By Michael Rosen

The Joe Biden administration caught many by surprise last
week when US Trade Representative Katherine Tai announced the US would support a petition filed last October at the World Trade
Organization (WTO) by India and South Africa that would suspend intellectual
property (IP) protections for COVID-19 vaccines to allow generic manufacturers
to produce vaccine doses. Unfortunately, this waiver of patent rights will
cause more harm than good.

We examined this issue late last year when the Donald Trump administration — along with Australia, Brazil, Britain, Canada, the EU, Japan, Norway, and Sweden — opposed the petition. But now it’s back with a vengeance, with the US backing the move to halt the application of Trade-Related Aspects of Intellectual Property Rights (TRIPS) to COVID-19 vaccines. In her announcement, Tai asserted:

This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures. The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines. . . . The Administration’s aim is to get as many safe and effective vaccines to as many people as fast as possible. 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.  

But while the decision won plaudits among those skeptical of
IP rights in particular, the TRIPS waiver mostly won’t do what they say it will,
and will do what they say it won’t. As the American Intellectual Property Law
Association (AIPLA) put it, we should be “concerned that the waiver approach is
unlikely to lead to the desired result of widespread access to high-quality
vaccines produced by qualified manufacturers and will negatively impact further
innovation.”

Specifically, the main drivers of vaccine unavailability in
the developing world are not patents but the absence of deep freezer or
refrigerator capacity, transportation, and other supply chain logistical issues. For instance, Moderna
has already agreed to forgo patent protection for its vaccine, but
no generic manufacturer has yet produced it, and India hasn’t even yet approved
the Pfizer vaccine.

Worse, a long and winding road remains for the production of
cheap and plentiful versions of the vaccine, as some European countries still
oppose the waiver, which must wend its way through layers of WTO bureaucracy.
Even if approved, the waiver won’t bear fruits for many months as generic
manufacturers learn how to make sufficient supply to exacting health and safety
standards. As the Biotechnology Industry Association observed:

Handing needy countries a recipe book without the ingredients, safeguards, and sizable workforce needed will not help people waiting for the vaccine. Handing them the blueprint to construct a kitchen that — in optimal conditions — can take a year to build will not help us stop the emergence of dangerous new COVID variants.

And while the TRIPS waiver won’t provide much help, it will
hurt innovation, as biotech companies will find themselves less willing to
invest billions of dollars in research and development funds the next time a
pandemic comes around — or even as COVID-19 variants proliferate. If these
pioneering drug developers lack confidence that their inventions will enjoy
appropriate protection, they’ll be less likely to risk blood and treasure to
create them.

As the AIPLA’s president explained, “IP protection incentivizes innovation and
collaboration. Implementation of the proposed TRIPS waiver would have a
chilling effect on research and development to address future health threats,
including COVID-19 variants.”

Instead of supplying additional vaccine doses or providing
desperately needed equipment to house and transport them, the Biden
administration chose to undermine IP and provide false hope to the suffering.
Perhaps for this reason, The Wall Street Journal Editorial Board labeled the Biden move “the single worst presidential
economic decision since Nixon’s wage-and-price controls.” The Journal may not
be wrong.

The post Biden’s surprising patent waiver decision raises more problems than it solves appeared first on American Enterprise Institute – AEI.