Posted by on May 20, 2021 10:22 am
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Categories: Competition & Regulation

 

By Grace-Marie Turner, Galen Institute

 

The Biden administration made “the single worst presidential economic decision since Nixon’s wage-and-price controls,” The Wall Street Journal wrote in a lead editorial last week. And we agree.

 

U.S. Trade Representative Katherine Tai said the U.S. would agree to “waive” intellectual property rights to Covid-19 vaccines and treatments and encourage other countries to follow.

 

Mr. Biden has thrown away “an American triumph of innovation,” the Journal writes. “In one fell swoop he has destroyed tens of billions of dollars in U.S. intellectual property, set a destructive precedent that will reduce pharmaceutical investment, and surrendered America’s advantage in biotech, a key growth industry of the future.”

 

China, with its second-rate vaccine technology, is delighted: “So global pressure works. And I hope it does not take forever for this to be a reality” a China state media rep tweeted.  

 

Intellectual property rights are fundamental rights, explicitly protected under Article 1of the U.S. Constitution, securing “to Authors and Inventors, the exclusive Right to their respective Writings and Discoveries.”

 

Developing countries have been pushing the World Trade Organization (WTO) to waive IP protections for Covid vaccines and therapies, and other developed nations—including Canada and France so far—have fallen into line behind the reckless U.S. decision.

 

They say they want to accelerate access to the vaccines, but they also want access to the technologies so they can profit by making them themselves.

 

“They want to force Western pharmaceutical companies to hand over IP free of charge so they can produce and export vaccines and therapies for profit,” the Journal says bluntly. 

 

This is far from a simple process. These new vaccines are extraordinarily complex; it takes Pfizer every minute of 60 days in state-of-the-art facilities in three different states to produce.   Here’s a great 7-minute video from Time that walks you through the process, and another description from The New York Times

 

If the market were to be flooded with knock-off versions, who’s to know if the vaccine or treatment you are getting is safe and properly made?  The entire world supply would be contaminated when faulty batches get into the supply chain.

 

“The waiver is not only dangerous, it is also superfluous, because Johnson & Johnson, Moderna, and Pfizer are already producing tens of millions of doses of vaccines and gearing up to produce more, and all have plans to distribute them around the world,” Citizens Against Government Waste explained in a post.

 

The progressives have prevailed yet again with President Biden, but they will quickly find that this heist will harm rather than accelerate rapid world access to these new medicines. Ramping up production in existing and expanded facilities, which already is happening, is the best way to quickly increase supply and assure safety.

 

Germany, whose BioNTech partnered with U.S.-based Pfizer on its vaccine, swiftly reacted: “Merkel Pushes Back on Vaccine Patent Waiver in Row With U.S.” Intellectual property must be protected, a German spokeswoman confirmed.

 

Just one country can stop the consensus agreement needed for the WTO to proceed. We are waiting to hear from the European Union, the U.K., Switzerland, Japan, and others that also have a huge stake in protecting intellectual property, but progressives are working hard to shame them into surrendering.

 

There is so much more to say about the cataclysmic damage this U.S. decision does, not just to the pharmaceutical industry whose stocks were hit by the announcement, but to every industry that labors, often for years, to produce unique technologies that create millions and millions of high-paying jobs, making America the world’s economic and technology leader.

 

The WTO’s decades-old agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) recognizes that “innovation, creativity, and branding” are vital.  Yet leaders are seeking support to waive its “legal recognition of the significance of links between intellectual property and trade.”

 

Intellectual property rights are bedrock and MUST be protected. You can’t put IP protections back in the bottle once released, and the battle must be fought now.

 


Grace-Marie Turner is the Founder and President of the Galen Institute