Regulatory and Legal Reform

As the House and Senate gear up for key trade hearings this week, manufacturers are watching with great concern a purported compromise between the U.S., EU, South Africa and India that would waive intellectual property rights for COVID-19 vaccines, according to POLITICO EU (subscription).

The background: In October 2020, India and South Africa tabled a proposal to waive IP rights for a broad array of COVID-19 preventions and treatments, including vaccines. Although the U.S. Trade Representative in May 2021 announced support for a waiver for COVID-19 vaccines, member states have remained divided on the proposal, with European governments and a range of American, European and other voices opposing the waiver, saying it is problematic and ineffective.

The latest: This week, members of the two key congressional committees—the House Committee on Ways and Means (Wednesday) and the Senate Finance Committee (Thursday)—will question U.S. Trade Representative Katherine Tai on the so-called Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver among discussion on other trade priorities.

• Earlier this month, Ambassador Tai’s office confirmed U.S. agreement to the broad compromise, though not the specific text. The purported text “states that a country wouldn’t need to try to secure authorization from the holder of the patent before undertaking this process. Rather than being limited to compulsory licensing, it ‘includes other acts, such as executive orders, emergency decrees and judicial or administrative orders.’ It would also bundle together all patents necessary to produce a product,” according to POLITICO.
• The NAM notes that the purported text could be used to waive not just critical COVID-19-related patents but critical manufacturing-production technologies in general. This allowance could hit a broad swath of manufacturers.
• Congressional voices ramped up almost immediately after the announcement: Sens. Thom Tillis (R-NC), Tom Cotton (R-AR) and Marsha Blackburn (R-TN) urged Commerce Secretary Gina Raimondo to “take all steps possible … to reverse Ambassador Tai’s disastrous decision to enter into this agreement.” The waiver, they said, would “destroy high-paying American jobs” and “enable any company or government—including hostile actors like China and Russia—to simply steal cutting-edge American technology.”

The NAM says: The proposed waiver, which still requires agreement from EU member states and World Trade Organization member countries more broadly, would not solve the critical manufacturing and supply chain challenges—and that the critical challenge now is not vaccine supply, but distribution and demand.

• The kind of innovation that created the coronavirus vaccines “is a fundamental American value and has been not only a core of our response to this pandemic, but also the foundation of our ability to create new health products and solutions to respond quickly to future health emergencies,” said NAM Vice President of International Economic Affairs Ken Monahan.
• Waiving property rights for innovative products would harm both U.S. technology leadership and the well-paying jobs it provides, he said.

Instead of a waiver of critical intellectual property, Monahan called for “effective, practical broadly supported initiatives suited to best fight COVID-19 now, including stronger coordination to tackle these bottlenecks and facilitate trade in health products.”