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US announces support of COVID-19 vaccine IP waiver

In a highly significant move, the US government has announced its backing for a waiver on intellectual property (IP) protection for coronavirus disease 2019 (COVID-19) vaccines for the duration of the pandemic. World Trade Organization (WTO) meetings are likely to continue consideration of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver proposal, though any resolution is likely to take months and is unlikely before the next formal TRIPS Council meeting scheduled for early June.

Any negotiated waiver is likely to provide for only a narrow, temporary relaxation of IP protections for the near-term duration of the current pandemic, with mechanisms for IP rights to be re-established subject to performance indicators such as vaccination production or immunity levels.

To an extent, US political support for an IP waiver for COVID-19 vaccine manufacturing may mark a pivot from vaccine nationalism to vaccine diplomacy. However, given that most low to middle income countries will not have the manufacturing capability or raw materials to mass produce vaccines to the same quality standards as the originator, the relative impact of the vaccine waiver in terms of increasing vaccine supply internationally could be muted.

The policy could also end up having a counterproductive effect on vaccine rollout. The loss of quality control by original developers could give rise, in certain circumstances, to situations whereby a safety or manufacturing issue created by a locally produced vaccine version undermines confidence in vaccines

If implemented, the move could considerably weaken the economic position of vaccine developers that depend on IP protection for their research investment, although developers such as AstraZeneca (UK), which is selling the vaccine to emerging countries at cost, would probably be less severely affected. Notably, the US government has rights to US patent 10,960,070 (the '070 patent), which covers some key mRNA vaccine IP used in both Moderna's (US) and Pfizer (US)/BioNTech's (Germany) COVID-19 vaccines. However, although BioNTech has been paying royalties for this IP component, the US government had reportedly exempted Moderna from this requirement.

Although the US's position may be largely symbolic - and the actual implementation of such a move would require consensus support from the EU, Japan, and other nations (and thus appears unlikely for now) - it could potentially set a precedent for governments to exert pressure on pharma companies to release their patent protection, potentially undermining support for growth in pharma research overall.

Posted 06 May 2021 by Eoin Ryan, Senior Analyst and

Janet Beal, Senior Research Analyst, Life Sciences, IHS Markit and

Lindsay Newman, Ph.D., Director, Economics & Country Risk, IHS Markit

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