Pfizer, Moderna Shares Plummet As Key Vaccine-Making Countries Line Up Behind Biden’s Covid Patent Waiver Plans - Forbes

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Topline

Shares in major manufacturers of Covid-19 vaccines plummeted Thursday as the European Union, one of the world’s largest producers of vaccines and home to a number of pharmaceutical heavyweights, signaled its willingness to discuss U.S. plans to waive various intellectual property protections on the shots in order to boost global vaccine supplies.

Key Facts

The EU is “ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner,” European Commission President Ursula von der Leyen said Thursday.

Von der Leyen said this willingness included U.S. proposals for a “waiver on IP protection for Covid vaccines,” something the bloc has previously rejected.

Pressure is now growing on other wealthy nations to support the endeavor after the U.S. backed proposals to waive vaccine patents, with New Zealand signaling its support shortly after.

Shares in major vaccine makers have fallen since the U.S. announcement, with Pfizer and Moderna respectively down 3.45% and 3.19% in premarket trading at the time of writing.

BioNTech and CureVac, two German manufacturers, are down 16.9% and 15.49% respectively.

Key Background

The U.S. and the EU are among the world’s staunchest defenders of intellectual property rights and the decision to consider waiving protections is a major policy change. An intellectual property waiver would allow other companies around the world to access the information needed to make their own vaccines and allow them to do so legally. Theoretically, this will boost overall production and help poorer countries access much needed supplies ahead of what could otherwise be a years-long wait. India and South Africa have been leading international calls for an easement to patent protection throughout the pandemic, something wealthy nations like the U.S., the EU, Japan, Australia and the U.K. have at one point opposed.

Tangent

Though intellectual property rights frequently feature in trade discussion, calls for relaxing them during the Covid crisis echo the big international disputes over HIV medication in the 90s.

What To Watch For

The World Trade Organization is set to meet again Thursday and discuss the proposals. Attention will be on other key nations who have blocked a waiver to see whether pressure from theU.S., and potentially the EU, will alter things. The U.K., Switzerland, Canada and Japan are all included in this group.

Contra

The EU’s position doesn’t explicitly endorse an IP waiver, merely promising to consider it. The bloc’s past position has been that such waivers would not necessarily boost supplies and that there’s much more that goes into producing a vaccine than the instructions, including knowhow, specialist equipment and a robust supply chain. Dr. Anthony Fauci, Biden’s chief medical adviser, fears a waiver would take too long to get shots in arms to be the most effective solution. The economic interests of domestic pharmaceutical industries are also key considerations. Companies tend to strongly oppose any efforts to do away with intellectual property rights, arguing that without the money patents bring in, there is little incentive for them to undertake the expensive task of developing and bringing drugs to market.