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US backs waiver of patents on Covid vaccines after historic policy shift

By Patrick Smith
Posted on Thursday, 6 May 2021 04:53

Kenyan nurse Anne Boraya prepares to vaccinate tour guides and travel operators with the AstraZeneca/Oxford vaccine against the coronavirus disease (COVID-19), under the COVAX scheme, in Nairobi, Kenya 27 April 2021. REUTERS/Monicah Mwangi

US trade representative Katherine Tai’s support for a waiver of intellectual-property protections for Covid-19 vaccines is a bold foreign policy move by President Joe Biden's administration and an early tactical win by Ngozi Okonjo-Iweala, new director-general of the World Trade Organisation (WTO).

Okonjo-Iweala, who had previously chaired the Gavi Alliance, the public-private vaccine group, said reaching a deal over patents to allow a massive boost to production in a global emergency would be a top priority for her. She has been at the Geneva-based WTO for just two months.

Now she will have to steer some delicate and difficult negotiations to get the hoped for global agreement at the WTO on the waiver.

Potential push-back

Multinational corporations – from Big Pharma to tech giants – fear the US concession marks a costly precedent for them. And Okonjo-Iweala knows that the opposition of just one powerful member state could scupper a deal.

Tai’s announcement, after consultations with Okonjo-Iweala and the World Health Organisation (WHO), shows how seriously the US government and international agencies are taking the threat of the second wave of Covid-19 infections engulfing India.

Some analysts there estimate as many as a million new cases a day, adding to fears of these variants spreading to other developing regions.

In the past few days, the Biden administration’s ’America First’ vaccine policy had been easing with reports of some consignments from the US’s vast reserve stocks being shipped to India, to protect frontline workers.

More to be done

But President Biden’s internationalist supporters had been urging him to do much more, making a symbolic break with what they see as the narrow nationalism of the Trump presidency. Leftists such as senators Elizabeth Warren and Bernie Sanders led the charge in the US.

Some strategic thinkers see an opportunity for the US to regain some moral high ground from China over the distribution of global public goods in the pandemic. There is also the overarching goal of saving as many lives as possible.

“This is a global health crisis and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures,” said trade representative Tai. “This administration believes strongly in intellectual property protections but in the service of ending the pandemic supports the waiver of those protections for Covid-19 vaccines.”

No quick fixes

Although the US would actively support the waiver in forthcoming negotiations at the WTO, Tai, the first Asian-American and woman of colour to be appointed US trade representative. warned there would be no quick fixes.

“Those negotiations will take time given the consensus-based nature [of the WTO] and the complexity of the issues involved.”

Adding to that complexity will be the vehement opposition of those Big Pharma companies that developed, tested and manufactured Covid-19 vaccines, thanks to a mix of public and private financing, in record time last year.

Big-Pharma lobbying

For years, lobbyists for Big Pharma at the WTO and the WHO have, with the backing of several Western governments, fought off attempts to lift patent restrictions on life-saving drugs.

The US decision on 5 May marks a decisive break with that alliance. Yet Britain, several European Union countries plus Japan and Switzerland have also opposed a waver of vaccine patents despite the global emergency. At least some of them will change their position in line with Washington.

Big Pharma companies still argue that the limits on vaccine distribution come down to local production capacity and the limits of national logistics rather than questions of pharmaceutical patents. They add there is a global shortfall of the materials needed – the vials, the syringes, ultra-cold storage facilities – to deliver those much-needed shots in billions of arms.

Money and other worries

Capital markets gave their own speedy verdict on the US backing for the waiver. Shares in vaccine-producing pharma companies plummeted : Moderna stock fell by 6.2%, Pfizer’s by 2.6% and BioNTech’s by 8.9%.

But the US shift is a political boost for developing countries. India and South Africa, both with their own vaccine production capacity – India is the world leader in quantitative terms – led the campaign to get WTO members to suspend intellectual-property rules on vaccine patents, at least for the duration of the global pandemic.

Tai’s announcement followed some amendments to India’s and South Africa’s proposals on intellectual-property flexibility, which appear to have been mediated through Okonjo-Iweala’s office.

Diplomatic skills

Steering the waiver proposal through will test the negotiating skills of Okonjo-Iweala and her new team.

It looks like no coincidence that the US made this policy shift the day after Okonjo-Iweala appointed four new deputy directors-general, a carefully chosen mix of gender and nationality:

  • Angela Ellard (US);
  • Anabel González (Costa Rica);
  • Jean-Marie Paugam (France);
  • and Xiangchen Zhang (China).

They will all presumably be signed-up supporters of the intellectual-property waiver and will try to use their influence on their and other governments to support the move.

That will not rule out some tricky compromises and backroom deals along the way. So much is at stake: millions of lives for humanity and billions of dollars for the corporations.

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