The Biden administration plans to support a temporary waiver on patents and other intellectual property rules preventing developing countries from mass-producing generic COVID-19 vaccines, United States Trade Representative Katherine Tai announced on Wednesday.
A group of developing countries led by India and South Africa was pushing for the move, which comes as a relief for global public health advocates.
“The Administration believes strongly in intellectual property protections, but in the service of ending this pandemic, supports the waiver of these protections for COVID-19 vaccines,” Tai said in a statement.
The United States does not have the power to unilaterally enact the patent waiver, nor did Tai commit to the version of the waiver currently drafted by India and South Africa. Instead, she pointed to the need for further negotiations.
But Tai’s remarks signal the end of American leadership of a bloc composed primarily of wealthy nations that has prevented the World Trade Organization from reaching the unanimous consensus needed to even begin negotiations over the terms of a waiver.
Because the U.S. — which is home to some of the world’s most lucrative pharmaceutical companies — has historically been a major obstacle to patent liberalization, American support for the waiver is widely viewed as a sign that it will eventually be adopted.
It is an outcome that the pharmaceutical industry has fought hard to prevent, deploying more than 100 lobbyists in the first few months of 2021 to pressure lawmakers. Shares of Pfizer, BioNTech, Novavax and Moderna fell following Tai’s announcement.
The Pharmaceutical Research and Manufacturers of America, the country’s largest pharmaceutical trade organization, issued a scathing statement claiming that the waiver would do more harm than good.
“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,” PhRMA president and CEO Steve Ubl said. A patent waiver, Ubl argued, “flies in the face of President Biden’s stated policy of building up American infrastructure and creating jobs.”
But public health experts say that failure to prioritize vaccinations for populations around the world as fast as possible will end up hurting Americans, dragging the pandemic on and creating opportunities for new variants to arise. When the coronavirus spreads unchecked, it can mutate, leading to variants that could be more resistant to already-developed vaccines, requiring even more global resources to end the pandemic.
For-profit drug makers deployed a variety of talking points against the waiver. They argued that it could lead to faulty drug production, allow China or Russia to steal valuable intellectual property, or disincentivize further development of treatments related to COVID-19. Yet many proponents of the waiver argue that the huge sums of public money pumped into the pharmaceutical industry to develop COVID-19 treatments and vaccines weakens companies’ arguments about intellectual property.
The pharmaceutical industry has claimed that the current dearth of vaccine supplies is due to a lack of raw materials and industrial capacity in developing countries, rather than the lack of legal freedom to use and replicate patented technologies.
Tai addressed the high demand for raw materials, saying that the administration would work to alleviate supply shortages where they crop up. Coronavirus vaccines can require more than 200 individual materials sourced from a variety of countries, and there is currently very little transparency in the supply chain.
Public health advocates noted that several pharmaceutical companies have also already partnered with drug makers in developing nations to manufacture smaller batches of vaccines, and companies in countries like Bangladesh said they are ready to mass produce the shots the moment a waiver takes effect.
While there is already a global initiative funded by the U.S. and other high-income countries that aims to bring vaccines to low-income countries (COVAX), experts say it does not have enough resources to completely solve the problem of vaccine inequity.
Tai, who is representing the U.S. at a WTO meeting in Geneva on Wednesday and Thursday, emphasized that hammering out the details of a waiver could be a long, complex process.
“We will actively participate in text-based negotiations at the World Trade Organization (WTO) to make that happen,” she said in her statement. “Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.”
Still, the Biden administration’s decision marks a dramatic finale to a months-long pressure campaign for Biden to reverse his predecessor’s opposition to allowing talks over a waiver to begin, and is a victory for progressive lawmakers.
In October, India and South Africa wrote a letter asking that WTO member states enact a waiver on patents and other intellectual property protections “until widespread vaccination is in place globally.”
As vaccines have become more available in the United States and the COVID-19 pandemic has intensified in the developing world, calls for the temporary waiver from public health advocates and progressive politicians across the world have intensified.
In mid-April, Sen. Bernie Sanders (I-Vt.) and nine other senators signed a letter addressed to Biden calling for the waiver. Sanders applauded the administration’s decision on Wednesday, saying that “putting people over profits” was necessary to end the pandemic.
And on Tuesday, Rep. Jan Schakowsky (D-Ill.) unveiled a similar letter in the House with the support of a majority of the House Democratic Caucus. The letter included the signatures of a number of moderate Democrats from swing districts, such as Reps. Elissa Slotkin of Michigan and Jared Golden of Maine.
In a press conference touting the letter on Tuesday, Rep. Earl Blumenauer (D-Ore.), chairman of the House Ways and Means Committee’s subcommittee on trade, framed the issue as a question of self-interest in protecting Americans from additional spread of the COVID-19 virus.
“It is beyond comprehension that we’re not doing everything we can to make sure that we break this vicious cycle of reinfections,” he said, before expressing confidence that Tai knew how to “thread the needle” between the concerns of drug makers and the need to combat the pandemic.
Before he was elected in November, he told terminally ill activist Ady Barkan that waiving the patent rules would be 'the only humane thing in the world to do.'
Even Sen. Joe Manchin (D-W.Va.), a moderate with ties to the pharmaceutical industry, noted that funding from the U.S. government that helped support vaccine research should entitle the global public to lower drug prices.
In the end, it was Biden’s own remarks that may have had the greatest effect. Before he was elected in November, he told terminally ill activist Ady Barkan that waiving the patent rules would be “the only humane thing in the world to do.”
The White House was increasingly at pains to explain the discrepancy between Biden’s remarks then and his inaction up until now.
“The president spoke about his support for this type of a waiver back during the campaign,” White House press secretary Jen Psaki said on Wednesday before Tai’s announcement. “But ... we have been running a process in the administration that includes all stakeholders in the administration, and he is somebody who has welcomed people of different views.”
It is too soon to tell whether the announcement marks a new approach to U.S. intellectual property policy more broadly. But the news comes less than a month after the White House narrowly avoided choosing between IP protections and its climate agenda.
Earlier this year, a dispute between LG Chem and SK Innovation, two South Korean battery manufacturers, boiled over when the U.S. International Trade Commission ruled in LG Chem’s favor, deciding to ban the other firm from importing the raw materials needed to make the lithium-ion units that power electric vehicles.
In response to the ruling, SK Innovation said it would likely need to shutter a $2.6 billion battery factory complex in Commerce, Georgia, unless Biden issued a rare presidential veto of the ITC decision. Industry analysts warned that without the factory, LG Chem could gain a near-monopoly hold on the electric vehicle market, granting it the ability to dictate prices. Trade hawks argued vetoing the ITC decision risked weakening the U.S. stance on IP protections.
Hours before Biden faced a legal deadline to decide on the veto, SK Innovation and LG Chem reached a settlement, allowing the White House to avoid the decision altogether.
Alexander C. Kaufman contributed reporting.
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