Biden admin backs proposal to lift intellectual property rights on Covid-19 vaccines, Pfizer & Moderna stocks slip

5 May, 2021 20:54

The Biden administration has announced its support for waiving intellectual property rights for Covid-19 vaccines “to help end the pandemic.” Pfizer and Moderna stocks immediately took a hit.

“These extraordinary times and circumstances call for extraordinary measures,” US Trade Representative Katherine Tai tweeted on Wednesday. “The US supports the waiver of IP protections on COVID-19 vaccines to help end the pandemic and we’ll actively participate in @WTO negotiations to make that happen.”

There have been calls for months to waive intellectual property protections on Covid-19 vaccines, with critics arguing that such a move would quicken the pace of distribution and manufacturing of vaccines around the world. 

A proposal put forth by India and South Africa in October called on the World Trade Organization (WTO) to exempt countries from enforcing patents related to Covid vaccines, citing the “exceptional circumstances” of the pandemic. The proposal would have allowed WTO members to let other companies make generic versions of the jabs. Intellectual property protections, it noted, were “hindering or potentially hindering timely provisioning of affordable medical products.” 

Supporters of a waiver say it will enable hard-hit lower-income countries to distribute vaccines quicker, while critics have argued the waivers could create distribution issues and even make vaccines less safe.

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The US, European Union and Britain reportedly pushed back against the idea at the time. Even billionaire Bill Gates, who has been one of the most vocal advocates behind Covid vaccines, recently voiced opposition to lifting intellectual property rights. 

“The thing that’s holding things back, in this case, is not intellectual property,” he told Sky News last month. “It’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines. You’ve got to do the trial on these things. And every manufacturing process needs to be looked at in a very careful way.”

He later suggested moving vaccine manufacturing from a “Johnson & Johnson warehouse” to a “factory in India” could create problems.

“Moving a vaccine, say, from a [Johnson & Johnson] factory into a factory in India, it’s novel, it’s only because of our grants and expertise that can happen at all,” he said. 

Both Pfizer and Moderna stocks took hits following the Biden administration’s latest announcement. It comes days after Pfizer CEO Albert Bourla referred to his company’s vaccine this week as a “durable” revenue stream that could continue being in demand thanks to potential calls for annual shots. He also said he was in talks with “basically all the governments of the world” about providing shots through 2024. 

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President Biden confirmed shortly before the release of the statement from Tai that he was planning on backing the proposal. In her statement, Tai admitted it will “take time” to go into effect, given the “complexity” of the issue, as well as the needed consensus in the WTO. 

WTO Director-General Tedros Adhanom Ghebreyesus called the Biden administration statement a “monumental moment in the fight against Covid-19” in a tweet celebrating the decision.  

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