The WTO Failed the World in Covid

This month the World Trade Organization threw in the towel on COVID-19. Medicines like Paxlovid have been plentiful in the U.S. and Europe, but because of insufficient supplies and high prices, hardly anyone in Africa, Asia, and Latin America has had access. After more than three years of debate, the WTO declared on Feb. 13 that it was unable to reach agreement on waiving global patent rules for COVID-19 treatment to ease the way for expanded production.

This month the World Trade Organization threw in the towel on COVID-19. Medicines like Paxlovid have been plentiful in the U.S. and Europe, but because of insufficient supplies and high prices, hardly anyone in Africa, Asia, and Latin America has had access. After more than three years of debate, the WTO declared on Feb. 13 that it was unable to reach agreement on waiving global patent rules for COVID-19 treatment to ease the way for expanded production.

Those confused about why the WTO is even still debating COVID-19 nearly a year after the public health emergency was declared over by the World Health Organization can be forgiven. Not only is this slow speed not what the world needs in a pandemic, it is also not how the World Trade Organization is supposed to work, and begs questions on WTO’s relevance in a multi-crisis world. It also makes clear that responsibility for the global governance of pandemic-related technology and intellectual property cannot remain with WTO.

As negotiations have reconvened this week in Geneva over a new Pandemic Treaty, the question of which organizations should manage the response is a live question. Some negotiators are pushing for a role for the world’s health ministers and the World Health Organization on intellectual property, but the U.S. negotiator and others say these questions should stay with the WTO. The WTO’s failure, though, make this an increasingly untenable position: If the WTO cannot act in a pandemic to remove patents barriers and promote sharing of technology so the world can produce enough medicines and vaccines, then the WHO must be empowered to do so.

When the World Trade Organization was created in 1995, it marked a fundamental change to international trade law. Where the international system it replaced had primarily dealt with flow of goods across borders, WTO rules expanded the definition of “trade” to include the intangible—including patents on pharmaceuticals. All members were required to enforce 20-year monopolies over making new medicines. As the late scholar Susan Sell described it, this was a remarkable act of “forum shifting.” Before that, patents (effectively government-granted monopolies) were not part of “free” trade. Into the 1970s, many rich countries such as Italy and Japan did not allow patents on medicines, and many developing countries like India, Brazil, and Mexico had continued to exclude medicines from patent monopolies into the 1990s. But they were convinced to expand intellectual property in the new WTO agreement with a promise of “technology transfer” and a requirement that wealthy countries incentivize their companies to share with least-developed countries. This has not gone as promised.

The first effective medicines in the AIDS pandemic arrived just as the WTO came into being. It quickly became clear this debate about globally enforceable intellectual property was life-or-death as patents proved a major barrier to access. Twelve million Africans died between 1997 and 2007 with AIDS medicines too expensive and pharmaceutical companies blocking affordable generic versions. Eventually manufacturers in India, Brazil, South Africa, and elsewhere overcame barriers and made the drugs at a 99 percent lower cost. Today 30 million people are on treatment and cutting-edge medicines costs less than $50 per year.

Did drug companies voluntarily relent? Unfortunately, no. Dozens of low- and middle-income country governments issued “compulsory licenses” forcing drug companies to allow local producers to make HIV medicines. Activists pressured companies to drop their price and share their technology. The WTO eventually agreed on the “Doha Declaration” clarifying WTO rules allowing countries “flexibilities” to make affordable medicines and special consideration during emergencies. It took over a decade, but eventually the Medicines Patent Pool was created to facilitate voluntary sharing of technology—though companies only joined because compulsory alternatives left them little choice.

When the pandemic hit, these structures to transfer technology were all available, but world leaders decided to only use the voluntary elements—an approach that failed spectacularly. Scientists delivered vaccines in record time. Highly effective mRNA vaccines were developed in under a year and treatments followed. Paxlovid proved among the most effective—a long-standing HIV drug combined with a new drug similar to HIV antiretrovirals. Costa Rica and the WHO proposed a mechanism to pool technology and patents even before medicines were developed and approved. Over 100 different drug and vaccine manufacturers around the world were prepared to make them, several even showing they could reverse engineer mRNA vaccines. But no drug company agreed to share its technology, and none of the governments where companies were based compelled them to.

With neither a relaxation of WTO rules nor enough voluntary sharing to enable factories in Africa, Asia, and Latin America to expand supply, global leaders backed a set of voluntary efforts for low- and middle-income countries (LMICs). COVAX, the international effort to procure and equitably distribute vaccines, tried to secure vaccines from companies like Pfizer and Moderna. Predictably, however, COVAX quickly discovered high-income countries were locking up global supplies by using economic and political power to secure preferential access from companies. By the end of the first year, less than 1 percent of all vaccines had gone to low-income countries. Medicines fared no better. One analysis showed need for Paxlovid exceeded supply in LMICs by 8 million doses—leaving 90 percent without access. The lowest reported price was $250—200 percent of the average per capita spending on all health in lower middle-income countries.

These shortages had consequences. Analyses show as many as 27 million lives lost to the pandemic, many of which were preventable. Beyond the direct effect, dangerous coronavirus variants swept the world from contexts of high transmission and low vaccinated immunity. The pandemic has been longer and more damaging because of an artificially limited global supply of countermeasures.

Throughout this time the WTO was locked in debate. South Africa and India proposed a temporary waiver of WTO rules on all COVID-19 products during the pandemic. Pharmaceutical industry lobbyists cast this as a dangerous idea, launching a campaign against it claiming “voiding patents” would undermine innovation for pandemic products. In reality, a waiver does not take away IP rights. It simply suspends global rules temporarily, giving policymaking authority back to national governments to decide whether to enforce patents on pandemic-products during the pandemic without threat of WTO-linked sanctions. A waiver alone would not have solved the pandemic supply problem, which also required shared know-how and expanded manufacturing. But it would have removed threats of lawsuits for companies making financial and infrastructure investments in production lines and threat of sanctions from powerful states for governments allowing local production.

The WTO is supposed to be able to use mechanisms like waivers to respond to crises in a matter of weeks, not years. The Marrakesh Agreement explicitly includes a provision on waivers, stating the General Council must act within 90 days on a waiver request, assuming consensus, but falling back to a vote of three-fourths of members. Every year multiple WTO waivers are granted on issues from pharmaceuticals to diamonds to preferential trade for neighbors. But since 2020, the WTO’s efforts to pass a waiver in the middle of a world-changing event hit institutional and ideological roadblocks. Even as heads of states weighed in and wide swaths of the global economy depended on stopping the coronavirus, the institutional structure encouraged gridlock. Despite seemingly supportive law, the WTO’s structures encourage narrow interest-group politics, excluding actors with a broader public interest and economic agenda.

Narrowly-focused intellectual property negotiators framed the COVID-19 issue in ways that insulated negotiators, focused on footnotes and eligibility instead of stopping the pandemic, and gave an effective veto to trade negotiators from a few states with strong pharmaceutical lobbies. By the time the 12th WTO Ministerial Conference rolled around in June 2022, a simple pandemic-long waiver proposed two years earlier had morphed into a complicated mechanism that several developing countries declared unworkable. It only covered vaccines, pushing treatments to further negotiations. Eight months of more negotiations yielded no further progress, leading to the WTO’s declaration of no agreement last week.

It is time for a new forum shift. Negotiations over a new Pandemic Treaty are intensifying as negotiators hope for a May conclusion. The draft agreement includes a commitment to waive intellectual property during a pandemic and to use WTO flexibilities to produce pandemic-fighting products. These are the minimum steps to make the whole world safer. President Joe Biden already supported a patent waiver during the pandemic and is using these flexibilities at home, including “march-in” rights to limit patent monopolies on high-priced drugs in the U.S. The U.S. negotiator’s opposition suggests misaligned foreign policy.

But the agreement should go further. Given the WTO’s repeated failure, the new agreement should shift authority to waive patent rules to the World Health Assembly. And it should include a binding agreement to share publicly funded technologies for global production. States delegated authority to the WTO, which has proved a barrier rather than an asset in pandemics. Taking it back is just good governance.

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