RIO DE JANEIRO, BRAZIL – A debate that has gone virtually unnoticed in Brazilian foreign policy has returned to the spotlight this week. In October, India and South Africa proposed to the World Trade Organization (WTO) that there should be no trade sanctions on member countries that violate patents on drugs and vaccines against Covid-19.
The initiative came at a time when the results of the first vaccines against the virus that plagued the health of mankind and wore out economies emerged. The goal was to increase production capacity: production at the original manufacturers was limited and would hardly be enough for developed nations, let alone poor countries. With the breach of the patent, it was hoped that in the medium term, biotechnology laboratories and institutes worldwide could gain some scale and help in immunizing the global population.
The proposal, which mentioned the “exceptional circumstances” caused by the coronavirus, provided a temporary truce against the imposition of patent rules, trade secrets and pharmaceutical monopolies. It was endorsed by over 100 nations, according to calculations by Doctors Without Borders.
But there was a notorious group of countries opposed to the measure, which needed to agree, since the WTO works based on consensus. Among these nations were headquarters of major pharmaceutical industries such as the United States, the European Union, Switzerland, Norway, Canada, Japan, and Australia. But one country diverged from its traditional stance in relation to patents and aligned itself with the bloc of developed countries in the debate: Brazil.
In closed meetings of the WTO in October and the ensuing months, Brazil has repeatedly opposed the breaking of patents for vaccines. It was the only one among the main emerging countries to position itself this way. Even China, which has two national vaccines against Covid-19 so far, did not oppose the measure and said it is open to consideration. The debates occurred in the TRIPs council – which deals with the intellectual properties of its members – and have not yet reached a vote in the general council.
In the meetings, the Brazilian delegation has argued that a patent waiver “would hardly be a global solution” to the shortage of vaccines and that the best way forward is direct licensing agreements with manufacturers.
Brazil’s stance attracted attention. The country, after all, has a history of producing generic drugs and breaking patents. During the Fernando Henrique Cardoso government, in the early 2000s, the Ministry of Health (under Minister José Serra) threatened to break patents on HIV drugs and achieved better prices with pharmaceutical companies, resulting in a treatment program for the disease that would become a reference. Since then, Brazil has been one of the world’s pioneers on this front, a position that has been maintained by the subsequent governments.
The law of generic drugs, of that same time, led to savings in consumers’ pockets and was crucial to expanding access to medicines at the SUS (Unified Health System), say experts. According to data from the ProGenéricos association, savings in the law’s 20 years reached R$132 billion. In 2020, the sale of generic drugs grew by 7% during the pandemic.
Medications have spurred scientific development in the country’s pharmaceutical sector, as they require approval from the National Health Surveillance Agency (Anvisa) and are subject to rigorous testing.
According to Cristina Castro-Lucas, professor of entrepreneurship, innovation, brands and patents at the University of Brasília’s Institute of Biological Sciences, there was also a secondary economic effect, with an impact on the medium-sized pharmaceutical industry.
While large laboratories can invest more in research and development of new formulas, smaller ones gained competitiveness with the ability to innovate, working with patent formulas that were exclusive until now. “Medium-sized laboratories innovate by adding to a certain formula and introducing new solutions to society,” she said.
According to her, Brazilian actions with generic drugs have created access to the population, particularly low-income, who otherwise could not access patented drugs for diseases such as diabetes, HIV or heart disease.
Therefore, apart from the vaccines, the change in Brazil’s position at the WTO with respect to patents, opposing their breach for the development of essential drugs, also raises concern among experts: the likelihood that this position will persist in other instances, undermining not only the direct fight against the Covid-19 pandemic, but future drugs for other diseases and sequelae left by the coronavirus, which leads to lung, heart and kidney issues in many patients.
Ghost of last October
After the WTO debates since October, this week there was a new attempt at consensus on the subject of patents, again unsuccessful. But this time Brazil abstained and did not vote together with developed countries. The debate on Tuesday, January 18th, occurred amidst Brazil’s difficulty in obtaining the necessary vaccine doses and the urgency to improve diplomatic relations with BRIC countries, such as India, the author of the proposal. Brazil had hoped to receive two million doses of the AstraZeneca/Oxford vaccine from India – which arrived on Friday, January 22nd.
“Brazil’s vote with the developed countries was contrary to the Brazilian history,” says Soraya Smaili, dean of the São Paulo Federal University (UNIFESP) and professor of the Department of Pharmacology. “The patents are related to a very strong industrial issue, while arguing that they should be a public good,” she says.
The wealthiest countries have more patents and advocate the agenda, and the poorest are more dependent, have less sovereignty. With the coronavirus, everyone is feeling this.
In addition to the diplomatic obstacles created, the impasse in the WTO also exposed the lack of investment in research and development in Brazil: to protect patents one must develop them.
Smaili points out that the investment historically made is what places Brazil not as far behind as it could be in the race for a vaccine. But more is needed, says the professor. “This crisis, unfortunately, will not be the first. And the pandemic has made it clear that Brazil needs to invest to prepare for the coming challenges. This is not what we are really seeing”.
Worldwide, part of investment in innovation and technology is invariably governmental, because only governments accept some of the risks involved. In Brazil, many pioneering researches are notoriously conducted in public institutes, such as the Butantan and Fiocruz, and in university laboratories, from where some of the first innovations emerge that may later gain scale.
Public investment was part of the development of vaccines worldwide, which is another of the arguments of those who advocate patent breach. The American Moderna vaccine, for instance, received US$2.5 billion in public funds in the USA and had part of its research conducted by national agencies.
Also American Pfizer’s vaccine with German BioNTech, although it is one of the vaccines that used more exclusively private funds, was granted US$455 million from the German government, in addition to a commitment to purchase US$6 billion by the United States and the European Union. The Swedish-British AstraZeneca immunizer together with the University of Oxford relied on the UK’s public coffers. The American government has also invested in Johnson & Johnson’s vaccine, one of the most awaited this year because it may only require one dose.
Brazil has a number of vaccines in their early development stages, but which are suffering from funding shortfalls. The low investment in the Brazilian vaccine is a picture of the current situation in national science. In 2017, Brazil allocated 0.8% of its gross domestic product (GDP) – at the time around US$2 trillion – for research and development. In the United States, one of the world’s leading countries in investment in science, it was 2.8% of the US$19.4 trillion in GDP in the same year. Funds and programs for scientific development and support for researchers in Brazil have also been cut successively in recent years.
Patent breaches would have no impact in the short-term
Despite the discussion about patent breach, the result of this process would not resolve the shortage of immunizers in the short-term. According to experts, the measure proposed at the WTO would not have an immediate impact because the main obstacle is still production capacity. The result would come in a few months or even years, when more countries, particularly the poorest, would have aligned their domestic production.
There is also the argument that the vaccines were approved and developed in record time, and a patent break that would allow production to proceed with no direct authorization could undermine the quality and safety of supplies. At ANVISA itself, those interested in manufacturing a breached patent vaccine would have to prove that they are safe, possibly by conducting further clinical trials such as those conducted by the original manufacturers. This is currently the case with generic drugs.
“Even if the technology of Covid-19 vaccines were released, it’s difficult to guarantee that production would be safe without conducting new trials that would take time. And having unsafe vaccines would be the worst-case scenario,” says Professor Patricia Danzon, a health economics expert at the University of Pennsylvania who studies the price of drugs.
An alternative to patent infringement is technology transfer agreements. Brazil has guaranteed the right to manufacture the AstraZeneca/Oxford vaccine nationally – which will be produced at the Oswaldo Cruz Foundation – and the Coronavac vaccine, from China’s Sinovac – produced at the Butantan Institute.
“It is much more efficient to take the vaccines that have already been authorized and approve licensing contracts, like those Brazil has done,” says Danzon.
In both cases, Brazil paid to have the right to produce the vaccines internally, which is not a patent breach. But it also organizes the Fiocruz and Butantan’s plants to be able to manufacture the required supplies. Hence the need, at this time, to buy ready doses or to bring the two vaccines’ active ingredient from China, which only needs to be bottled in Brazil – as the Butantan has been doing with the Coronavac.
Organizing internal production takes time. One of the most celebrated examples in Brazil and a world reference, the production of influenza vaccines by the Butantan, involved a technology transfer process with Sanofi Pasteur that lasted more than a decade, starting with the bottling of the product since 1999 until its own production as of 2011. It’s a similar process to what is being done with the coronavirus vaccines at the moment – but in a period of time that needs to be much shorter.
Despite the low immediate impact and the possibility of agreements, one of the arguments that have been used in the WTO by countries and humanitarian organizations that advocate patent breaching is that the manufacturers’ agreements have been lacking in transparency.
For instance, not all manufacturers have joined the Covax Facility, the World Health Organization’s initiative to secure access to vaccines for the poorest countries – Pfizer joined the alliance only this week. Meanwhile, high-income countries have already guaranteed 85% of Pfizer’s vaccine and all of Moderna’s, according to London-based research company Airfinity.
“Since the start of the pandemic, pharmaceutical corporations have maintained their standard practice of tight control over intellectual property rights while pursuing secret and monopolistic trade agreements that exclude many developing countries from benefiting,” said Sidney Wong, executive director of Doctors Without Borders’ drug access campaign last year. Wong pointed out at the time that, with the exception of one company, “none of the vaccine’s developers have committed themselves to dealing with intellectual property differently from the status quo”.
The “exception” to which Wong refers is AstraZeneca, which ultimately led one of the largest Covid-19 vaccine distribution initiatives when licensing Fiocruz and the Serum Institute in India (the one responsible for sending the first two million ready doses of AstraZeneca’s vaccine to Brazil).
Lack of transparency and excessive power in the hands of patent owners are criticized by humanitarian organizations and even by WHO
The opponents to the patents also point out that the pharmaceutical companies have the prerogative of ending production rights granted to countries like Brazil. This would cause concern in the future, should the coronavirus require annual or periodic vaccinations, for instance.
The industry argues that it invests billions of dollars and runs risks in the production of new vaccines or drugs, which could not have been approved. Although pharmaceutical companies claim that they have not been seeking to profit from the first batch of vaccines, it is the existence of patents and the prospect of maximizing profits in the future that makes companies invest in research and development, the industry argues.
In the USA, where drugs are among the most expensive in the world, a common argument is that this scenario allows pharmaceutical companies in the country to hold 70% of the sector’s profit among developed countries, but also 60% of high value patents.
In Brazil, which lacks its own vigorous pharmaceutical industry, the investment in science and the breach of patents to ensure health to the population will continue to be issues in 2021.