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US vaccine patent surprise roils pharma as WTO debate heats up

Medical Staff prepares a vial of the Pfizer/BioNTech Comirnaty vaccine against COVID-19 at a vaccination center at the Messe trade fair grounds during the third wave of the coronavirus pandemic on April 8, 2021 in Erfurt, Germany. (Jens Schlueter / BLOOOMBERG)

The US’s sudden support for a waiver of patent protections for COVID-19 vaccines is headed for potentially thorny negotiations at the World Trade Organization over sharing the proprietary know-how needed to boost global supplies.

“In terms of how soon the WTO can deliver — that literally depends on the WTO members, collectively, being able to deliver,” US Trade Representative Katherine Tai said in an interview Wednesday. “I am the first one to admit that what we are leaning into is a process that is not going to be easy.”

With the European Union signaling a willingness to take part in the debate after the Biden administration’s announcement, pharmaceutical executives reacted with anger and their stock prices tumbled worldwide.

BioNTech SE’s depository receipts dropped as much as 16 percent in US trading, while shares of Pfizer Inc were down 2.8 percent as of 10:19 am in New York. Together, the companies sell the messenger RNA shot that was one of the first to win regulatory endorsement.

BioNTech SE’s depository receipts dropped as much as 16 percent in US trading, while shares of Pfizer Inc were down 2.8 percent as of 10:19 am in New York. Together, the companies sell the messenger RNA shot that was one of the first to win regulatory endorsement

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“This change in longstanding American policy will not save lives,” said Stephen Ubl, the president and CEO of PhRMA, the biopharma industry’s lobbying group. “This decision does nothing to address the real challenges to getting more shots in arms, including last-mile distribution and limited availability of raw materials.”

CureVac NV of Germany, which is developing another mRNA vaccine, fell as much as 13 percent in US trading.

The US and Europe have been strong supporters of IP protections at the WTO. As the pandemic leads to some of the world’s more monumental and lucrative scientific discoveries, defenders of IP rights are warming to some exceptions on ethical grounds even though the drug companies argue it’ll do more harm than good.

The WTO’s General Council is meeting on Thursday, though any final waiver of intellectual-property protections may take weeks to hammer out. Tai added that she sees momentum from WTO Director-General Ngozi Okonjo-Iweala “to take this opportunity and see what is the WTO capable of.”

In a statement, Okonjo-Iweala called it the “moral and economic issue of our time.”

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The Biden administration will encourage other countries to join its position, Tai said. “We are for the waiver at the WTO, we are for what the proponents of the waiver are trying to accomplish, which is better access, more manufacturing capability, more shots in arms,” she said.

Drugmakers argue that the plan is ineffective and 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.

Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, said the Biden administration’s decision “puts the hard-won progress in fighting this terrible disease in jeopardy.”

“While we wholeheartedly agree with the goal of protecting citizens around the world through vaccines, waiving patents will make winning the fight against the coronavirus even harder,” Moll said.

EU’s Position

EU officials involved in the discussions caution that any negotiations at the WTO will drag for months or even years and will only result into a partial waiver that does not touch mRNA technology.

Officials in Brussels see donations-in-kind of spare vaccines and a lift to export restrictions as a much more effective means to address the risks of mutations, rather than IP rights for vaccines that most countries in the world don’t have the capacity to produce.

India and South Africa, two nations struggling to contain fresh outbreaks of COVID-19, have been urging WTO members to temporarily suspend rules on IP rights, arguing that it would be the most efficient and equitable way to address vaccine shortages in poor countries.

The US wasn’t the only country with initial reservations. The EU, UK, Japan, Switzerland, Brazil and Norway have also resisted earlier proposals. However, supporters of the waiver argue that U.S. leadership on the issue could help sway other holdouts. The timing for approval of the waiver depends on how soon member states can find agreement.

Norway’s foreign ministry on Thursday praised the US’s decision to “commit itself to finding a solution that is less far-reaching than the proposal that was originally on the table, and on which there was great disagreement. This could be a limited and targeted measure to avoid patents being a possible bottleneck.”

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WTO chief Okonjo-Iweala said proponents of the waiver were planning to revise a proposal initially submitted in October 2020 and asked for a meeting open to all WTO members in the second half of May, before the next formal gathering on the issue slated for early June.

Tai also met with top executives of vaccine-producing companies and held calls with members of Congress and other stakeholders in civil society and public health. In April, she called on the pharma companies to make sacrifices.

“The desperate needs that our people face in the current pandemic provide these companies with an opportunity to be the heroes they claim to be — and can be,” she said at a virtual conference at the WTO.