The U.S.’s sudden support for a waiver of patent protections for Covid-19 vaccines is headed for potentially thorny negotiations at the World Trade Organization over sharing the proprietary know-how needed to boost global supplies.
“In terms of how soon the WTO can deliver -- that literally depends on the WTO members, collectively, being able to deliver,” U.S. Trade Representative
With the European Union and China signaling a willingness to take part in the debate after the Biden administration’s announcement, pharmaceutical executives reacted with anger and their stock prices tumbled worldwide.
“This change in longstanding American policy will not save lives,” said
“The EU is ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner,” European Commission President
The U.S. and Europe have been strong supporters of IP protections at the WTO, particularly as a way to enforce problems like Chinese patent infringement. As the pandemic leads to some of the world’s more monumental and lucrative scientific discoveries, defenders of IP rights are warming to some exceptions on ethical grounds even though the drug companies argue it’ll do more harm than good.
The WTO’s General Council is meeting on Thursday, though any final waiver of intellectual-property protections may take weeks to hammer out. Tai added that she sees momentum from WTO Director-General
In a statement, Okonjo-Iweala called it the “moral and economic issue of our time.”
The Biden administration will encourage other countries to join its position, Tai said. “We are for the waiver at the WTO, we are for what the proponents of the waiver are trying to accomplish, which is better access, more manufacturing capability, more shots in arms,” she said.
Drugmakers argue that the plan is ineffective and that few countries have the capacity to produce more vaccines even if they knew the formulas. Also, there’s limited global supply of the materials needed, and building new factories with the necessary technology to produce the vaccines could take years, they say.
Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, said the Biden administration’s decision “puts the hard-won progress in fighting this terrible disease in jeopardy.”
“While we wholeheartedly agree with the goal of protecting citizens around the world through vaccines, waiving patents will make winning the fight against the coronavirus even harder,” Moll said.
EU officials involved in the discussions caution that any negotiations at the WTO will drag for months or even years and will only result into a partial waiver that does not touch mRNA technology. Von der Leyen said in a tweet that the priority should be the ramping up of production of vaccines, after having earlier appealed to the U.K. and the U.S to lift export restrictions.
Officials in Brussels see donations-in-kind of spare vaccines and a lift to export restrictions as a much more effective means to address the risks of mutations, rather than IP rights for vaccines that most countries in the world don’t have the capacity to produce.
India and South Africa, two nations struggling to contain fresh outbreaks of Covid-19, have been urging WTO members to temporarily suspend rules on IP rights, arguing that it would be the most efficient and equitable way to address vaccine shortages in poor countries.
The U.S. wasn’t the only country with initial reservations. The EU, U.K., Japan, Switzerland, Brazil and Norway have also resisted earlier proposals. However, supporters of the waiver argue that U.S. leadership on the issue could help sway other holdouts. The timing for approval of the waiver depends on how soon member states can find agreement.
Norway’s foreign ministry on Thursday praised the U.S.’s decision to “commit itself to finding a solution that is less far-reaching than the proposal that was originally on the table, and on which there was great disagreement. This could be a limited and targeted measure to avoid patents being a possible bottleneck.”
WTO chief Okonjo-Iweala said proponents of the waiver were planning to revise a proposal initially submitted in October 2020 and asked for a meeting open to all WTO members in the second half of May, before the next formal gathering on the issue slated for early June.
What Bloomberg Intelligence Says:
“The U.S. backing for a patent waiver is more form than substance. The complex manufacturing of safe and effective vaccines means very little impact in the next 6-12 months, suggesting countries still need to secure booster shots for 2022. If patent waivers were to raise production, it would diminish the durability of revenue for innovators including BioNTech and Moderna. The resulting lack of incentives will mean slower development of vaccines against emerging variants and future pandemics.”
As the U.S. inoculations advanced and outbreaks diminished in recent weeks, the White House came under pressure from progressive Democrats and public-health advocates to take a stance while India in particular suffers from surging deaths and infections.
Tai also met with top executives of vaccine-producing companies and held calls with members of Congress and other stakeholders in civil society and public health. In April, she called on the pharma companies to make sacrifices.
“The desperate needs that our people face in the current pandemic provide these companies with an opportunity to be the heroes they claim to be -- and can be,” she said at a virtual conference at the WTO.
(Updates markets in fourth paragraph, adds EU stance in 15th)
--With assistance from
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Brendan Murray, Chad Thomas
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