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Waiving IP Rights on Vaccines Would Do No Good

Waiving IP Rights on Vaccines Would Do No Good

Back in 2013, the WTO “insightfully concluded” the case for patents falls apart “in the face of a public health crisis.” They were waiting for a global health crisis to finally push the patent wavering agenda and the COVID-19 pandemic provided them with the needed ammo. Facing vaccine shortages, mainly due to manufacturers being required to build new supply chains and global supply shortage of key input materials, India and South Africa thought of an easy way out:  a temporary intellectual property waiver. This proposal would have probably gone to the bin without attracting much attention until the surprise policy U-turn by the Joe Biden administration.

Although waiving IP rights on vaccines may at first glance seem like a perfect solution, it will bring new problems while not solving those it targets.

IP rights are one of the main reasons why so many companies invested and, in the end, successfully came up with vaccines in such a short amount of time, as it set the incentives for companies to do well: they would own their own inventions and would reap the rewards. Even more so, the global production of vaccines in 2021 is expected to reach more than 12 billion doses, a whole billion more needed for achieving potential sufficient global herd immunity. By forcing companies to cooperate involuntarily, there is no more room for rapid technology transfer. Moreover, those in favor of the IPRs waver think that somehow this will rid the world of scarcity. Thus, this top-down approach will do nothing more but increase the costs of production and extend the production process.

By wavering IP rights, we will be walking down a slippery slope. The COVID-19 pandemic is neither the first nor will it be the last pandemic in which we will need a quick solution through innovation. Once we were to take rights away, there will be no one else to blame for the lack of investment and drive for innovation. It will stop companies from voluntarily cooperating in the first place. This will not only hurt future pandemic vaccine innovation, but it will trickle down to every other industry.

This is why in May we signed on to the Geneva Network’s coalition letter on the importance of intellectual property rights when it comes to getting us out of the COVID slump.

The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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