No more the pharmacy/vaccine maker of the world?

In a month’s time, India has gone from exporting COVID-critical medicines and vaccines to requesting stocks from the very nations with whom we have export agreements. There are many reasons for this fall from grace. From over-confidence that India would never suffer a second wave to disastrous forecasting, we celebrated our victory too soon. And are now paying the price in the most tragic way possible. India has surpassed Brazil in the number of active cases and contributed the highest daily new cases globally in recent days. Every family has been COVID-touched; what varies is just the degree.

While SARS-CoV-2 is certainly a new virus and we could excuse our ignorance of its recurrence patterns, the demand-supply gap in critical medical supplies is not new to India.

After all, we have been dependent on imports of critical APIs for decades. We are only now trying to correct that imbalance with API parks and a Production Linked Incentive (PLI) scheme to lure entrepreneurs to invest in such infrastructure.

Which is why FICCI’s call for a PLI-type scheme to ramp up COVID-19 vaccine manufacturing in India is a no-brainer. The government has released funds to both Serum Institute of India and Bharat Biotech to help in the scale-up process but industry pundits point out that this might prove to be too little, too late.

Nevertheless, let us hope that every pandemic prepares us for the next one.

So will there be takers for a PLI scheme for vaccines? Given that vaccine makers will always be under price constraints?

Even braveheart entrepreneurs will be put off by the economics of vaccine manufacturing. SII and Bharat Biotech are supplying the central government at Rs 150 per shot. Both SII and Bharat Biotech are facing a backlash for their prices to state governments and the private market. SII reduced its initial price of Rs 400 for state governments to Rs 300 but stayed firm on charging Rs 600 for the private hospitals.

Bharat Biotech is being trolled as an even bigger profiteer, charging Rs 600 for state governments (which it later reduced to Rs 400) and Rs 1200 to private hospitals. Founder Dr Krishna Ella’s justification that he needs the revenues to reinvest into future vaccines is countered by the fact that taxpayer’s money was paid for a key part of Covaxin’s early development, with NIV, Pune and ICMR’s involvement from day 1.

If Covaxin is public-funded intellectual property, goes the argument, why can’t the government step in and control the price of Covaxin?

And that’s the heart of the matter. The usual market economics and intellectual property rights (IPRs) cannot work in pandemic times. This is why in October 2020, India and South Africa spearheaded a proposal to the World Trade Organisation (WTO) to temporarily waive certain provisions in the TRIPS Agreement, which would allow the mass production of COVID-19 vaccines, diagnostics and medicines. This would go a long way towards addressing the affordability and access issues.

Even though the proposal has now been co-sponsored by 60 countries, predominantly other developing countries, countries from the European Union, Switzerland and UK are opposing the proposal, while the US surprisingly seems to indicate that countries were free to go the compulsory licensing route.

If epidemiologists turned to medical history books to study the Spanish flu for tips on how to take on this century’s pandemic, legal eagles are looking for IPR parallels in cases like HIV-AIDS, whose treatment required costly anti-virals.

Which is why we need a much more nuanced stance.

IPR experts like Dr Yogesh Pai, Assistant Professor and IPR Chair at National Law University Delhi believe that a WTO IP waiver is a futile ‘blunt legal instrument’, as global vaccine tech-transfer needs other strategies, encompassing the sharing of manufacturing know how and trade secrets much beyond the hard facts. 

Pai’s contention that ‘where blunt legal instruments don’t work, using track-1 and track-2 diplomacy to place moral coercion on western governments to nudge firms to actively engage in technology licensing may still work wonders,’ is borne out by the intense backdoor negotiations before US President Biden finally decided to relent and release vaccines and key equipment like oxygen concentrators to India, after weeks of studied silence.

India has risen like a phoenix before, but this time, this resilience comes at too high a price. It will not bring back family members lost to COVID-19. Let us hope we remember these lessons and work towards a more rational and equitable policy framework that balances public health with private sector interests.