IP and Pharmaceutical Trade: Europe’s Unresolved Debate

If the European Union was an unashamedly profit-driven enterprise bloc, it could simply shrug off the awkward debates about how to share pharmaceutical technology with the wider world. But it isn’t, so it can’t—particularly as conspicuous gaps in COVID vaccination coverage keep the tensions high on intellectual property protection. The arguments rage on—and not only between the EU and countries without adequate vaccine access. Cracks are discernible within the EU, too.

The European Commission’s 2020 “action plan on IP” insists on “strong, balanced, and robust IPR [intellectual property rights] protection at the national, European, and international level.” The European Parliament has just adopted a resolution backing the Commission’s plan, noting approvingly that IP contributes to “the development of new medicines, and IP incentives are important for ensuring effective access to affordable medicines.”

At the same time, it recognized that inefficiencies in the system “hamper innovators and producers to the detriment of equitable patient access to treatments.” And in response to the pressures exerted by COVID, it acknowledges the need for “a more equitable distribution of vaccines around the globe,” particularly because “the lack of access to affordable vaccines is still a major challenge in developing countries.” It even goes so far as to urge greater EU efforts to “enhance global access to affordable COVID-related medical products.” And it calls for exploration of options for compulsory licensing of medicines, and for the European Commission to “follow through on its promise to engage in active and constructive text-based negotiations” at the World Trade Organization on easing access to vaccines in poorer countries.

But text-based negotiations at WTO are a non-starter for the Commission, which has steadfastly refused to engage in this way with the recommendations of a coalition of—mainly—poorer countries for international patent rules to be suspended so as to boost vaccine supplies. The discussions have been underway since 2020, but the Commission has swerved the text on the table and instead submitted its own less demanding text—provoking dismay and accusations of obfuscation from countries suffering from the lack of vaccines.

The bold rhetorical promises that the EU has consistently trumpeted about tackling COVID at the global level have made its position all the harder to defend. As far back as April 2020, the EU promised to spare no effort to help the world come together against COVID, in the words of Commission President Ursula von der Leyen, who has since made a refrain of “No one is safe until everyone is safe.” And as recently as October 2021, she was still offering reassurances that Europe “stands ready to contribute and invest in pandemic preparedness—at home and worldwide.” But as is all too evident, and as World Health Organization figures attest, this goal is still far from being achieved. And as long as there are large populations around the world seeking vaccination, the EU remains exposed to accusations of talking big and acting small, uncomfortably perched between rival claims of humanitarian principles and industrial imperatives.

One of the most recent exhibits in this very public discussion is a paper commissioned by the European drug industry from one of the major consultancies in the pharmaceutical world, IQVIA. Commenting on the EU’s growing practice of including novel IP provisions in free trade agreements it signs with countries around the world, the paper questions the assumption that longer periods of IP protection drive up drug costs. “EU FTAs that included pharmaceutical IP protection have shown that drugs’ share of healthcare spending tends to stay flat or fall after an FTA, and that prices for medicines rise more slowly than the level of inflation,” it states. In addition, “a strong IP index is correlated with increased clinical trial activity in a country, which can bring both clinical and economic benefits.” Strong IP protection makes possible “a meaningful contribution to R&D and clinical research, with associated benefits for patients and the healthcare systems,” it concludes.

It is an approach that is reflected among the ambiguities of the European Parliament’s resolution on IP, which explicitly “defends the idea that promotion of better IP management in the research and innovation community is needed in order to materialize Europe’s excellent research into innovation that are beneficial to its citizens and businesses.” The prospects for an early resolution of the EU’s conflicts over patents seem no closer now than they have ever been.

Reflector is Pharmaceutical Executive’s correspondent in Brussels