On May 5 the Biden administration shocked the pharmaceutical industry with its announcement that it would support the forfeiture of all intellectual property (IP) rights in the COVID-19 vaccines at the World Trade Organization (WTO) talks. Will this government move to negate the IP rights actually happen?
Corinne Cardina, bureau chief of healthcare and cannabis at Fool.com, and Motley Fool writer Taylor Carmichael discuss why this IP forfeiture is unlikely to occur. This Motley Fool Live conversation was recorded on May 14.
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Corinne Cardina: Specifically, this would be the World Trade Organization is the decider about this potential IP waiver that is at stake here. There's two battling schools of thought. IP is intended to incentivize companies to innovate, to develop new drugs. Of course, the cost of R&D is enormous and companies have to basically have assurance that they're going to be able to sell their drug exclusively to want to put up millions, sometimes billions of dollars to develop them. You can imagine that this issue has mobilized the pharmaceutical industry to come out and say, "This would be just terrible for the industry. No one's ever going to develop a drug again if this happens." Then on the flip side, you look at the vaccine equity across the world. That is really a call to action for something has to change. There's competing schools of thought on whether the IP waiver would be the best thing to do. Let's talk about what pragmatically it would mean. Is this something that could happen soon? What's the timeline and what would have to happen? President Joe Biden has come out and said he supports it, but of course it's not really totally up to him. What should we be watching?
Taylor Carmichael: Well, part of his campaign promise in the election, Joe Biden said, is that he wanted to take the vaccines off patent. What the Biden administration has announced is that they are going to support the waiver of patent protections in the World Trade Organization. The World Trade Organization is a huge conglomerate of countries. It's, I think, 164 countries and they all have to agree before they do anything. So as you can imagine, it's like herding cats, trying to get 164 countries all to agree on something can be really difficult. But this is different than the U.S. position last year. They came out and said we support the waiver of intellectual property rights for the vaccine because of COVID-19 and because this is a healthcare emergency. That doesn't mean that there is going to be a waiver of protection rights because he's only supporting it in the World Trade Organization and all 164 countries have to agree and they're going to talk about it. This whole process is going to take a couple of years to get out, I think.