MAPGuideⓇ Commentaries

GHIAA’s Comments on the Negotiating Text
of the Pandemic Agreement

On October 16, 2023, the WHO released a Negotiating Text for the WHO convention, agreement or other international instrument on pandemic prevention, preparedness and response (now referred to as the “Pandemic Agreement”) to WHO member states. This latest text follows the previous Bureau’s Text (May 2023), and Zero Draft (February 2023). The Negotiating Text has not yet been officially published on the INB website but is available from Health Policy Watch.

The comments and recommendations below seek to contribute to the ongoing dialogue on the provisions of the Pandemic Agreement, with a focus on the sections most relevant to the formation of partnerships and agreements related to publicly funded R&D, licensing and technology transfer, material transfer, and the procurement of pandemic-related products.

A. Research and Development

Extracts from the Negotiating Text [emphasis added throughout]

9.4 Each Party shall, in accordance with its national laws and considering the extent of public funding provided, publish the terms of government-funded research and development agreements for pandemic-related products, including information on:

(a) research inputs, processes and outputs, including scientific publications and data repositories with data shared and stored securely in alignment with Findability, Accessibility, Interoperability, and Reusability principles;

(b) pricing of end-products, or pricing policies for end-products;

(c) licensing to enable development, manufacturing and distribution, especially in developing countries; and

(d) terms regarding affordable, equitable and timely access to pandemic-related products during a pandemic.

11.3 During pandemics, each Party shall, in addition to the undertakings in paragraph 2 of this Article: […]

(b) encourage all holders of patents related to the production of pandemic-related products to waive or manage, as appropriate, for a limited duration, the payment of royalties by developing country manufacturers on the use, during the pandemic, of their technology for the production of pandemic-related products, and shall require, as appropriate, those that have received public financing for the development of pandemic-related products to do so;

Comments

  • We are disappointed to see that the Negotiating Text does not include any clear commitments by the Parties to attach equitable access conditions to public R&D funding. The Zero Draft included some preliminary language that was a step in the right direction in this regard, but it was removed in the subsequent Bureau’s Text and has not been reinstated.
  • The only proposed requirement on publicly funded developers, although still with the caveat “as appropriate”, is to waive or manage payments of royalties for the use of their technology in the event of a pandemic (Article 11.3(b)). Reduced royalties may contribute to the affordable pricing of the pandemic-related products to some extent, but this mechanism alone is insufficient to ensure equitable access to publicly funded products, particularly if there are no obligations for the developer to have entered into licensing and technology transfer agreements in the first place.
  • Article 9.4 places some transparency-related obligations on the Parties in relation to publicly-funded R&D agreements, but it appears to conflate two distinct types of information:
    • 9.4(a) seems to refer to the publication of the results of publicly funded research, not the underlying funding agreement terms. Open access publication of results is an obligation that should be placed on the recipients of public funding, rather than on the Parties. It is unlikely that governments could fulfill this publication commitment without the cooperation of the funded organization that is performing the research and that is likely to be the owner of the research results.
    • 9.4(b), (c), and (d) relate to the publication of the terms set out in an R&D funding agreement. Governments should be able to fulfill this commitment provided they include appropriate language permitting them to do so in the confidentiality provisions of their agreements. The commitments of the Parties related to the transparency of agreement provisions are discussed further in Section 5 of this commentary.

Recommendations

  • The Parties should commit to including obligations in public R&D funding agreements to ensure equitable access to the results of the funding. Equitable access obligations should apply regardless of the level of public funding, although Parties should be permitted sufficient flexibility to negotiate detailed terms according to the context of a specific agreement. The Parties should recognize that the negotiation of R&D funding agreements, particularly for early stage research, is when they have the greatest leverage for negotiating equitable access obligations; this opportunity must not be lost.
  • Equitable access obligations to be included in public R&D funding agreements should address the affordability, availability, accessibility, and appropriateness (“the 4 As”) of pandemic-related products developed with public funding. The concrete actions needed to achieve the 4 As should be coordinated through an equitable access plan, an evolving document that remains attached to the product development plan, even if the related intellectual property and/or development activities are transferred to new development and manufacturing partners.
  • The Parties should also recognize that equitable access obligations do not need to prevent for-profit entities from making commercial returns when appropriate, and therefore should not be viewed as a disincentive to accepting public funding. Examples of how this can be achieved are discussed further in Section B below.
 

B. Licensing and Technology Transfer

Extracts from the Negotiating Text

10.1 The Parties, with a view to achieving more geographically and equitably distributed global production of pandemic-related products, and increasing the timely, fair and equitable access to safe, effective, quality and affordable pandemic-related products, and thereby reducing the gap between potential demand and supply at the time of a pandemic, shall: […]

(d) encourage entities, including manufacturers within their respective jurisdictions, in particular those that receive significant public financing, to grant, subject to any existing licensing restrictions, on mutually agreed terms, non-exclusive, royalty-free licenses to any manufacturers, particularly from developing countries, to use their intellectual property and other protected substances, products, technology, know-how, information and knowledge used in the process of pandemic-related product development and production, in particular for pre-pandemic and pandemic diagnostics, vaccines and therapeutics for use in agreed developing countries;

(e) actively support, participate in and/or implement, as appropriate, relevant WHO technology, skills and know-how transfer programmes and initiatives aimed at enabling developing countries to produce pandemic-related products, in order to facilitate strategically and geographically distributed production of pandemic-related products;

[…]

10.3 Each Party, in addition to the undertakings in paragraph 2 above, shall:

(a) encourage research and development institutes and manufacturers, in particular those receiving significant public financing, to waive or manage, for a limited duration, royalties on the use of their technology for the production of pandemic-related products;

(b) promote the publication, by private rights holders, of the terms of licensing agreements or technology transfer agreements for pandemic-related products; and

(c) promote the voluntary licensing and transfer of technology and related know-how for pandemic-related products by private rights holders with established regional or global technology transfer hubs or other multilateral mechanisms or networks.

11.2 The Parties shall:

(a) coordinate with, collaborate with, facilitate and incentivize the manufacturers of pandemic-related products to transfer the relevant technology and know-how to manufacturer(s) on mutually agreed terms as appropriate, including through technology transfer hubs and product development partnerships, and to address the need to develop new pandemic-related products in a short time frame;

(b) make available non-exclusive licensing of government-owned technologies on mutually agreed terms as appropriate, for the development and manufacturing of pandemic-related products, and publish the terms of these licenses

[…]

(e) develop a database that provides the details of pandemic-related products for all known pandemic potential diseases, including the technological specifications and manufacturing process documents for each product;

11.3 During pandemics, each Party shall, in addition to the undertakings in paragraph 2 of this Article: […]

(c) encourage all holders of patents related to the production of pandemic-related products to waive or manage, as appropriate, for a limited duration, the payment of royalties by developing country manufacturers on the use, during the pandemic, of their technology for the production of pandemic-related products, and shall require, as appropriate, those that have received public financing for the development of pandemic-related products to do so;

(d) encourage manufacturers within its jurisdiction to share undisclosed information, as defined in Article 39.2 of the TRIPS Agreement, with qualified third-party manufacturers where such information prevents or hinders urgent manufacture by such qualified third parties of a pharmaceutical product that is necessary to respond to the pandemic.

Comments

  • We note that there is some overlap between Articles 10 and 11 regarding the promotion of voluntary licensing and technology transfer activities. This overlap risks creating contradictory obligations between the two articles. Furthermore, Article 10 is currently titled ‘Sustainable Production,’ but licensing and technology transfer are more likely to support distributed manufacturing (which is also referenced in the text of the article) than sustainability. A critical component of sustainability – currently absent from Article 10 – is the buyer for the end product. Clearly defined and appropriately funded procurement structures with mandates to serve different markets will act as an incentive for both product developers and potential manufacturers to enter into licensing and technology transfer agreements.
  • We also note a lack of clear distinction between the expectations on: (i) product developers that have received public R&D funding; and (ii) private rights holders (which we assume refers to product developers that have not received public R&D funding). As discussed in our comments on the Bureau’s Text, governments can – and should – do more than just “encourage” publicly funded product developers to engage in licensing and technology transfer activities.
  • Article 11.2(b) requires the Parties to enter into non-exclusive licensing agreements for government-owned technologies. However, this section is lacking any reference to engagement in technology and know-how transfer in conjunction with those licensing agreements. Article 10.1(e) sets out a separate requirement to participate in WHO technology and know-how transfer programs, but it does not refer to providing non-exclusive licenses as part of that engagement. Considering these two provisions in an integrated manner could ensure a more coherent approach to government participation in initiatives to facilitate distributed manufacturing.
  • Article 10.1(d) refers to royalty-free licenses, and Articles 10.3(a), and 11.3(b) refer to waived or managed royalties. While these mechanisms may be appropriate to support affordable pricing in some circumstances and for some markets, the ability to earn some royalties – perhaps on a tiered basis depending on country income levels – can be an incentive for both publicly and privately funded product developers to enter into licensing and technology transfer agreements. Developers will incur costs associated with negotiating and fulfilling the obligations under these agreements and will need to be able to recover or otherwise be reimbursed for these costs.
  • Article 11.2(e) refers to the development of a database including technological specifications and manufacturing process documents for pandemic-related products. While some of this information may be available from publicly available patent documents, it seems likely that some will be trade secret information owned by product developers which could only be included in a database through a contractual obligation or voluntary donation.

Recommendations

  • Article 11 should include a statement on the linkages between sustainable and distributed manufacturing, licensing and technology transfer, and equitable access to pandemic-related products so that there is clarity on the intended outcomes of technology transfer activities and what is needed to ensure that they are successful.
  • The Pandemic Agreement should include commitments by the Parties to require (not just encourage) the recipients of public R&D funding to enter into licensing and technology transfer agreements for the purpose of facilitating equitable access to products developed with public funding. To ensure that governments are able to enforce these requirements, they must be included in the equitable access obligations set out in an R&D funding agreement (see Section A above). Successful partnerships between publicly funded product developers and distributed manufacturers can be a mechanism that supports developers in fulfilling other equitable access obligations related to the 4 As, particularly given that manufacturing partners may have lower cost bases and a greater understanding of regional markets and regulatory processes.

Publicly funded product developers should be required to include assessments of suitable manufacturing partners and their locations at the appropriate stage in their equitable access plans. Early consideration of requirements including technical capabilities, facility capacity, and quality assurance processes can help with the identification of partners that can meet the standards required to make a safe and efficacious product. As an alternative to requiring publicly funded developers to identify distributed manufacturing partners themselves, they could instead be required to enter into licensing agreements with organizations such as the Medicines Patent Pool (“MPP”) which then take responsibility for identifying suitable sublicensees.

  • Public R&D funding agreements should also set minimum standards for the terms on which licensing and technology transfer must take place to ensure that they have the intended impact on access to the product. These standards could include:
    • The royalties or other fees that may be charged to a licensee;
    • The expected territory for the license; and
    • The expected levels of cooperation so that a licensee can successfully manufacture a product and then register it for use in relevant markets. This could include considerations beyond an initial technology transfer process such as access to a reference product and exclusivity waivers. 
  • While obligations for licensing and technology transfer should be placed on publicly funded product developers, the Parties should also acknowledge the costs associated with building successful distributed manufacturing partnerships. The developer’s costs for negotiating and performing their obligations under these agreements need to be included in the scope of the publicly funded project budget; alternatively, the developer could be permitted to charge reasonable costs to the recipient, potentially in the form of royalties or other technology transfer fees. The cost structures in a recent agreement between the MPP, as the “implementing arm” of the WHO’s COVID-19 Technology Access Pool (“C-TAP”), and Medigen, a private company, provide an example of such an approach.
  • The provisions of the Pandemic Agreement related to government participation in, and support for, distributed manufacturing initiatives should be presented in a consolidated manner to facilitate implementation of these obligations by each Party. The Parties should also consider the underlying mechanisms that will need to be in place for them to be able to fulfill their obligations. For example, there will need to be national policies or legislation that:

(i) permit licensing, technology transfer and manufacturing activities related to government-owned technology outside of national borders; and

(ii) ensure that either there is no exclusive licensing of potentially relevant government-owned technology, or that governments retain rights under exclusive licenses to allow them to enter into additional license agreements for the purposes of meeting equitable access needs and the obligations of the Pandemic Agreement. Exclusive licenses entered into by the U.S. National Institutes of Health contain language to this effect.

C. Material Transfer

Extracts from the Negotiating Text

(j) “recipient” means receivers of WHO PABS [Pathogen Access and Benefit-Sharing] Material from the WHO coordinated laboratory network, such as manufacturers of vaccines, diagnostics, pharmaceuticals and other products relevant to pandemic prevention, preparedness and response, as well as biotechnology firms, research institutions and academic institutions. Any manufacturer that enters into any contracts or formal agreements with recipients or laboratories in the WHO coordinated network for the purpose of using WHO PABS Materials on the manufacturer’s behalf for commercialization, public use or regulatory approval of that manufacturer’s vaccines, diagnostics or pharmaceuticals shall also be considered a recipient for purposes of this Agreement

12.4 The WHO PABS System shall have the following components: […]

(b) PABS multilateral benefit-sharing: […]

ii. The PABS SMTAs shall include, but not be limited to, the following monetary and non-monetary benefit-sharing obligations:

1. in the event of a pandemic, real-time access by WHO to a minimum of 20% (10% as a donation and 10% at affordable prices to WHO) of the production of safe, efficacious and effective pandemic-related products for distribution based on public health risk and need, with the understanding that each Party which has manufacturing facilities that produce pandemic-related products in its jurisdiction shall take all necessary steps to facilitate the export of such pandemic-related products, in accordance with timetables to be agreed between WHO and manufacturers; and

2. on an annual basis, contributions from Recipients, based on their nature and capacity, to the capacity development fund of the sustainable funding mechanism established in Article 20.

(c) The Parties shall also consider additional benefit-sharing options, including:

i. encouragement of manufacturers from developed countries to collaborate with manufacturers from developing countries through WHO initiatives to transfer technology and know-how and strengthen capacities for the timely scale-up of production of pandemic-related products;

ii. tiered-pricing or other cost-related arrangements such as no loss/no profit arrangements, for purchase of pandemic-related products, that consider the income level of countries;

12.5 In the event that pandemic-related products are produced by a manufacturer that does not have a PABS SMTA under the WHO PABS System, it shall be understood that the production of pandemic-related products requiring the use of WHO PABS Materials, implies the use of the WHO PABS System. Accordingly, each Party, with respect to such a manufacturer operating within its jurisdiction, shall take all appropriate steps, in accordance with its relevant laws and circumstances, to require such a manufacturer to provide benefits in accordance with paragraph 4(b)(ii) of this Article.

[…]

12.7 The Parties shall ensure that all components of the WHO PABS System are operational no later than 31 May 2025. The Parties shall review the operation and functioning of the WHO PABS System every five years.

Comments
  • We welcome the added definition of a Recipient under the WHO PABS System, which is a good step towards recognizing the complexity of applying the terms of a PABS SMTA throughout the product development process. However, it is important that the Pandemic Agreement considers how these terms will remain enforceable beyond the initial PABS SMTA.
  • Article 12.4(b)(ii) lists obligations that must be included in a PABS SMTA, and Article 12.4(c) then lists additional obligations to be considered by the Parties. The reason for the split between required obligations and those for consideration is unclear. Arguably, some of the additional options for consideration could be more effective in facilitating equitable access, and may not be more challenging to negotiate with Recipients. For example, if publicly funded product developers should be required to engage in technology transfer activities (per our recommendations in Section B), then the same obligation should also be included in PABS SMTAs.
Recommendations
  • The Parties will need to achieve a balance between ensuring that sufficient and appropriate access commitments are attached to the receipt of PABS Materials, and the need to rapidly conclude SMTAs with a range of organizations in the event of a pandemic. The current language leaves room for negotiation of the exact terms of an individual SMTA, which can delay progress at a time of urgency. Work to ensure that the PABS System is operational by the end of May 2025 (per Article 12.7) should therefore include the development of a template PABS SMTA through a process involving dialogue with likely Recipients.

The template SMTA should be ready for use with different types of organization and, where necessary, should include options to be used in different scenarios. It should also provide clarity over the required flow-through of obligations to subsequent parties beyond the initial SMTA signatory, so that they remain enforceable and attached to the use of the related materials throughout the product development process, as is intended by the definition of Recipient.

D. Procurement

Extracts from the Negotiating Text

13.4 Each Party shall take appropriate measures to reduce waste of pandemic-related products, including through the exchange and/or donation of products in order to maximize their use, while taking account of the needs of recipient countries.

15.1 Each Party shall develop national strategies for managing liability risks in its territory regarding the manufacture, distribution, administration and use of the novel vaccines developed for response to pandemics. Strategies may include, among others, the development of model contract provisions, vaccine injury compensation mechanisms, insurance mechanisms, policy frameworks and principles for the negotiation of procurement agreements and/or the donation of novel vaccines developed in response to pandemics, and building expertise for contract negotiations in this matter.

Comments

  • We are disappointed at the removal of language that had been included in Article 12, Option B of the Bureau’s Text requiring the Parties to include certain provisions in government-funded purchase agreements.

Recommendations

  • The Pandemic Agreement should include some common principles to be adhered to by Parties entering into bilateral purchase agreements. In particular, the Parties should include provisions in their agreements that allow them to transfer the products that they purchase to other countries or multilateral bodies – such rights will be necessary to fulfill the product exchange and donation commitments set out in Article 13.4. Product transfer rights will further need to be supported by appropriate compensation and liability management mechanisms, as outlined in Article 15.

E. Transparency of agreement terms

Extracts from the Negotiating Text

9.4 Each Party shall, in accordance with its national laws and considering the extent of public funding provided, publish the terms of government-funded research and development agreements for pandemic-related products, including information on:

(a) research inputs, processes and outputs, including scientific publications and data repositories with data shared and stored securely in alignment with Findability, Accessibility, Interoperability, and Reusability principles;

(b) pricing of end-products, or pricing policies for end-products;

(c) licensing to enable development, manufacturing and distribution, especially in developing countries; and

(d) terms regarding affordable, equitable and timely access to pandemic-related products during a pandemic.

10.3 Each Party, in addition to the undertakings in paragraph 2 above, shall: […]

(e) promote the publication, by private rights holders, of the terms of licensing agreements or technology transfer agreements for pandemic-related products;

2. The Parties shall: […]

(b) make available non-exclusive licensing of government-owned technologies on mutually agreed terms as appropriate, for the development and manufacturing of pandemic-related products, and publish the terms of these licenses;

13.3 The Parties shall support the WHO SCL [Global Supply Chain and Logistics] Network’s development and operationalization and participate in the WHO SCL Network, including through sustaining it at all times. The terms of the WHO SCL Network shall include: […]

(f) promoting transparency in cost, pricing and all other relevant contractual terms along the supply chain;

[…]

13.5 Each Party shall, at the earliest reasonable opportunity and in accordance with applicable law, make publicly available online the terms of government-funded purchase agreements for pandemic-related products in those instances in which the Party is directly entering into such purchase agreements.

13.6 Each Party shall, in its government-funded purchase agreements for pandemic-related products, to the fullest extent possible and in accordance with applicable laws, exclude confidentiality provisions that serve to limit disclosure of terms and conditions.

Comments

  • We welcome the inclusion of requirements related to the publication of the terms of: 
    • Publicly funded R&D agreements (Article 9.4), although we note the caveat “considering the extent of public funding provided”;
    • License agreements for government-owned technologies (Article 11.2(b)), although we note the removal of the requirement from 11.5(e) – Option B of the Bureau’s Text for this to be “at the earliest reasonable opportunity and to the fullest extent possible”; and
    • Government-funded purchase agreements – online and at the earliest reasonable opportunity.
  • We also welcome the provisions related to encouraging privately funded product developers to publish the terms of their licensing and technology transfer agreements for pandemic-related products, although we note that there is no requirement for publicly funded product developers to do so.
  • We note that there are no provisions related to transparency over the terms of PABS SMTAs or of WHO or other multilateral purchase agreements.

Recommendations

  • Reiterating our comments on the Zero Draft and Bureau’s Text, transparency over agreement terms provides a mechanism for monitoring, and holding the Parties accountable for, compliance with their obligations. With this in mind, the Pandemic Agreement should include aligned requirements for the Parties to publish the terms of publicly funded R&D agreements and publicly funded purchase agreements – both bilateral and multilateral. Publication should be:

(i) online via an easily accessible route;

(ii) to the fullest extent possible; and

(iii) within a defined timeframe.

Similar requirements should apply to license and technology transfer agreements that are entered into by product developers to fulfill their obligations under a publicly funded R&D agreement (see Section B).

Conclusion

The Parties to the Pandemic Agreement should commit to attaching equitable access conditions to public R&D funding, as well as to the use of WHO PABS materials. While the exact terms of each contract may need to be negotiated depending on the context, the Pandemic Agreement can establish clear principles to be adhered to as part of a consistent, global, and transparent approach. These principles should extend to required licensing and technology transfer activities to support the development of distributed manufacturing networks that are willing and able to meet the pandemic-related product needs of all populations in a timely manner.

The success of this approach will rely on sufficient funding and other incentives to support continued engagement and sustainable business models for both public and private organizations, underpinned by accountability mechanisms to ensure that all parties meet their obligations.

Authors: Bridie Telford

First Publication Date: October 24, 2023