Shares of Moderna and other makers of the COVID-19 vaccines plummeted after the US backed a plan to waive intellectual property protections for the life-saving products.
Moderna stock fell more than 6 percent Wednesday after the announcement and extended those losses a further 2 percent in premarket trading on Thursday. Pfizer shares were down more than 3 percent in that same period and shares of its vaccine partner BioNTech were down more than 7 percent.
U.S. Trade Representative Katherine Tai announced Wednesday that the US will advocate for the “extraordinary measures,” which would potentially enable companies in developing countries to manufacture their own versions of the vaccines, increasing the supply globally.
The proposal is working its way through the World Trade Organization, and there’s no certainty it will become policy.
The Administration’s aim is to get as many safe and effective vaccines to as many people as fast as possible,” Tai said in a statement. “The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines.”
Proponents of suspending the protections, such as the World Health Organization, say doing so will save lives and end the pandemic more quickly. Weekly new cases of COVID-19 remain at record highs globally as the virus devastates many poor and developing countries.
But pharmaceutical companies and industry representatives oppose the policy move, saying that it won’t immediately boost the global supply of doses, because there are more obstacles than just IP rights. They say vaccine manufacturing is complex and waiving IP protections globally could cause new issues.
The technological know-how behind the vaccines is also seen as proprietary by the industry and sharing any of it could hurt a company’s competitive advantage.
Pfizer CEO Albert Bourla told the Wall Street Journal that waiving IP protections would discourage biotech companies from developing products for the next pandemic.
The surprise move by the US comes as the outbreaks in other countries has become increasingly dire.
India and South Africa were among the first countries to push for the waiver, which was initially opposed by the US, the European Union and other wealthy governments. But pressure from global health advocates has mounted on the US to commit to the policy move.
But it remains to be seen if US backing will be enough for the policy to be implemented globally. The WTO will need to achieve consensus among its 164 member nations for the proposal to be adopted.