Biden wants to waive patent protections for COVID-19 vaccines. We asked a patent lawyer what happens next

May 6, 2021, 11:29 AM UTC

On Wednesday, U.S. President Joe Biden’s administration announced its support for waiving patent protections on COVID-19 vaccines, a blockbuster move with the potential to fundamentally shift how COVID-19 vaccines are manufactured and distributed around the globe.

U.S. Trade Representative Katherine Tai said in a statement that dropping the waivers and forcing companies to share how they develop and manufacture vaccines would increase global vaccine manufacturing and help bring a speedier end to the global pandemic.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” Tai said in the statement.

The measure quickly won plaudits from the 100 nations that have supported such a measure, progressive politicians in the U.S., along with the World Health Organization.

“This is a monumental moment in the fight against #COVID19. The commitment by [President Joe Biden] & [U.S. Trade Representative Katherine Tai] to support the waiver of IP protections on vaccines is a powerful example of leadership to address global health challenges,” WHO chief Dr. Tedros Adhanom Ghebreyesus tweeted.

But a range of actors including the Wall Street Journal editorial board, Republican politicians, and the pharmaceutical industry quickly denounced the move, saying it would do little to equalize COVID-19 vaccine access and potentially undermine the safety of COVID-19 vaccines.

“The Biden administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety,” the Pharmaceutical Research and Manufacturers of America, a pharmaceutical trade association in the U.S., said in a Wednesday statement. “This change in long-standing American policy will not save lives.”

The markets didn’t like the news either.

By Wednesday evening, the share prices for U.S. vaccine makers like Moderna, Pfizer, and Novavax had dropped by as much as 6% on U.S. exchanges. In China, stocks for vaccine makers like Cansino Biologics, Fosun Pharma, and Walvax similarly plunged.

Bryan Mercurio, an expert in trade policy and pharmaceutical patent law at the Chinese University of Hong Kong, explained to Fortune how Biden’s decision would upend the global pharmaceutical industry, why the patent waivers aren’t necessarily a done deal, and why simply dropping the patent waivers may not immediately lead to more COVID-19 vaccine production. (The interview below has been edited for length and clarity.)

Fortune: How will the waiver work?

Mercurio: Patent rights are created by governments to fix [market] failure, right? Pharmaceutical companies invest millions or billions of dollars into something that can be easily replicated for a few dollars. Actual production doesn’t really cost that much. So in order to maintain incentive to create, governments came up with that limited-term monopoly to manufacture, export, import, etc. their patented products.

At this point, this waiver would just simply allow other companies to have the formula to be able to use the patent and be able to manufacture the vaccines themselves. So in theory, it’s taking away the rights of the inventor.

Why did Biden do this?

[Biden’s position] clearly shows a change and a shift in the traditional negotiating position of the United States and the power of the pharmaceutical lobby industry, which has, to some extent, dictated American trade policy in this area for decades.

This is a chance [for Biden] to show a very big difference [with Trump]. And to show, hey, the U.S. is willing to cooperate, and to come together with the international community on issues of importance.

The U.S. has now said it will support the measure. But will the policy get through the World Trade Organization?

There’s still a long road ahead. I have to say a lot of articles I read today just assume, okay, now the U.S. has entered into these negotiations, so it’s a done deal. That assumes that every other country who was against this is now just going to follow the U.S. and that their worries and concerns about the order don’t remain.

I still am pretty skeptical that we will get anything this year. I suspect that the details will get in the way of the idea, and the [World Trade Organization] will delay a final decision for quite some time.

Will the patent waivers increase COVID-19 vaccine manufacturing?

If a top pastry chef tells me to bake a cake, their version is going to be better than my version. I’m not going to be able to do it. The reason is that while patents are important, it’s the know-how, or what we call kind of trade secrets, that really add value in order to successfully manufacture quality, safe, and effective pharmaceuticals or vaccines. That is the key.

My worry is, in some countries, where standards might not be so strong, there’s going to be a lot of substandard vaccines coming into the market and which could actually have devastating effects.

If not through patent waivers, how can we equalize COVID-19 vaccine access?

The most important thing is to find out where there are potential manufacturing capabilities. I think it’s limited now. But we need to find and exploit them and figure out how to scale them up if they do exist.

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