Ten months after the United States recorded its first case of COVID-19, the pharmaceutical industry did the unthinkable and developed a vaccine for the coronavirus. Health experts, politicians, and talking heads warned that it would take a couple of years before Big Pharma could create an inoculation for the highly infectious respiratory illness. Former President Donald Trump was confident they were on their way, and soon after the 2020 election, a handful of companies, from Pfizer to Moderna, announced vaccines.
But all the hard work, manpower, and investment might be undermined as the White House is considering waiving intellectual property protections for coronavirus vaccines. Will this lead to a transformation of patent law, or is it merely grandstanding by President Joe Biden?
Biden Does the Waive
During the 2020 campaign, Biden had promised that he would "absolutely, positively" suspend patent protections on vaccines, telling medical activist Ady Barkan that "this is the only humane thing in the world to do.” The president had been slammed for not following through on this commitment. The U.S. government and several allies had blocked deliberations at the World Trade Organization (WTO) regarding a proposal to waive protections for certain patents and technologies as part of efforts to expand vaccine output in developing nations.
The president has been facing immense pressure to share U.S. vaccine supplies and technology to combat the coronavirus. Several nations are enduring significant outbreaks, including India, where nearly half of all new global infections were recorded in the last week.
Many Democrats, including Sen. Elizabeth Warren (D-MA), pushed the president to take action. Biden ostensibly heeded these calls as the administration announced on May 5 it would support violating intellectual property safeguards on vaccines. Katherine Tai, the United States trade representative, issued a statement confirming that "extraordinary measures" need to be taken in the global health crisis:
"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. It will also work to increase the raw materials needed to produce those vaccines."
Tai noted that negotiations would take time, but the U.S. would in the meantime push for enhanced production and distribution of both vaccines and raw materials worldwide.
World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus celebrated the move by calling it a "monumental moment in the fight against Covid-19" that represents the "moral leadership" of the White House. The Africa Centres for Disease Control and Prevention also applauded the move: "This is leadership in action! History will remember this decision as a great act of humanity!"
But while these institutions are calling it a moral imperative, will it have real-world consequences?
To Waive or Not to Waive
Proponents of the proposal contend that there would be broad public health implications by not following through on this policy. Supporters also note that the federal government had poured billions of dollars into research and development and advanced purchases of these products without knowing which ones would be successful. In other words, it is socializing investment risk and privatizing profits.
At the same time, is this an expropriation of these firms' property? It was their innovation, resources, and financial investment that made the development of vaccines possible. Drug-makers assert that these waivers jeopardize companies' massive investments in pharmaceutical and vaccine development – now and in the future. Patents allow them to set the price on products they exclusively possess. Indeed, the purpose of patent law is for the government to protect the inventor's property rights and creation.
Logistics would be another headache in this saga. Right now, manufacturing COVID-19 vaccines is a complex, time-consuming, and expensive process. Producing vaccines and filling them into vials takes three days. After this step is completed, the vials are transferred to an inspection line for quality control and testing, requiring an additional three weeks. Once orders are executed, producers take another two days to package them into thermal shipping boxes, pour 50 pounds of dry ice to ensure they are cold enough, and then ship them to customers.
By erecting new facilities, these firms would be transferring resources from production at current sites.
In the end, critics aver that this will do nothing to speed up vaccine distribution. Instead, Clete Willems, a former attorney at the Office of the U.S. Trade Representative, told CNBC that this "will endorse China’s ability to piggyback on U.S. innovation to further its vaccine diplomacy aim."
The War on the Private Sector?
Is big business’ gamble on a Biden victory becoming a bad investment for them? Within only a few months of entering the Oval Office, the administration has proposed a corporate tax hike, an increased capital gains penalty, a higher income tax for folks (or households) earning $400,000 or more a year, and canceled the Keystone XL pipeline project. Now the president is looking to scrap intellectual property, even though officials say it is temporary. But as cynical conservative and libertarian economists quip, there is nothing more permanent than a temporary government edict.
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Read more from Andrew Moran.
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