At first blush, the Biden administration’s decision to support waiving international intellectual property protections for coronavirus vaccines seems like a laudable act of humanitarian largesse, but the waiver is really a wolf in sheep’s clothing. The change would do little to speed up the production and distribution of vaccines in the countries that need them most, and the long-term ramifications would chill innovation domestically and globally.
Sen. Elizabeth Warren (D-Mass.) recently revealed what many on the Left hope to accomplish through this waiver. "Special [IP] protections for drug companies are an even bigger issue than COVID-19 alone,” she stated. “I think it's time now for our trade negotiators to take leadership and actively set rules that lower drug costs for American families.”
Democrats including Warren hope to achieve their long-held goal of weakening patent protections by pushing the World Trade Organization to waive IP protections enforcement for coronavirus vaccines under TRIPS, an international IP treaty. If the waiver is agreed to, countries could use patents -- essentially the recipe for a drug – and obtain trade secrets -- the tips and tricks innovators use to perfect the recipe -- used in vaccine production. As currently written, TRIPS already allows for compulsory licensing of patents in some cases, but the waiver would allow for an unprecedented pilfering of trade secrets.
Once the genie is out of the bottle regarding trade secrets, it is almost impossible to prevent their spread. That is why Congress passed and President Obama signed the Defend Trade Secrets Act in 2016. This law established vigorous protections for trade secrets and cleared up ambiguity about what counts as a trade secret.
The threat of losing trade secrets has already had a tangible impact on the stock price of pharmaceutical companies including Moderna and BioTech, which both dropped after the Biden administration's announcement. Shaken investors realize that this waiver could hurt the companies’ long-term health.
Without rigorous IP protections, pharmaceutical companies would be disincentivized from spending the approximately $2.6 billion it takes to develop a successful drug. Why spend years on research and development when public officials can simply take your patents and trade secrets without permission?
Proponents of the waiver argue that the prospect of quicker vaccinations outweighs suppressing innovation. In reality, waiving IP protections is a largely symbolic move that is unlikely to speed up either the production or distribution of vaccines.
For one thing, Moderna has already voluntarily waived IP protections for its vaccine, which means any company can manufacture the Moderna vaccine. Additionally, international law already allows for compulsory licensing of vaccines. Both of these factors mean that there is little need for additional intervention because if a country wants to manufacture a coronavirus vaccine, it may already do so.
Even under the most optimistic timeline imaginable, it would take months to implement this waiver and begin manufacturing vaccines. By the time the change is effective, most countries will likely already have enough vaccines because of companies like Moderna and humanitarian aid from countries like the United States.
Additionally, this waiver does nothing to solve the underlying infrastructure problems that are hamstringing countries such as India, which don't have the necessary resources to quickly and efficiently produce and distribute a vaccine. Waiving IP protections won't change that fact. Pfizer's vaccine, for example, involves the use of 280 different components obtained from 19 countries, making it unlikely that a developing country can secure materials in quantities sufficient to produce a vaccine.
Rewriting patent law that has worked for centuries to serve the needs of the moment would not be prudent. A careful weighing of all factors shows that the change would do little to help vaccinate the world and would leave stifled innovation as its only legacy. It is imperative that the Biden Administration retract their support for this ill-considered wavier and instead focus on helping unvaccinated countries get more shots in arms as quickly as possible.
