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Forget Patent Rights! Here's the Real Issue in COVID-19 Vaccine Distribution

By Taylor Carmichael - Updated Jun 26, 2021 at 11:02PM

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The problems that are actually slowing down vaccine distribution globally involve bottlenecks in the raw material supply chain.

While COVID-19 vaccinations are happening are high levels and rapid rates in the U.S., in much of rest of the world, people are not so lucky. Vaccines are not widely available in many countries, particularly in the Third World. This leads to an obvious and vital question: How do we speed up distribution?

The Biden administration has announced that it supports the waiver of intellectual property rights in the COVID-19 vaccines at the World Trade Organization (WTO). If all 164 countries in the WTO agree, this would allow other companies to start producing generic versions of the COVID-19 vaccines.

But would this actually lead to faster, more widespread distribution of those vaccines around the world? 

Corinne Cardina, bureau chief of healthcare and cannabis at Fool.com, and Motley Fool writer Taylor Carmichael discuss the distribution issue, and how it might be solved. This segment was recorded on May 14 on Motley Fool Live. 

Taylor Carmichael: One point that I would make is that is not really the cost that is the problem in vaccine distribution. Governments are paying for the vaccines. They're free to everyone. To you, to me. Nobody is being charged for the vaccines except governments.

Governments are paying for the vaccines. In essence, when the government says we're just going to take them, then what they mean, is we're not going to pay you any more for the vaccine. I wouldn't kid yourself about the government being nice to people. They could pay if they wanted more vaccines.

But the issue with distribution is not cost. The issue is there are bottlenecks in some of the raw materials that are needed for the vaccines. That's what Novavax (NVAX -2.47%) has run into. The two major companies that are providing vaccines to the Third World are AstraZeneca (AZN -1.80%) and Novavax. They're talking about supplying a billion vaccines or more to the Third World. So it's not a cost issue. It's not an intellectual property issue. At least in Novavax's case, the delays have been in regard to raw materials. And they're strange raw materials, but they need the materials in order to make the vaccine. That's something the federal government could actually help them with -- they've put out defense contract orders to not let these supplies out of the country because we want vaccines for Americans. But if they were to release those bottlenecks, that would speed up [production] in the Third World, and would speed up the rest of the world. That's really what should be done.

Taylor Carmichael owns shares of Novavax. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Novavax, Inc. Stock Quote
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AstraZeneca PLC
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