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The US has backed a temporary suspension of intellectual property rights for Covid-19 vaccines, a move that enraged the pharmaceutical industry.
Joe Biden’s top trade adviser Katherine Tai said that while the US administration “believes strongly” in IP protections, it would support a patent waiver for vaccines.
“This is a global health crisis — and the extraordinary circumstances of the Covid-19 pandemic call for extraordinary measures,” Tai said.
The EU, which has previously opposed the waiver along with the UK and Switzerland, on Thursday said it was “ready to discuss” how the proposal could help address the current crisis.
A measure to allow countries to temporarily override patent rights for pandemic-related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by almost 60 countries.
Tedros Adhanom Ghebreyesus, the WHO’s director-general, told the Financial Times the decision was a “monumental moment” in the fight against Covid-19.
Shares of Moderna, BioNTech and Novavax, however, shed between 3 and 6 per cent on Wednesday after the White House announcement. Frankfurt-listed shares in messenger RNA vaccine maker BioNTech fell 14 per cent on Thursday.
In theory, a waiver would allow any pharmaceutical manufacturer in the world to make “copycat” vaccines without fear of being sued for intellectual property infringement, wiping out the profits of some big drug companies.
“Intellectual property is the lifeblood of biotech, it’s like oxygen to our industry,” said Brad Loncar, a biotech investor. “If you take it away, you don’t have a biotech sector.”
Moderna and Regeneron, another pharmaceutical company, both report results today and are likely to be asked about the US move.
Our Trade Secrets newsletter takes a deeper look at the Biden administration’s surprise decision. Sign up here.
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