The profits of the pharmaceutical industry are protected by a stronghold of patents that guarantee drug manufacturers a stream of revenue until they expire. On Wednesday, Joe Biden broke with decades of American orthodoxy and made a crack in the wall.
Its administration decision Supporting a temporary waiver of Covid-19 vaccine patents sparked immediate outrage in the pharmaceutical industry, which argues that the move ignores their intellectual property rights and will discourage American innovation when sending jobs to the foreign.
“Intellectual property is the lifeblood of biotechnology, it’s like oxygen for our industry,” said Brad Loncar, a biotechnology investor. “If you take it out, you don’t have a biotech sector.”
Biden’s senior business advisor, Katherine Tai, said that while the US government “still strongly believes” in intellectual property protection, it supports patent waivers for Vaccines against covid-19 to help boost global jab production.
This decision comes at a time when certain countries, in particular India, are struggling to tackle new waves of the virus even as others have launched successful vaccination campaigns that are lowering infections, hospitalizations and deaths.
The waiver proposal was presented to the World Trade Organization in October and has since been backed by more than 60 countries who say global vaccine production must increase dramatically to contain the virus. Washington’s support marks a crucial step in making the proposal a reality, and Tai said the United States will engage in negotiations to clarify the details of the WTO waiver.
Tedros Adhanom Ghebreyesus, director-general of WHO, told the Financial Times that the decision was a “monumental moment” in the fight against Covid-19. “I am not surprised by this announcement. This is what I expected from President Biden’s administration.
However, the pharmaceutical industry did not expect it; the United States has tended to fiercely protect the intellectual property rights of domestic firms in trade disputes. Industry executives described the move as a blow to innovation that would do little to boost global production due to a shortage of manufacturing facilities and skilled workers.
“The actions taken by the administration here are very unnecessary and damaging,” said Jeremy Levin, president of the Bio Biotechnology Trade Association. “Securing vaccines quickly won’t be the result, and worse yet, it establishes a principle that companies that have invested in new technology will run the risk of having that taken away.
The shares of major Covid-19 vaccine makers have been affected by the announcement. Shares listed in Frankfurt on BioNTech fell 14 percent on Thursday. Moderna and Novavax closed between 3% and 6% in New York the day before.
Sven Borho, managing partner of OrbiMed Advisors, a healthcare investment firm, said pharmaceutical executives feared the administration’s decision could set a precedent that would make it easier to suspend patents in the healthcare sector. ‘to come up.
“They worry in the long run that it’s a foot in the door – ‘OK, we did it with Covid-19, let’s do it with the next crisis, and the next one,'” he said. . “And then all of a sudden it’s a cancer drug patent that has to be struck down. They fear that this is a mechanism that sets the stage for future actions. “
Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering, said there was a potential trade-off that pitted the looming need to contain the pandemic against the risk that drugmakers would be more careful when investing in pioneering therapies in the future.
“If this action allows better access and more people see their lives saved today in 2021 and the consequence is that we may not have new gene therapy for 100 children, then this is the trade-off. which is worth discussing, ”Bach said. .
The battle over intellectual property rights is the first major international patent dispute since a clash over expensive HIV treatments between drug makers and several countries, including Brazil and South Africa, in the late 1990s.
Countries struggling to contain the epidemic wanted to manufacture their own generic versions of anti-HIV drugs, but the companies that developed them interpreted these measures as a violation of patent agreements, spawning a slew of litigation that frustrated them. efforts to generate a supply of inexpensive pills.
Members of the pharmaceutical industry say the suspension of patents on Covid-19 vaccines in an attempt to boost overseas production will hurt biotech jobs in the United States. Donald Trump’s administration strongly opposed the waiver last year.
Levin said American technology “could create jobs in America, but moving it overseas creating very high quality jobs would be very damaging. [here]”.
The mRNA technology used in the BioNTech / Pfizer and Moderna vaccines is being tested to treat other diseases such as cancer and heart disease, and pharmaceutical lobbyists have claimed that suspending their patents would allow other countries to take advantage of advances in American research.
The long-term consequences are unclear. Umer Raffat, analyst at Evercore ISI, noted that the waiver was not permanent and that other influential players, including the EU and the UK, had yet to support the Biden administration’s decision.
Borho d’OrbiMed said: “This is a unique circumstance. I think it will ultimately be restricted and fair for Covid-19 vaccines. I don’t think the Biden administration wants to undermine broad patents for biotechnology or the pharmaceutical industry. “
Supporters of the waiver have applauded the U.S. government’s decision as an important step towards increasing the global supply of Covid-19 vaccines.
“The pharmaceutical industry has said the pandemic is not the time to do business as usual,” said Zain Rizvi, access to medicines specialist at Public Citizen. “Funded by billions of taxpayer dollars, [vaccine makers] have a moral imperative to stop opposing efforts to develop. . . production.”
