The Biden administration has apparently learned the wrong lessons from the COVID-19 pandemic. In a recent statement, U.S. Trade Representative Katherine Tai announced the “Biden-Harris Administration’s” support for waiving intellectual-property protections for COVID-19 vaccines — a move that will destroy the innovative industry that made the pandemic-ending vaccines possible.
It is hard to overstate the pharmaceutical industry’s accomplishments of the past year. It normally takes ten years and billions of dollars to develop vaccines for new diseases caused by novel viruses. Yet only ten months after SARS-CoV-2 — the virus that causes COVID-19 — was identified, two new vaccines were developed, tested, and authorized for emergency use by the FDA. Two months later, Johnson & Johnson added a third vaccine, and now other entrants including AstraZeneca (already approved overseas) and smaller companies, Curevac and Novavax, are waiting in the wings.
These accomplishments stem from the patent protection, including temporary monopoly pricing, that incentivizes innovation and generates the profits to fund it. Innovative new medical products often lower the effective price of health care by providing previously unavailable treatments at patent-protected prices that fall as competing products, and eventually generics, come to market. While these patent-protected prices can initially be high, they often provide effective treatment and health that was previously unavailable at any price — the first drugs for HIV were expensive but lifesaving and prices declined as competing drugs and cheaper generics became available.
COVID-19 vaccines are the only path to ending the pandemic, and their value must be measured against the pandemic’s costs. The cost of efforts to slow the pandemic in the U.S. via a nationwide shutdown of “nonessential” economic activities approach $7 trillion per year (roughly $20 billion per day), even without accounting for medical expenditures and valuation of lives lost (roughly a $2.5 trillion valuation of the 580,000 deaths so far).
In fact, COVID-19 vaccine producers have already voluntarily waived the ordinarily high patent-protected prices and profits for their products: AstraZeneca and Johnson & Johnson have both pledged to provide their vaccines on a not-for-profit basis for the duration of the pandemic; Moderna and Pfizer are making a profit but only charging between $30–40 for a complete two-dose course, hardly exorbitant amounts for lifesaving products that were the first to market; and Novavax, which is expected to seek FDA authorization in the next few weeks, has agreed to charge only $3 a shot in Africa.
Read the full article at National Review.