U.S. to Back Waiver of Vaccine IP Protections at WTO, Tai Says

The U.S. will support a proposal to waive intellectual-property protections for Covid-19 vaccines, joining an effort to increase global supply and access to the life-saving shots as the gap between rich and poor nations widens.

“We are for the waiver at the WTO, we are for what the proponents of the waiver are trying to accomplish, which is better access, more manufacturing capability, more shots in arms,” U.S. Trade Representative Katherine Tai said in an interview on Wednesday. She spoke with Bloomberg shortly before USTR’s public announcement.

U.S. to Back Waiver of Vaccine IP Protections at WTO, Tai Says

The Biden administration will now actively take part in negotiations for the text of the waiver at the World Trade Organization and encourage other countries to back it, Tai said. She briefed Biden on Tuesday, a person familiar with the matter said.

She acknowledged the talks will take time and “will not be easy,” given the complexity of the issue and the fact that the Geneva-based WTO is a member-driven organization that can only make decisions based on consensus.

“In terms of how soon the WTO can deliver -- that literally depends on the WTO members, collectively, being able to deliver, and so I am the first one to admit that what we are leaning into is a process that is not going to be easy,” Tai said. She added that she sees energy from WTO Director-General Ngozi Okonjo-Iweala “to take this opportunity and see what is the WTO capable of.”

Shares of Moderna Inc., Pfizer Inc., BioNTech SE and Novavax Inc. fell on the news. Moderna declined 6.2% after earlier dropping the most intraday in two months. Pfizer fell as much as 2.6% before closing little changed. American depositary receipts of Germany’s BioNTech retreated as much as 8.9%. Novavax, which is also developing a Covid-19 vaccine, declined as much as 11%.

The waiver has been opposed by drugmakers, who say the plan is ineffective. They argue that few countries have the capacity to produce more vaccines even if they knew the formulas. Also, there’s limited global supply of the materials needed, and building new factories with the necessary technology to produce the vaccines could take years, they say.

“This change in longstanding American policy will not save lives,” said Stephen Ubl, the president and CEO of PhRMA, the biopharma industry’s lobbying group. “This decision does nothing to address the real challenges to getting more shots in arms, including last-mile distribution and limited availability of raw materials. These are the real challenges we face that this empty promise ignores.”

U.S. to Back Waiver of Vaccine IP Protections at WTO, Tai Says

India and South Africa, two nations struggling to contain fresh outbreaks of Covid-19, have been urging WTO members to temporarily suspend rules on IP rights, arguing that it would be the most efficient and equitable way to address vaccine shortages in poor countries.

”We will be exercising our convening power at the WTO to bring members together to work towards resolving the different viewpoints to bridge the gap so that the WTO can be relevant, the WTO can be a force for good,” Tai said.

Other Holdouts

The U.S. isn’t the only country that until now has withheld support for the waiver. The European Union, U.K., Japan, Switzerland, Brazil and Norway also have resisted the push. However, supporters of the waiver argue that U.S. leadership on the issue could help sway other holdouts. The timing for approval of the waiver depends on how soon member states can find agreement.

“Given what is at stake, this is the best chance for the WTO to be able to come together to deliver something that is going to help people and make a difference,” Tai said.

As the U.S. inoculations advanced and outbreaks diminished in recent weeks, the White House came under pressure from progressive Democrats and public-health advocates to take a stance while India in particular suffers from surging deaths and infections.

As inter-agency discussions were ongoing, Tai also met with top executives of vaccine-producing companies and held calls with members of Congress and other stakeholders in civil society and public health.

At a WTO meeting on Wednesday, India and South Africa agreed to revise their proposal, first introduced in October, to present to members for a meeting tentatively scheduled for the second half of May.

Okonjo-Iweala’s Role

A spokesman for the WTO told reporters that Okonjo-Iweala is heartened by the willingness of India and South Africa to address other countries’ concerns in their redrafted proposal.

In coming up with a U.S. position, Tai and the Biden team had to balance competing stakeholder views to ensure any outcome on the issue would save lives while not stifling innovation.

While progressive lawmakers, including Senators Bernie Sanders and Elizabeth Warren, have pushed the White House to support the waiver, the pharmaceutical industry has argued that handing over vaccine technology to China and Russia would hurt their ability to compete.

“I applaud the Biden administration for taking this bold step to speed up the production and availability of coronavirus vaccines,” Sanders said on Twitter. “I also recognize the dedicated work done by activists around the world to put this issue on the global agenda. We are all in this together.”

In April, Tai called on the pharmaceutical industry to make sacrifices.

“The desperate needs that our people face in the current pandemic provide these companies with an opportunity to be the heroes they claim to be -- and can be,” she said at a virtual conference at the WTO. “As governments and leaders of international institutions, the highest standards of courage and sacrifice are demanded of us in times of crisis. The same needs to be demanded of industry.”

©2021 Bloomberg L.P.

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