US support for vaccine patent waiver sets stage for WTO debate

Over sharing the proprietary know-how needed to boost global supplies of the life-saving shots.
Image: Bloomberg

US support for a waiver of intellectual-property protections for Covid-19 vaccines heads to the World Trade Organisation, setting the stage for potentially thorny talks over sharing the proprietary know-how needed to boost global supplies of the life-saving shots.

“In terms of how soon the WTO can deliver — that literally depends on the WTO members, collectively, being able to deliver,” US Trade Representative Katherine Tai said in an interview Wednesday. “I am the first one to admit that what we are leaning into is a process that is not going to be easy.”

On Thursday the European Union signaled a willingness to take part in the negotiations, as shares of vaccine makers tumbled in the US, Asia and Europe.

“The EU is ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner,” European Commission President Ursula von der Leyen told a virtual conference in Florence, Italy. “And that’s why we are ready to discuss how the US proposal for a waiver on IP protection for Covid vaccines could help achieve that objective.”

Vaccine makers’ shares fell in Europe. The depository receipts of Pfizer Inc.’s partner BioNTech SE dropped as much as 19% in Germany. Together, the companies sell the messenger RNA shot that was one of the first to win regulatory endorsement. CureVac NV of Germany, which is developing another mRNA vaccine, fell as much as 16%.

The WTO’s General Council meets again on Thursday, though any final agreement that drugmakers are likely to oppose may take weeks to hammer out. Tai added that she sees momentum from WTO Director-General Ngozi Okonjo-Iweala “to take this opportunity and see what is the WTO capable of.”

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.

The waiver has been opposed by drugmakers, who say the plan is ineffective. They argue 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.

“This change in longstanding American policy will not save lives,” said Stephen Ubl, the president and CEO of PhRMA, the biopharma industry’s lobbying group. “This decision does nothing to address the real challenges to getting more shots in arms, including last-mile distribution and limited availability of raw materials. These are the real challenges we face that this empty promise ignores.”

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.

”We will be exercising our convening power at the WTO to bring members together to work towards resolving the different viewpoints to bridge the gap so that the WTO can be relevant, the WTO can be a force for good,” Tai said.

Other holdouts

The US wasn’t the only country with reservations about the waiver. The EU, UK, Japan, Switzerland, Brazil and Norway have also resisted the push. However, supporters of the waiver argue that US 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.

“Given what is at stake, this is the best chance for the WTO to be able to come together to deliver something that is going to help people and make a difference,” Tai said.

As the US 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.

While inter-agency discussions were ongoing, 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.

At a WTO meeting on Wednesday, India and South Africa agreed to revise their proposal, first introduced in October, to present to members for a meeting tentatively scheduled for the second half of May.

In April, Tai called on the pharmaceutical industry 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. “As governments and leaders of international institutions, the highest standards of courage and sacrifice are demanded of us in times of crisis. The same needs to be demanded of industry.”

© 2021 Bloomberg

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Philanthropy is commendable as long as it is voluntary. Populist politicians are false philanthropists when they expropriate the property of others to spend on welfare projects. If this is a voluntary act of kindness, then the proposal should come from the vaccine companies and not from politicians. When we remove the profit objective we destroy the motive to spend money on development and supply chain logistics. TB, AIDS, diabetes, and malaria are deadly diseases and those patients will also benefit from free or cheaper drugs. Where do we draw the line?

That being said, we have to be compassionate and share scarce lifesaving resources for the benefit of those who cannot afford them. The problem is that the price mechanism is the most efficient allocator of resources.

Ramaphosa and his “Fellow South Africans” could not manufacture toilet paper if given the patents.
Good luck !!!

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