Decades before the W.T.O. and Trips came into being, companies like Pfizer and Johnson & Johnson enjoyed the protection of restrictive intellectual property rules. Via Trips, they sought to impose the same rules on developing countries, whose more liberal laws had allowed for the production of more affordable, duplicate versions of their drugs. Trips reversed the situation, slowing the diffusion of pharmaceutical know-how in developing countries, grounding innovation to a halt and elevating drug prices.
With the W.T.O. meeting approaching, the industry has stiffened its resolve against the Trips waiver. In The Economist, Michelle McMurry-Heath, the president and chief executive of the Biotechnology Innovation Organization, a prominent trade association, wrote that it could undercut the industry’s incentives to develop solutions for future health emergencies. She accused “self-interested” countries pushing the initiative of “exploiting the pandemic to acquire innovative technology invented in America and Europe” and suggested countries could exploit the “bioweapon potential” of mRNA-based vaccines like those made by Pfizer and Moderna — a spurious claim, experts have said.
These arguments, misleading as they are, clarify the industry’s position. Prolonged patent protection — extracting profit from the marketing and pricing of a product over a lengthy interval — has gifted it with a formidable monopoly, one that stifles innovation rather than encourages it.
Drug companies also seem reluctant to acknowledge that a temporary suspension like this one, affecting only one product, would hardly affect its bottom line. This year, Pfizer is expected to generate $15 billion in sales from its vaccine, with profit margins between 25 percent and 30 percent. Profits from the Covid-19 vaccine alone could be about $4 billion. While the industry surely deserves credit for rapidly developing the vaccines, it could not have done so without generous government subsidies: The United States alone has given over $12 billion to six major vaccine companies for this purpose.
In the event of a lack of consensus at the W.T.O., granting a Trips waiver would require the support of a large majority of the W.T.O.’s 164 members. Some 100 W.T.O. member-governments now support the move; 60 of them are official sponsors. Given Washington’s effective veto power over the institution, Mr. Biden’s support could push it over the top.
Mr. Biden need not fear political blowback. A recent survey conducted by Data for Progress and Progressive International found that 60 percent of American voters support the Trips waiver; only 28 percent oppose it. He should also bear in mind that drug companies, with their penchant for high prices, are among the least-trusted sectors of U.S. industry.
The choice for Mr. Biden, then, is clear: Protect a patent regime that safeguards the interests of powerful multinational corporations or empower developing nations to defend themselves. On Wednesday, the world will know whether he has the courage to do the right thing.
Walden Bello is a co-founder of Focus on the Global South and an adjunct professor of sociology at the State University of New York at Binghamton.
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