By Geoffrey Smith
Investing.com -- U.S. President Joe Biden’s belated conversion to the idea of waiving intellectual property rights on Covid-19 vaccines is more a question of style than substance, and the world should probably be grateful that it isn’t more.
His trade advisor Katharine Tai indicated last week that the U.S. will support a ‘temporary’ waiver of intellectual property rights on Covid-19 vaccines in an attempt to hasten the global campaign to protect people against the disease.
It’s a nice gesture. It makes the U.S. look more like its self-image of a noble and altruistic superpower capable of solving the world’s greatest problems: a true world leader that puts the good of humanity before the profits of pharma companies.
But the administration knows it is unlikely ever to become reality. For one thing, the proposal adopted by Tai is one being handled by the World Trade Organization, which in this case needs the unanimous support of all its members. Both the EU and, after some vacillation, the U.K., have indicated that they don’t support the idea.
Moreover, even if the Europeans should decide to support it, the likes of Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) are more than able to delay the process in the U.S. courts, for whom the protection of property rights is more important than making the government look good. By the time such obstacles are cleared, the pandemic may be well and truly over.
As a result, the Biden administration is making itself look like the good guys, and making the Europeans look mean and curmudgeonly. The world, meanwhile, goes on suffering.
There is no denying the need to push out vaccines faster across the world. The mantra “no-one is safe until we are all safe” is an inane exaggeration, but to the extent that the fate of the rich world economy is tightly linked to the emerging one, there can be no full recovery from the pandemic unless the Indian, African, Latin American and Southeast Asian economies can function normally.
There is real need in India, where official daily death tolls of over 4,000 are almost certainly heavily understated, and in South Africa. The latter in particular is deeply scarred by the reluctance of western pharma companies to share their HIV/AIDS drugs more charitably in the 1990s, during a pandemic that claimed over 11 million lives and blighted many more.
However, those two governments aren’t free from charges of insincerity either, needing to deflect blame for their countries’ current woes away from themselves. Much has been made of India’s decision to allow mass political rallies during this year’s state election campaigns, but the more damning truth is that India has failed to use two decades of breakneck economic growth to improve its public health system: India’s health spending fell from over 4% of GDP in 2000 to barely 3.5% in the last full year before Covid. During that time, it has found plenty of money for both nuclear weapons and a space program of its own.
But even when issues such as global equity between rich and poor are put aside, the arguments in favor of IP waivers are not compelling. The blood clotting disorders triggered by AstraZeneca's (LON:AZN) and Johnson & Johnson's (NYSE:JNJ) vaccines are a reminder of how easily triumph can turn to something near disaster in the world of drug development.
Russia’s drug industry has already proved it cannot manufacture the Sputnik vaccine to consistent standards, sending defective batches to Slovakia and elsewhere. Reports from Brazil to the Seychelles suggest that Sinopharm’s Covid-19 vaccine is, to all intents and purposes, ineffective.
Making vaccines is hard. Allowing companies around the world with – to put it mildly – uneven manufacturing competence to make copycat versions of drugs that have been visibly rushed through the approval process in the first place is an unjustifiable extra layer of risk.
And the risks of a botched rollout of copycat drugs must not be overlooked. There are serious doubts about corners having been cut in the authorization process for Covid vaccines, and about the motivations of governments who have overseen the process. Those doubts have already spread well beyond the fringes of public opinion. A high-profile setback with Covid-19 drugs could make vaccine refusal mainstream for years and legitimize conspiracy theory in other realms.
Intellectual property protections exist for two reasons: to ensure that inventors can reap the proper reward for their ingenuity and thus to incentivize the next generation of inventors; and to ensure that new technology which benefits society is delivered in such a way as not to undermine those benefits. Those are two enormous public goods. Their cost is the superprofit now being accrued by Moderna and BioNTech. It may not be to the taste of everyone, but denying them their reward will only mean that the next time the world needs a miracle drug in a hurry, the expensive R&D department needed to develop it will not be there.