Africa’s Response to COVID-19: What roles for trade, manufacturing and intellectual property?

 Testing: in search of reliable methods for decentralised implementation

The WHO’s call for “Testing, testing, testing” has ramped up the race for identifying mechanisms to screen and identify people that carry the virus, or that have developed immunity to it, in the fastest, most accurate and least expensive way possible. At present, no unique global protocol for screening citizens is available – which is also a factor explaining large variations in the reporting of national data. The most frequently used method for testing has been the in-lab molecular type, which typically requires a long time for diagnosis, sophisticated equipment and well trained medical personnel. A second method identifies antibodies through serology tests. This approach enables the assessment of whether a person is positive and if she is immune to the virus (although it is yet unclear for how long immunity lasts). Even though the diagnosis for potentially affected patients needs to come from molecular testing, from an epidemiological point of view, the advantages of the serology-based methods could offer manifold advantages: they are cheaper, faster and do not require a high level of skills to be implemented correctly, and ultimately could be used for self-diagnosis (Financial Times, 2020[11]).

Generalised testing is becoming the shared goal for all countries under lockdown to safely ease restrictions, restore trust and gradually reopen economies. For Africa, and for all developing countries where social distancing is hard to implement and will make the most vulnerable pay the highest price, access to safe, affordable and adequate serology test kits is crucial. They can be deployed in decentralised settings, quickly and without the need of highly skilled paramedical personnel. A major challenge is the reliability of existing testing techniques, especially if they will need to be used for widespread screening (WHO, 2020[12]).

The race to develop and manufacture testing kits is open and intensifying. As of 18 May, companies’ self-reported data to the Foundation for Innovative New Diagnostics (FIND) show that 540 different testing kits are available for commercialisation – up 76% compared to 7 April – and 90 more are currently in development. A third of all tests (35%) have been commercialised by Chinese companies, followed by the United States (13%) and Korea (12%). Companies in the United States account for 26% of in-development tests, of which the majority are serological tests that have the potential to deliver mass testing (Figure 2). In Africa, two private firms from Egypt have commercialised one test each, and companies in Ghana, Kenya, Nigeria, Senegal, South Africa and Uganda have tests in development (FIND, 2020[13]; ECA, 2020[14]). In Latin America, four Brazilian firms have commercialised a test each and a company from Argentina is involved in developing one (FIND, 2020[13]).

 

Figure 2. Number of commercialised or in-development tests for COVID-19, 2020

Numbers by country of origin and testing technology

Note: The data on FIND are self-reported and the authors have not checked the reliability of the information.

Source: Authors’ elaboration based on FIND (2020), SARS-COV-2 Diagnostic pipeline, https://www.finddx.org/covid-19/pipeline/?section=molecular-assays#diag_tab

The scientific, technological and industrial challenges linked to developing and commercialising testing kits deployable on a large scale are multiple. The principle challenges are the time needed and the reliability of the processes to develop, prototype, test and approve them for commercialisation. The research efforts for developing reliable and affordable tests involve a variety of players, including big pharmaceutical companies and co-operation between specialised laboratories and firms. Co-operative projects are often international and merge competences of different players (researchers, doctors and hospital personnel, and biotechnology firms). Table 2 presents some examples of ongoing actions in this area.

As COVID-19 is a pandemic, testing needs are high and almost simultaneous everywhere. There is fierce competition not only to develop a solution, but also to access the testing kits and their components (e.g. swabs, reagents) once available. Deploying testing in a decentralised way and with no need for technical personnel is a priority for Africa. To do so, actions on multiple fronts are needed, involving global solidarity, continental co-operation and national action. It is of significant importance to:

• Support global research efforts in this area. This is of global interest and funding should be expanded;

• Rely on local research capacity and players in Africa, involving them in regional partnerships, to enable identification of solutions that could work under the specific circumstances of African countries. Some African countries have gained capacity through their responses to the Ebola 2014 crisis, which could be scaled up to respond to this emergency;

• Fast-track approval of successful solutions and ensure access to African countries;

• Facilitate access to imports, knowledge and technology, lift IP protection on testing solutions and make use of existing flexibilities to enable local manufacturing and affordable access, when possible.

 Protecting: limiting contagion among health workers, patients and citizens

Limiting contagion among health workers, patients and citizens is critical in all pandemics. For COVID-19, it is even more so given the virulence and high diffusion rate of the virus. Protective devices, which are in high demand, include masks (both surgical for sanitary use, and the simpler, disposable or reusable ones for everyday use), gloves, sanitising products and hospital gear, such as aprons, bodysuits and visors. Their timely availability makes a big difference in the capacity to contain the contagion.

Most of these medical supplies are disposable, involve relatively simple manufacturing processes, and must meet safety norms and certifications. Stopping the circulation of counterfeited medical supplies and equipment is essential to ensure patients safety (OECD, 2020[22]; OECD/EUIPO, 2020[23]).1 The personal protective equipment (PPE)2 market is highly concentrated. The top ten exporters account for 70% of total exports. PPE shortages in Italy, Spain, France and more recently the United States, reveal that the timely availability of these “commodities” cannot be taken for granted. The People’s Republic of China (hereafter “China”) is the world’s top PPE exporter, accounting for 32% of total exports during 2016-18, followed by Germany (8%) and the United States (6%). Since protective garments make up a large share of PPE, countries with capabilities in textiles also feature among the world’s top exporters, such as India and Jordan, while Malaysia is among the world’s largest glove producers, due to its large rubber resources. Africa as a whole accounts for approximately 1% of global imports and 1% of global exports. The continent could leverage on its expanding textile sector to produce PPE as part of the COVID-19 response.

Most PPE enters Africa from China (Figure 3). China accounts for 41% of all PPE imports to Africa, followed by France (8%), Spain (6%) and Germany (5%). India and Turkey are also important suppliers of PPE, particularly of protective garments (8% and 5% respectively) and gloves (4% and 5% respectively). Malaysia is also a big source of gloves (11% of total), while Viet Nam accounts for 4% of mouth-nose protection equipment. About 11% of PPE exports from African countries are for intra-African trade. This percentage goes up to 19% for protective garments, indicating local capabilities in this segment that could be scaled-up. South Africa is the top exporter within the continent, accounting for 7% of exports of all PPE items. Many of Africa’s top sources of PPE are countries that are currently ramping up production to satisfy their domestic markets. These could prove useful partners for knowledge sharing on how to make industrial reconversion work and could become once again stable sources of PPE once the epidemic slows down in their home markets.

 

Figure 3. Africa’s imports of personal protective equipment (PPE), by country of origin, 2016-18

Share of total imports, 2016-18 (%)

Note: The classification for PPE follows the methodology of Bown, C. (2020), COVID-19: China's exports of medical supplies provide a ray of hope, Peterson Institute for International Economics https://www.piie.com/blogs/trade-and-investment-policy-watch/covid-19-chinas-exports-medical-supplies-provide-ray-hope. It is based on the definitions provided by the Commission Implementing Regulation (EU) 2020/402 of 14 March 2020 making the exportation of certain products subject to the production of an export authorisation.

Source: Authors’ elaboration on UN Comtrade (2020), database, https://comtrade.un.org/data/

Ensuring availability and access to PPE is essential to minimise the damages of the pandemic, but also to manage societal expectations. Anxiety among citizens grows fast when there is a perceived shortage of a basic supply. When this happens, trust in governments’ capacity to deliver effective solutions plummets.

To address the supply shortages of protective devices, governments are pursuing multiple avenues simultaneously (Table 3):

• Secure and increase imports

China, the world’s leading PPE producer, has re-started manufacturing and has been ramping up production. According to government data, production of masks at the end of February stood at 116 million a day, 12 times its supply prior to the outbreak (Bown, 2020[24]; State Council of China, 2020[25]). Competition for accessing PPE is high. Given pandemic nature of the COVID-19 emergency, almost every country needs the same supplies at the same time and orders surpass capacity. According to press reports, several countries rushed to secure supplies from China, including Brazil, France and the United States, causing delays and a system of distribution based on delivering to the highest bidders (Reuters, 2020[26]). The price of masks for state procurement has climbed to USD 0.6-0.8, almost 10 times its usual cost in the United States (Bloomberg, 2020[27]). Identifying mechanisms to avoid price gouging and price hikes is essential to ensure affordable access to these goods. In this respect trade facilitation and tariff reduction measures on PPE and other COVID-19 related goods are of particular importance (OECD, 2020[28]; OECD, 2020[29]).

• Scale up production, where existent, and prioritise domestic markets

Manufacturing companies specialised in protective medical devices are scaling up production to meet the upsurge in demand. Some are shifting to a seven-day workweek. However, this has been challenging. Masks and protective clothing use a melt-blown polypropylene (PP) for filtering. This material is complex to produce and it is difficult to scale up its supply in the short-run. The price of melt-blown has risen by nearly 20 times in China. Most countries recurred to special provisions to incite companies to benefit primarily the domestic market, making local production a safer option for traditionally importing economies. In the case of the European Union, regulations were enacted in mid-March to ensure regional market deliveries of protective equipment to EU countries that need it most (European Commission, 2020[30]).

• Foster industrial reconversions

A growing number of firms worldwide have reconverted their plants and some countries focus on scaling up local production to meet national needs. Several reasons motivated these reconversions – from the need to keep business running when only “essential activities” are allowed, to responding to government requests or incentives, to showing an image of a “caring, territorial rooted business”. However, producing something new, even relatively simple like protective gear, is not easy. Firms need time to learn how to produce efficiently. From identifying the required raw materials to redesigning production lines, training workers and engaging with new suppliers, firms need to gain new expertise to reconvert their production lines. In the case of PPE, they also need to meet quality and safety standards. Leaving the process at the individual firm’s responsibility could be costly. A co-ordinated approach seems more effective, including facilitating access to raw materials, standards for production and logistical channels.

In addition to channelling support to the most vulnerable, the following actions are particularly important to ensure availability and timely access to PPEs in Africa:

• Facilitate PPE imports and exports, including within Africa.

  • Fast-track the finalisation of rules of origin for PPE-related textile products under the African Continental Free Trade Area (AfCFTA) negotiations;

  • Share, free of charge, the standards and guidelines for the manufacture, testing and certification of PPEs, which is already underway in the African standardisation community;

  • Harmonise standards and conformity assessment for PPE-related textile products.

• Foster the setting up of import and export consortia to negotiate better prices and secure relevant quantities.

• Facilitate effective industrial reconversions, preferably around regional poles within the continent:

  • Issue guidance at the national and continental levels to orient firms in reconversion processes.

  • Enable Business-to-Business (B2B) knowledge sharing to speed up reconversion processes.

  • Share protocols and lifting IP protections to enable local manufacturing.

• Value local solutions and ideas: promote dialogue and cross-fertilisation of public institutions, academia, industry and investors to spur new ideas and co-operation, and scale-up successful experiments in given locations.

• Leverage regional industrial hubs within the continent to scale-up production. Several African countries – Morocco, South Africa, Tunisia, Egypt and Mauritius – have medical supply capacity, whose development can be accelerated through collaborations. Over the longer-term, the AfCFTA could support the emergence of regional value chains to better serve Africa’s health market, that ECA estimates at USD 259 billion annually. To that effect, trade negotiators should ensure that medical supplies are not restricted within the AfCFTA’s “excluded lists” and consider including health services as an additional priority sector for liberalisation under the trade in services negotiations.

 Treating: ensuring availability of trained medical personnel and ventilators

The technological and industrial solutions linked to treating COVID-19 are more complex to manufacture than PPE. They also require well-trained personnel to make them function properly. The experience of most affected countries shows that the main challenges are linked to availability of ventilators and capacity to maintain them fully operational and functional over long periods of time (according to virologists, COVID-19 “eats the pulmonary cells” making breathing increasingly difficult in severe cases). Patients tend to be in intensive care with assisted breathing between two to four weeks on average, much longer than for other similar viruses.

The pandemic has in fact, created a steep increase in the demand for ventilators. Bloomberg reports that the world demand for ventilators is ten times the current supply capacity (Bloomberg, 2020[36]). It is hard to estimate the demand in Africa, but whatever it will be, it will add up to a chronical shortage in the continent. An epidemiological model developed by Imperial College of London estimates that Africa will require 30 000 ventilators in a best case scenario and 400 000 in the worst case scenario, characterised by zero mitigation measures (Imperial College, 2020[37]). In addition, ventilators are far from affordable. Professional in-hospital ventilator prices range between USD 20 000 and USD 50 000 depending on the sophistication and technology used (Open, 2020[38]).

The upsurge in demand calls for large increases in production but also for innovation. Existing models (e.g. traditional mono-patient usable ventilators) are not the best suited for the current needs and some hospitals are piloting double-patient ventilators. In addition, these complex devices need replaceable components, such as valves. Under normal circumstances, these are purchased from specialised suppliers, often from far away. However, national trade restrictions on medical devices, factory closures in production hubs and logistics hurdles (transport is much slower and ports are starting to suffer from container congestions) are putting strain on traditional procurement channels. Local manufacturing is therefore emerging as a critical component to address COVID-19 treatment needs.

Global exports of therapeutic respiration machines averaged at USD 6.8 billion annually during 2016-18. Five countries account for over half of total world exports. The top exporters are the United States (13%), Germany (11%), Singapore (11%), Australia (11%) and China (10%). China is the first trading partner for Africa, accounting for 20% of continental imports, followed by the United States (17%) and Germany (12%). Intra-African trade in respiration machines is 2.5% of Africa’s import, with South Africa being the main continental provider (Figure 4).

 

Figure 4. Trade in therapeutic respiration machines, 2016-18

Note: Based on code HS 901920.

Source: Authors’ analysis based on UN Comtrade, database, https://comtrade.un.org/

Given that these devices are more costly and complex to develop than PPE, governments worldwide are taking an active role in ensuring availability and in supporting local manufacturing (Table 4). In particular, governments are striving to ensure national availability of ventilators by:

• securing domestic markets first. Most countries issued temporary export bans and restrictions to ensure provision to the local market first, for PPEs and for ventilators. Even though the economies are gradually reopening, several trade restrictions prevail. For example, the United States issued in early March a permit and license requirement for exporting ventilators, which is still in force as of mid-June according to Market Access Map information from the International Trade Centre (ITC, 2020[10]; OECD, 2020[39]). This approach puts importing countries, including African ones, particularly at risk of facing shortages.

• supporting the scaling up of local manufacturing capacities. Some countries are incentivising local manufacturing, mostly by relying on reconversion of automotive plants to exploit technological and engineering complementarities. Some countries are resorting to extraordinary measures to request domestic firms to reconvert their production lines. Reconversions are however complex and require time. In addition, lockdowns are cutting supply chains and making manufacturing of these complex devices challenging. Ventilators are made of hundreds of different components, often coming from highly specialised suppliers scattered around the world. Bottlenecks in ramping up manufacturing of these devices can come from shortages in the supply chain and from lack of key components.

• fostering research partnerships to provide innovative solutions. With many economic activities suspended due to lockdown measures, several governments are incentivising innovators and established manufacturers to collaborate and develop new solutions to tackle ventilator and components shortages. Some big players with capacity in mechanical engineering and technologies are collaborating with research laboratories, doctors and hospitals, to innovate and prototype new ventilators. Innovation prizes and open-source solutions, are also being used to foster the discovery of innovative solutions (OECD, 2020[40]).

Africa lacks adequate manufacturing capabilities to meet its demand for ventilators, in quality and quantity. To ensure timely and affordable availability of these devices, all levers will matter. In particular:

• Fast-tracking imports and exports, globally and within Africa, and ensuring that trade restrictions do not harm Africa’s capacity to access adequate and affordable supply.

• Enabling free movement of specialised medical personnel globally and within Africa, and supporting digital platforms for knowledge sharing between medical personnel.

• Sharing knowledge and technology, lifting IP and making use of existing flexibilities to enable local manufacturing, leveraging installed manufacturing capacities to strengthen regional production hubs in the continent.

 Curing: getting ready to ensure affordable access to drugs and vaccine

There is no cure available for COVID-19 yet. No proven effective drug to treat it, and no vaccine to immunise the population. The race for testing the use of drug treatments and for developing a vaccine is underway. The discovery, testing, manufacturing and commercialisation of new drugs are risky and lengthy. Having multiple efforts working towards the same goal means better chances of success overall. However, it is important to ensure global co-operation on successful trials, in order to scale up production and distribution, and ensure affordable access to anybody, anywhere (OECD, 2020[52]).

Several countries are testing the use of previously existing drugs to treat COVID-19 with mixed results (Figure 5). Some of these drugs include available treatments for malaria, influenza, Ebola, HIV and arthritis. Generalised use should not take place until clinical trials and tests are completed, to avoid nurturing false hopes, and ensure patients’ safety. According to information self-reported by institutions undertaking clinical trials to ClinicalTrials.gov, a site managed by the US-based National Institute of Health, clinical trials globally to determine the effectiveness of drugs in treating COVID-19 increased by more than 3 times from 166 on 6 April to 560 on 18 May 2020. Clinical trials take time to design and deploy. The vast majority of these efforts (305) are at the early stages, and many are not yet recruiting patients. The majority of drug trials are now taking place in the United States, which accounts for one-third of the world’s total clinical trials and has surpassed China, which is second, followed by Europe. In Africa, Egypt counts 20 ongoing clinical trials, making it 7th in the world. The only other two countries in Africa with ongoing clinical trials for COVID-19 drug treatment are South Africa and Senegal, with one each.

The development of a vaccine is critical to bring COVID-19 under control. Big multinationals and top public and private laboratories are racing to develop and test the vaccines (Figure 6). However, more research is needed, and developing a vaccine and proving it is effective and safe (subject to all clinical trials and approbations needed) will take time in the best-case scenario (from one to two years, according to experts).

 

Figure 5. Ongoing clinical trials for COVID-19 drug treatments, number by country, 2020

Source: Authors’ elaboration based on ClinicalTrials.Gov (2020) database https://clinicaltrials.gov/

 

Figure 6. Vaccines for COVID-19: number of ongoing research projects by country, 2020

Note: This figure is based on the location of the headquarters of the listed partners. A full circle means a vaccine has been developed fully by one or more institutions based in the same country, while a half circle implies that partners were located in two different countries and so on.

Source: Authors’ elaboration based on (WHO, 2020[53]) DRAFT landscape of COVID-19 candidate vaccines – 15 May 2020 https://www.who.int/who-documents-detail/draft-landscape-of-covid-19-candidate-vaccines.

The race to develop a vaccine for COVID-19 is intensifying. According to the WHO, as of 15 May there were 117 ongoing COVID19-related vaccine research programmes, twice the efforts ongoing on 4 April. The number grows by the day (WHO, 2020[53]). An increasing number is proceeding with clinical trials, with a total of eight already in clinical evaluation, up from two at the start of April. As mentioned above, the United States is leading, with its firms and research labs involved in 35 research programmes out of the reported 116, followed by China in 15. Both the United States and China participate in more programmes now compared to early April (11 and 3 more respectively), but their combined share of the reported programmes, fell from over 55% to 43% as more countries have amplified their efforts recently. Russia increased to nine programmes (up from 1) and Canada to 13 (up from 5). Asian emerging economies are taking an active role: players from India are participating in seven programmes, and Malaysia, Thailand and Viet Nam in one each. In Latin America, Brazil is the only country participating in a research programme. Africa stands out for its absence.

Public and private actors are deploying significant efforts to develop a cure (Table 5). But the key is not only developing the vaccine, but being able to access it. At present, firms and public resources are prioritising investing in research, but getting ready for large-scale manufacturing to ensure affordable access to drugs and vaccines when they are ready is a priority that needs to be addressed urgently. In particular, governments and businesses are:

• mobilising funding for international co-operation in vaccine research. Governments and investors worldwide are following different funding models. Norway, the United Kingdom and Canada are making significant pledges to the Coalition for Epidemic Preparedness Innovations (CEPI) to fund international co-operative research for the vaccine. By the end of April, CEPI had secured USD 1 billion in commitments, about half the sum it expects to be needed. Lead companies are also venturing into new forms of partnerships. On 24 April the WHO and a group of health actors (including the Bill and Melinda Gates Foundation, CEPI, GAVI, UNITAID, the Wellcome Trust and the World Bank Group) launched a global collaboration for accelerating the development and production of vaccines with equitable global access. Responding to the call, the EU together with France, Germany, the United Kingdom, Norway and Saudi Arabia launched a pledging call that raised close to EUR 7.5 billion. In early June, a USD 2 billion procurement fund was announced to ensure vaccine access for the world’s poorest countries at GAVI’s virtual summit hosted by the United Kindgom. The British Glaxo Smith Kline and the French Sanofi, traditionally competitors, teamed to combine expertise and facilities to develop a vaccine for COVID-19.

• scaling up and speeding up clinical trials. Countries with research and manufacturing capabilities in pharmaceuticals are taking the lead in expediting clinical studies. However, not all countries have the opportunity to rely on local players to advance research. Even where manufacturing capabilities in pharmaceuticals are present (e.g. in South Africa, Egypt, Morocco, Kenya and Nigeria), firms may lack the financial means or organisational capabilities to engage in these activities. The effort by the WHO to launch and co-ordinate a global clinical trial for drug effectiveness offers an opportunity for developing countries to access and contribute to frontier research. Bottom-up initiatives, driven by researchers, are also providing a space for co-ordinating clinical trial efforts, sharing expertise and expediting results.

• getting ready for large-scale manufacturing. Some countries are focusing on taking steps to get ready for large-scale manufacturing. The US government is collaborating with big pharmaceuticals to scale up their research and manufacturing capacities for the vaccine. Through a partnership with the government, Johnson&Johnson invested USD 1 billion for research and development, clinical trials and preparation for large-scale manufacturing for a vaccine for COVID-19. Other countries are passing bills that enable the use of flexibilities such as compulsory licensing and related intellectual property (IP) flexibilities. Some countries are putting in place emergency legislative acts to ensure that the supply of drugs to combat COVID-19 matches the demand in their country (Health Policy Watch, 2020[54]). The flexibilities included in the WTO agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Doha Declaration, even if they have limitations, enable countries to take steps to ensure affordable access to drugs and therapeutic methods. Article 27 of the TRIPS Agreement clarifies that members might exclude therapeutic and surgical methods for the treatment of humans and animals from patentable subject matters diagnostics. Article 31 and Article 31b clarify the conditions under which compulsory licensing – granting the use of a patent without the authorisation of the right holder – is possible. The WTO Doha Declaration on the TRIPS Agreement and Public Health clarifies, in section 5d, that countries can determine the principle of rights exhaustion that best fits their domestic policy objectives. The principle of international exhaustion of IP rights could be applied to enable parallel imports (these are products sold in a market by the patent owner, or with its consent, and then imported in a third country without the consent of the patent owner) (for more details on this point linked to COVID-19 response see (OECD, 2020[55])).

The limited access to affordable drugs in Africa and the global scale of the pandemic, make it urgent to design both a collaborative global research effort and a global solidarity response to ensure that the continent has access to the cure, when ready. In particular, it is of utmost importance to:

• continue supporting research and development globally and in Africa

• facilitate participation of African institutions and researchers in global research efforts

• enable the use of TRIPS flexibilities to allow local manufacturing and trade with no IP infringement to ensure timely and affordable access to any COVID-19 related drug and vaccines in Africa.