The Star Late Edition
VACCINE PATENT WAIVER: THE PROS AND CONS EXPLAINED
THE BIDEN administration has agreed to back a proposal to suspend intellectual property protection for Covid-19 vaccines.
This is a break from US government’s long-held position on strong intellectual property protection, which has also been supported by many research-intensive countries in Western Europe and the pharmaceutical industry.
These protections are codified in the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights agreements. India, South Africa and many other emerging economies have been pushing for a waiver from patent protection, and have been supported in this effort by World Health Organization (WHO) director-general Tedros Adhanom Ghebreyesus.
The intent behind the push for the waiver is, of course, well intended – to remove any bottlenecks due to intellectual property protections and ramp up the production and distribution of the vaccines in the rest of the world.
The question remains about whether the bottlenecks in Covid vaccine production are due to intellectual property protection. Typically, we think of patent protection leading to high prices and reduced output as monopolies tend to set prices well above the marginal cost of production to maximise profits. But high prices do not seem to be the problem here.
Vaccines are priced far more reasonably even if all countries do not pay the same price for them. So even if companies like Pfizer are making profits, would removing the IP protection increase production and distribution in the developing world? Perhaps it would bring some immediate relief in terms of production and distribution could follow if more manufacturers in emerging economies allocate resources to vaccine production immediately.
However, in addition to waiving legal protections, manufacturers in emerging economies need to be supported with the technology to produce the vaccines. This may be particularly true of the newer mRNA vaccines such as those from Pfizer and Moderna, which are difficult to manufacture, but may equally apply to adenovirus vaccines such as the one produced by AstraZeneca.
While opening the possibility of production via the waiver may be a start, it is not a guarantee that enough manufacturers will be found to take up production. This type of technology transfer may be best achieved via voluntary licences – in which originators provide manufacturers with the knowhow to produce their vaccines – as has been done by AstraZenca.
One might then ask, where is the harm in trying even if this does not work? The trouble is in maintaining incentives for the future.
If intellectual property protection is waived in the face of a public emergency, even as a one-off, will firms invest next time there is a similar emergency? The fact that Pfizer reaped millions in profits is beside the point. What is more relevant is how much more we have benefited from the vaccines through saving lives.
Setting aside intellectual property protection can be a dangerous precedent, particularly if it may not work.
What can be done to alleviate the production problem globally? Voluntary licences are a start. Along the same lines, the US could just buy the patents from the manufacturers outright based on their discounted future value, and then make them available to manufacturers world over.