The administration of U.S. President Joe Biden announced Wednesday its support towards suspending the patents on COVID vaccines for a short time to facilitate the manufacture and distribution of vaccines around the world.
Joe Biden’s administration announced on Wednesday that it will support a temporary suspension of patents to facilitate the manufacture and distribution of vaccines worldwide.
Even if intellectual property is a major priority for businesses, Washington expresses their prevalence in favor of protecting the COVID-19 vaccines, according to government statements. During the current health crisis and the challenging circumstances of the ongoing pandemic, the US government has called for extraordinary measures.
Countries that have been heavily affected by COVID, like India and South Africa, are requesting this suspension with the objective of making vaccination faster in their countries. However, other countries like France, have shown their disagreement with these demands. Instead, they propose donating vaccines to less-developed nations.
The consultations in the WTO (World Trade Organization) will take longer since the institution has to have a majority of agreement regarding the complicated circumstances that are being taken care of. The objective is to provide as many safe and effective vaccines to as many people and as quickly as possible in order to resist against the backdrop of the pandemic’s widespread spread, especially in India.
The government will keep working hand in hand with private companies and potential allies in order to boost their efforts regarding vaccine manufacturing and distribution, officials said. World Health Organization (WHO) head Tedros Adhanom Ghebreyesus on Wednesday hailed the historic decision made by the United States to support a temporary lifting of patents on antiviral vaccines to accelerate their production and distribution worldwide. Tedros went to Twitter to post a message thanking the US. He encouraged people to join the cause and remain together in solidarity, to support the efforts and commitment of the scientists who produced the life-saving covid-19 vaccines.
Why Is It Important?
When developing a drug, pharmaceutical companies patent their discovery so that no one else can manufacture it. In other words, they can regulate its price and distribution, so the drug may not be accessible to everyone. In October last year, India and South Africa filed a proposition to the World Trade Organization (WTO) to approve a temporary suspension of certain aspects of intellectual property on vaccines, at least until the pandemic is brought under control.
The announcement was greeted by sharp declines on the stock market of Wall Street in the shares of pharmaceutical companies including Pfizer, Moderna, BioNTech, and Novavax.
Biden was compliant with the promises made during his time in the campaign. He supported the suspension of patents. However, the reasoning behind it points to the rapidly collapsing rate of vaccination in his country, the United States, which currently has millions of doses that haven’t been administered as of today.
Intellectual Property vs. Vaccine Production
The representative of the U.S. Foreign Trade said that Washington believes it is necessary to increase vaccine production to combat and eradicate the pandemic across the world while making it clear that she still believes strongly in protecting intellectual property. She argues that the current situation has had an immense impact worldwide, which is why the government should respond accordingly, taking measures to another level and making them more severe.
Biden’s stance on the issue was released after debating for several days. This debate was initiated due to the burden companies we’re putting upon the government to give solutions and compensations to pharmaceutical companies and other businesses related to health and vaccination in the US. The pharmaceutical sector has stood against this decision. Their arguments are:
- It could damage their business model since it’s no longer rentable.
- It will not solve short-term distribution problems because vaccine production requires very specific means.
The Reasons Why the U.S., EU, and the UK Opposed the Patent Suspension
Anthony Fauci, Chief Epidemiologist at Washington, replied to Biden’s decision by saying that the US has “a moral obligation as a wealthy country to help those who would otherwise die”.
Once again, India and South Africa have been leading underdeveloped nations in the fight for patent suspension by asking the WTO to remove these on COVID vaccines, medicines and tests in order to allow new nations to make them and increase production.
Until now, producers of these medicines, such as the U.S., the EU, the UK and Switzerland, have shown disagreement towards Biden’s dilemma under the argument that intellectual property serves as a stimulus for the production of vaccines and other goods to combat pandemics that might occur in the future.
Members from the WTO have recently been negotiating a different proposition with India and South Africa. Specific information on what the negotiation is has not been revealed, however, it is expected that they gain the support of reluctant countries. In particular, the proposal could establish limits of time and schedule on the period during which the rule of patent suspension was still in order, according to Keith Rockwell.
Pharmaceuticals Plunge on Wall Street
Immediately after the news broke, the shares of these companies plummeted in the market. However, they were able to stabilize their finances after the huge drops before the conclusion of trade sessions on Wall Street.
- Moderna, which had recorded slight gains, had a drop of 6.19%.
- Novavax lost 4.94%.
- Germany’s BioNTech lost 3.45%.
- Pfizer had a major fall initially. However, after recovery, they had an increase of 0.05%.
Pfizer Obtains 3.5 Billion in 3 Months of 2021 with Its Vaccine
The U.S. group disclosed earlier a sharp enhancement in its earnings during the first months of the year due to sales of the Covid-19 vaccine, becoming its primary profit source. Pfizer earned between January and March some 3.5 billion dollars with their vaccine. They also expressed that for the year as a whole they expected to earn about 26 billion dollars, considering the already-signed contracts made so far.