Business | A shot in the arm

America wants to waive patent protection for vaccines

But it will not have an immediate effect on supplies

|WASHINGTON, DC

AMERICA HAS long been the global protector-in-chief of intellectual property. But on May 5th it sought to tear up the rule book. “The extraordinary circumstances of the covid-19 pandemic call for extraordinary measures,” said Katherine Tai, the United States Trade Representative. To help battle the pandemic, the administration of President Joe Biden said it supported waiving some intellectual-property protections for vaccines. Jaws dropped—along with the share prices of vaccinemakers.

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Investors shuddered at the idea that other manufacturers might pounce on unprotected intellectual property. Only a day earlier, Pfizer forecast vaccine revenues of $26bn in 2021, with profits around $7bn. Splitting such spoils could blunt the incentive to invest and undermine innovation. And if firms fear that their know-how can be pilfered with impunity, it could undermine collaborative efforts. Just as bad, botched imitations by generic manufacturers could fuel vaccine hesitancy.

The waiver’s advocates argue that a pandemic is not the time to be thinking about profits. Moreover, existing commercial agreements should be unaffected. Beyond that, it is unclear how much extra supply of vaccines a waiver could unlock. The complexity of some production processes means that copycats will need co-operation from originators. James Love of Knowledge Ecology International, an advocacy group, hopes that the threat of weaker protections could encourage more voluntary-licensing agreements, in which companies transfer their know-how. There are untapped suppliers such as Teva, an Israeli generics firm, which recently said that it would give up looking for a production partner. But even these sort of voluntary agreements are likely to take around six months to set up.

American support for a waiver is the first step in what could be a lengthy process. Several countries, including members of the European Union, Britain and Switzerland, which opposed such a move at the WTO last year, must be persuaded to change their minds. They will struggle to hold the line against America, so may agree to a narrow exception to trade rules. A broader waiving of the rules, as proposed by India and South Africa, to include the removal of patent and trade-secret protections for all covid-related products, including therapeutics and diagnostics, is not on the table. In her comments Ms Tai mentioned waiving intellectual-property protections, but only for vaccines.

Consensus at the WTO could take months to secure, and after that countries will still have to change domestic laws. Meanwhile, the pandemic will be raging, while other constraints on vaccine supply continue to bite, including the availability of special inputs from plastic tubing, filters and even specialist bags. Investors may worry about a fall in profits. If negotiations at the WTO suck energy away from other initiatives to transfer technology and increase vaccine supplies, that would really be something to fear.

Dig deeper

All our stories relating to the pandemic and the vaccines can be found on our coronavirus hub. You can also listen to The Jab, our podcast on the race between injections and infections, and find trackers showing the global roll-out of vaccines, excess deaths by country and the virus’s spread across Europe and America.

This article appeared in the Business section of the print edition under the headline "A shot in the arm"

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