membership since the establishment of the Organization in 1995. In July, Turkmenistan was granted observer status in the WTO, with the understanding that it would apply for accession no later than in five years. This brought the total number of observer governments with the intention to accede to the WTO to 24, an increase by five since 2016 when Afghanistan and Liberia became the Organization’s most recent Members. The continuing interest to become part of the multilateral trading system is a testament to the attraction and relevance of its values and principles for all economies, regardless of their size or level of development.

“3. The COVID-19 pandemic undoubtedly hampered or delayed the technical work by acceding governments, Members and the Secretariat to prepare for, engage in and follow up on Working Party meetings. However, thanks to the firm commitment of the acceding governments to advance their work, four Working Parties met, including through the use of virtual platforms that connected the acceding governments which were unable to travel to Geneva. One acceding government had to cancel its already scheduled meeting due to the suspension of all WTO meetings in March. Out of the four accession Working Party meetings held in 2020, three were on LDC accessions (Ethiopia, Comoros and Timor-Leste). In two cases – the Working Parties of Ethiopia and Uzbekistan – this also represented the formal resumption of accession processes after several years of inactivity (8 and 15 years, respectively), signalling their desire to use WTO membership negotiations to drive domestic economic reforms, which have broader implications in the regions where they are located.

“4. When the pandemic halted planned missions, technical assistance, and outreach activities which required air travel, the Secretariat rapidly shifted the mode of operation to virtual format and took advantage of the opportunities provided thereby. In addition to the formal accession Working Party meetings which took place via Interprefy, the Accessions Division organised virtual technical meetings and briefing sessions with acceding governments, Working Party Chairpersons and partners in support of accessions. Moreover, the Division delivered a number of technical assistance, training and outreach activities in response to articulated needs of acceding governments, using various virtual platforms, such as MS Teams, Zoom and WebEx. In fact, the number of activities delivered by the Division and of participants who attended or were trained in 2020 exceeded considerably the numbers in previous years.

“5. One of the novel outreach programs developed in 2020 was two week-long activities which consisted of a series of webinars combining lectures, training and panel discussions. The first Accessions Week was organised from 29 June to 3 July, and the first edition of the Trade for Peace Week took place from 30 November to 4 December. These virtual events brought together a large number of resource persons and panellists from around the world and reached out to a larger number of participants, in a highly cost-effective manner, in comparison with traditional in-person activities. While the full values and benefits of in-person interaction cannot be replaced or replicated, the Accessions Week enabled the Secretariat to remain engaged with acceding governments and Members, experts and partners, beyond Geneva and around the world. The Trade for Peace Week provided an effective networking platform to expand the WTO’s partnership with the peace and humanitarian communities in support of fragile and conflict affected (FCA) countries in accession.

“6. The importance of collaboration and cooperation with partners was never felt more strongly than in 2020. The Secretariat made concerted efforts to enhance and expand the “Trade for Peace through WTO Accession” Initiative to support FCA countries in accession and those recently acceded to the WTO. In 2020, nine acceding governments were identified as being in a FCA situation according to the World Bank’s classification1, while conflicts emerged or resurged in some others. The pandemic hit hardest countries which had already been suffering from years of conflict, political crises, drought and other natural disasters, compounded by declines of the price of oil and other commodities. Nonetheless, some FCA acceding LDCs showed remarkable resilience in sustaining their engagement in accession. The Working Party on the Accession of the Union of Comoros resumed its work with determination to finalise the process as soon as possible. The Working Party on the Accession of Timor-Leste activated the Working Party by holding its first meeting nearly four years after its establishment, despite various challenges faced on the domestic front. Moreover, Somalia submitted its Memorandum on the Foreign Trade Regime, the base document to start its accession engagement with Members. Furthermore, the Secretariat continued to provide support to the g7+ WTO Accessions Group, which was coordinated by Afghanistan.

“7. The year 2020 marked the 25th anniversary of the WTO. The Secretariat used its annual flagship event, the China Round Table on WTO Accessions, to review the contributions made by accessions to the multilateral trading system since 1995. The event also provided an opportunity for an exchange of ideas to explore the future expansion of WTO membership towards universality, including through possible improvements in the accession process. The year also marked a significant anniversary milestone for five Article XII Members2 – Albania, Croatia, Georgia, Jordan and Oman which joined the WTO in 2000, the year with the largest number of new members to date. Other anniversary milestones included the fifth anniversaries of Membership of Kazakhstan and Seychelles and the fifteenth anniversary for the Kingdom of Saudi Arabia. In recent years, membership anniversaries have become an important occasion to reflect on the benefits and values of being part of the Organization.

“8. Finally, the thematic focus of the 2020 Annual Report was on the complementarities and synergies in negotiating WTO membership and regional trade agreements. Almost all acceding governments are involved in regional integration initiatives in parallel with their efforts to achieve WTO membership. The highlight of the year was the implementation of the African Continental Free Trade Area (AfCFTA) to which all African WTO applicants are signatories. The Report’s thematic section builds on the rich discussions held on the topic during the 2020 Regional Dialogues on WTO Accessions for Africa and for the Arab Region, as well as other meetings on Central Asia and Eurasia. It aims to explore key opportunities and challenges that may arise in a simultaneous pursuit of regional and global integration efforts and to provide a checklist of issues for trade negotiators to consider in maximising the benefits from the participation in multiple trade arrangements.”

The full report is embedded below.

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Waiver of TRIPS Obligations During COVID-19 Pandemic

The sixth agenda item involves the effort from India and South Africa with a number of other developing or least developed countries to obtain a waiver from most TRIPS obligations on medical goods needed for the COVID-19 pandemic. This has been a very controversial issue with developed countries with pharmaceutical companies involved in the production of vaccines and other items opposing the waiver on the basis of existing flexibilities within the TRIPS Agreement and on the global efforts through the WHO, GAVI and CEPI to provide vaccines to low- and middle-income countries through COVAX with financial contributions from many countries, NGOs and others. See, e.g., February 19, 2021, COVAX’s efforts to distribute COVID-19 vaccines  to low- and middle income countries — additional momentum received from G-7 virtual meeting, https://currentthoughtsontrade.com/2021/02/19/covaxs-efforts-to-distribute-covid-19-vaccines-to-low-and-middle-income-countries-additional-momentum-from-g-7-virtual-meeting/

The TRIPS Council received the proposal back in October but has been unable to provide a recommendation to the General Council. A meeting of the TRIPS Council earlier this month continued the lack of agreement. Thus, the agenda item will simply result in the item being continued on the General Council’s future agendas until resolved or dropped. See WTO, Members discuss TRIPS waiver request, exchange views on IP role amid a pandemic, 23 February 2021, https://www.wto.org/english/news_e/news21_e/trip_23feb21_e.htm (” In this context and given the lack of consensus on the waiver request, members agreed to adopt an oral status report to be presented to the General Council at its next meeting on 1-2 March. The report indicates that the TRIPS Council has not yet completed its consideration of the waiver request and therefore will continue discussions and report back to the General Council.”); December 11, 2020, Council for Trade-Related Aspects of Intellectual Property Rights meeting of December 10, 2020 – no resolution on proposed waiver of TRIPS obligations to address the pandemic, https://currentthoughtsontrade.com/2020/12/11/council-for-trade-related-aspects-of-intellectual-property-rights-meeting-of-december-10-2020-no-resolution-on-proposed-waiver-of-trips-obligations-to-address-the-pandemic/; December 6, 2020, Upcoming December 11th Council for Trade-Related Aspects of Intellectual Property Rights meeting – reaction to proposed waiver from TRIPS obligations to address COVID-19, https://currentthoughtsontrade.com/2020/12/06/upcoming-december-11th-wto-council-for-trade-related-aspects-of-intellectual-property-rights-meeting-reaction-to-proposed-waiver-from-trips-obligations-to-address-covid-19/; November 2, 2020, India and South Africa seek waiver from WTO intellectual property obligations to add COVID-19 – issues presented, https://currentthoughtsontrade.com/2020/11/02/india-and-south-africa-seek-waiver-from-wto-intellectual-property-obligations-to-address-covid-19-issues-presented/.

Fisheries Subsidies negotiations — Draft Ministerial Decision

The WTO has been pursuing negotiations on fisheries subsidies to address sustainable fishing concerns since the end of 2001. Conclusion of the negotiations were supposed to take place in 2020 but WTO Members were unable to get the job completed in part because of disruptions from the COVID-19 pandemic. While completing the negotiations remains a key objective of Members and the incoming Director-General and such completion is needed to fulfill the UN Sustainable Development Goal 14.6, WTO Members continue to face a large number of challenging issues. See, e.g., WTO press release, WTO members hold February cluster of meetings for fisheries subsidies negotiations, 24 February 2021, https://www.wto.org/english/news_e/news21_e/fish_24feb21_e.htm; February 22, 2021, An early test for the incoming WTO Director-General — helping Members get the Fisheries Subsidies negotiations to a conclusion, https://currentthoughtsontrade.com/2021/02/22/an-early-test-for-the-incoming-wto-director-general-helping-members-get-the-fisheries-subsidies-negotiations-to-a-conclusion/.

Agenda item 7 is entitled “Supporting the Conclusion of Fisheries Subsidies Negotiations for the Sustainability of the Ocean and Fishing Communities — Draft Ministerial Decision — Communication from Brazil (WT/GC/W/815. The draft Ministerial Decision is an effort by Brazil to highlight the critical aspect of the negotiations which is to address environmental sustainability and presumably reflects Brazil’s concerns with the efforts of so many Members to protect their subsidies versus ensuring sustainable fishing. The document is embedded below.

WTGCW815

An attack on Joint Statement Initiatives

As reviewed in the incoming Director-General’s statement on February 15 and the summary of her statement by DDG Wolff on February 25, an important aspect of ongoing work at the WTO is a number of Joint Statement Initiatives that were started at the end of the 11th Ministerial Conference in Buenos Aires, including on e-commerce/digital trade.

Agenda item 10 is a frontal attack on such initiatives by India and South Africa through their paper, “Legal Status of Joint Statement Initiatives and Their Negotiated Outcomes”, WT/GC/819. I had reviewed the submission in an earlier post. See February 20, 2021, Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/. The agenda item will like see many delegations take the floor to support the use of joint statement initiatives within the WTO or to oppose them. While there won’t be a resolution of the issue, the challenge to the process could significantly handicap some of the efforts envisioned by the incoming Director-General to help developing and least developed countries take advantage of the e-commerce/digital trade world and eventually participate in talks and/or in an agreement. WT/GC/W/819 is embedded below.

WTGCW819-1

Agenda item 8 is viewed as related to agenda item 10. India has been seeking to limit WTO consideration of e-commerce issues to the multilateral efforts over many years within the existing Councils and Committees of the WTO (but where limited progress has been made).

COVID-19 and possible future pandemics — addressing existing trade restrictions and improving the functioning of the WTO to better handle in the future

The incoming Director-General has as a high priority to work with Members to improve monitoring of export restraints on medical goods and agricultural goods during the pandemic and working with Members to see that the WTO helps Members recover and better handle any future pandemics. The Ottawa Group had put forward a trade and health initiative in November 2020. See COVID-19 AND BEYOND: TRADE AND HEALTH, WT/GC/223 (24 November 2020). The communication was made by Australia, Brazil, Canada, Chile, the European Union, Japan, Kenya, Republic of Korea, Mexico, New Zealand, Norway, Singapore and Switzerland. The document contains an annex reviewing the types of actions Members could take to improve the response to the pandemic and improve conditions going forward. Included in the annex to the communication are sections on export restrictions; customs, services and technical regulations; tariffs; transparency and review; cooperation of the WTO with other organizations. Several paragraphs in the communication review the issue of possible export restrictions on vaccines and are copied below.

“9. We realize that the challenges related to the scarcity of essential medical goods, now alleviated to some extent by the response on the supply side, may be repeated at the moment of the development of a vaccine or new medical treatments. In this context, we welcome the COVID-19 Vaccine Global Access Facility (COVAX), a global pooled procurement mechanism for COVID-19 vaccines, managed by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO. This mechanism is critical in securing an equitable share of vaccines for all Members of the international community. As we strongly support the objective of this facility, we call on WTO Members to ensure that any export-restricting measures do not pose a barrier to the delivery of necessary supplies under the COVAX facility.

“10. We recognize the collaborative efforts of private and public stakeholders in the research and development of COVID-19 diagnostics, vaccines and treatments. We encourage the industry to take actions to ensure access at affordable prices to COVID-19 diagnostics, vaccines and treatments for vulnerable populations and support voluntary pooling and licensing of IP rights to accelerate the development of such diagnostics, treatments and vaccines and scaling up their production. We recognize the importance of the IP system in promoting R&D and innovation for access to effective treatments. We note that the flexibilities provided by the TRIPS Agreement and reaffirmed in the Doha Declaration on the TRIPS Agreement and Public Health remain available to protect public health and to promote access to medicines for all.”

The full document is embedded below.

WTGC223

Canada will be providing an update on the initiative at the General Council meeting and will likely see many Members provide comments on the agenda item.

Agenda item 9 was added by Colombia, Costa Rica, Ecuador, Panama and Paraguay reflecting concerns by them (and presumably many other trading partners) about actions taken by the European Union to exert control over exports of vaccines from the EU in light of EU concerns about its own access to vaccines from manufacturers. See CALL TO PREVENT EXPORT RESTRICTIONS ON COVID-19 VACCINES, WT/GC/818 (18 February 2021). The document is embedded below.

WTGCW818

Since the EU is one of the Members who has pushed the trade and health initiative, there is concern by some WTO Members that its actions on vaccines run counter to the initiative it is supporting. Presumably the EU will argue that its actions are consistent with its rights under the WTO and is consistent with the language laid out in paragraphs 9 and 10 above.

The two agenda items are likely to show the concerns of many Members on equitable access to medical goods during the pandemic and the reluctance of at least some Members to reduce their flexibilities under the existing WTO rights and obligations.

Conclusion

DDG Wolff indicated that Members selected the incoming Director-General because she is “fearless in the face of daunting challenges”. There is no shortage of daunting challenges facing the WTO and its new Director-General. A few have been reviewed above.

Some good news is that the EU and the United States are supportive of many of the priorities laid out by DG Ngozi Okonjo-Iweala in her February 15 statement to the Special Session of the General Council as seen in the recent EU revised trade policy and the opening statement of USTR nominee Katherine Tai at yesterday’s Senate Finance Committee confirmation hearing See February 18, 2021, The European Commission’s 18 February 2021 Trade Policy Review paper and Annex — WTO reform and much more proposed, https://currentthoughtsontrade.com/2021/02/18/the-european-commissions-18-february-2021-trade-policy-review-paper-wto-reform-and-much-more-proposed/; February 25, 2021, U.S. Trade Representative nominee Katherine Tai confirmation hearing before the U.S. Senate Finance Committee, https://currentthoughtsontrade.com/2021/02/25/u-s-trade-representative-nominee-katherine-tai-confirmation-hearing-before-the-u-s-senate-finance-committee/.

The challenges the new Director-General and the WTO Members face will be made harder by the lack among Members of a common vision and agreed purpose of the WTO, by the current inability of the WTO system to address fundamentally different economic systems, by the structure of decision making, by the failure of obligations to be updated to match level of economic development and role in global trade and by the related issue of how special and differential treatment is used. These challenges have resulted in a negotiating function that is broken, in a dispute settlement system that has no checks on the reviewers for errors or failures to operate within the bounds of authority granted in the Dispute Settlement Understanding and in the underperformance of the monitoring and implementation function.

Hopefully, DG Okonjo-Iweala will develop a strong personal staff and group of DDGs to help her attempt the seemingly impossible — getting meaningful progress and reform from the 164 current WTO Members. See February 13, 2021, Leadership change at the WTO — with Dr. Ngozi Okonjo-Iweala’s arrival next week, what support team and early changes in the role of the Secretariat could help WTO Members move forward?, https://currentthoughtsontrade.com/2021/02/13/leadership-change-at-the-wto-with-dr-ngozi-okonjo-iwealas-arrival-next-week-what-support-team-and-early-changes-in-the-role-of-the-secretariat-could-help-wto-members-move-forward/

Director-General Ngozi Okonjo-Iweala will get her first reality check at the General Council meeting on March 1-2.


India and South Africa Seek Waiver from WTO Intellectual Property Obligations to Address COVID-19 — Issues Presented

India and South Africa submitted a communication to the WTO Council for Trade-Related Aspects of Intellectual Property Rights entitled “Waiver from Certain Provisions of the TRIPS Agreement for the Prevention,
Containment and Treatment of COVID-19.” IP/C/W/699 (October 2, 2020). The document and correction are embedded below.

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W669C1

The waiver request was made part of the agenda of the Council for TRIPS agenda for its meeting on October 15-16. The WTO Secretariat provided a short press release on the TRIPS Council meeting. The discussion on the waiver proposal is quoted below.

“Some 40 members engaged in a substantive discussion on a proposal submitted by India and South Africa for a temporary waiver of certain TRIPS obligations they said would facilitate an appropriate response to COVID-19. The proposal suggests a waiver for all WTO members on the implementation, application and enforcement of certain provisions of the TRIPS Agreement in relation to the “prevention, containment or treatment” of COVID-19. The proponents argued this would avoid barriers to the timely access to affordable medical products including vaccines and
medicines or to scaling-up of research, development, manufacturing and supply of essential medical products.

“The waiver would cover obligations in four sections of Part II of the TRIPS Agreement (https://www.wto.org/english/docs_e/legal_e/27-trips_04_e.htm) — Section 1 on copyright and related rights, Section 4 on industrial designs, Section 5 on patents and Section 7 on the protection of undisclosed information. It would last for a specific number of years, as agreed by the General Council, and until widespread vaccination is in place globally and the majority of the world’s population is immune. Members would review the waiver annually until its termination.

“According to the proponents, an effective response to the COVID-19 pandemic requires rapid access to affordable medical products such as diagnostic kits, medical masks, other personal protective equipment and ventilators as well as vaccines and medicines. The outbreak has led to a swift increase in global demand, with many countries facing shortages, constraining the ability to effectively respond to the outbreak. As new diagnostics, therapeutics and vaccines for COVID-19 are developed, there were significant concerns about how these will be made available
promptly in sufficient quantities and at affordable prices to meet global demand.

“The proponents argued that many countries — especially developing countries — may face institutional and legal difficulties when using TRIPS flexibilities, including the special compulsory licensing mechanism provided for in Article 31bis (https://www.wto.org/english/res_e/publications_e/ai17_e/trips_art31_bis_oth.pdf), which they saw as a cumbersome process for the import and export of pharmaceutical products. Now was the time for the WTO as an organization to rise up to the collective call for defeating the pandemic. The WTO would not succeed in its efforts to rebuild the COVID-19 affected economies unless it acts now to first save those lives that are going to build these economies. It is time for members to take collective responsibility and put people’s lives before anything else, they concluded.

“While a number of developing and least developed country members welcomed the proposal as a contribution to the discussion, many were still studying it in their capitals and asked for clarification on certain points, particularly regarding its practical implementation and the possible economic and legal impact of the waiver at national level. A number of developing and developed country members opposed the waiver proposal, noting that there is no indication that intellectual property rights (IPRs) have been a genuine barrier to accessing COVID-19 related medicines and technologies.

“While acknowledging that the sustained and continued supply of such medicines and technologies is a difficult task, they observed that non-efficient and underfunded health care and procurement systems, spiking demand and lack of manufacturing capacity are much more likely to impede access to these materials. In the view of these members, solutions can be legitimately sought within the existing IP system as the TRIPS Agreement provides enough tools and sufficient policy space for members to take measures to protect public health. The suspension of IPRs,
even for a limited period of time, was not only unnecessary but it would also undermine the collaborative efforts to fight the pandemic that are already under way.

“Given this range of positions, the Council chair, Ambassador Xolelwa Mlumbi-Peter of South Africa, said that the item would remain suspended as members continue to consider the proposal. Requests for waivers concerning WTO agreements must be submitted initially to the relevant council for consideration. After 90 days, the TRIPS Council has to submit a report to the Ministerial Conference. Given that the proposal was submitted on 2 October, the 90-day time-period expires on 31 December 2020. The TRIPS Council meeting will be reconvened on the item of the waiver proposal as appropriate before that date, the chair said.”

WTO, 20 October 2020, Members discuss intellectual property response to the COVID-19 pandemic, https://www.wto.org/english/news_e/news20_e/trip_20oct20_e.htm.

Waiver provisions in the WTO

Article IX:3 and 4 of the Marrakesh Agreement Establishing the World Trde Organization deal with waivers from obligations WTO Members have assumed.

“Article IX

“Decision-Making

” * * *

“3.   In exceptional circumstances, the Ministerial Conference may decide to waive an obligation imposed on a Member by this Agreement or any of the Multilateral Trade Agreements, provided that any such decision shall be taken by three fourths of the Members unless otherwise provided for in this paragraph.

“(a)    A request for a waiver concerning this Agreement shall be submitted to the Ministerial Conference for consideration pursuant to the practice of decision-making by consensus. The Ministerial Conference shall establish a time-period, which shall not exceed 90 days, to consider the request. If consensus is not reached during the time-period, any decision to grant a waiver shall be taken by three fourths of the Members.
 

“(b)    A request for a waiver concerning the Multilateral Trade Agreements in Annexes 1A or 1B or 1C and their annexes shall be submitted initially to the Council for Trade in Goods, the Council for Trade in Services or the Council for TRIPS, respectively, for consideration during a time-period which shall not exceed 90 days. At the end of the time-period, the relevant Council shall submit a report to the Ministerial Conference.

“4.   A decision by the Ministerial Conference granting a waiver shall state the exceptional circumstances justifying the decision, the terms and conditions governing the application of the waiver, and the date on which the waiver shall terminate. Any waiver granted for a period of more than one year shall be reviewed by the Ministerial Conference not later than one year after it is granted, and thereafter annually until the waiver terminates. In each review, the Ministerial Conference shall examine whether the exceptional circumstances justifying the waiver still exist and whether the terms and conditions attached to the waiver have been met. The Ministerial Conference, on the basis of the annual review, may extend, modify or terminate the waiver.”

Some questions from the waiver proposal

The waiver proposal put forward by India and South Africa is extraordinarily broad – covering all WTO Members for a broad range of products not clearly delineated, with the waiver of a broad array of TRIPS obligations without a demonstration of the relevance of the requests for some (e.g., copyright) for a potentially lengthy period of time.

The proposal raises a series of questions that should be addressed to understand whether the waiver is appropriate. These questions include whether such a broad waiver request is appropriate or envisioned by Article IX:3 and 4 of the Marrakesh Agreement? Shouldn’t those requesting a waiver be required to demonstrate that the existing flexibilities within the TRIPS Agreement are inadequate to address concerns they may have? Can two Members request a waiver of obligations for all WTO Members? Can a waiver request be considered where the product scope is lacking clarity, and the uses/needs of the waiver are very broad and potentially open to differing views? To what extent is there a need for those seeking a waiver to present a factual record of actions being taken by governments, companies and international organizations to provide access to medical goods during the pandemic including to developing and least developed countries? Shouldn’t those seeking a waiver identify the extent of existing licenses by major pharmaceutical companies with them or other WTO Members for the production of vaccines or therapeutics to address COVID-19?

Historical usage of waivers have not been as broad as that requested by India and South Africa

Waivers are exceptional by their nature and Article IX:3 talks in terms of a waiver of some obligation for a particular Member, not the waiver of many parts of an agreement for all members. When one looks at waivers granted previously by the WTO, one sees a range of topics — many relate to time for Members to implement changes from updates of the harmonized tariff systems (for individual countries who sought the temporary waiver), some pertain to preferential arrangements between one Member and another or a group of Members and some pertain to waiver of deadlines or specific obligations for least developed countries. Two documents prepared by the WTO Secretariat show waivers granted or continuing in existence in 2019 and all waivers between 1995 AND 2015. The two documents are embedded below.

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Thus, the present request for a waiver by India and South Africa doesn’t seem to comply with the literal terms of Article IX:3 of the Marrakesh Agreement or with the much more narrow scope of waivers typically considered. As reviewed above, the request would apply to all members, not just India and South Africa. The request also seems overly broad both in terms of products (not clearly defined), uses and provisions to be waived.

Existing flexibilities within the TRIPs Agreement

Because of the importance to all WTO Members of the health of their citizens, there has been a lot of focus and discussion within the WTO on the interface between intellectual property and public health. Under the original TRIPs Agreement and the subsequent amendment to the Agreement in 2005 that took effect as Article 31bis to the TRIPs Agreement in 2017, there is flexibility within the TRIPs Agreement for Members to deal with health emergencies including through compulsory licensing which can include the right to manufacture and export to developing and least developed countries who don’t have pharmaceutical manufacturing capabilities in-country. See TRIPs Agreement Article 31, Article 31bis and WT/L/641. The current language of Articles 31 and 31bis from the patent portion of the TRIPS Agreement are presented below.

Article 31 Other Use Without Authorization of the Right Holder

“Where the law of a Member allows for other use (7) of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected:

“(a)  authorization of such use shall be considered on its individual merits;
 

“(b)  such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;
 

“(c)  the scope and duration of such use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor technology shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive;
 

“(d)  such use shall be non-exclusive;
 

“(e)  such use shall be non-assignable, except with that part of the enterprise or goodwill which enjoys such use;
 

“(f)  any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;
 

 “(g)  authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances;
 

“(h)  the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;
 

“(i)  the legal validity of any decision relating to the authorization of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
 

“(j)  any decision relating to the remuneration provided in respect of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
 

“(k)  Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive. The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases. Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur;
 

“(l)  where such use is authorized to permit the exploitation of a patent (“the second patent”) which cannot be exploited without infringing another patent (“the first patent”), the following additional conditions shall apply:
 

“(i)  the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent;
 

“(ii) the owner of the first patent shall be entitled to a cross-licence on reasonable terms to use the invention claimed in the second patent; and
 

“(iii)  the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent.

Article 31bis

“1. The obligations of an exporting Member under Article 31(f) shall not apply with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) in accordance with the terms set out in paragraph 2 of the Annex to this Agreement.

“2. Where a compulsory licence is granted by an exporting Member under the system set out in this Article and the Annex to this Agreement, adequate remuneration pursuant to Article 31(h) shall be paid in that Member taking into account the economic value to the importing Member of the use that has been authorized in the exporting Member. Where a compulsory licence is granted for the same products in the eligible importing Member, the obligation of that Member under Article 31(h) shall not apply in respect of those products for which remuneration in accordance with the first sentence of this paragraph is paid in the exporting Member.

“3. With a view to harnessing economies of scale for the purposes of enhancing purchasing power for, and facilitating the local production of, pharmaceutical products: where a developing or least developed country WTO Member is a party to a regional trade agreement within the meaning of Article XXIV of the GATT 1994 and the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries (L/4903), at least half of the current membership of which is made up of countries presently on the United Nations list of least developed countries, the obligation of that Member under Article 31(f) shall not apply to the extent necessary to enable a pharmaceutical product produced or imported under a compulsory licence in that Member to be exported to the markets of those other developing or least developed country parties to the regional trade agreement that share the health problem in question. It is understood that this will not prejudice the territorial nature of the patent rights in question.

“4. Members shall not challenge any measures taken in conformity with the provisions of this Article and the Annex to this Agreement under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994.

“5. This Article and the Annex to this Agreement are without prejudice to the rights, obligations and flexibilities that Members have under the provisions of this Agreement other than paragraphs (f) and (h) of Article 31, including those reaffirmed by the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2), and to their interpretation. They are also without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under the provisions of Article 31(f).”

The WTO Secretariat has a page on its website that discusses intellectual property and the public interest, https://www.wto.org/english/tratop_e/trips_e/trips_and_public_interest_e.htm, which reviews both flexibilities for Members in addressing public interest needs as well as current topics being discussed within the TRIPS Council. There also have been publications by the WTO Secretariat, WIPO and WHO on flexibilities in accessing medical technologies. See, e.g., WTO, WIPO and WHO, Promoting Access to Medical Technologies and Innovation, SECOND EDITION, https://www.wto.org/english/res_e/booksp_e/who-wipo-wto_2020_e.pdf. And on October 21, 2020 the WTO held a technical workshop on health, trade and intellectual property in addressing COVID-19. See 21 October 2020, WTO workshop on health, trade and intellectual property: an integrated approach to COVID-19; https://www.wto.org/english/news_e/news20_e/heal_21oct20_e.htm. There is a lengthy combined powerpoint presentation available from the webpage which was used in the workshop.

Thus, there can be no doubt that the WTO TRIPS Agreement provides significant flexibilities to Members to address health emergencies. The waiver proposal from India and South Africa doesn’t review any actual efforts to utilize the flexibilities but just opines that Members won’t be able to effectively utilize them. Such an approach should not be acceptable for such far reaching requests as the proposal from India and South Africa.

Ongoing efforts by governments, companies and organizations to make medical goods available to developing and least developed countries

Strangely missing from the waiver request submitted by India and South Africa is any mention of the global efforts underway to ensure access to medical goods and vaccines and therapeutics as approved.

There have been various fund raising efforts in 2020 to provide the necessary wherewithal to organizations focused on developing vaccines for global distribution or focused on the distribution of medical goods, vaccines and therapeutics globally.

CEPI and GAVI in coordination with the WHO have extensive efforts underway, including access to large manufacturing capacity for approved vaccines within the pool of vaccines being developed and included in the CEPI portfolio.

In addition, some private companies involved in manufacturing vaccines under development have licensing arrangements with certain producers for distribution to developing and least developing countries. Some companies have made access to the drawings of their medical equipment available to any company wishing to produce the equipment.

Thus, it is hard to understand a need for a broad waiver when there is considerable international cooperation and substantial vaccine capacity available for some of the vaccines in late stage testing. The WTO membership deserves to have a full compilation of developments and existing actions to facilitate access to medical supplies for developing and least developed countries. The India and South Africa waiver proposal provides none of the relevant information.

While it is not the purpose of this post to develop the full factual record, I provide below some links which supply some information on ongoing developments. See The Guardian, October 20, 2020, India at heart of global efforts to produce Covid vaccine, Country plays central role in development, manufacture, and possible distribution of potential vaccines, https://www.theguardian.com/world/2020/oct/20/india-at-heart-of-global-efforts-to-produce-covid-vaccine (“A deal has already been struck for the Serum Institute of India, based in the city of Pune, to produce 1bn doses of the the Oxford/AstraZeneca vaccine, seen as the forerunner in the vaccine race.” “Johnson and Johnson, whose Covid-19 vaccine is also in phase 3 clinical trials, has struck a deal with the Indian pharmaceutical company Biological E to produce up to 500m doses if successful.” “Bharat Biotech, a Hyderabad-based pharmaceutical company, has a deal to manufacture 1bn doses of Washington University’s intranasal vaccine, now in clinical trials, and Indian pharmaceutical giant Dr Reddy’s has a deal to do a phase 2/3 human trials in India of Russia’s controversial Sputnik vaccine and then produce 100m doses. There are also at least a dozen indigenous vaccines being developed within India. ” “Poonawalla of the Serum Institute said that ‘50% of whatever quantity we manufacture will be kept for India and the remaining will go to low- and middle-income countries.'”).

GAVI, the Vaccine Alliance, October 15, 2020, COVID-19 SITUATION REPORT #19, https://www.gavi.org/sites/default/files/covid/Gavi-COVID-19-Situation-Report-19-20201015.pdf (“COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, co-led by Gavi, the Coalition
for Epidemic Preparedness Innovations (CEPI) and WHO. Gavi is coordinating the development and implementation of the COVAX Facility, the global procurement mechanism of COVAX. The COVAX Facility will make investments across a broad portfolio of promising vaccine candidates (including those being supported by CEPI) to make sure at-risk investment in manufacturing happens now. Gavi is also coordinating the development and implementation of the Gavi COVAX Advance Market Commitment (AMC), the financing instrument that will support the participation of 92 low- and middle-income countries and economies in the COVAX Facility.
The goals of the COVAX Facility and AMC include:
“❖ to support the largest actively managed portfolio of vaccine candidates globally
“❖ to deliver 2 billion doses by the end of 2021
“❖ to offer a compelling return on investment by delivering COVID-19 vaccines as quickly as possible
“❖ to guarantee fair and equitable access to COVID-19 vaccines for all participants
“❖ to end the acute phase of the pandemic by the end of 2021”).

CEPI, October 21, 2020, CEPI expands global manufacturing network, reserving manufacturing capacity for more than 1billion doses of COVID-19 vaccines, https://www.gavi.org/vaccineswork/cepi-expands-global-manufacturing-network-reserving-manufacturing-capacity-over-1-billion-doses (“CEPI signs agreements with Biofabri (Spain) and GC Pharma (Republic of Korea) to reserve vaccine manufacturing capacity for more than 1 billion doses of COVID-19 vaccines designated by CEPI.
CEPI’s strategic investments in vaccine manufacturing at facilities around the world will support the COVAX goal to produce 2 billion doses of safe and effective vaccine by the end of 2021.”).

Conclusion

There is no doubt that the COVID-19 pandemic presents a global health crisis. In response to the crisis there have been activities within the WTO to minimize restrictions on the movement of medical goods and a workshop looking at the interface of trade, intellectual property and public health to help Members address internal needs. The TRIPS Agreement has various flexibilities to permit Members to address health challenges. At the same time there have been extraordinary efforts by many governments, companies and international organizations to cooperate both to develop vaccines and therapeutics but also to speed up manufacturing and work towards equitable distribution of medical goods. Leading pharmaceutical companies have already entered into licensing arrangements to provide billions of doses of vaccines when approved to developing and least developing countries. GAVI and CEPI in coordination with the WHO are working on supporting various vaccine development, securing manufacturing capacity and raising funds to permit broad distribution of vaccines and other products to countries in need and others who have contributed to the group effort.

So factually, it is hard to understand the waiver request filed by India and South Africa. Against a backdrop of how waivers have been used in the past and the lack of a demonstration that existing flexibilities won’t provide acceptable answers, the waiver proposal also is deficient in terms of legal justification. The proposal is not justified, is too broad both in terms of product coverage, Members who would be given waivers, and the range of
TRIPS provisions that would be waived for some number of years.

These are serious problems with a proposal that requires TRIPS Council action and referral to the General Council by the end of the year. Thus, the TRIPS Council should recommend against acceptance of the waiver proposal put forward by India and South Africa.