This post is part of the series COVID-19
Other posts in this series:
- COVID-19 Lockdown is making SA’s already Bad Economy, Worse
- South Africa’s Lockdown is not Prima Facie Lawful
- To tackle COVID-19 we need Trade Collaboration and Innovation (Current)
As member states of the World Health Organization prepare to gather in Geneva on May 18th for the World Health Assembly, a global coalition of 31 think tanks calls on governments to commit to open trade, collaboration, and innovation in the fight against Covid-19 and future disease outbreaks.
The global coalition of think tanks is concerned that many countries are hoping to overcome the crisis with policies that have demonstrably failed in the past, including trade barriers, export bans, and the expropriation of property rights.
The united declaration calls for a range of measures to safeguard supplies of essential medical goods and support innovation for future Covid-19 treatments and cures. Import tariffs are applied by many countries on medical supplies and personal protective equipment, driving up prices and reducing availability. Nepal, for instance, sets a 15% average tariff on medicines. Ecuador imposes a 55% levy on personal protective equipment. And India charges a 10% tax on imported vaccines.
Tariffs on medical supplies should be abolished urgently and permanently perhaps via a binding World Trade Organization commitment or deal.
By late April, 80 countries and separate customs territories had instituted export curbs to preserve supplies for their populations. These are exacerbating global shortages of essential medical goods by disrupting global manufacturing supply chains. Thanks to these export bans, particularly on active pharmaceutical ingredients, there are already shortages in the global supply of medicines unrelated to COVID, such as paracetamol and antibiotics.
There is currently not nearly enough IP related to Covid-19 and everything must be done to attract more companies into R&D instead of scaring them away.
Innovation is crucial to finding a long-term solution to a newly identified disease like Covid-19. That includes the invention of new therapeutics and vaccines, but also their mass manufacture and rapid distribution throughout the world.
When they become available, governments can hasten their launch by increasing cooperation with other countries to speed up the regulatory approval process. This is particularly important for a country such as South Africa where there is an estimated backlog of approximately 16,000 drug applications. Of these applications, 50% are over five years old. Using the current strategies, it would take eight years to clear the backlog even if no new applications were received. South Africans cannot wait five years for the South African Health Products Regulatory Authority (SAHRPA) to approve new Covid-19 therapies and vaccines. Cooperation is therefore key.
Governments should also support innovation and avoid pre-emptively removing intellectual property (IP) rights from any new vaccines or treatments that emerge. There is currently not nearly enough IP related to Covid-19 and everything must be done to attract more companies into R&D instead of scaring them away.
It is of grave concern that in 2018 the South African government introduced an IP policy that promotes a policy of issuing “workable compulsory licences” through a non-judicial review mechanism. Simply put, the government wants to make it easier to expropriate IP from innovators by bypassing the courts. Viewed in conjunction with the recent resolution of the ruling party’s National Executive Committee to “drive localisation and the development of local manufacturing…[and]…to build a national pharmaceutical company”, South Africans have several reasons to be worried.
Now is not the time for countries to look inwards. The crisis will only be resolved, and economies will only recover if countries can trade and collaborate freely with each other.
The risks here are immense. If it chooses to co-opt the IP of any new vaccine or medicine, the South African government would have to scale up manufacturing and distribution to provide access for every South African as quickly as possible. It would have to ensure that quality standards are met for the drug or vaccine and met at a lower price than that available on international tender with innovator manufacturers. Given the government’s track record with healthcare provision, this seems highly improbable. Cooperation is surely a far better strategy.
It is highly concerning that many countries, including South Africa, are looking to the failed ideas of the past to address the crisis. Barriers are being erected that are deepening shortages of medical supplies, undermining innovation, and hampering efforts to beat the disease. Now is not the time for countries to look inwards. The crisis will only be resolved, and economies will only recover if countries can trade and collaborate freely with each other.
Jasson Urbach is a director of the Free Market Foundation. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.
Continue reading this series:
South Africa’s Lockdown is not Prima Facie Lawful