Biden Admin Support For Vaccine IPP Waiver Is A Diplomatic Victory, Even Though An Eventual Waiver May Do Little To Alleviate Current Shortage Woes

In what can be termed as a big move to curb the impact of the pandemic across the world, the Biden Government in the United States stated on Wednesday that it would support a temporary waiver of intellectual property provisions (IPP) for the Covid-19 vaccines.

It must be noted that India, along with South Africa, had been at the forefront in the WTO to negotiate a waiver on the IPP for the vaccines in order to ensure equitable and faster access to vaccines in the developing nations.

The first proposal was made in October 2020 which was then turned down by the US and EU.

US Trade Representative Katherine Tai said that the US would support the proposal that will be taken up at the World Trade Organisation (WTO), thus dismissing the objections from the pharma lobby in the country.

Assuming the proposal is accepted at the WTO, it would allow companies in countries across the globe to manufacture the vaccine, under their own labels.

Tai also remarked that while the Biden administration believes strongly in protecting intellectual property rights, support for the IPP waiver was essential to end the pandemic.

At the WTO, the final approval for the waiver will revolve around the current WTO agreement for IPP known as the Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS.

It was introduced in 1995, when the WTO came into being, in order to ensure patent protection to innovations in the realm of technology. For the waiver of IPP on vaccines, WTO is where the buck shall stop.

Tai also commented that the talks at the WTO would take time, given the challenge of reaching a consensus amongst the stakeholders, but that the US would actively participate in the negotiations.

The European Commission President, Ursula von der Leyen, representing the European Union (EU) responded to the US support for the waiver, stating that the EU was ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner.

The support for other countries in the WTO will be critical, Tai added, stating how the Biden administration would be encouraging other countries to join their position.

Interestingly, it was the US, along with the EU, UK, Japan, Switzerland, Brazil, and Norway that resisted the idea of IPP waiver for vaccines when India first made the proposal last year. However, it is being speculated that the US' change of stance on the issue could bring together many nations to agree on the waivers.

Already, Norway’s foreign ministry has expressed support for the US, as has China.

WTO Chief Okonjo-Iweala said that the advocates of the waiver were now going to revise a proposal submitted in October 2020, and then have an informal meeting in May that would be open to all the WTO members before a formal meeting in June.

The pharma lobby and companies were far less enthusiastic about the plan, however. They are also expected to voice their protest the move at the WTO.

The reactions were visible in the markets of Europe and Asia where Tai’s remarks triggered a fall in the stock prices of many pharmaceutical companies including Moderna Inc. BioNTech SE’s depository receipts dropped 19 per cent in Germany.

Shares of Pfizer Inc were 3.4 per cent down in US premarket trading as per a report in Bloomberg. CureVac NV in Germany developing another mRNA vaccine also faced the brunt of the announcement, shares falling as much as 17 per cent. Many Asian pharmaceutical companies also saw their shares slump. Johnson and Johnson share prices were also marginally down.

Pharma lobbies have strongly come out in opposition to the waivers.

Firstly, the argument being made is that the supply of materials needed to build the vaccine is severely constrained, and even if it were not, only a few countries have the infrastructure to build it.

For the countries with the capacity, the infrastructure and technology curation would take time, defeating the entire purpose of IPP waivers. Some pharma lobbies have estimated that the first vaccine in such a scenario could take years to produce.

The US pharma lobby, PhRMA, had its CEO coming down hard against the remarks from Tai, stating that the waiver would do nothing to address the immediate challenges of getting more shots, last-mile distribution, and raw materials constraint.

Majority of the stakeholders said that the IPP waivers would only end up discouraging the current manufacturers who are working overtime to supply doses across the world. Already, the Group of 20 (G-20) leaders had been approached by the representatives of the world’s biggest pharmaceutical companies.

However, the pharma companies are not entirely off the mark. As elaborated in this column, the scaling up of vaccine production has several challenges, and even if the WTO agrees on an IPP waiver, it may do little to address the immediate crisis.

There is another side to the coin as well. Given there is lack of clarity on the frequency of the usage of the vaccines, the unprecedented waves of the virus and the new variants in the future, an IPP waiver at the WTO could go a long way in taking vaccine administration to the least developed parts of the world, especially in South America, Africa, and South-East Asia.

Perhaps, that is the only reason why pharma companies are opposed to it, given it kills their golden goose in case an annual or bi-annual vaccination drive is imperative in the future.

The announcement by the Biden government has an obvious diplomatic colour to it. Lately, India and the US have been engaged in elaborate efforts to deal with the pandemic as India struggles with the second coronavirus wave.

Also, this is the second time in the last few weeks that the White House has reversed its stance on a request made by the Indian government. Firstly, it was about the medical supplies and vaccine support, which was first rejected by the White House, and now the IPP waivers, which were first rejected in October 2020. The US has now agreed to both.

At the diplomatic poker table, the Modi government has its aces in order. From ensuring medical supplies and equipment to India from the US to standing up to China by banning Huawei from 5G trials, and now finding support from the US again for IPP waivers, the Modi government is registering huge yet underrated victories in the diplomatic realm.