The stock prices of several coronavirus vaccine developers took sharp
downturns on Wednesday, after the Biden administration announced it
supports stripping away vaccine patent protections so the formulas can
be shared with the world to produce generics.
What are the details?
U.S. Trade Representative Katherine Tai announced in the afternoon that
the administration supports waiving intellectual property protections
for COVID-19 vaccines.
Tai said in a statement:
"This is a global health crisis, and the extraordinary
circumstances of the COVID-19 pandemic call for extraordinary
measures. 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.
We will actively participate in text-based negotiations at
the World Trade Organization (WTO) needed to make that happen.
Those negotiations will take time given the consensus-based
nature of the institution and the complexity of the issues
CNBC reported that following the news, shares of vaccine producers
Pfizer, Biontech, Novavax, and Moderna all plunged "to session lows."
The outlet reported that following the sharp drops, "Pfizer ended its
trading day flat, while Moderna lost 6.1%; Johnson & Johnson shed a
The Pharmaceutical Research and Manufacturers of America, a trade group
that represents several of the pharmaceutical companies impacted,
slammed the Biden administration's move.
"In the midst of a deadly pandemic, the Biden Administration has taken
an unprecedented step that will undermine our global response to the
pandemic and compromise safety," the group's president and CEO, Stephen
J. Ubi, told CNBC. "This decision will sow confusion between public and
private partners, further weaken already strained supply chains and
foster the proliferation of counterfeit vaccines."
Reactions to the news were split on social media, with some people
slamming the move and saying that pharmaceutical firms should be able
to profit off the development of the vaccines. One person wrote, "This
current administration has no understanding of the great lengths that
went into development of these life saving vaccines. These companies
should be able to profit from there (sic) hard work."
Another expressed concern over the precedent that the Biden
administration's policy sets, tweeting, "Pretty extraordinary step.
Once this box is opened I think it will be hard to limit it only to
COVID. What about cancer drugs? What if we get a cure for Alzheimer's?
Are those really less important than COVID-19? This has major
ramifications for IP going forward in the U.S."
But others argued that sharing the vaccine technology was more
important than profits. Akshaya Kumar, the crisis advocacy for Human
Rights Watch, wrote, "Thanks for taking this bold position
@AmbassadorTai! By doing so, the US may help turn the tide on this
pandemic and save countless lives globally."
Some pointed out the pharmaceutical companies had received a hefty
amount of taxpayer funds for the speedy development of the shots under
former President Donald Trump's "Operation Warp Speed."
One person replied, "Taxpayers funded this, not the companies. They
took almost no risk, just reaped reward. All this is doing is asking
them -- who, again, did not pay for this and risked functionally
nothing -- to accept slightly less of a reward."
Time magazine reported in December that Operation Warp Speed "allocated
more than $12 billion to vaccine makers" for the development (including research and clinical studies) and manufacturing of the first 300
Six deals were made between the U.S. government and individual firms or partnerships, including Johnson & Johnson, Moderna, Novavax, and
undertakings by AstraZeneca-Oxford, Sanofi-GlaxoSmithKline, and Pfizer-BioNTech.
Fox Business reported in March that the deals are still rolling in for
approved U.S. vaccine producers not only from the federal government,
but from countries abroad.
At that point, Pfizer and BioNTech expected to split $15 billion in
vaccine revenues by the end of 2021, while Moderna expected $18.4
billion in advanced sales and Johnson & Johnson was on track to pull in
roughly $10 billion by the end of the year.
Those potential revenues could look entirely different if the formulas
are spread to other firms globally.