Vaccine Feud: Fight for Patents Waiver Sparks ‘Third Way’ Debate | Explain This

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    The pharmaceutical companies hate it. The Biden administration is embracing it. Now, finding common ground for wider distribution of Covid-19 vaccines in poorer countries falls to the World Trade Organization — a body known more for its inability to do international deals than to clinch them.

    Drug companies have a powerful ally in Germany, along with other nations, opposing a waiver of rules protecting the intellectual property behind the vaccines. When the U.S. backed that waiver, it sent shares of American and European vaccine makers tumbling on Wednesday.

    At issue is an arcane 1995 WTO agreement on trade-related aspects of intellectual-property rights, known as Trips. It provides enforceable rules for safeguarding trademarks, designs, inventions and other intangible goods in global trade. Trips has re-entered the political lexicon amid a debate over how to stem the current surge in the pandemic in lesser-developed countries.

    India and South Africa have proposed a broad waiver from the Trips agreement’s rules on the production and export of vaccines and other critical medical goods needed to combat the Covid-19 virus.

    Enter the WTO’s new director-general, Ngozi Okonjo-Iweala, who officially began her tenure in Geneva just over two months ago.

    A former Nigerian finance minister, she’s offering an alternate approach — a so-called third way — whereby private companies engage in licensing agreements with nations to share some but not all of the knowledge and designs needed to produce vaccines in the developing world.

    On the surface, the request from poorer nations is simple. With less investment firepower and other resources to develop vaccines and medical technologies, they should be allowed to do everything they can to treat their citizens without fear of punitive trade retaliation.

    Citing a moral imperative to save lives, waiver proponents like the humanitarian organization Médecins Sans Frontières argue that it’s unconscionable for wealthy nations to hoard vaccine know-how and for pharmaceutical companies to prioritize profits over lives in poor nations.

    But the broader implications of the request are not so simple.

    While India and South Africa say IP rules for vaccines create unnecessary hurdles to ending the pandemic, opponents of the waiver argue that enforceable IP rules are critical tools that incentivize companies to take the very kind of risks that resulted in the development and deployment of multiple Covid-19 vaccines in less than a year.

    Chancellor Angela Merkel weighed in against the U.S.’s support of the waiver, with a German government spokeswoman on Thursday saying it would create “severe complications” for the production of vaccines.

    “The limiting factor for the production of vaccines are manufacturing capacities and high quality standards, not the patents,” the German government spokeswoman said. “The protection of intellectual property is a source of innovation and this has to remain so in the future.”

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