Anjalee Khemlani
·Senior Reporter
The U.S. is supporting discussions about waiving vaccine patent rights in order to help increase vaccine production globally as a new wave of coronavirus cases, particularly in India, is causing concern.
U.S. Trade Representative Katherine Tai said in a statement Wednesday the country would engage in text-based negotiations with the World Trade Organization.
But Tai also tempered expectations, noting that, "Negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved."
The negotiations center around the Trade-Related Aspects of Intellectual Property Rights, known informally as the TRIPS Agreement. Both India and South Africa pushed for waivers in October.
Many health and policy experts, however, believe the move, while unprecedented, is unlikely to have any real impact.
"I don't see what this move gets us in terms of getting more vaccines," said Craig Garthwaite, director of health care at the Kellogg School of Management at Northwestern University.
Garthwaite told Yahoo Finance it appears more of a symbolic gesture to signal that the U.S. is taking the surge in India seriously.
But if the Biden administration were taking the crisis more seriously, it would have already sent tens of millions of stockpiled AstraZeneca (AZN) doses to India, he said.
The Biden administration has faced stark criticism over its hoarding of AstraZeneca doses, especially after Chief White House Medical Adviser Dr. Anthony Fauci said the U.S. would not need them.
One vaccine expert, Dr. Peter Hotez at Baylor College of Medicine, said the U.S. doses would be a "drop in the bucket" of what India needs.
Manufacturing bottleneck
Experts like bioethicist NYU Langone's Dr. Arthur Caplan say the patent waivers are no more than a red herring, "because no one is going to get a vaccine by next month."
The issue hasn't been the technology, but rather the manufacturing process, Caplan told Yahoo Finance. So a patent waiver and technology transfer is useless, he added.
The CEO of industry trade group BIO said in a statement that the effort is pointless, and the U.S. should instead focus on ramping up to provide to the world.
"Handing needy countries a recipe book without the ingredients, safeguards, and sizable workforce needed will not help people waiting for the vaccine. Handing them the blueprint to construct a kitchen that - in optimal conditions - can take a year to build will not help us stop the emergence of dangerous new COVID variants," Dr. Michelle McMurry-Heath said.
Pfizer (PFE) CEO Albert Bourla recently told Yahoo Finance that the process to manufacture the vaccine involves 19 countries already — signifying a global effort for sourcing and production— for a technology that didn't exist at scale before the pandemic.
"Right now, the bottleneck is related with the ability to ramp up manufacturing at the levels that the demand is. The issues are with raw materials that are in limited supply. These are highly specialized raw materials ... It's not simple chemicals," Bourla said.
Which is why, even if a company were to get the technology and try to produce more vaccines, they wouldn't be able to sustain regular production, and it would take them at least two years to scale up, Bourla said.
Garthwaite echoed Bourla's comments, noting that making a vaccine, "is not like trying to make a cheesecake."
Meanwhile, Moderna (MRNA) had already voluntarily waived its patent enforcement in October, with no reports of takers on the offer.
Even if there were, CEO Stéphane Bancel told Yahoo Finance that the company doesn't have resources to allocate to bring in a new partner.
"Because we are still a small company, you know Moderna is 1,300 people ... the tech transfer would take resources away this year, to prepare for next year if we were to outsource the technology. That will limit our ability to make as many doses as we can this year," Bancel said.
People wearing face shields and masks as a precaution against the coronavirus as they wait to receive COVID-19 vaccine in Mumbai, India, Thursday, April 29, 2021. India set another global record in new virus cases Thursday, as millions of people in one state cast votes despite rising infections and the country geared up to open its vaccination rollout to all adults amid snags. (AP Photo/Rajanish Kakade)
IP is the holy grail
But the biggest questions circulating have been about what it means for future intellectual property protections and how that could affect the U.S.'s standing in the biotechnology sector.
"The holy grail of the U.S. is IP," said Raymond James analyst Chris Meekins.
Meekins told Yahoo Finance Wednesday that the unprecedented move raises questions for something that "has always been a lockbox for good reason."
He noted Tai's comment on the pace of negotiations was important, because the idea that a waiver would be "game-changing action for India or South America in the next three months is wishful thinking."
The proposal, which the EU is also supporting on its end, can help the world control the pandemic. But German Chancellor Angela Merkel pushed back on the idea Thursday, according to a Bloomberg report.
Dr. Shereef Elnahal, former New Jersey health commissioner and current CEO of a New Jersey-based hospital said the decision also has local impacts - with international flights, including from India, arriving daily in the region.
That, Elnahal said, is a goal "that should outweigh intellectual property concerns on these vaccines, especially since the federal government has already pumped tens of billions in guaranteed revenue to these companies for vaccine development."
NYU's Caplan said that it's also possible that negotiations could sour if trade partners ask for things the U.S. and pharma companies are not willing to give. On the other hand, a limit to only use this strategy for pandemics, and to set a reimbursement rate of some sort, could make it more appealing for the U.S., he added.
"It's ludicrous to try and protect patents in a worldwide pandemic," Caplan said.
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