Team Biden Erodes the IP Protection That Undergirds Global Public Health

CommentaryThere are ways to do well by doing good, and successful vaccine development is one of them. COVID-19 vaccines are now protecting the world from death and disease. But in the next pandemic—due to the erosion of intellectual property protections for vaccine science on a global level—we may not be so lucky. On June 17, the Biden administration has signed onto a World Trade Organization initiative, to the benefit of China and led by India and South Africa, to wipe out intellectual property (IP) protections for the pharmaceutical companies that developed the winning mRNA vaccines. The agreement grants developing countries, among which China wrongly places itself, rights to manufacture COVID vaccines “without the consent of the right holder.” Vaccine Development Needs IP Protection Vaccines that use mRNA technology were developed by Moderna and Pfizer, both American companies, and not by happenstance. American companies developed the vaccines because intellectual property protections are best protected here in America. Science goes where science is appreciated, compensated, and protected. The same goes for investors who take risks with their own money to keep scientists employed. Investors and scientists form, fund, and staff pharmaceutical companies, few of which would have worked at the height of the pandemic, including through dangerous vaccine trials with patients seen as at the highest risk of infection, except for the significant upside. For every vaccine that succeeded, there were three or more that failed. So the upside has to be high. And that high upside is called significant profit. For a single life-saving drug, some anti-pharma critics would call it “obscene profit.” But take a step back to look at the pharmaceutical industry as a whole. Investors in pharma may commit to multiple companies at once. Each company can simultaneously invest in multiple drug development cycles. Many of these experimental drugs fail. Many pharma companies fail. And so while a lot of money is lost throwing pharma spaghetti at the wall to see what sticks, the few drugs that succeed need to make “obscene profits” to fund the entire industry. Without profits from successful drugs, none of them get attempted, which means that none of them succeed. This is exactly the path that the Biden administration took by giving into demands from countries like China, India, and South Africa to wipe out international IP protections during an emergency. U.S. Trade Representative Katherine Tai said the deal was “a concrete and meaningful outcome to get more safe and effective vaccines to those who need it most.” Trade Representative Katherine Tai addresses the Geneva Graduate Institute on the role of the World Trade Organization (WTO) in the global economy and U.S. policy priorities in Geneva, Switzerland, on Oct. 14, 2021. (Denis Balibouse/Reuters) But the International Federation of Pharmaceutical Manufacturers & Associations expressed “deep disappointment” at the decision. They rightly point out that IP is “not a barrier to vaccine scale-up and wide acknowledgement of vaccines surplus.” The federation warns that the WTO agreement will have “severe consequences on innovation and global health security.” Vaccine Supply Is Not the Problem The free market, along with donations by governments, have already provided plenty of vaccines globally to treat almost everybody who wants them. As pointed out by the federation, IP supported the production of 13.9 billion COVID vaccines and counting. That’s almost two doses for every person on the planet. For those who cannot get the vaccine, the problem is not in production but the lack of sufficient medical personnel, delivery, cold storage, and other logistics. Giving away the IP does nothing to help deliver vaccines for which there is already a surplus. But it does impede the next vaccine from being developed. Low Vaccine Uptake in Africa An Omicron wave hit Africa last year but did not cause a surge in deaths and hospitalizations, in part because the population is younger. As a result, there is less interest among the population in getting vaccinated. In Sierra Leone, for example, just 12 percent of people are vaccinated and almost nobody has a booster. But they have plenty of vaccines. “Vaccine deliveries are now coming to Africa faster than many vaccination programs can get them into arms,” according to The New York Times. “Some African governments have had to ask manufacturers to pause shipments until they can use up what they have on hand.” Democracy and the market work to bring the world what it needs. It strikes a balance between a dignified quantity of equity, achieved through vaccine donations and progressive taxation, for example, and the freedom of markets that voters invariably choose. Conversely, communism in countries like the former Soviet Union and China today has failed to provide the standard of living that Western Europeans, Japanese, South Koreans, an

Team Biden Erodes the IP Protection That Undergirds Global Public Health

Commentary

There are ways to do well by doing good, and successful vaccine development is one of them. COVID-19 vaccines are now protecting the world from death and disease. But in the next pandemic—due to the erosion of intellectual property protections for vaccine science on a global level—we may not be so lucky.

On June 17, the Biden administration has signed onto a World Trade Organization initiative, to the benefit of China and led by India and South Africa, to wipe out intellectual property (IP) protections for the pharmaceutical companies that developed the winning mRNA vaccines.

The agreement grants developing countries, among which China wrongly places itself, rights to manufacture COVID vaccines “without the consent of the right holder.”

Vaccine Development Needs IP Protection

Vaccines that use mRNA technology were developed by Moderna and Pfizer, both American companies, and not by happenstance. American companies developed the vaccines because intellectual property protections are best protected here in America. Science goes where science is appreciated, compensated, and protected. The same goes for investors who take risks with their own money to keep scientists employed.

Investors and scientists form, fund, and staff pharmaceutical companies, few of which would have worked at the height of the pandemic, including through dangerous vaccine trials with patients seen as at the highest risk of infection, except for the significant upside.

For every vaccine that succeeded, there were three or more that failed. So the upside has to be high. And that high upside is called significant profit. For a single life-saving drug, some anti-pharma critics would call it “obscene profit.”

But take a step back to look at the pharmaceutical industry as a whole. Investors in pharma may commit to multiple companies at once. Each company can simultaneously invest in multiple drug development cycles. Many of these experimental drugs fail. Many pharma companies fail. And so while a lot of money is lost throwing pharma spaghetti at the wall to see what sticks, the few drugs that succeed need to make “obscene profits” to fund the entire industry.

Without profits from successful drugs, none of them get attempted, which means that none of them succeed.

This is exactly the path that the Biden administration took by giving into demands from countries like China, India, and South Africa to wipe out international IP protections during an emergency.

U.S. Trade Representative Katherine Tai said the deal was “a concrete and meaningful outcome to get more safe and effective vaccines to those who need it most.”

Trade Representative Katherine Tai
Trade Representative Katherine Tai addresses the Geneva Graduate Institute on the role of the World Trade Organization (WTO) in the global economy and U.S. policy priorities in Geneva, Switzerland, on Oct. 14, 2021. (Denis Balibouse/Reuters)

But the International Federation of Pharmaceutical Manufacturers & Associations expressed “deep disappointment” at the decision. They rightly point out that IP is “not a barrier to vaccine scale-up and wide acknowledgement of vaccines surplus.”

The federation warns that the WTO agreement will have “severe consequences on innovation and global health security.”

Vaccine Supply Is Not the Problem

The free market, along with donations by governments, have already provided plenty of vaccines globally to treat almost everybody who wants them. As pointed out by the federation, IP supported the production of 13.9 billion COVID vaccines and counting. That’s almost two doses for every person on the planet.

For those who cannot get the vaccine, the problem is not in production but the lack of sufficient medical personnel, delivery, cold storage, and other logistics. Giving away the IP does nothing to help deliver vaccines for which there is already a surplus. But it does impede the next vaccine from being developed.

Low Vaccine Uptake in Africa

An Omicron wave hit Africa last year but did not cause a surge in deaths and hospitalizations, in part because the population is younger. As a result, there is less interest among the population in getting vaccinated. In Sierra Leone, for example, just 12 percent of people are vaccinated and almost nobody has a booster. But they have plenty of vaccines.

“Vaccine deliveries are now coming to Africa faster than many vaccination programs can get them into arms,” according to The New York Times. “Some African governments have had to ask manufacturers to pause shipments until they can use up what they have on hand.”

Democracy and the market work to bring the world what it needs. It strikes a balance between a dignified quantity of equity, achieved through vaccine donations and progressive taxation, for example, and the freedom of markets that voters invariably choose.

Conversely, communism in countries like the former Soviet Union and China today has failed to provide the standard of living that Western Europeans, Japanese, South Koreans, and Taiwanese have, because command economies are highly inefficient.

China Wants to Destroy IP

The Wall Street Journal rightly lambasts “Friday’s [June 17] agreement by the WTO’s 164 members that lets developing countries, including China, steal intellectual property for Covid vaccines.”

It sets a bad precedent for the theft of future IP, which is a competitive advantage of the United States against China and other command economies. By more unilateral giveaways to China, the Biden team is again weakening the United States economically, which puts democracy at risk globally.

covid-19 vaccine--Russia
A scientist prepares samples during the research and development of a vaccine against the (COVID-19) at a laboratory of BIOCAD biotechnology company in Saint Petersburg, Russia, on June 11, 2020. (Anton Vaganov/Reuters)

“The White House is flogging the [WTO vaccine] deal as a diplomatic victory,” according to the Journal’s editorial board. “But it’s an enormous defeat for U.S. national interests that will benefit China and set a precedent that erodes intellectual property protection. This won’t be the last time global grifters seek to pilfer U.S. technology.”

Progressives who call for “vaccine equity” that would justify such theft wrongly think they are saving lives. In fact they are debilitating the market system that brought us the vaccines in the first place. And that same market system has something called differentiated pricing that can offer the same vaccines delivered in the West for a high price, to medium-income countries like China at half the cost, and to poorer countries for free through foreign aid programs.

Everyone wins, but only if markets and freely-chosen aid regimes are allowed to work. President Joe Biden is not letting markets work, which gets him points in Beijing in the short term but destroys global public health in the long term.

“An earlier draft of the compromise would have prevented China from taking advantage of the [IP] waiver,” according to the Journal. “Friday’s agreement doesn’t.”

Now China can steal U.S. mRNA technologies, develop their own branded vaccines, including for other diseases, and undercut U.S. companies on price.

IP Thieves Are Never Satisfied

That isn’t enough for IP thieves, who want even more, including American test and treatment technologies. Development of these took money, risk, and hard work. Yet Beijing, New Delhi, and Pretoria want it for free.

If they can’t get it through the WTO, the Chinese Communist Party (CCP) will doubtless attempt to steal it through cyber-espionage and reverse-engineering, as they have with hundreds of billions of IP annually stolen from the United States alone.

India has followed similar strategies.

“In India, for nearly five decades, the generic industry has reverse-engineered drugs to mass manufacture low-priced therapeutics,” as an editorial in the Indian Express admits.

“But vaccines present a different order of challenge: Manufacturers require not only patented knowledge but also partnerships with the original innovator to develop these preventives,” according to the editorial.

It’s time for the United States to tell Beijing, New Delhi, and Pretoria that in no uncertain terms, we are done playing Mr. Nice Guy until we get more support for what matters to the world’s long-term health and a sustainable balance between equity and innovation. That is best provided by democracy and free markets, which these three countries should get more serious about supporting.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.


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Anders Corr has a bachelor's/master's in political science from Yale University (2001) and a doctorate in government from Harvard University (2008). He is a principal at Corr Analytics Inc., publisher of the Journal of Political Risk, and has conducted extensive research in North America, Europe, and Asia. His latest books are “The Concentration of Power: Institutionalization, Hierarchy, and Hegemony” (2021) and “Great Powers, Grand Strategies: the New Game in the South China Sea" (2018).