By Yuka Hayashi and Jared S. Hopkins 

WASHINGTON -- The U.S. said Wednesday it would support the temporary waiver of intellectual property provisions to allow developing nations to produce Covid-19 vaccines created by pharmaceutical companies, citing an urgent need to stem the pandemic.

Overriding objections from the pharmaceutical industry, U.S. Trade Representative Katherine Tai said the U.S. would support a proposal working its way through the World Trade Organization. Such a policy would waive the IP rights of vaccine makers to potentially enable companies in developing countries and others to manufacture their own versions of Covid-19 vaccines.

"The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for Covid-19 vaccines," Ms. Tai said in a statement.

Countries suffering from an explosion in new cases -- including India and South Africa -- have pushed for the waiver. In India, it was reported recently that less than 2% of the population had been vaccinated, and new Covid-19 cases are at record highs globally, as the pandemic rages unchecked in many poor and middle-income countries.

Pharmaceutical companies, however, oppose it, saying the waiver won't provide the short-term results proponents think it will, partly because of the challenge of setting up complex new production facilities to manufacture the vaccines.

Ms. Tai also warned that the talks at the WTO to approve a waiver policy will take time, given the consensus-based nature of the group, but that the U.S. will actively participate in negotiations.

The Pharmaceutical Research and Manufacturers of America, the drug industry's main D.C.-based lobbying and trade group, said the Biden administration's decision will weaken already-strained supply chains and spur counterfeit vaccines.

"This decision does nothing to address the real challenges to getting more shots in arms, including last-mile distribution and limited availability of raw materials," PhRMA said in a statement.

Pfizer Inc., which partnered with BioNTech SE to develop a Covid-19 vaccine, declined to comment. Representatives for Moderna, AstraZeneca and Johnson & Johnson didn't immediately respond to requests for comment.

Lifting patent restrictions means that rival companies would be able to manufacture vaccines using public patents without risk of legal challenges by Covid-19 vaccine makers, said Zachary Silbersher, a patent lawyer at Markman Advisors, LLC.

However, manufacturing the Covid-19 vaccines is a complex scientific process that involves securing hard-to-find raw materials and scaling them in a way that has never been done before, according to industry experts. Factories must be built or retrofitted with special, expensive equipment, and employees must have the manufacturing know-how.

"I can't imagine that waiving patent rights is all of a sudden going to create competitors overnight," Mr. Silbersher said. "Even if you're armed with the patents, that doesn't mean you have all the information to make these vaccines. There's a gap, and that gap could be significant."

In an interview Tuesday, Pfizer Chief Executive Albert Bourla said that sharing patents doesn't make sense because doing so wouldn't lead to increased production of vaccine doses.

"It is so wrong," Mr. Bourla said of forcing the patent sharing. He said the limited supply of Covid-19 vaccines stems from how before the pandemic, there weren't any approved products using the new gene-based mRNA technology in the Pfizer-BioNTech vaccine.

Pfizer, he said, has been ramping up its manufacturing capabilities to close that production gap for more than a year. Dictating the sharing of patents would discourage biotech companies from developing products for the next pandemic, he said.

Moderna last year said it wouldn't enforce patents related to its experimental Covid-19 vaccine while the pandemic continues and is willing to license the patents to others after the pandemic.

The U.S., the European Union and other wealthy nations were among the countries that opposed the original waiver proposal offered by South Africa and India in October, saying IP protection provides an important incentive for innovation.

In her statement, Ms. Tai said the support for the IP waiver is just one part of Washington's effort to get vaccines around the world quickly.

"As our vaccine supply for the American people is secured, the Administration will continue to ramp up its efforts -- working with the private sector and all possible partners -- to expand vaccine manufacturing and distribution," she said. "It will also work to increase the raw materials needed to produce those vaccines."

Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, hailed the U.S. action as a "monumental moment in the fight against COVID-19".

In its statement Wednesday, PhRMA said that Covid-19 vaccine production was already ramping up and companies were exporting more shots overseas.

"Biopharmaceutical manufacturers are fully committed to providing global access to Covid-19 vaccines, and they are collaborating at a scale that was previously unimaginable."

The surprise move by the Biden administration came as the flare-up of the pandemic in India underscores the risks that the virus and emerging variants pose for the world.

Governments and other health experts have called for sharing patent rights to help spur additional production of vaccines around the world, particularly in developing nations where few people have received shots. The U.S. and other nations have by contrast progressed to vaccinate almost a majority of their populations.

The White House on Tuesday unveiled a goal for 70% of the U.S. adult population to have one vaccine shot and 160 million U.S. adults to be fully vaccinated by July 4.

The Biden administration has come under intense pressure to take steps to ease the global vaccine shortage in recent weeks.

The current WTO agreement -- the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS -- was introduced in 1995 upon the birth of the WTO itself, providing patent protection to technological innovations, including drugs and vaccines.

Support by the U.S. for the temporary waiver doesn't mean it will be approved at the WTO, an organization that makes decisions on consensus among members. The European Union, the U.K., Switzerland, Japan and Brazil are among the countries that opposed the original proposal offered by South Africa and India in October.

"The thing that has holding things back in this case is not intellectual property. It's not like there's some idle vaccine factory, with regulatory approval, that makes magically safe vaccines," Bill Gates, whose charitable foundation has made significant contributions to global vaccine efforts, said on Sky News last month.

Ngozi Okonjo-Iweala, who became the WTO's director-general in March after serving as the head of Gavi, an international vaccine group, had proposed a "third way" to improve access to vaccines before her appointment. Her proposal focused on technology transfer and licensing of manufacturing without requiring an IP waiver.

"Ngozi is following a dual track. She says, 'Lets talk about TRIPS waiver,' which is so contentious that it's not going to be resolved quickly, but at the same time, 'Lets make sure there is more production in developing countries,'" said Alan Wolff, a U.S. trade lawyer who finished his term as deputy director-general of WTO last month.

The continuing debate echoes the fight over AIDS/HIV medication in the late 1990s and the early 2000s that raised a question about the role of intellectual property rights during a deadly public health crisis.

Amid the criticism that the IP protection rule made the medicines already readily available in wealthy nations prohibitively expensive for poorer countries experiencing terrible outcomes, WTO members made changes to the TRIPS agreement. The move also encouraged pharmaceutical companies to voluntarily ease conditions of licensing agreements, resulting in significant declines in drug prices.

Write to Yuka Hayashi at yuka.hayashi@wsj.com and Jared S. Hopkins at jared.hopkins@wsj.com

 

(END) Dow Jones Newswires

May 05, 2021 20:22 ET (00:22 GMT)

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