Home Economy The United States is opposed to giving up IP vaccines

The United States is opposed to giving up IP vaccines


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Hello from Washington, where the sun is shining and vaccines are now available to all of us.

Please note that our main part today is looking at the types of trade that are in increasing attention for bringing vaccine equity and how to vaccinate to poorer countries. In DC, with more and more talk surrounding intellectual property protection for Covid-19 drugs, the big question is should they stay or should they go?

Our character in the news is Chinese President Xi Jinping, who has called for a new world order the equivalent of an attack (in a fragile way) on the new US administration.

Do not forget click here if you want to receive Trading Secrets from Monday to Thursday every week. And we want to hear from you. Send any thoughts to [email protected] Or email me at the address [email protected]om

Pharmaceutical risks and USTRs contested about IP vaccines

As vaccination rates soar in the US and other developed economies, attention is increasingly shifting to how commercial can help produce and distribute vaccines faster to poorer countries – and this that led to a controversy in Washington.

The debate at the World Trade Organization in Geneva over intellectual property rights over Covid-19 vaccine and other drugs has been going on since October of last year. But just recently, more people noticed it in DC. In Geneva, India and South Africa led charges of forcing the waiver of intellectual property rules in Trade-Related Aspects of Intellectual Property Rights (Trip) for vaccines, Covid-19 drug and diagnosis.

The Trips Agreement came into effect in 1995 and was updated again in 2001 after the HIV / Aids crisis to help poor countries continue to protect public health even though they cannot afford to buy medicines. their number needs. Among the flexibility in Trips are mandatory licenses that allow countries to waive intellectual property rights and allow anyone able to manufacture versions of the drugs involved to do so. – although in this case, the patent holder still has to pay a fee. World Health Organization said However, both fear triggered anger by more developed countries and the slowdown in changing domestic laws means the mandatory licensing mechanism is not yet in use.

With AstraZeneca pledging to sell its vaccine for $ 3 to $ 4 a shot until the end of the pandemic, the problem is not the cost but the supply. India and South Africa believe that the Trip waivers will allow their domestic pharmaceutical industry to produce generic versions of some vaccines, alleviating bottlenecks in production leaving companies behind Successful vaccine candidates are struggling to fulfill orders.

However, the United States and the EU, among others, have opposed giving up. At least, the US opposed it under Donald Trump.

New US trade representative Katherine Tai has upset the pharmaceutical industry when it comes out to reconsider the US stance, even if it hasn’t changed yet. In a series of meetings in recent weeks, she met with industry and business lobbyists, pharmaceutical companies, trade unions, and advocacy groups to discuss IP relinquishment. Is that a good idea or not. She also stated clearly, in one stated to the WTO, that the market is not active enough to bring vaccines to the world.

Just considering the possibility of giving up the Trip (even if it was only done in an open spirit) is a stark shift of opinion from the Trump administration’s stubborn opposition to the waiver and has drawn outrage from pharmaceutical companies that consider patents and IPs the key factor in protecting their products. The USTR was keen to show that nothing is decided, it is just exploring options.

Some Democrats have urged the current administration to consider an exemption option. Also, following, one big letter signed by numerous Nobel Prize winners (mostly in science and economics) as well as former world leaders, urging President Joe Biden’s group to give up their immunity.

Talking to Joseph Stiglitz, an economist and signer of the letter, Trade Secrets asked him where he felt in deciding when to give up intellectual property rights and when not. – if we give up intellectual property rights to drugs now, why not always? And wouldn’t that destroy the private sector’s motivation to invest? He replied that pandemic pandemic is special and unusual situations, and therefore the argument of “slippery slope” has not been accepted. He also pointed to the massive public investments made to get the vaccine in and run under the Trump administration’s $ 7 billion Warp Speed ​​campaign (good summary by a Peterson Institute article, to which we will return).

The industry, for its part, argues that bottlenecks cannot be alleviated through the loosening of IP rules and they are there simply because there is just too much production capacity to create complex products. like a vaccine.

Manufacturer's vaccine distribution chart

Instead of allowing generic versions to be created, pharmaceutical companies want to continue with their licensing system, where they can join to help third-party manufacturers produce vaccines safely. . According to them, that means there will be scientific scrutiny of the quality of vaccines produced. In turn, that would prevent fraudulent manufacturers from creating sophisticated injections that could compromise already fragile beliefs about vaccine safety in many countries. As long as the licensing system is in place, pharmaceutical companies have an incentive to transfer their technology and help ensure that complex manufacturing processes are being executed correctly. This is especially true in the case of informational RNA vaccines, such as those produced by Moderna and Pfizer, that use genetic codes generated by a biological and technology-related process that is not easy. copied by generic manufacturers.

Infographic showing how Pfizer-BioNTech vaccine works

The USTR says it is exploring all the options and doesn’t seem in a rush to object to giving up.

So, if it’s not to give up intellectual property rights, what else can be done? Interestingly, the Peterson Institute looked at the Warp Speed ​​of the Campaign as a model. The popular story is that the United States wasn’t all that great in pandemic management. But Peterson points to the US administration’s success in using the Defense Manufacturing Act to subsidize the purchase of vaccine materials and inputs such as bioreactor vials and bags, as well as to spend money to accelerate the financial risk share of new vaccine testing. Global cooperation to replicate this subsidy approach to all levels of this vaccine supply chain can be achieved through a means of trade, which they call the Vaccine Trade and Investment Agreement please Covid-19 (CVITA). In it, a framework to subsidize the vaccine supply chain could be set up, so that countries could coordinate investments in materials such as bioreactors, vials, syringes, etc. It can be ensured that countries will promise not to impose export control measures that would compromise vaccine deployment in some jurisdictions.

There is no doubt that investing in accelerating vaccine production and distribution pays off huge dividends. An article in the academic journal Science says each vaccine is currently being produced worth $ 5,800 when priced in common global interest for the world economy (more on methodology). here), making even more expensive mRNA vaccines a ray of light. Let’s hope the WTO dialogues are on the right track.

People in the news

Chinese President Xi Jinping at the opening ceremony of the Boao Asia Forum
Chinese President Xi Jinping in the opening ceremony of the Boao Asia Forum © AFP via Getty Images

Speaking at the Boao Forum for Asia, Chinese President Xi Jinping earlier this week launched an attack that concealed America’s global leadership and warned of the economic split of the two superpowers.

Xi did not name the United States in his 18-minute speech, My colleagues in Beijing reportedBut he is targeting Washington’s efforts to decouple supply chains and ban the sale of vital U.S. semiconductors and other high-tech goods to Chinese companies like Huawei.

“Rules set by one or more countries should not be imposed on others, and the unilateralism of individual states should not set a universal rhythm,” he said. Love williams

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