On Wednesday, the Biden administration backed waiving intellectual property protections for COVID-19 vaccines, a move meant to boost production and ensure more of the world becomes inoculated. The news came in the middle of a Yahoo Finance interview with Massachusetts Senator Elizabeth Warren.
"Fantastic!” she said upon learning the news, raising her hands in the air in a double fist pump (at the 18 minute mark in the video above). “I'm delighted."
The move reversed the Biden administration’s stance and came after pressure from liberal Democrats like Warren. In a statement on the decision, U.S. Trade Representative Katherine Tai noted that “extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures.”
The pharmaceutical industry has fought waiving patent protections for drug makers, arguing that it discourages the industry from taking risks and investing in creating new drugs. Shares of COVID-19 vaccine makers Moderna (MRNA), and BioNTech (BNTX) were down by as much as 8% and 6%, respectively, in morning trading on Thursday.
'A humanitarian matter'
Asked earlier in the interview about a potential patent waiver, Warren said that “this is not a time to be protecting the multi-billions of dollars in profits for these companies.” She added that speed was of the essence “as a humanitarian matter and frankly, it's just a matter of our international relations.”
While more than 1.2 billion vaccine doses have been given around the world, The New York Times notes that there's a stark difference in vaccination rates between some countries. In some countries, according to The Times, no doses have been administered. A patent waiver could, in theory, allow for cheaper generics to be produced and increase vaccine doses around the world, including where cases are spiking.
“We need to be out there getting those vaccines into the arms of as many human beings as possible, not doing what a handful of already billionaire drug companies want us to do in order to protect their profits," Warren told Yahoo Finance.
Warren spoke to Yahoo Finance Editor-in-Chief Andy Serwer for an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Warren ran for president in the Democratic primary as a more progressive alternative to President Joe Biden but has supported his agenda since he took office. She recently released a new book, “Persist,” featuring stories that she says illustrate further changes Biden could make in the next 100 days.
“My job is to help him succeed as president,” she said.
An ‘unprecedented step’
The move on COVID vaccines gained immediate support from Democratic lawmakers, including Warren, who led the pressure campaign alongside figures like Sen. Bernie Sanders and Rep. Rosa DeLauro of Connecticut. Countries like India and South Africa — which asked the World Trade Organization (WTO) to waive the intellectual property protections — could benefit from easier access to vaccines if other members of the organization agree to the waiver.
One pharmaceutical industry source told Reuters that the industry would fight to ensure any waiver was as limited as possible. And the trade group PhRMA called the move an “unprecedented step that will undermine our global response to the pandemic and compromise safety.”
Public support is likely to be behind the move as pharmaceutical companies working on the COVID vaccines have reported sky-high profits during the crisis. Pfizer (PFE) recently reported that its vaccine generated revenue of $3.5 billion in the first quarter of 2021 alone. That figure translates into somewhere around $900 million in pre-tax profits for the company.
Pfizer didn’t accept any funding from the U.S. government in the development of its coronavirus vaccine, though the company’s partner, BioNTech, did accept aid from the German government. Still, the U.S. government has bought millions of doses from the company. Other companies, like Moderna, did receive U.S. government funding during the development process.
Moderna had previously announced that it would “not enforce our COVID-19-related patents against those making vaccines intended to combat the pandemic.”
To be sure, the Biden administration’s support does not guarantee that the WTO members will adopt a waiver, though European Union officials expressed openness on Thursday to at least discussing the matter.
“Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved,” Ambassador Tai said in her statement.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.