US backs plan to suspend Covid vaccine patents during pandemic

US backs plan to suspend Covid vaccine patents during pandemic

EU says it is ‘ready to discuss’ move to rip up intellectual property rights

The US has backed a temporary suspension of intellectual property rights for Covid-19 vaccines, in a change of tack welcomed by countries such as South Africa and India but that will unsettle the pharmaceutical industry.

President Joe Biden’s top trade adviser Katherine Tai said that while the US administration “believes strongly” in IP protections, it would support a waiver of those rules for Covid-19 vaccines.

In theory, a waiver 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 messenger RNA vaccine maker BioNTech fell 14 per cent on Thursday. Moderna and Novavax closed down by between 3 per cent and 6 per cent in New York on Wednesday. The companies did not immediately respond to a request for comment.

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.

Ursula von der Leyen, the European Commission president, said the EU was “ready to discuss” how the proposal could help address the current crisis, but she insisted the first 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 EU has previously opposed the waiver, along with the UK and Switzerland. On Wednesday Tai rattled US pharmaceutical companies by putting the American position under review.

“This is a global health crisis, and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures,” Tai said in a statement.

Tai said the US would “actively participate” in negotiations at the WTO to hammer out the text of the waiver, but added that 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,” Tai said.

“It will also work to increase the raw materials needed to produce those vaccines,” she added.

Von der Leyen said in a speech to the European University Institute on Thursday morning that she was prepared to engage with “any proposals that address the crisis in an effective and pragmatic manner”.

But she made no commitment to fall in line with the US announcement.

“The EU is also ready to discuss any proposals that address the crisis in an effective and pragmatic manner,” said von der Leyen. “And that’s why we are ready to discuss how the US proposal for a waiver on intellectual property protections for Covid vaccines could help achieve that objective.”

She added that “in the short run” the EU was calling on all vaccine-producing countries to permit exports and to avoid measures that disrupt the supply chains. She contrasted the EU’s approach with that of some allies, saying “Europe is the only democratic region in the world that exports vaccines on a large scale”.

Soumya Swaminathan, the WHO’s chief scientist, told the Financial Times the health body was “extremely encouraged” by the news. “Accompanied by . . . the scale-up of regional manufacturing capacity, this could be a game-changer in the fight against this pandemic.”

The prospect of a waiver has been supported by more than 100 Democratic lawmakers on Capitol Hill, as well as Nobel Prize-winning economists and former world leaders.

However, it 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.

Steve Ubl, the chief executive of PhRMA, a trade group representing pharmaceutical companies, said the waiver would “not save lives” and “does nothing to address the real challenges to getting more shots in arms”.

“In the midst of a deadly pandemic, the Biden administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety,” said Ubl. “This decision will sow confusion between public and private partners, further weaken already strained supply chains and foster the proliferation of counterfeit vaccines.”

Pharma companies have previously warned that temporarily scrapping patents for Covid shots would risk handing novel technology to China and Russia.

Lori Wallach, director of Public Citizen’s Global Trade Watch, which campaigned for the waiver, welcomed the news and urged the Biden administration to produce “the fastest possible agreement” on a waiver text at the WTO.

“By fighting for the rest of the world to have access to vaccines like we here have, the Biden administration is recognising that ‘no one is safe until we are all vaccinated’ is more than a slogan,” said Wallach.

One person briefed on the pharma industry’s lobbying efforts described the administration’s decision to back a waiver as a “head scratcher”.

“Politically 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 would support the administration’s efforts to get vaccines out as quickly as possible and 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 the question of whether there should be a waiver, but warned that the process could get bogged down in time-consuming litigation.

His comments provoked a backlash from Biden’s liberal supporters, especially when he was questioned by the journalist Mehdi Hasan on his online television show.

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