Proposed Vaccine Deal: Ignoring the Constitution and Giving Away American Intellectual Property

A t the behest of the Biden administration, the World Trade Organization is about to vote on a “waiver” that would remove American intellectual-property rights that protect Covid vaccines. Trampling over these rights and the U.S. Constitution will only harm future pandemic preparedness and undermine American competitiveness.

Nearly two years ago, developing countries led by India and South Africa proposed that intellectual-property rights should be waived indefinitely for Covid-19 related products (including vaccines). They argued that patents and copyrights might restrict the global supply of needed medical goods, and it would be best to give them up entirely as long as Covid-19 was spreading. Up to now, that effort has not succeeded.

Instead, the opposite has played out. Aided by intact property rights that allow firms to safely share their vaccine recipes, data, and other know-how, manufacturers all over the world have been able to take part in increasing the supply of crucial medical goods. In fact, as a direct result of intellectual-property protections, India and South Africa have not only increased their capacity to produce vaccines on their own, but they are sitting on stockpiles they can’t get rid of.

Their negotiators have expertly navigated the Covid crisis to focus international discussion on forcing the United States and Germany to surrender the rights of the most innovative mRNA vaccines to the whole world. Except for China, of course, which was suspected (even if it wasn’t named) of trying to steal the recipe for the vaccines earlier in the pandemic. To remedy the unsightly transfer of American competitiveness to an adversary, current discussions of the waiver are focused on including an ironclad pinky swear by China to voluntarily opt out of using the waiver.

Developing countries led by India have been attempting to weaken patent protections at the WTO since at least the 1980s. For all the benign-sounding talk that accompanies this drive, the economic reason underlying it is not hard to guess. Weak intellectual-property protections allow the massive generic industry powering India’s “pharmacy of the world” to undercut America’s competitive edge. It seems only the White House has missed the memo.

For decades such efforts have been resisted by the U.S. and Europe where pharmaceutical innovators such as Moderna and BioNTech, for example, rely on patents to secure the billions needed to fund long-term research and development. Even then, once a new drug has been created, it can fail clinical trials, as have 28 Covid vaccines and 99 Covid therapeutics in the U.S. so far.

Property rights are the backbone of America’s competitiveness. Patent-intensive industries are responsible for 44 percent of employment in America’s manufacturing sectors and make innovation hubs such as Silicon Valley possible. Trademark-intensive industries including retail small business and professional services are responsible for 37 percent of GDP and employ 29 percent of Americans. Robust intellectual-property rights have played an immense role in this country’s remarkable economic success and pandemic preparedness.

America’s historic commitment to intellectual property is not by chance. The Constitution gives Congress the responsibility “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” And, especially relevant here, the Constitution also charges Congress to “regulate Commerce with foreign nations” and gives it the power to “make treaties.”

Yet, in regard to the proposed “waiver” of intellectual-property rights at the World Trade Organization, the Biden administration, without the consent, guidance, or consultation with Congress, has negotiated an international commercial agreement permitting more than 100 countries to effectively ignore American intellectual-property rights. Democratic and Republican Senate leaders have condemned the U.S. trade representative’s “failure to consult properly with Congress.” But more needs to be done.

The administration must reject the proposed waiver, not only to honor the Constitution and protect American competitiveness but because the waiver itself will do significant damage to efforts to fight Covid.

One of the lesser recognized benefits of a patent as an exclusive right is the ability of the holder to prevent false, mislabeled, substandard, counterfeit, and otherwise unauthorized versions of the patented item from reaching consumers. It just so happens that India and South Africa host some of the largest markets of fake pharmaceuticals. Waiving these rights will make it nearly impossible to differentiate a genuine vaccine from a fake filled with glucose or something toxic like glycol, which happens so often in India that it has earned that country a regular spot on the U.S. Priority Watch list.

With vaccine hesitancy being the problem that it is, especially in developing countries where rates lag for various reasons, facilitating an increased likelihood of harmful fake vaccines will not help. Nor will removing the incentive and ownership rights that innovators need to make additional strain-specific vaccines.

This should be a moment to celebrate. The World Health Organization announced that the COVAX facility that distributes vaccine doses to the developing world has “more than enough doses needed.” To end the pandemic, the WHO asks countries to set ambitious vaccination targets and work on last-mile deliveries. Waiving intellectual-property rights plays no role in reducing vaccine hesitancy, producing more vaccines, or helping in any other way. Indeed, it would be counterproductive.