Can the World Trade Organization Accelerate Global Vaccine Distribution?
In In May, the Biden administration announced an about-face in US negotiations at the World Trade Organization (WTO). The United States now supports lifting all patent protections for COVID-19 vaccines and allowing generic companies to start manufacturing these vaccines as soon as possible.
There are 164 countries that belong to the WTO, and no agreement is binding unless all 164 countries agree to it. So what will the WTO actually do? And will that speed up the distribution of COVID-19 vaccines to the rest of the world? Also, if the patents are dissolved, how will that affect the stocks of the biotech companies that created these vaccines?
In this video clip of a Motley Fool live episode, recorded May 14, Fool.com writer Taylor Carmichael discusses the financial ramifications for vaccine makers of what the WTO might do.
Taylor Carmichael: We don’t know what the World Trade Organization is going to say at the end of the day. Again, 164 countries must accept it. The only way it would affect the pharmaceutical companies, I think, would not be next year, it would be later. So theoretically that could limit profits in 2023, 2024. It depends on what the WTO accepts and what it says. The interest of the Biden administration and its announcement was that this was an emergency right now, but it won’t be an emergency in two years and three years. And if there is no patent protection in two to three years, it will cost companies a lot of money. This next year, the next two years, that will not be the case at all.
They already have contracts with governments, they will already be paid. They just have to make the medicine and distribute it. In terms of emergencies, lawyers aren’t really good at emergencies. This is not a lawyer business. Lawyers are taking their time and it will take a few years. I don’t think it will help anything in the emergency situation, and there is an emergency, a lot of people are dying in India right now. It’s an emergency, but removing intellectual property from AstraZeneca (NASDAQ: AZN), Novavax (NASDAQ: NVAX), and Moderna (NASDAQ: ARNM) will not speed anything up. You are always going to have supply bottlenecks. It might even make matters worse if you have more companies trying to manufacture these drugs.
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