Wednesday, May 5, may go down in history as the day it began – “it” being the ultimate economic downfall of the United States. Why? Because that was the day the Biden administration – caving to pressure from liberal Democrats on Capitol Hill and leaders of many developing countries – announced its support for patent waivers regarding the COVID-19 vaccines developed by U.S. pharmaceutical companies, in a wrong-headed effort to ameliorate the spread of the disease in poorer countries.
At issue is a push by developing countries, led by South Africa and India, to exempt World Trade Organization member nations from maintaining patent protections on some trade-related intellectual property rights, also called TRIPS. They want pharmaceutical companies in the developing world to be able to manufacture or import cheaper generic versions of the COVID-19 vaccines.
The Biden administration’s decision to support the patent waivers was wrong on several fronts.
First, it simply won’t work as its supporters believe it will to get more vaccine shots into more arms in less time in poor countries. Having the right to produce the vaccine is not the same as having the ability to produce the vaccine. Removing the patent protections won’t by itself lead to production of the vaccines; the production process relies on highly specialized equipment and highly trained personnel, and requires complex technology transfers and sophisticated international trade. For example, according to a spokeswoman for Pfizer, “the company’s vaccine requires 280 components from 86 suppliers in 19 countries.”
Second, even if it did work, the long-term damage done to intellectual property rights – the very foundation of our politico-economic system, written into our Constitution by our Founding Fathers – would far outweigh whatever minimal short-term benefit its supporters see. Said one industry analyst, “For the industry, this would be a terrible, terrible precedent … It would be intensely counterproductive, in the extreme, because what it would say to the industry is: ‘Don’t work on anything that we really care about, because if you do, we’re just going to take it away from you.’”
The analyst raises an excellent point. When President Trump urged the pharmaceutical industry to double down on its efforts to produce a vaccine to help end the pandemic, they did so with the confidence and the assurance that America stands by patent protections. If Biden’s decision stands, then next time we have a pandemic, we cannot expect them to stop what they’re doing and refocus their efforts on developing new life-saving drugs with zero hope that they will be able to retain their intellectual property rights.
With this decision, the Biden administration is signaling that America’s commitment to patent protections is inversely proportional to the life-saving value of the innovation: as life-saving value increases, commitment to patent protection decreases, and vice versa. That’s perverse.
Further, waiving a property owner’s rights, for even the most noble of causes, nevertheless sets a dangerous precedent. Where is the limit? Once the WTO has made the decision to waive intellectual property rights for this one basket of drugs, what’s to keep the organization from doing the same thing for another batch of drugs? Where does it stop? “It sets a tremendous precedent of waiving IP rights that’s likely going to come up in future pandemics or in other serious diseases,” said David Silverstein, a patent lawyer who advises drug companies.
Third, the pharmaceutical industry isn’t the only industry that relies on the protection of intellectual property. Computer software and manufacturing, semiconductors, electronics, chemicals, electrical equipment, medical equipment and supplies, synthetics, plastics and rubber products, motor vehicles, transportation equipment, and aerospace products and parts are just some of the other intellectual property-intensive industries where company executives are now wondering what might happen to their firms’ intellectual properties if President Biden comes to appreciate them too much.
Fourth, the decision sends a signal to the world about the U.S. government’s determination to defend its own interests, and that signal is nothing short of disastrous. Gone is any notion of “America First.” That’s been replaced by “Please, Take Our Place in Line. We Insist.” Gone, too, is the notion that we have the right to private property. That’s been replaced by “community property” for all intents and purposes. Let’s just say Vladimir Putin, Xi Jinping, and Kim Jong-un have all taken notice – and all are smiling.
Of course, that last observation – that the decision sends a signal to the world about the priorities and values of the new American government, and represents a reversal from the previous administration – factored in heavily to the administration’s decision-making process, I’m sure.
On a final note, I can’t help but laugh at Biden’s support for what he called “temporary” waivers of patent protection – as if no government program ever established for “temporary” purposes had metastasized into a permanent edifice of The Swamp.
The good news is, the American president is not the final authority on this matter. In order for the South Africa/India proposal to be adopted by the World Trade Organization, all 164 countries must approve. Germany’s Angela Merkel opposes granting the waiver. Obviously, she’s got a better understanding of what makes the world work than does President Biden. She’s probably got a stronger backbone, too.
Americans should not have to rely on a German leader to stand up for our rights. That’s not normally considered the job of a German chancellor. That’s a job for President Biden. I just wish he’d do it.
It is maddening to me that, as a person who is not happy with big corporations teaming up with big government to infringe on the rights of the individual, I find myself forced to defend Big Pharm’s right to keep its patents. As distasteful as it may be, the defense of property rights surmounts my discomfort with some companies’ behavior. Even numbskull CEOs should be able to maintain their firms’ property rights – because in defending their property rights, we are defending property rights for ALL of us.
• Jenny Beth Martin is Honorary Chairman of Tea Party Patriots Action.