Vaccine Waivers: The Biden administration signaled it would support waiving vaccine IP protections. Here’s what both sides are saying. To have stories like this and more delivered directly to your inbox, be sure to sign up for our newsletter.
Top Story: Vaccine Waivers
Vaxed: Last week, Pfizer and Moderna, two of the most high-profile COVID-19 vaccine manufacturers, reported their first-quarter earnings. On Tuesday, Pfizer announced the company’s vaccine helped generate $3.5 billion in revenue during the first three months of the year — roughly one quarter of its total revenue. Moderna then reported its latest results on Thursday. The Cambridge, Massachusetts-based company generated $1.9 billion in sales, $1.7 billion of which came from its COVID-19 vaccine. This helped the company, which has been around for over a decade, post its first profit ever. Investors cheered the results, but then something interesting happened. Shares of both companies promptly tumbled during Thursday trading. Why?
Waxed: On Thursday, the Biden administration waxed the pharmaceutical industry by signaling it would support waiving intellectual property protections for the vaccines, which Ambassador Katherine Tai said would “help end the pandemic.” In a release, she stated, “Supply for the American people is secured,” but the administration’s goal “is to get as many safe and effective vaccines to as many people as possible.” Waiving intellectual property protections could help remove bottlenecks, ramping up production and getting vaccines to the rest of the world. Do we really want the “double mutant” virus variant in India to make its way to the US? At the same time, if IP protections are thrown to the wayside, even just once, will firms like Pfizer invest and be as incentivized to develop a vaccine during the next pandemic? That’s the debate. Here’s what both sides are saying:
On The Right
The right sees a dangerous attempt by the Biden administration to jeopardize hard-earned, costly private intellectual property. They believe a waiver would undermine profit incentives that helped power COVID-19 vaccine production in the first place.
More Left-Leaning Lunacy: Kimberley A. Strassel, writing in the Wall Street Journal, says this move encapsulates the Biden presidency, which she characterizes as employing “fictional narratives, executive overreach, recklessness, and kowtowing to the left.” She states the vaccine was “a triumph of innovation, investment, and capitalism,” but now Biden intends to “give away the technology to every drugmaker in the world” including Chinese state-owned enterprises. Strassel also accuses “Team Biden” of “willful disregard of Operation Warp Speed… because it is too petty to give credit to any person, company, or initiative connected to the Trump administration.” Ultimately, she states Biden is bending once again to the progressive wing of the Democratic party “over those in the administration who noted that waiving patent protections isn’t the answer.”
Biden Surrenders American BioTech: An editorial from the same outfit said, “this may be the single worst presidential economic decision since Nixon’s wage-and-price controls.” In regards to last week’s share price reaction, they note it has already “destroyed tens of billions of dollars in US intellectual property” in “one fell swoop.” The writers believe this move “surrendered America’s advantage in biotech” and squandered a “great soft-power opportunity.” Meanwhile, “Global vaccine supply is already increasing rapidly thanks to licensing agreements the vaccine makers have made with manufacturers around the world.” Rather than simply hand over American IP to the rest of the globe, the WSJ writers urge Biden to “negotiate bilateral vaccine agreements and export excess US supply,” or even “spend more to help the companies produce more for export.” Instead, they say, he “has sent a signal around the world that nobody’s intellectual property is safe in America.”
Waiver’s Likely Won’t Work: Finally, Jazz Shaw declares in HotAir, “There will never again be another Operation Warp Speed if this plan goes through.” He states American companies that “basically dropped everything” to produce “viable vaccines” in an “unimaginably short period of time” will think twice next time before sacrificing their resources. Furthermore, Shaw dismisses US criticism for vaccinating “our own people first before vaccinating the rest of the world.” In his mind, “That’s our government’s first responsibility.” Still, Shaw is hopeful that Biden’s intentions will fail, pointing out the move requires “a unanimous vote by the World Trade Organization…and it doesn’t sound like all of the member countries are on board.”
On The Left
The left generally applauds what they consider global humanitarianism by way of commercial success. While some commentators don’t see a high likelihood of short-term, tangible benefits, they all agree the move sends a valuable message to the world at large.
The Government Has Leverage: Ruth L. Okediji writes in CNN that “vaccine inequality” involving “patents and other types of intellectual property have become central to how the world emerges from the pandemic.” She pans the “global patent system” for enabling “the creation of drugs that pharmaceutical companies can sell at high prices, to the patients who can afford them and largely for diseases prevalent in wealthy countries.” Specifically, Okediji describes a 1995 TRIPS agreement pushed by global pharmaceutical companies “in response to growing competition from the burgeoning generic drug industries in countries such as India and Brazil.” The fact the government funded Operation Warp Speed, she says, “undermines arguments for strong global enforcement of pharmaceutical patents, and for high prices to reward investment.” These governments, Okediji concludes, “hold important leverage over private pharmaceutical firms, and they could wield that leverage to bring patentees to the table to issue licenses to qualifying generic firms.”
Vaccine billionaires that can’t vaccinate billions: Meanwhile, an editorial in The Guardian calls Operation Warp Speed a “remarkable yet bittersweet success” that points both to “humanity’s scientific achievements and its social and economic failures.” The writers state, “We have created vaccine billionaires, yet cannot vaccinate billions,” seeing two “necessary” tracks for ameliorating these issues: IP sharing and addressing wealthier countries “hoarding doses.” They say that opposition to IP sharing has “already cost half a year” while the latest American reversal has exposed “the ugliness of the EU and UK’s position.” Ultimately, the editorial conveys a hopeful message that the US has “a chance to place themselves on the right side of history.”
American Leadership: Lastly, Justin Hughes, writing for USA Today, is more skeptical that IP sharing will have the advertised effect. He cites difficulty in manufacturing, scarcity of raw materials, and “epic logistical challenges” as bottlenecks that extend beyond IP access in developing countries. Nonetheless, “The message to the pharmaceutical industry…is to put profits aside and focus on human well-being.” Hughes concludes, “This wasn’t a decision about intellectual property or about the logistics of vaccination” but rather a “decision about America’s global leadership.”
Flag This: Vaccine Waivers
From a financial perspective, the verdict is out on whether or not Biden’s potential waiver will ultimately end up impacting Pfizer and Moderna’s top and bottom lines. First, vaccine supply is set to expand dramatically through next year, so there will likely be enough vaccines to distribute globally without removing IP protections. Secondly, it’s not an easy task teaching other people and companies how to manufacture mRNA, which is the novel technology used to produce the Pfizer and Moderna vaccines. Moderna CEO Stéphane Bancel said on the earnings call, “You cannot go hire people who know how to make mRNA. Those people don’t exist … then they will have to go run the clinical trials, get the data, get the product approved, and scale manufacturing. This doesn’t happen in six or 12 or 18 months. We have been working at this for years.” Lastly, the World Trade Organization can’t just force companies to teach other manufacturers to make their vaccines. If implementing waivers is meant to remove red tape, it may end up creating a whole new ribbon.
So what’s the solution? Well, along with just staying the course, “voluntary licenses” could be one option. Companies like Pfizer and Moderna could voluntarily provide manufacturers with the know-how to produce their vaccines. AstraZeneca is already doing this. The Biden administration could also just buy the patents outright based on their discounted future value. Think of it as an acquisition. Hypothetically, this would keep current incentives in place for R&D and innovation, while achieving the goal of increasing distribution.
Flag Poll: Vaccine Waivers
What do you think? Should the Biden administration lobby other countries to approve vaccine waivers? Use the comment section below to share your thoughts.
Bonus: Have you checked out our “Pros and Cons” Glossary yet? This is where we dive deep into topics like Defunding the Police, the Death Penalty, and now this! Click here to read about the Pros and Cons of the vaccine patent waiver.