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Biden Administration Supports Patent Waivers for Coronavirus Vaccine

By Eric Volkman - May 5, 2021 at 8:44PM

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If enacted, such a move would hit the smaller vaccine makers particularly hard.

On Wednesday, shares of the makers of authorized coronavirus vaccines were generally slammed by discouraging news from the federal  government.

In an official statementc, U.S. Trade Representative Katherine Tai wrote that "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."

Child getting a jab from a medical professional.

Image source: Getty Images.

This comes shortly after top officials at the World Trade Organization apparently pushed its member countries to devise an agreement to temporarily suspend such protections. Such a move would benefit less advantaged countries struggling to contain the spread of the disease.

Tai's statement won high-level support from Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization. In a tweet, Ghebreyesus wrote that it "is a monumental moment in the fight against #COVID19. The commitment by @POTUS Joe Biden & @USTradeRep @AmbassadorTai... is a powerful example of [American] leadership to address global health challenges."

At the moment, three coronavirus vaccines have Emergency Use Authorization from the FDA to combat the global health scourge -- Moderna's (MRNA -0.95%) mRNA-1273, Pfizer (PFE 1.29%) and BioNTech's (BNTX 0.52%) BNT162b2, and the one-shot jab developed by Johnson & Johnson's Janssen unit. All benefit from patent protection.

Of the quartet, shares of Moderna, BioNTech, and Johnson & Johnson all fell after the statement was released, with Moderna suffering the steepest drop (6.2%). Pfizer, meanwhile, rose only very slightly on the day.

Among that group, the younger and less-diversified Moderna and BioNTech stand to lose the most from intellectual property waivers. Shareholders of those companies in particular should keep a close watch on how the situation develops.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$49.20 (1.29%) $0.62
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$168.28 (0.91%) $1.51
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$148.58 (-0.95%) $-1.42
BioNTech SE Stock Quote
BioNTech SE
BNTX
$148.38 (0.52%) $0.77

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