U.S. Weighs Global Vaccine-Expansion Move Opposed by Drugmakers

The Biden administration is weighing an appeal from progressive Democrats to accelerate global access to Covid-19 vaccines by supporting a waiver of intellectual-property protections, a move opposed by big drugmakers.

Lawmakers led by senators Bernie Sanders and Elizabeth Warren last week called on President Joe Biden to back a proposal before the World Trade Organization that seeks a broad waiver from obligations on the protection of intellectual property rights, including patents, copyrights and trade secrets.

The aim is to ease rules regarding the production and export of vaccines and other critical medical goods needed to combat the Covid-19 virus.

The lawmakers and allies including labor unions argue that supporting the plan -- backed by South Africa, India, and more than 50 other countries -- would save lives. The Trump administration blocked the proposal, first put forward in October. Failing to act on it would put drug company profits ahead of people, advocates say.​

​U.S. Trade Representative Katherine Tai has indicated that the status quo isn’t an option, without committing to change or maintain the country’s stance at the WTO.

In separate virtual meetings on April 13 with drugmakers and waiver-seeking groups, she said the administration wants to increase the production and distribution of vaccines. The next day at a WTO meeting, Tai said inequality in vaccine access is totally unacceptable and that the market has failed in meeting the health needs of developing countries, calling on nations to consider whether changes to the group’s rules might be needed.

The U.S. isn’t the only country that has opposed a waiver; the European Union, U.K., Japan, Switzerland, Brazil and Norway also have resisted the push. The WTO is a consensus-based organization, meaning an objection from any one member can stop action. But waiver supporters argue that U.S. leadership on the issue could help to sway other holdouts.

‘Critical’ Need

“The waiver is critical to be able to increase global production of vaccines and treatments as soon as possible,” said Lori Wallach, director of the Global Trade Watch at Public Citizen, one of the groups lobbying for the measure.

Public Citizen is pushing for the U.S. to support the waiver at a WTO General Council meeting starting May 5 and says backers have collected more than 2 million petition signatures urging Biden to take the step.

WTO delegates failed to break new ground Thursday in their deliberations on the waiver during an informal meeting in Geneva.

During the meeting, the U.S. told WTO members that it’s seeking a better understanding of how the organization’s current intellectual-property rules limit the production and delivery of Covid-19 vaccines, according to a participant at the meeting. Meanwhile, the EU, U.K. and Switzerland -- which are home to key Covid-19 vaccine manufacturers -- said they opposed any initiative that would undermine or upend IP rights, the participant said.

India and South Africa said they were in the process of updating their waiver proposal to address some WTO members’ initial concerns.

Nations already have the power to issue compulsory licenses -- allowing them to make the vaccine without the patent holder’s permission, for a fee -- for homegrown manufacturing.

But the proposal would let countries obtain know-how and negotiate deals to produce vaccines elsewhere without facing trade blowback from the U.S. and European Union, where most of the drugmakers are based.

Business groups say the waiver 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.

The move also could weaken a priority of decades of U.S. trade negotiations: strong protection for intellectual property, which drugmakers and other industries say helps maintain the U.S. technological lead.

While the U.S. government contributed funding for Covid-19 vaccines and helped develop some of the foundational technology, companies had already been investing in developing the mRNA technology in Moderna Inc. and Pfizer Inc.’s vaccines for years beforehand.

U.S. Weighs Global Vaccine-Expansion Move Opposed by Drugmakers

Of the shots administered globally so far, 39% have gone to people in 27 wealthy nations that represent 11% of the world population. Countries making up the least-wealthy 11% have gotten about 2% of inoculations, according to an analysis of data in the Bloomberg Vaccine Tracker.

“The top priority of the United States is saving lives and ending the pandemic in the United States and around the world,” Adam Hodge, a USTR spokesman, said in response to a Bloomberg News inquiry about the U.S. position on the waiver. “Along with our investments in Covax, we are working with our global partners to explore pragmatic and effective steps to surge the production and equitable distribution of vaccines.”

India has placed limits on exports of vaccines made within its borders amid a record number of infections. South Africa has said a shortage of jabs is undermining plans to vaccinate two-thirds of its population this year, and has blamed in part drugmakers who object to the waiver proposal.

The pharmaceutical companies say they are working to expand global capacity already, and argue that the fastest way for the U.S. to help developing countries is by giving them the stockpile of vaccines it already has, like tens of millions of doses of the jab developed by AstraZeneca Plc, which hasn’t been approved for U.S. use.

Wealthy countries “are stockpiling or blocking the shipment of vaccine doses, impeding their global distribution, and choosing to vaccinate their low-risk populations before focusing on higher-risk patients abroad,” Michelle McMurry-Heath, president of the industry group Biotechnology Innovation Organization, or BIO, said in a letter to Tai this week.

After Pandemic

Drugmakers worry about being forced to turn over research they would use for other medicines that could be critical to their future after the pandemic ends.

“You would have a couple of years where a patent isn’t enforceable, and then it is again,” Hans Sauer, BIO’s deputy general counsel, said in an interview. “But you can’t do that for trade secrets and data on biologic materials. You can’t un-disclose a trade secret.”

Republican Senator Thom Tillis wrote to Tai last week urging opposition to the waiver, saying it would be “disastrous” and put China and India in a position to demand the transfer of mRNA technology from the U.S., giving industries in those nations a free boost to compete against American companies and workers.

Then there’s concern about safety and the possibility that a lack of regulation for production could lead to mistakes in the process, creating chaos and undermining confidence in immunization.

While it’s no panacea, a waiver “moves things in the right direction,” said James Love, director of Knowledge Ecology International, which advises the UN and governments on health issues.

©2021 Bloomberg L.P.

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