Biden Administration Supports Waiver of IP Protection for COVID-19 Vaccines

By Donald Zuhn --

In a statement issued earlier today, United States Trade Representative Katherine Tai announced "the Biden-Harris Administration's support for waiving intellectual property protections for COVID-19 vaccines."

As we reported earlier this year, India and South Africa proposed last fall that the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO) recommend "a waiver from the implementation, application and enforcement of Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement in relation to prevention, containment or treatment of COVID-19" to the General Council of the WTO.  The two countries also recommended that "[t]he waiver should continue until widespread vaccination is in place globally."

In March and April, the Biotechnology Innovation Organization (BIO), Pharmaceutical Research and Manufacturers of America (PhRMA), a group of fifteen industry and trade organizations (including BIO and PhRMA), four intellectual property organizations, and Sen. Thom Tillis (R-NC), the Ranking Member of the Subcommittee on Intellectual Property, sent separate letters to the Biden Administration, members of Congress, and officials at the Patent and Copyright Offices, asking the recipients to oppose the waiver proposal.

Ambassador Kai's statement regarding the waiver proposal was concise:

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.  We will actively participate in text-based negotiations at the World Trade Organization (WTO) needed to make that happen.  Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved.

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.  It will also work to increase the raw materials needed to produce those vaccines.

Several media outlets reported on the Ambassador's statement this afternoon before it became publicly available on the Office of the United States Trade Representative website.  The New York Times reported that the WTO had held further discussions about waiving intellectual property protections earlier in the day, and that more discussions were expected in the coming weeks, as India and South Africa were preparing a revised waiver proposal (see "The Biden administration says it will support lifting patent protections to help produce more vaccines globally").  CNN reported that prior to the Ambassador's statement, "[t]here had been divisions within the administration over whether to ease some patent restrictions on vaccines, according to people familiar with the matter" (see "US supports vaccine patent waiver proposal at World Trade Organization").

Responding to the Ambassador's announcement, the U.S. Chamber of Commerce released the following statement from Executive Vice President and Chief Policy Officer Neil Bradley:

The administration has gotten this issue wrong; undermining intellectual property rights for complex, hard to manufacture vaccines will not accelerate global production, instead it will take us off track in the ongoing and successful efforts to license and scale global production of vaccines that individuals can be confident are safe and effective.  Make no mistake, this move will undermine the global fight against COVID and it will diminish our ability to prepare for and respond to the next pandemic.  We urge the administration to reverse course and work with the business community to deliver on the President's recent promise to make America the 'arsenal of vaccines.'

For additional information regarding this topic, please see:

• "Suspending IP Protection: A Bad Idea (That Won't Achieve Its Desired Goals)," April 26, 2021
• "Sen. Tillis Asks Biden Administration to Oppose WTO Waiver Proposal," April 21, 2021
• "IP Organizations Support Continued Opposition to Waiver Proposal," April 5, 2021
• "Industry Coalition Supports Continued Efforts to Oppose Waiver Proposal," March 29, 2021
• "BIO and PhRMA Urge Biden Administration to Oppose Proposed WTO TRIPS Waiver," March 11, 2021
• "IPO Sends Letter on IP Law and Policy to President-Elect and Vice President-Elect," January 4, 2021

Comments

[Greg DeLassus]

1) Until today, Brazil, the E.U., the U.K., & the U.S. all opposed a TRIPS waiver. Now that the U.S. backs a waiver, does that really change anything? That is to ask, will those others also change to match the U.S.? The E.U. & U.K. have their own domestic pharmaceutical industries to consider.

2) If one or more of the others stands against a waiver, can it pass? In theory WTO rules allow for majority vote, but usually the General Council prefers to work by unanimous consensus rather than majority rules.

3) What if—as seems very likely to me—the waiver passes and it makes no difference one way or another. When the U.S. CoC complains that “this move will undermine the global fight against COVID and it will diminish our ability to prepare for and respond to the next pandemic,” I rather wonder how this is supposed to happen. How will this diminish any abilities? How will the waiver change anything at all?

[skeptical]

Mr. Delassus continues to ploy his "I don't see" - while clenching tight his eyes to any transfer of NON-patent know-how.

At this point, that has become beyond passe.

[Greg DeLassus]

Evidently the EU is wobbly on this so far.

https://www.nytimes.com/2021/05/06/world/europe/coronavirus-vaccine-patent-eu.html

[Karl P. Dresdner, Jr, PhD, US Patent Agent 63,319]

In the United States the Covid-129 vaccines are being paid for by US taxpayer dollars.
This a thoughtful and moral approach so that all people living in the US are protected while gradually knocking down the incidence of new Covid-19 infections in humans.

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"Covid vaccines: How much they cost, who's bought them and ... SEE -
https://www.cnbc.com › 2020/11/17 › covid-vaccines-h...
Nov 17, 2020 — The cost of some of the leading coronavirus vaccine candidates ranges from $3 to $37. ... Two Covid-19 vaccines have been found to be highly effective in ... charging between $32 and $37 per dose for its vaccine for some customers. ... to manufacture between 500 million to 1 billion doses globally in 2021."
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Pfizer Reaps Hundreds of Millions in Profits From Covid Vaccine SEE - https://www.nytimes.com/2021/05/04/business/pfizer-covid-vaccine-profits.html

The vaccine brought in $3.5 billion in revenue in the first three months of this year, nearly a quarter of its total revenue, Pfizer reported. The vaccine was, far and away, Pfizer’s biggest source of revenue.

The company did not disclose the profits it derived from the vaccine, but it reiterated its previous prediction that its profit margins on the vaccine would be in the high 20 percent range. That would translate into roughly $900 million in pretax vaccine profits in the first quarter.
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I suggest there are at least three obvious other approaches instead of an IP waiver.
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1. No IP Waiver occurs but big Pharma companies sell their vaccine at internationally cost of its manufacture or within a 5% instead of making a 20% profit for years 2021-2023? Each Foreign country pays the Pharma Company.
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2. No IP waiver but the US government buys the Covid-19 vaccine doses and pays the Big Pharma companies a nil profit price which giving Big Pharma companies a Tax deduction. Then the US Government delivers the Covid-19 virus to all countries as Good Will for Free.
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3. No IP waiver and Big Pharma continues to get current profits on the Covid-19 virus for year 2021 but then sells the vaccine at a price where the vaccine manufacturer makes a 5% profit and is compensated by a tax deduction.
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4. No IP waiver anywhere in the world by any Covid-19 patenting, and all countries in the World donate free vaccine doses in their own countries paid by their governments taxes as in the US presently, and the Covid-19 countries donate free Covid 19 vaccine doses to countries that presently do not make the vaccine.
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With any of these approaches, the IP waiver becomes unneeded.

It is a The countries seeking the waiver of IP protection for the vaccines do not want to pay for the vaccines.

[skeptical]

Mr. Dresdner observes:

"It is [t]he countries seeking the waiver of IP protection for the vaccines do not want to pay for the vaccines."

Yes.

Clearly.

It was not ANY of the leading countries that ever came up with the idea of "Hey, let's wave ALL IP protections (and that clearly includes NON-patent IP)."

There is a larger game afoot. Not sure why this seems to escape the (same) people across the blogosphere...