The US has backed a temporary suspension of intellectual property rights for Covid-19 vaccines, in a change of tack that rattled drugmakers and sent their shares down.
President Joe Biden’s top trade adviser Katherine Tai said on Wednesday that while the US administration “believes strongly” in IP protections, it would support a waiver of those rules for Covid-19 vaccines.
“This is a global health crisis and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures,” she said in a statement.
A measure to allow countries to temporarily override patent rights for pandemic-related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by almost 60 countries. It would allow any pharmaceutical manufacturer in the world to make “copycat” vaccines without fear of being sued for intellectual property infringement.
Frankfurt-listed shares in mRNA vaccine maker BioNTech fell as much as 8.5 per cent on Thursday in New York, while Moderna shares were trading down 2.6 per cent. CanSino Biologics, a Chinese private company that developed a single-shot adenovirus-vectored vaccine with Chinese military researchers, fell 14 per cent.
The US will “actively participate” in negotiations at the WTO to hammer out the text of the waiver, Tai said, adding those discussions would take time given the complexity of the issues involved.
“As our vaccine supply for the American people is secured, the administration will continue to ramp up its efforts — working with the private sector and all possible partners — to expand vaccine manufacturing and distribution,” she said.
Soumya Swaminathan, the WHO’s chief scientist, told the Financial Times he was “extremely encouraged” by the news. “This could be a game-changer in the fight against this pandemic.”
“The Biden administration is recognising that ‘no one is safe until we are all vaccinated’ is more than a slogan,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.
The prospect of a waiver has been supported by Nobel Prize-winning economists and former world leaders. On Thursday, Vladimir Putin said Russia, which manufactures the Sputnik V vaccine, would also support the move.
“There is an idea in Europe which deserves attention . . . to completely lift patent protection from coronavirus vaccines,” the president said in a televised meeting. “A pandemic is an emergency situation . . . No doubt, Russia would support such an approach.”
China’s foreign ministry said it looked “forward to having active and constructive discussions with all parties under the WTO framework in order to reach an effective and equitable agreement.”
But Angela Merkel, German chancellor, voiced her opposition. “The limiting factor when it comes to vaccine production are production capacities and the high quality standards, not the patents,” she said in a statement. “The protection of intellectual property is a source of innovation and it must remain so in the future.”
In a speech to the European University Institute on Thursday, European Commission president Ursula von der Leyen said the EU was “ready to discuss” how the proposal could help address the current crisis “in an effective and pragmatic manner”. Brussels has previously opposed the waiver, along with the UK and Switzerland.
But she made no commitment to fall in line with the US and insisted the priority was for vaccine-producing countries to lift barriers to exports and address supply chain interruptions. The US, a large vaccine-producing country, has reserved most of its homegrown jabs for domestic use.
The initiative has been opposed by many in the pharmaceutical industry, who have argued that manufacturing bottlenecks rather than IP rules are the primary constraint on producing more vaccines. Drugmakers have also warned that scrapping patents for Covid shots would risk handing novel technology to China and Russia.
Steve Ubl, the chief executive of PhRMA, a trade group representing pharmaceutical companies, said the waiver would “undermine our global response to the pandemic and compromise safety”. “This decision will sow confusion between public and private partners, further weaken already strained supply chains and foster the proliferation of counterfeit vaccines,” he said.
Moderna chief executive Stéphane Bancel said the patent waiver “will not help supply more mRNA vaccines to the world any faster in 2021 and 2022 which is the most critical time of the pandemic”. “There is no idle mRNA manufacturing capacity in the world,” he added on Thursday.
One person briefed on the pharma industry’s lobbying efforts said the administration’s decision to back a waiver was a “head scratcher”.
“It will put many Democrats in a difficult position defending a policy that would ship good manufacturing jobs from Massachusetts to China,” the person said.
Ron Wyden, the Democratic chair of the Senate finance committee, which oversees trade, said he planned to work with the US trade representative “to ensure they negotiate a waiver of vaccine IP protections that will get results and save lives around the world”.
Earlier this week, Anthony Fauci, the US president’s chief medical adviser, said he was “agnostic” on a waiver but warned that the process could get bogged down in time-consuming litigation.
Additional reporting by Sam Fleming in Brussels, Christian Shepherd in Beijing and Henry Foy in Moscow