The announced temporary waiver of COVID-19 vaccine patents by Joe Biden’s administration has hit vaccine maker shares and raised serious concerns in the pharma industry.
Waiving intellectual property rights for COVID-19 vaccines
On Wednesday, United States President Joe Biden announced his support on waiving intellectual property rights for COVID-19 vaccines, in order to boost global vaccine supplies. This has caused serious concerns for pharmaceutical companies, in that the move could discourage innovation in the United States and that this could set a precedent making it easier to suspend patents in the future.
The unprecedented decision would enable any pharmaceutical manufacturer to produce a copy vaccine without the need to have intellectual property rights.
COVID-19 vaccine shares plummet
Shares in mRNA-based COVID-19 vaccine developer BioNTech (NASDAQ:BNTX), plunged 10.1% on Thursday following a drop of 3.5% on Wednesday. Similarly, Moderna (NASDAQ: MRNA), which also produces an mRNA-based COVID-19 vaccine, saw its shares slide by 9% on Thursday after a 6.2% decline Wednesday.
Shares of pharma giant Pfizer (PFE), which is producing the mRNA-based vaccine in partnership with BioNTech, were also down on Thursday, dropping 2.9% as the market opened.
Whilst pharma giants like Pfizer, which have a very wide therapeutics portfolio may not be as affected by a patent waver on COVID-19 vaccines, the impact on smaller biotech organisations, such as Moderna is expected to be much bigger.
The announcement was supported by the head of the World Health Organization, Tedros Adhanom Ghebreyesus, on Twitter, who said “it is a monumental moment in the fight against COVID19”:
However, German Chancellor Angela Merkel has expressed her disagreement with the proposal to suspend intellectual property rights for Covid-19 vaccines, saying it would have “serious implications” for global vaccine production. On Thursday, European Commission President Ursula von der Leyen said that the European Union is willing to discuss the proposal.